Sources of the Factors that Created the Ethical Dilemma
Competitive Pressure
The satellite imaging industry is competitive. Since the business is capital intensive, existing satellite imaging companies have to compete for the few clients available. International Satellite Images (ISI) believes that it will lose business to its competitors if it reports a non-aggressive launch date.
The competitive pressure to approve a false launch date highlights competition as a source of the company’s ethical dilemma (Wheelen and Hunger 1).
Business Integrity
A company’s business integrity is an important part of its overall sustainability. Indeed, companies that have a poor business reputation lose business to those that have a good business reputation and businesses that have a good business reputation steal business from companies that have a poor reputation.
From its decision to report a false launch date, ISI’s business integrity risks negative publicity. If the company reports the false launch date, its business reputation spoils because HTC would realize that the launch date is false.
However, if the company reports the true launch date, it would build its business integrity (eventually) because the company would receive a positive perception. Jim knew that ISI’s business integrity dents if he reported the false launch date. This way, they would lose the Japan business deal. From this understanding, ISI’s business integrity was a source of the ethical dilemma (Wheelen and Hunger 1).
Financial Gains
Financing a satellite program is expensive. It was therefore imperative for ISI to secure the Japan business deal because HTC would finance its satellite program. If it failed to secure this deal, the company would be unable to launch its satellite program because it would lose business to its competitors. This outcome would have serious financial implications on the company because it would lead to the loss of millions of dollars.
ISI’s decision to report a false launch date would however secure the Japan deal (with HTC) and eventually, it would have saved itself from the severe financial implications of losing business to its competitors. The financial gains (and possible loss) that would have arisen from the ethical dilemma therefore stand out as a cause of ISI’s ethical dilemma (Wheelen and Hunger 1).
What ISI should do
The consequences of ISI’s decision to report a false launch date (or not) bears significant financial and reputational implications on the company. However, the company should report the true launch date, as opposed to the false launch date.
This is the right ethical decision. In the short-term, this decision may contradict the company’s short-term goals (which is to “look good” to the clients and outshine their competitors) but in the long-term, this decision would be beneficial for the company since ISI would be perceived to be ethical. This perception would also build the business’s integrity.
Eventually, as other companies continue to report false launch dates, ISI becomes the exception. Therefore, in the long-term, the business would benefit from observing ethical practices and reporting a correct launch-date.
Role of a Code of Ethics in Resolving the Dilemma
A code of ethics would have resolved ISI’s dilemma. Ethical dilemmas (such as ISI’s) outline the reasons businesses have a code of ethics. Therefore, through the entrenchment of business code of ethics, employees can know how to solve ethical problems (such as ISI’s). If ISI had a stable code of ethics, it would better handle ethical dilemmas throughout all business operations (not only the marketing department).
Therefore, not only would Jim know how to manage ISI’s ethical dilemma, all employees would know what decisions to make when they face similar ethical dilemmas. Therefore, through the establishment of the ethical code of conduct, employees’ ethical expectations are determined and ISI receives protection from the actions of rogue employees (such as the company’s president who supports the quest for unethical business practices).
Comprehensively, when the code of ethics is entrenched as part of ISI’s business culture, the company would have a seamless process for managing ethical dilemmas.
What should be in the Code of Ethics?
Different businesses have different codes of ethics. However, there are some standard components businesses use to develop their codes of ethics. In ISI’s case, the company’s code of ethics should contain the business’s policies, controls and processes.
The policies should contain the steps to take when there is a possible conflict of interest between the business and employees and how the company protects whistleblowers if they reveal an unethical practice in the organization.
This provision is important for ISI’s ethical dilemma because there is a possible conflict of interest between the president’s short-term goals and the company’s long-term goals (sustainability) (Wheelen and Hunger 2).
The code of ethics should outline the procedures to take in such a case. Similarly, Jim has the option of “blowing the whistle” on the management for endorsing an unethical business practice and he needs protection against such an action. Therefore, the code of ethics should outline protectionist structures to safeguard his security. Best practices in ethical conduct should inform these policies, controls, and processes.
What happens if ISI had a Code of Ethics, which prohibits the exposure of proprietary information to anyone outside the company?
If ISI had a code of ethics, which prevented the disclosure of information to anyone outside the company, Jim’s would have no avenue to express his concerns about unethical conduct in the organization. Under such circumstances, Jim should opt to resign from the company.
If he stays in the company and supports the unethical conduct, his personal reputation would be dented (alongside the company’s) (Wheelen and Hunger 3). Therefore, in future, Jim would have little defense against his actions (say, if he were to seek employment with another company).
The best option for his defense would therefore be to resign from the company and avoid the repercussions of supporting an unethical business practice. By pursuing this strategy, Jim may get alternative employment elsewhere and avoid the future repercussions of endorsing unethical practices.
Utilitarian Approach
The utilitarian approach bases its ideologies on “consequentialism”. This approach proposes the view that the right course of action (ethical approach) provides maximum happiness.
Full Disclosure vs. Withholding
According to the utilitarian approach, full disclosure is better than withholding information. This assumption relates to the ISI ethical dilemma because Jim has the option of reporting the correct launch date (full disclosure) or reporting the false launch date (withholding) (Wheelen and Hunger 3).
The latter approach does not signify the best outcome (according to the utilitarian approach) because once HTC realizes that ISI reported a wrong launch date, it may cancel its contract with the company and take its business elsewhere.
This outcome does not provide maximum happiness. According to the utilitarian approach, full disclosure would provide the maximum outcome because ISI would benefit from improved business integrity and profitability in the end.
Individual Rights Approach
Most ethical debates use the “individual rights approach” for evaluation but utilitarianism proposes a “communal approach” to analyze ethical dilemmas.
Therefore, the utilitarian approach conflicts with the individual rights approach because it analyzes the “general good” of an ethical dilemma as opposed to an “individual’s good”. Therefore, in ISI’s case, the organization’s wellbeing would be more important than the wishes of the company’s president (or Jim).
Justice Approach
The justice approach bases its principles on the need to uphold fairness. Therefore, the main argument advanced in the justice approach is if the ethical decision is fair or not. The utilitarian approach however emphasizes the benefits of the ethical decision and in this regard, it conflicts with the justice approach.
Indeed, fair decisions may sometimes not maximize the general happiness (or outcome) of an ethical dilemma. In this regard, the utilitarian approach contradicts the justice approach by supporting a decision that maximizes the organization’s wellbeing, as opposed to evaluating if the decision is just, or not.
Kant’s Categorical Imperatives
Kant’s categorical imperatives emphasize the need to base ethical decisions on categorical imperatives as opposed to hypothetical circumstances. For instance, the utilitarian approach supports the view that reporting a false launch date for ISI would not maximize the overall good of the organization (and everyone involved) but Kant’s approach shows that this decision is reliant on subjective factors (Wheelen and Hunger 1).
According to Kant’s approach, this decision is wrong. The utilitarian approach therefore supports the maximization of positive outcomes for the organization (and all stakeholders) as opposed to the maximization of positive outcomes for a few individuals (as Kant’s approach proposes).
Works Cited
Wheelen, Thomas, and D. Hunger. Strategic Management and Business Policy: Toward Global Sustainability (13th Edition), New York: Prentice Hall, 2011. Print.