Introduction
We are faced with ethical issues in our interactions as human beings. Ethics can loosely be defined as a system of moral principles by which social conduct is judged as either “right” or “wrong”. As relates to business, ethics are moral principles which prescribe what is legitimate behaviour in varied business dealings (Chryssides & Kaler 1993, p.3).
An interesting concept with regard to ethics is that there is no standardized approach to dealing with ethical dilemmas as they all spring from very unique legal, political, social and economic backgrounds. This makes the task of dealing with ethical dilemmas especially challenging for managers.
This paper sets out to review three case studies in which different ethical issues are dealt with. The various ethical theories that they may apply to deal with the situations will be given and the rationale behind the decisions made extrapolated. All this shall be in a bid to elaborate that a good theoretical knowledge in ethics will greatly assist deal with the unique ethical issues
The Area Manager’s Dilemma
In this particular case, Chris, a regional director with the organization has just discovered that David, one of the other regional managers is unprincipled, devious and a liar. As such David’s actions are not only highly questionable but also ethically unsound. Chris has to take up some solid cause of action and therein lies the ethical dilemma.
According to Chris’s reasoning, he can either complaisant and turn a blind eye to David’s behaviour, or, he can take affirmative action and accuse David of dishonesty to the higher ups. A view of this particular scenario with Kohlberg’s theory of moral development in mind might better shed light as to the actions that Chris might possibly take as well as shedding light on the principles to be applied in dealing with David.
Kohlberg’s developmental theory is concerned with the manner in which people judge what is right and wrong. According to the theory, one’s reasoning becomes more ethical as one advances through the stages (Frederick 2002, p.221). This being the case, we can clearly articulate that David is at a lower level in Kohlberg’s scale. To be specific, he is in Level one which is also known as the Preconventional Morality level.
Furthermore, it can be contended that he is in the stage I of this level since he is primarily concerned with getting caught in his wrongdoings. In this level, the behaviour of an individual is controlled by external rewards and/or punishments. David is not oblivious of punishment which is why he “tells barefaced lies to account for difficulties or shortfalls”. Neither is he without a concept of rewards which is why he is “always aiming to please the director.”
Chris on the other hand is way higher up in the Kohlberg’s scale. The very fact that he considers David’s behaviour as intolerable and views sinking to David’s level as unacceptable reinforces the statement that Chris is indeed on a higher level. Chris is Level Three of Kohlberg’s as can be deduced from his ethical perspective. A person at this level has public interest as his primary concern and will go to great extents to see that social order is maintained.
Chris’s level on Kohlberg’s scale dictates that he will do everything possible to stop David who is evidently acting not in the public interest but for his own good. Chris will therefore report David to the higher ups.
However, Kohlberg’s theory dictates that one can only perceive and understand the moral actions that occur one step above his particular level (Sims 2002, p.135). This being the case, it would be more logical for David to act as dictated by the second level. In the second level, actions which are approved by the other people are judged to be the right ones.
As such, David’s actions such as running his area on a patronage basis are approved by his colleagues and therefore can be viewed as ethical. Whistle blowing on the other hand is not approved of and might actually alienate Chris from his staff and the other managers. This being the case, the best action for Chris would be to seek a compromise with David and try to make him act in a manner that is acceptable to all.
The HR manager’s dilemma
In this scenario, the Human Resource manager finds himself faced with two different cases, both bearing a similar theme, employee privacy and criminal records. In the first case, the manager finds out that one of his staff has acquired a criminal record due to tax evasion. In the second case, an aspirant applicant admits to having a criminal record during an interview.
Inevitably, the tax conviction will have some bearing as to the member’s continued stay in the organization. At the bare minimal, the fact that the member was convicted by a court of law on evasion charges highlights the fact that he must be dishonest.
While it might be argued that the moral standing of an individual does not have any implications as to his capability in the work setting, the organization stands being a victim of the employee’s misdeeds in the face of the public. This is especially a reality in this particular case since the employee in question is in contact with the organizations customers.
The employee is the organizations ambassador to the outside world and as such his actions are seen to be a reflection of the organization. According to the newspaper, the total tax avoided amounted to 5000, a sizable amount. If the employee had the audacity to carry out such a scheme, it is not inconceivable that he may also set out to defraud the company. With these considerations in mind, it would no doubt be most prudent for the HR manager to recommend that the organization terminate its engagement with the said employee.
In the second case, the initial perception of the manager as to the applicant’s personality is that of a qualified, mature and sociable person. To top it off, the applicant comes clean concerning his previous conviction thereby accentuating his honest nature. However, the HR manager must disregard this personal attributes as he contemplates the effect that employing someone with a criminal record can have on the company.
From the testimonials of the applicant’s former employer and his OU tutor, it can be deduced that he is truly reformed and ready to become a credit to the society. Employing such a character can greatly aid the public image of the company since it highlights the organizations faith the county’s rehabilitation systems. There is always the danger of the applicant being stigmatized by his colleagues because of his record. Weiss (2008, p.367) asserts that managers should limit access to private information about employees to avoid such scenarios.
Looking at the decisions arrived at in this two cases, it can be seen that preference was given to the participant who exhibited honesty. The employee convicted of tax evasion was discriminated against since he already had a contract with the organization which he violated by his unethical acts. This made him less deserving leading to his unfavourable treatment.
The applicant was treated as worth of the support of the organization since not only did he purport to hold ethical attributes such as honesty but employing him would also serve the organizations own interests. Fredrick (2002, p.405 )asserts that companies may be held criminally liable for the behaviour of their employees despite the employees having acted on their own volition. As such, it is in the best interest of the company to make sure that its employees are honest and people of integrity.
Turner & Newall: The Case of the Asbestos Industry
This scenario presents a case whereby the needs of the company’s shareholders to make profit are pitted against the safety of the workers and consumers of the company products. Underlying concepts in the case are secrecy whereby the company directors failed to divulge vital information about asbestos since the information would have had unfavourable results for the company’s profitability as elaborated in the case.
The concept of distributive justice is also highlighted whereby the rewards should be proportional to the contributions made. In the asbestos case, distributive justice is neglected since the workers were not compensated really as adequate as the nature of their jobs dictated. This case can be reviewed with the social contract theory in mind. The Social Contract theory holds that actions carried out by someone are morally permissible if they increase the benefits of an individual or indeed, the society at large (Fredrick 2002, p.32).
Notably, the asbestos companies used the bankruptcy law to deal with the liabilities that arose from the numerous court cases. The adequacy of this move can be looked at from two perspectives. In the first case, the companies were pushed to this measure by the litigation against them. As such, this is a protective measure that allows the company to at least fulfill its role to the shareholders and creditors who are the primary concerns of the company.
Given the circumstances, it can be argued out that filling for bankruptcy was an adequate measure since it enabled the company to fulfill part of its mission. On the other hand, filling for bankruptcy implies that the company cannot go on with its normal mode of operations hence due to lack of profitability; it cannot settle claims by the various victims of its actions.
Having reached an agreement that the company should compensate its workers and consumers to the damage done, the question arises as to how the various costs should be split amongst the various stakeholders. The management of the company must have known about the dangers that their products presented to the workers and the consumers.
However, the management’s principle responsibility was to ensure the continued profitability of the company. This being the case, the major beneficiaries of the company’s profitability (namely the shareholders) should be forced to make the hugest contribution to the compensation efforts since they benefited the most.
In an attempt at redress for the victims, the Goyder Sanction may be implemented. This sanction seeks to force companies to act in a responsible manner by making them socially accountable to all their stakeholders.
The rationale behind this move is that most managers will be reluctant to act in the interest of the society at large if these interests are at loggerheads with the goals of the organization as a whole. The Goyder Sanction is therefore not only practicable but as such the most appropriate mechanism since it obligates the companies to recognize their social contract obligations which dictate that morally permissible actions are those that increase one’s benefit but not at the cost of harming others (Fredrick 2002, p.32).
The management of the company is no doubt the major culprit since they made the actual decision operational decisions of the company and sanctioned the secrecy that led to even further damage to workers and consumers. However, it should be taken into consideration that the management was only acting in the interest of the shareholders and company board who were the major benefactors of the profits obtained from the business dealings.
It would therefore be unjust to personally hold the management responsible since they were only protecting the interests of the company. A better means of seeking justice would be to collectively punish all the stakeholders. This would most suitably be implemented by transferring the ownership of the company as in the Johns-Manville case. In this way, all the involved parties (stockholders, management and directors) are punished and wronged parties get redress for the wrongs done.
The governments and company’s that import asbestos have a responsibility to the importing countries. They should ensure that the importing countries are aware of the risks that the products contain.
This will lead to informed consent since the importers will acknowledge the risks involved and it they feel that the risks outweigh the benefits, they can always opt out of such business dealings. In addition to this, the importers will be empowered to take actions to safeguard their workers and consumers from the adverse effects of asbestos.
Conclusion
This paper set out to outline three case studies that showcase ethical issues that may be faced. Applications of various theories has been seen to assist in coming up with solutions to each of the independent cases. From the discussions presented, it can authoritatively be stated that the business environment is faced with multiple ethical issues and a graceful resolution of the issues is imperative for the business interests as well as the interest of the society at large.
References
Chryssides, D G & Kaler, H J 1993, An Introduction to Business Ethics, Cengage Learning EMEA.
Frederick, R 2002, A Companion to Business Ethics, Wiley-Blackwell.
Sims R R, 2002, Teaching Business Ethics for Effective Learning, Greenwood Publishing Group.
Weiss, W J 2008, Business Ethics: A Stakeholder and Issues Management Approach, Cengage Learning.