Summed up in the professional code of ethics are the professional obligations. The task of code of ethics is to indicate the expectations of the public at the workplace (Hooker, 2000). Historically, organization managers have been bestowed with a duty to ensure maximum wealth of the stakeholders by all legal ways (Hooker, 2000).
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This idea is encompassed in the corporate law, arguably on the perspective that it stipulates legal responsibility of directors and managers and shields them from wanton legal procedures.
Considering the case at hand, it is evident that the CEO did actually abide by the conditions and provisions of the corporate law as illustrated above by ensuring that the company stayed put and actually regained its grounds. However, the CEO might have contradicted moral ethics but as we shall see, theoretical paradigms may explain his actions.
The word stakeholder was invented in the 1980’s to depict the wider collection of individuals that a business should be concerned about (Hooker, 2000). They include employees, customers and the community at large that surround such a company (Hooker, 2000). On the other hand, a situation arose where balancing the duty of the owners and that of the stakeholder was a challenge.
A solution to this dilemma was proposed. In organizations, managers and directors are answerable to the owners but on a condition that they have to take responsibility for not only the financial interests but also ethical obligations of the owners related to the business (Hooker, 2000). Thus, their business-related obligations become professional obligation of their fiduciaries (Hooker, 2000).
The main ethical issue in our case is the issue of morality. The key stakeholders in this case are the employees, the community and the customer. Focusing on complains presented to Veronica, it is clear that many employees feel that their CEO’s behavior is inappropriate and undermines the acceptable code of conduct for a business professional.
The community on the other hand is a vital stakeholder when analyzing moral issues. It is the mandate of each individual in the executive position to uphold good morals since any deviation from this conduct not only affects the current generation but also has negative impact on the future generations.
Should this information of the inappropriate conduct by the CEO reach the larger customer fraternity, customers will have a formed opinion about the company.
This may negatively affect the company’s market share since the customer will shy away from acquiring goods from this company (Hooker, 2000). This threatens the company, affects the growth of the company, and may ultimately lead to negative growth (Hooker, 2000).
Generally, the impacts of violation of accepted code of conduct within a company or an organization are far reaching. Potentially, energy levels of employees are likely to go down, attendance becomes low, turnover excels, and customers lose trust. Worse still, the company profits may dwindle causing to closure of the organization.
Theoretical approaches in this case study
Ethical theories aims at describing the “meaning of moral language in everyday discourse, and the schema in moral standards or set rules” and in situations where there are variations between different discourse and action as well as different schema, they aim to advocate for an understanding of behavior (Howell, 2010).
The author notes that using certain concepts, an ethical theory is able to describe and explain schema and moral language (Howell, 2010). Here, two theoretical approaches will be used to analyze the case study.
The Aristotelian Virtue Ethics
The two parts of this theory can be used to illustrate the CEO’s actions. First, Aristotle argues that, the ultimate goal is to promote our personal happiness (Gray, 2011). Secondly, he argues that to attain our personal happiness we should endeavor to have habits and behavior that promote happiness (Gray, 2011).
Generally, Aristotle’s idea of happiness implies “good life”. In addition, he argues that pleasure, knowledge, and virtue appear to be necessary goals even if they do not cause happiness (Gray, 2011).
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Aristotle appears reluctant to use rules to make decisions on moral issues. He argues that instead of having rules, people need to develop virtuous character traits through an intuitive understanding of morality. According to Aristotle, Such a person has practical wisdom. Aristotle “finds that wisdom tends to be based on extremes” but he does not think that rules are the best way to understand ethics (Gray, 2011).
Looking at this theory, we can argue that the CEO was behaving as he did because he wanted to achieve satisfaction.
In this case, Aristotelian would argue that for as long as the CEO acted to the best of his interest in order to achieve his own happiness, then there is no problem. The claims that the CEO is behaving unpleasantly towards young girls at social functions may not be bad if such behavior leads to his happiness. However, the theory is criticized for putting ‘our happiness’ as the ultimate thing (Gray, 2011).
Being concerned about other people’s happiness is also important and thus everyone’s happiness should be taken into consideration. Thus, the manager should be considerate of others and avoid verbal and physical sexual aggression towards his juniors.
Ross thinks that by learning more about our moral duties, we are able to struggle to balance our moral obligations as well as our values. Ross denies the existence of one single “overarching moral principle or rule” (Gray, 2011). He therefore proposes that our moral duties are prima facie and that some things have an inherent worth (Gray, 2011).
Various prima facie duties exist according to Ross. They are duty of fidelity, reparation, gratitude, beneficence, and non-injury (Gray, 2011). In our case, the latter is more significant. The duty of non-injury prompts us not to harm others. Thus, the CEO has a duty not to cause harm to others and should be held accountable for his actions.
Based on the duty of reparation, the CEO should be able to pay for the any harm that may come to others courtesy of his behavior. Intrinsic values are what we think as “common sense” (Gray, 2011).
They come because of contemplating for some time and may not be apparent from the beginning. Thus, looking at Mr. Handsome, he might not view his behavior as wrong due to lack of that intrinsic value. It may have to develop over time.
Solving the puzzle
Ethics and moral issues are very complex. It is therefore not easy for one to make a decision on what actions to take in this case. The situation calls for an understanding of who is involved and the likely consequence of such an intervention, on the involved parties (employees, shareholders, customers, community/public among others).
It is important to note that ethics issue is not only a corporate issue, but it is also a societal problem and is rapidly becoming a legal issue as well (Michael, 2006). If I were in Veronica’s shoes, the following would have been my approach to dealing with the situation as is suggested by Michael (2006).
Four steps that are involved in making and acting on an ethical decision; recognizing an issue as an ethical one, making an ethical judgment, deciding to do what is ethical and actually behaving ethically.
Recognizing the ethical issue
To deal with an ethical issue, it is important to understand whether such an issue is apparent in the first place. As indicated by Michael (2006), experiments have revealed that the extent to which we are close to or feel we are close to victims/beneficiaries of our actions influences our ethical actions.
To this effect, I would start by involving the CEO and other senior employees in creating an internal brief indicating what is expected of every person within the company in as far as ethical codes relating to unwarranted sexual advances in the company are concerned, both in and outside the company’s environment.
This would serve as a deterrent and help in imposing sanctions to individuals who would be found with such misconduct. This way, if later complaints against the CEO continue, actions against him can be taken. This way, he will be punished by his own rules.
Making ethical judgment
Making a judgment is a function of reasoning or reason-influenced intuition (Michael, 2006). Here, looking at the various situations under which the CEO has been accused of misconduct and borrowing from the professional expectation, the CEO could be warned or be sanctioned.
Resolving to do the ethical thing
Upon determining an ethical procedure to be used, the next step is to determine the best course of action among the available alternatives.
According to the over-justification theory, withdrawing a reward (or introducing a punishment) which had been given to people for something they enjoy makes the significance of the act to them to disappear (Michael, 2006). Thus by instituting sanctions, the CEO may desist from such inappropriate behaviors.
Rules give clear directions as opposed to the ethical principles and as so, violations are easily detectable. Although deciding on what to do from an ethical point of view may be difficult, violation of principles of ethics lead to guilt or shame as opposed to rules that come along with fines or imprisonment or even termination (Boeing, 2006).
To this effect, people may avoid violation of rules and not breaching ethical principles. Thus, I would ensure that all rules are adhered to. This would be an ethical standard set within the company but with repercussions.
The solution to ethical misconduct is not exclusively rules alone. However if rules are properly formulated in line with the statutory requirements, they can act as a deterrent factor for employees as well as managers and can be used to protect the various stakeholders that may be affected by ethical misconduct.
Nonetheless, there should be clear training on ethics at company’s domestic level so as to ensure that people understands their professional obligation both to the company and the community. Thus, when sanctions are imposed, every individual is aware of their expectations.
Boeing, S., 2006. Ethical Business Conduct Guidelines. Web.
Gray, J. W., 2011. Notes on business ethics. Web.
Hooker, J., 2000. Some Business-Related Ethical Issues in Engineering. Web.
Howell, R., 2010.Choosing ethical theory and principles and applying them to the question: Should the seas be owned?, International Journal of Tran disciplinary Research, 5 (1) 1-28.
Michael, L., 2006. Business Ethics, The Law of Rules: Corporate Social responsibility. Cambridge: Harvard University.