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An ethical issue of OptiMotors Case Study


Introduction

The paper involves an analysis of a case study in which the CEO is faced with a crucial decision to make. It is only through incorporation of all stakeholders’ perspectives that one can reach a tenable position as will be illustrated.

Seeing

According to the acronym S-T-A-R, a business leader ought to be a seeing, talking, acting and reviewing practitioner. In the first letter of the acronym, one is expected to see an ethical issue. OptiMotors is facing a serious moral dilemma; the company has been closing lucrative deals under the guidance of Galen.

However, the methods that he uses to close the deal not only bother some employees but also affect its CEO-Bob. He initially had objections to sales techniques that his sale team leader used because they were quite extreme. One may assert that at this point, Bob failed at speaking out against ethical issues.

He did not see the issue so he did nothing about it. Fear of contradicting one of his most charismatic and promising salesmen may have prevented him from doing so. Bird and Waters explain that people will often do this because they do not want to be perceived as whistle blowers.1

Failing to provide adequate feedback to one’s workers is tantamount to moral muteness as workers will not inculcate ethics in their business practices. At the end of it, they may get into habitual lying, and this may damage a business’ reputation.

On top of that, many of them may subject the company to prosecution and legal misconduct. Clearly, Bob had not seen unethical practices in his company. If he continues with this, he may subject the company to the above-mentioned consequences. Therefore, he needs to end his blindness to the matter.

When seeing unethical behaviour, one must look into the moral justifications for one’s actions. The CEO needs to tap into his moral framework. If he took on a consequentialist outlook, he would find that it would not be in the best interest of the company to take action against Galen and the rest of the team.

A consequentialist thinks about the ends and not the means. The school of thought would encourage the use of strip clubs as a means towards garnering more sales. Therefore, the consequentialist would say that accompanying clients to strip clubs is acceptable; what counts is that the deal is sealed.

However, seeing practitioners are required to look into the context of an ethical dilemma, such as the one under consideration. While this extreme sales tactic has brought some new clients to the firm, it has cost the firm two vital employees. It is likely that other employees may follow Joan’s path.

Further, the tactic might give the company negative publicity and cause it to loose other clients. Additionally, Joan could sue the company for discrimination and this could also tarnish its image. Therefore, the benefits that come from accompanying clients to strip clubs could be offset by the loss of repeat business and valuable employees.

In the end, the wise business decision would be to abandon the strategy. It is virtuous for Bob to step up and speak against this sales tactic. It is his duty to put an end to the issue. He needs to see the issue for what it is; unethical

Talking

After seeing that a moral issue exists, he needs to talk about it. This implies communicating to people in an open and honest way about his perspective. The entities involved include Galen, Joan, April, the sales team and other employees.

The leader should first start with Galen and inform him about his discontentment with that sales approach. He can then explain why he took on that stance and even explain some of the consequences the business has had to deal with owing to Galen’s extreme sales strategy.

He should also talk to the rest of the company and inform them that he is not content with the sales approach in the company and that this takes away value from the organisation. He also needs to talk about ethics in general and why this is critical to OptiMotors.

Action

In business ethics, a virtuous leader takes the responsibility of taking action or ‘doing’. In order to act, one must make a decision first, which may be done through rationality or reasonableness. The problem with rationality is that it aims at protecting the decision maker.

It causes leaders to pursue their self interests and pretend as though feelings are non existent. Therefore, the more plausible approach is being reasonable. Here, one thinks about what others cannot reasonably reject in order to foster an ethical environment.2

One considers other people’s perspective before reaching a decision. Bob is in a position of power where he can make change in his environment. He needs to promote fairness by adopting a path that exemplifies just that. The CEO ought to consider both sides of the equation carefully.

According to Galen, top salesmen in their industry perform so well because they are wiling to do extreme things to seal a deal, including going to strip clubs. He is aggressive about members of his team and feels that the method works well for the company.

If Bob was an ethical leader, he would at least examine the validity in Galen’s argument. Many men visit strip clubs in order to feel special. The females in those clubs will not judge them or expect them to behave in a certain way; consequently, many of them feel in control and special at such a setting.

It is likely that these sentiments cannot be felt as easily in a typical diner or a conventional meeting place. Clients can let go and not have to worry about harassment suits or the like. Even Galen explained that the strip joint provides a great avenue to bond with another male in an unrestricted environment.

The big question should be whether these feelings of control, uniqueness and male bonding translate into tangible returns. Galen claims that they do, but these positive sales outcomes should not come at the expense of other sales as well.

On the flipside, however, one must consider what actually goes on in those strip clubs. When OptiMotors creates a culture of frequently taking out clients to strip clubs, many of the employees will be under pressure to go there even when they do not want to.

Furthermore, sometimes these trips may not yield desired outcomes. Some clients may get so distracted from the goings on in the club that they may deviate from the initial goal of going there in the first place. A sociologist and former strip-club dancer known as Katherine Frank explains that rarely did patrons in her former place of work ever sign any deals.

The atmosphere was just not conducive for it.3 It is likely that Galen may be overstating the usefulness of visits to Red Ruby. OptiMotors may yield similar results if it engaged in another customer-bonding experience that was less extreme.

It could be that the clients that Galen signs are merely responding to his willingness to spend time with them rather than the actual visits to the strip joint.

Galen may not be the star that Bob perceives him to be. When Bob hired him in the company, he was impressed by his sales numbers, but did not know how Galen achieved those targets. Galen appears to belong to the breed of salesmen who are willing to do anything to make a sale.

He is not very different from representatives who get intimate with clients in order to secure contracts. If a company cannot allow the latter behaviour to take place, then it should not let Galen get away with such behaviour.

Building relationships with clients is an important part of making a sale, but when such activities cross the moral line so blatantly, then a company should put an end to them.

Perhaps another important dynamic is the legality of the issue as well as the possibility of being sued by Joan. Joan insisted on accompanying Galen to a strip club with the client, but Galen would not let her. She felt sidelined because of her gender and therefore discriminated against.

Her main problem is not visiting strip clubs per say; it is not accompanying Galen to Red Ruby when the client under consideration was one of her most important ones. The government of Australia condemns discrimination in the workplace. Galen feels that Joan would not fit into the male-dominated atmosphere of a strip club.

In fact, Galen is right about this because strip clubs are designed for male audiences. However, he is wrong about using a tactic that places a woman at a disadvantage. By allowing employees to use sales strategies that women have no equal access to, the company is not providing an equal opportunity to them.

Even the male bonding claims are also restricted to men. OptiMotors is sending the message that its female employees are not important enough to warrant full involvement in sales strategies.

Therefore, Joan has a valid case if chooses to pursue the matter further. The country’s laws prohibit discrimination in the workplace and this situation will not be an exception.

April’s matter is slightly different from Galen’s or Joan’s. She objects to the ethical aspect of visiting strip clubs with clients. Her resolve was so strong that she was willing to leave the company for it. April and many other employees have certain ethical expectations that govern their work practices.

If no standards exist in a certain organisation, then the ethical line can easily be crossed, and this may be unacceptable to workers. April is a highly principled employee who focused on making sales in an ethical way. She has definitely lost respect for OptiMotors because she perceives her boss to have let the matter get out of hand.

When leaders fail to take a stand about something, their employees will loose respect for them. They may also assume that the same thing could occur when other more important decisions arise.

April’s departure may send an unwanted message to employees who may assume that the company has no moral compass.

Employees in the company have been making sales using conventional methods in the past. While these strategies may appear less dramatic than Galen’s, they are more sustainable. Trying all the tricks in the book, including strip clubs, is stretching the moral fibre of the company very thinly.

Making deals in sleazy venues would not be something that the company would be proud about if it got out. Sustainable organisations are those ones who move away from daily sales transactions and focus on long term value addition. Strip clubs are not in any way related to the product type and vision of the company.

The sales leader has stooped to the cheapest and most convenient method of making a sale. He should be selling value to clients and not a good time. Bob’s initial strategy of using racing cars tracks as a way of building relationships with buyers was more in tune with the company’s overall vision.4

Given all the perspectives that have been considered in the organisation, it is clear that the firm has lost slight of its vision and this stems from Galen’s introduction of the controversial visits to Red Ruby.

Even though his actions are bringing in revenue to the company, they are causing many unwanted expenses. Benefits from this approach will soon be offset by lawsuits, employee resignations, client attrition and excessive expenses. 5

The company can achieve more sustainable results if it used a different approach in sales; it needs to sell its core products and services.6 Therefore, Bob should scrap the Red Ruby idea immediately.

He ought to talk to Galen about it and instruct him to refrain from using it. If Galen is unwilling to abandon his strategy, then Bob should dismiss him.

After dealing with the latter individual, Bob should then approach April and Joan. He should apologise for allowing such behaviour to go on under his leadership to both ladies. If possible, he needs to offer April her job back and explain that strip clubs are a thing of the past.

In order to win April over, the CEO should make April leader of an ethics committee in the organisation. He should also tell her that the company has a comprehensive new policy in place designed to prevent such issues from arising.

The sales team needs to be sensitised about ethics and the importance of focusing on core issues when selling. A mandatory program ought to be put in place in order to make sure that everyone understands what is expected of them ethically.

Since the company has now established a routine of taking some clients to Red Ruby, it should say no to all the clients who make this request in the future. Its salespeople should simply explain to these customers that their request is not in alignment with their business and respectfully turn them done.

They should then suggest a replacement activity that is relevant to the company’s offerings. Suggesting alternatives are always an effective way of letting someone down easily and it increases the chances of acceptance from the recipient.

In certain circumstances some consumers may choose to take their business elsewhere. This business has been putting quantity before quality for too long and unless it corrects that, then it could record immense losses in the future. Clients who want the firm to bend over backwards for them even when this becomes unethical are simply not worth it.

Review

The last letter in the acronym STAR refers to reviewing one’s actions. When a person makes a decision, one should reflect on it and draw some lessons from it. In the case of the company under consideration, Bob should not assume that business ethics will threaten corporate hospitality.

It is possible to build good relationships without behaving unethically. The best way of dealing with such a situation in the future is to teach employees how to make wise business decisions. They should follow the same path that Bob used to come to his conclusions in this case.

Bob should also use the same path to make similar decision in the future. Shown is a diagrammatic illustration of how the decision was made hence how similar decisions should be made in the future.

How the decision was made hence how similar decisions should be made in the future

Conclusion

The ethical dilemma under consideration indicates a leader who did not use the STAR acronym soon enough. He needed to see this issue as soon as it arose and talk or take action against it.

Bob can salvage the situation by creating a new ethical policy, apologising to April and Joan, and by instructing Galen to abandon his controversial sales strategy. Salesmen need to be taught how to focus on core activities and make ethical decisions.

Bibliography

Bird, Frederick & Waters, James. “The Moral Muteness of Managers?” California Management Review 32, no.1 (1989): 73-88.

HCCA. “Corporate Gifts and Entertainment: A survey of Practices.” Health Care Compliance Association. Web.

Frank, Katherine. G-Strings and Sympathy: Strip Club Regulars and Male Desires. Duke: Duke University Press, 2002.

Sen, Amartya. The Idea of Justice. London: Penguin, 2009.

Slomski, Michael. “The Changing Environment of Business Ethics.” Journal of Accountancy 14, no. 9 (2006): 90-99.

Tracy, Brian. Advanced Selling Strategies: The Proven System of Sales Ideas, Methods, and Techniques Used by Top Salespeople Everywhere. Chicago: Simon and Schuster, 1996.

Footnotes

1 Frederick Bird & James Waters, “The Moral Muteness of Managers?” California Management Review 32, no.1 (1989): 73-88

2 Amartya Sen, The Idea of Justice, (London: Penguin, 2009), 7.

3 Katherine Frank, G-Strings and Sympathy: Strip Club Regulars and Male Desires, (Duke: Duke University Press, 2002), 99.

4 HCCA, “Corporate Gifts and Entertainment: A survey of Practices,” Health Care Compliance Association.

5 Michael Slomski, “The Changing Environment of Business Ethics,” Journal of Accountancy 14, no. 9 (2006): 90-99.

6 Brian Tracy, Advanced Selling Strategies: The Proven System of Sales Ideas, Methods, and Techniques Used by Top Salespeople Everywhere, (Chicago: Simon and Schuster, 1996), 55.

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IvyPanda. (2020, January 14). An ethical issue of OptiMotors. Retrieved from https://ivypanda.com/essays/an-ethical-issue-of-optimotors-case-study/

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IvyPanda. 2020. "An ethical issue of OptiMotors." January 14, 2020. https://ivypanda.com/essays/an-ethical-issue-of-optimotors-case-study/.

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