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OptiMotors Company’s Business Ethics Case Study


Introduction

Business ethics is a very important issue which all enterprises, organisations, and companies need to adhere to in order to be able to enhance their performances. Ethics does not only involve the internal customers who are the workers of an organisation but also extends to cover buyers or customers who purchase goods and services manufactured by the firm (Rutherford et al. 2012, 335).

However, competition in business has forced business entities to try and adopt unethical means of attracting and winning business from customers.

While wooing customers through the provision and granting of favours is acceptable, businesses occasionally outdo it by employing ethically unacceptable methods so as to appease buyers. This paper particularly addresses the aspect of client entertainment, seeking to analyse the limits beyond which business entities need not exceed in entertaining their clients.

Seeing the Ethical Perspective

Although business ethics is considered to be universal, the aspect remains to be highly subjective, basing on the surrounding circumstances, the timing, as well as the cultural practices being observed (Albert and Franks 2012, 224). These issues would determine whether a manager would regard practice as unethical or falling within the acceptable standards.

When companies seek to entertain their customers or potential customers for purposes of winning business opportunities, their managers must first of all be in a position of noticing whether or not whatever the entertainment being planned meets the ethical thresholds or not.

In the case of OptiMotors, the CEO of the company sees and realises that it is ethically impractical for potential clients of the company to be entertained at the Red Ruby Club, a strippers club, in the name of an evening out (Lampe and Crystal 2012, 99).

Even though Galen, the sales representative head at the company, insists on the visiting delegation from Kinan Motors being hosted at the strippers club, Bob notices that something is amiss in the whole set-up and plan but feels tied to the aftermath, which is the winning of a lucrative business deal with handsome rewards.

It is evident, from Bob’s reactions that his individual position considers strippers club’s patronage to be ethically incorrect and distasteful.

Although the sales representative head, Galen, who is the one pursuing on plans to have Kinan Motors sign a business deal with OptiMotors insists that there is nothing wrong to have the delegation hosted at the Red Ruby Club, the CEO sticks to his ground to ascertain that the whole plan does not receive the ethical clean bill of health, at least from him as an individual.

He cites the activities that take place at the entertainment spot as being morally wrong but Galen responds by pointing out that his old school age is probably to blame for such an observation (Cuilla 2011, 335).

The manager sees how morally impractical it is to expect potential clients with the standards of Kinan Motors to be hosted at a strippers club but has no, organisational cultural, basis to dismiss such plans. He is not assertive in asking Galen to back-off from plans to host the delegation at Red Ruby Club.

The lack of an organisational culture on morality particularly plays a significant role in explaining why Bob sees the danger but treats it casually. He trusts the sales manager as a good performer who should be given the freedom to perform without any interference.

Thus, although the CEO seems to insist on Galen seeking an alternative entertainment spot, he is also quick to note that choice and decision squarely lies with him. In other words, although OptiMotors would wish to appear before its clientele as being ethically responsible in its business activities, the prevailing circumstances matter in the choice of action to be taken by OptiMotors.

In this instance, the supposed benefit that will be realised by OptiMotors as a result of closing the Kinan deal makes the management overlook the resultant ethical repercussions that could occur. The company feels that for as long as it achieves its business objectives, there is little worry in trying to ensure that the ethics are adhered to and observed (Rutherford et al. 2012, 335).

Talking about Ethics

Talking about ethical practices for managers is closely associated with seeing. In other words, it is only after seeing unethical practices that managers can discuss the same with a view of addressing such malpractices. For ethics to be strictly adhered to within an organisation, managers need to be the kind who see and also talk about what they see (Trevino and Catherine 2010, 33).

This would be implying moral discernment and understanding on the part of the managers. OptiMotors, however, is a perfect example of an organization that does not put into action the “talking” or “discussion” bit while dealing with ethical issues of concern.

The company’s senior manager notices how unethical it would be for the company if Galen, who is the sales manager, would be allowed to continue with plans to host the delegation from Kinan Motors at a strippers club.

Although the CEO expresses dissatisfaction of the plans through his actions, the discussion he holds with his subordinate is casual. Bob is not strict in his objection of the plans and instead gives Galen room to decide on which way is perfect. He recognises the fact that Galen is a top performer who needs ample time to decide on what is right for him for as long as the company will be able to close the deal in a satisfactory manner.

Bob’s actions towards Galen’s plans are strongly informed by the fact that his subordinate would have easily seen him as being a poor performer when it came to business knowledge and ideas.

Although hosting potential business clients in an entertainment spot considered morally wrong could have resulted in OptiMotors losing out on the deal altogether, the CEO appears to be less concerned about the repercussions and instead, he is only concerned with his task of bidding for the clients. There is little indication that the CEO had the obligation of making judgements that concerned the company (Cragg 2012, 16).

Had Bob been a manager who recognises the importance of holding discussions as concerns ethical issues, he would have harboured a strong principle on the impact of communicating, especially to his workers, in a direct and overt manner. In this context, Bob would have given Galen chance to express his position and understanding as concerns his decision to host the delegation at a strippers club.

This would then have given Bob a clear and informed opportunity to discuss the issue and explain to him why the company would not condone such plans in the first place. In other words, communication would have allowed both Bob and Gallen to discuss their moral standings and review the implications to the company (Trevino and Catherine 2010, 45).

OptiMotors does not create such an environment where subordinates and their respective supervisors can exhaustively discuss ethical practices. Though Galen is the head of the sales department, employees in his department raise their serious ethical concerns with the CEO instead of facing him over the same.

April Hartley, an employee at the company serving in the sales department points it out to tell Bob that her reason for resigning from the company is as a result of unethical practices, which her supervisor, Galen, feels comfortable ordering subordinates in the department to practice. April also informs Bob that another employee from the department, Joan, was on her way out because of the same reasons.

This indicates that although the subordinates discuss these issues amongst themselves, they feel helpless because they have no channel of involving their superiors in the discussions (Grace and Cohen 2010, 86).

To the workers, the fact that it is their own managers pushing them to indulge in unethical practices, in the name of making business, makes them resigned to believing that OptiMotors has little, if any, concerns for ethics and morality. The company, instead, appears to place more emphasis on money and business irrespective of the moral circumstances.

Even after April hints to Bob of the impending resignation from Joan, the CEO does not take the initiative to discuss it out with Galen. Both Joan and April are experienced top performing sales representatives whose resignation should have served as a wakeup call for the management to act on the escalating immorality at the firm.

However, the concern for business takes centre stage in the company’s operations, and the CEO, although is disheartened at the resignations, seems to be contented that the company is performing well in the business front. Bob promises the workers that he is willing to discuss their concerns only after they raise it up with him.

He is not unaware of what transpires in the company but wishes that workers need to be less pushy and tolerate the practices for as long as the company remains profitable.

This continued action by the management, unfortunately, has created the impression to the workers that the company and its entire management have little considerations for ethics (Trevino and Catherine 2010, 39). The diagram below showcases the ethical decision making process in an organisation.

The ethical decision making process in an organisation

Source: Managing Business

A talking manager can hardly condone the culture of leniency on committing mistakes at will (Cuillla 2011, 340). Had Bob spoken out in the strongest words possible against Galen’s plans, it would have enhanced accountability amongst the staff at the firm. Workers are likely to be strict in their operations if they see managers speak with firmness against immoral practices.

Had this been the case, Bob as the CEO of the company, would have instead initiated imaginative solutions on how to treat the delegation from Kinan Motors other than allowing them to be hosted at the Red Ruby Club.

When the CEO appears to discourage Galen from pursuing his Red Ruby plan, the latter is quick to point out that even when Bob goes out to play golf so as to find clients, it is not because he is immoral but because clients have to be looked out for in all means possible (Sen 2009, 46).

Bob does not emerge to set the record straight as concerns the two scenarios but rather keeps quiet in the hope that his silence will interfere less with Galen’s plans of finding a lucrative deal for the company.

Acting against Unethical Practices

Although holding discussions about ethical concerns is part of acting for managers, there is more action needed from managers to ensure that the ethical issues are fully addressed. Before action can be pursued, the unethical practices must be clearly revealed, and alternative solutions sought to address the situation.

Organizational cultures and practices form part of the action plan which managers must pursue to address immorality and unethical practices in the organization. It is evident that OptiMotors lacks any internal structures that can effectively address the concept of ethics within its ranks.

Bob, although can determine that Galen’s intended action is ethically wrong, he lacks the structural support to reign in the dissenting officer. Even after the two employees resign citing ethical reasons, Bob is in agreement with their concerns, but the lack of existing structural support leaves him without any resolve to act on the matter (Spencer 1998, 210).

Ethical action, however, takes place in a process where one activity leads to the other (Cuillla 2011, 336). It is this reasoning that explains why it becomes difficult for Bob to out rightly act on Galen’s action plan concerning the evening out of potential OptiMotors’ clients at a strippers club.

Equally, the manager fails to move in with speed and put on check a situation where highly performing employees are resigning because of being compelled to act in a manner that is ethically unacceptable.

The company can wholesomely be regarded as consequentialist in its actions, planning, and reasoning through its insistence that serving customers is the main concern, whether or not the way followed to attain this objective meets the ethical threshold.

Review of the Ethical Concept

In seeking to operate in an ethically satisfactory manner that is acceptable to both customers and employees as well, organisations and their management must review all ethical issues arising and seek to address them once and for all.

Ethical review enables the organisation to entrench a culture which, apart from seeking to pursue moral uprightness in actions, also seeks to eliminate completely unethical practices and behaviour (Sandel 2009, 23). When reviews on how the company deals with ethics are not conducted on a regular basis, it leaves the company exposed and, thus, putting it in a very tight situation.

It is the lack of ethical reviews that leave Bob unsure of what to do when reality finally downs on him that his company is facing a crisis on ethics. Key employees are leaving OptiMotors, but the CEO feels by interrupting he will affect Galen’s productivity, which would in turn translate to losses in the firm (Cragg 2012, 9).

Conclusion

Ethics is a key ingredient in the performance of any organisation or company. Clients often analyse the ethical stature of a company before deciding on whether or not to do business with a firm. However, it is important that as companies compete to win the trust of customers, they do not over indulge and in the process end up acting immorally.

OptiMotors perform particularly well because the company has put its ultimate goal as that of winning customers at whatever cost. Thus, the sales department which has the responsibility of winning clients indulges in immoral acts in the name of entertaining its clients, both potential and existing ones.

Although the CEO notices this, he fails to talk about it, and his inaction leads to key employees resigning their positions citing unethical practice.

Reference List

Albert, Spalding Jr. & Franks Rita. 2012. “Business ethics as an accreditation requirement: a knowledge mapping approach.” Global Conference on Business & Finance Proceedings 7, no. 2: 224-236.

Cragg, Wesley. 2012. “Ethics, enlightened self-interest, and the corporate responsibility to respect human rights: A critical look at the justificatory foundations of the UN framework.” Business Ethics Quarterly 22, no. 1: 9-36

Cuillla, Joanne. 2011. “Is business ethics getting better? A historical perspective.” Business Ethics Quarterly 21, no. 2: 335-343.

Grace, Damien, and Cohen Stephen. 1999. Business ethics, 4th ed. Melbourne: Oxford University Press.

Lampe, Marc, and Crystal Engleman-Lampe. 2012. “Mindfulness-based business ethics education.” Academy of Educational Leadership Journal 16, no. 3: 99-111

Rutherford, Matthew, Parks Laura, Cavazos David, and White Charles. 2012. “Business ethics as a required course: Investigating the factors impacting the decision to require ethics in the undergraduate business core curriculum.” Academy of Management Learning & Education 11, no. 2: 174-186.

Sandel, Michael. 2009. Justice: What’s the right thing to do? New York: Farrar, Strauss and Giroux.

Sen, Amartya Kumar. 2009. The idea of justice. Cambridge: The Belknap Press.

Spencer, Pickett. 1998. “Diary of a control freak: The manager’s guide to internal control.” Managerial Auditing Journal 13, no. 4: 210-232.

Trevino, Linda, and Katherine Nelson. 2010. Managing business ethics. Danvers, MA: John Wiley & Sons.

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IvyPanda. 2019. "OptiMotors Company's Business Ethics." October 4, 2019. https://ivypanda.com/essays/optimotors-companys-business-ethics/.

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IvyPanda. (2019) 'OptiMotors Company's Business Ethics'. 4 October.

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