Every organization is governed by their own set of guidelines for work related behavior of their employees. Though variously named let us call them as conduct, discipline and appeal (CDA) rules .This will generally cover up to a level below the board level. Any breach/deviation in the actual conduct from the stated guidelines/rules can lead to imputing the employee. This may lead to show cause/charge sheet/seeking explanation etc depending upon the severity of breach/deviation.
The company will constitute a court of enquiry by appointing an inquiry officer to go into the causes, motivation, moral turpitude of the imputed, implication of findings on the organization and sometimes the impact of fall out of the decision based on the inquiry report. The competent authority (mostly board member) will decide on the quantum of punishment if found guilty or exoneration of the employee if proven innocent. Sometimes such cases may implicate the innocent and also get punished but that is done to show the other employees that there is strict adherence to CDA rules.
While guilty is punished for the actions there is no ethical dilemma. If the innocent is punished for actions resulting from extraneous factors beyond his control merely based on the fact that company suffered loss, there arises dissonance. This dissonance in mind of the next superior puts him into ethical dilemma. He has little choice and has to accept the decision of the management. The case study deals with such a situation based on author`s personal experience in Visakhapatnam Steel plant during his tenure as head of ferro alloys stores.