Assessing the Ethical Issues - Coursework Example

ASSESSING THE ETHICAL ISSUES Name of Student Name of Institution Name of Professor Date of Submission Executive Summary This paper analyzed three ethical dilemmas of the company and established that the company in Hasson (2007) ‘Why didn’t we know? and its employees faces the ethical problem of loyalty, influence of rewards and bonuses, organizational culture and notion of fairness. It analyzed these dilemmas based on consequentialist and non-consequentialist perspectives with emphasis laid on utilitarian, Kantianism, libertarian, deontological and virtue ethics as theories of ethics. It also analyzed which combinations best explains the company’s predicament and best solution. It established that a combination of virtue ethics and deontological perspectives will create an organizational learning culture which will form a solid foundation for communication and relations between employees and the company with the outside world. Assessing the ethical issues Introduction Every organization is set up to meet a set of objectives and goals which will ensure their survival. While for-profit organizations are primarily setup to maximize and sustain profits, not-profit organizations are usually setup to achieve a certain political or social objective. However, without proper relations within the organization and with the outside environment, the formation of these organizations would be futile. The stakes are even higher for businesses whose sole reason for formation is profit maximization; the shareholders including the founders, employees and the management must have a set of rules that guide how they relate within the business and with the general public (Hoffman & Driscoll, 1999). These rules are meant to set a boundary between would be viewed as good or bad. That is, building a distinction wall that will enable and ensure that the liberties, rights and freedoms of all stakeholders of the business or organization are not only guaranteed by also protected legally. Therefore, it is imperative that all employees of the organization including the owners, management and shareholders behave within the confines of these laid down standards to ensure that professionalism permeates the organization and its activities (Hoffman & Driscoll, 1999). This will also ensure that the much needed integrity and confidentiality reign within the organization. This code of ethics must also be adhered to even by the precandidates for any position within the organization. They also spell out the corrective measures and punishment that can be meted out in case they are breached. Most importantly, they must be within the confines of the supreme constitution of the country Johnson, 2012). This report will analyze the predicament of Galvatrens as presented in the article “Why Didn’t We Know?” authored by Ralph Hasson (2007) with the view of analyzing the company’s ethical problems and dilemmas. This will be done based on comparison and contrasting of four ethical perspectives: Utilitarianism, Libertarian, Virtue Ethics and Deontology. This will be aimed at identifying which ethical perspectives best captures the business’ ethical dilemmas. The main issues identified in Hasson (2007) The Business problem In order to identify the ethical dilemmas of Galvatrens as presented in Hasson (2007), it is imperative that the contentious issue(s) are first identified and then the ethical perspective given. This is because it is these contentious issues that lead to ethical problems. That is, there is not clear cut disconnect between a business problem and ethical dilemma; one leads to the other. The company is faced with the problem of lack of organizational learning which has hindered effective information and knowledge creation and sharing across all management levels, throughout the organization and with the external environment (Marquardt, 2011). This has led to a potential unfair termination of contract suit, mistrust amongst management and employees especially whistleblowers and possibly, the resignation of some key members of staff. Ethical Dilemmas The three ethical dilemmas identified are: 1. Notion of fairness 2. Loyalty 3. Achievability and competition or the overjustification effect Generally, the ethical dilemmas that arise within the corporate world are as a result of increased competition not only within the marketplace but also within the internal business environment. Employees are constantly jostling for recognition, power and increased wages. The management is constantly under pressure to deliver according to the industry standards, meet the complex customer demands and ensure that the company stays afloat in the ever turbulent waters on the globalized economic environment. When such heat is passed on to the employees, it generates a great deal of internal competition with each other and with time. Moreover, the society in general has become very sensitive when it comes to issues governing respect for human dignity and freedoms and liberties which are guaranteed and protected by the constitution (Weston, 2013). In all these conundrum of pressure, drawing the line between what is fair or not; what is moral accepted or not may become a significant challenge. When such moral thinking is applied within the workplace, the question of ethical conduct and behavior within the workplace therefore arises. The ethical issues are also tempting for they open windows of opportunities for the individual involved to deceive the participant(s) or even manipulate them to do their whim. Teleopathy or tunnel vision or goal sickness is a common phenomenon in offices today where workers and management are obsessed with goals. Rewards and bonuses has a corrupting influence as the employees will go a great length to justify their positions and earn more rewards and bonuses. Management sets goals as per the market conditions. The onus is on the employee to exhaust all possible ways to meet them. This over justification effect, apparently pushed Greg Wilson, a divisional sales manager at Galvatrens to enter into stuff-channeling scheme with a few of his bigger customers. It will “meet quarterly sales targets and trigger bonuses” (Hasson, 2007). Mike Fields, the whistleblower who has launched a wrongful dismissal case against the company inherits the ethical dilemma of responsibility. Is it his responsibility to report such a case? Moreover, was it morally acceptable for Terry Samples, senior vice president of sales, to demote Mike immediately after he reported the case? Was Mike’s demotion and transfer on the grounds of poor fair considering that he had just reported a case of misconduct by a fellow employee and also considering his current personal predicaments? His dismissal was procedural: the administration reserves the right to dismiss an employee if it deems he/she has failed to perform or meet the set targets. However, job satisfaction and therefore productivity goes beyond reporting work. It is determined by a complex web of interpersonal and office related factors which make Mike’s dismissal potentially unfair. Cultures are about interactions and relationships based on a set of behaviors, values and attitudes. These behaviors occur in a given environment and for businesses, it is a competitive corporate environment full of pitfalls and tempests. Equally, there are beacons of hope and opportunities which if utilized effectively can lead to progression and survival. However, it is the ability of any organization to cut a niche for itself culturally by having the right mix of values, attitudes and behaviors in response to their environment that will ensure that they identify the opportunities, identify and avoid the pitfalls and finally attain financial success necessary for survival. Therefore, various organizations have various cultures but only those with brave and unique cultures can survive. While values and attitudes are unique to individuals and organizations by extension, the behaviors and relationships which they form in a unique environment are also unique (Janicijevic, 2012). The company has introduced a new organizational culture: open door policy and information sharing. However, it has not been fully implemented and widely accepted throughout the organization. Some conservative managers, directors and senior management such as Chip have rejected the policy delaying its implementation by casting doubts on the training of employees on ethics. An open door policy allows for the management including directors to handle issues pertaining to the operations of the company such as misconduct (Hoffman & Driscoll, 1999). But whose responsibility was it to handle the matter? Was Harry right to pass over the issue to Harry? Is his delays and absence justified? Comparing and Contrasting different ethical perspectives Ethical theories provide a mirror through individuals can view their actions and justify them. They are the moral barometer that distinguishes between what is considered as morally right or wrong and therefore, highlight the ethical dilemmas that the company and its staffs are faced with. Broadly divided into consequentialism and non- consequentialism, these normative theories on ethical behavior view actions and results through different lenses. To a consequentialist, an action is moral right or wrong based on the accompanying result or its consequences. Conversely, a non-consequentialist will judge actions itself and not its consequences. That is, actions are judged exclusive of the results (Shaw, 2010). Libertarianism lays emphasis on the morality based on duties and obligations. It has a deontological view of scenarios. That is, it lays emphasis on the duty of individuals to respect the individual freedoms and liberties while pursuing the consequences of actions. Mike’s predicament can be viewed as consequences of the libertarian actions of his superiors: Terry and Harry by extension. It is a manifestation of the conflict between the actions of autonomous agents who have full self-ownership enforcing their rights to an indeterminate extent. It is this indeterminacy that loss of immunity to and violation of individual agent’s rights (Barnett, 2004). However, libertarians believe that such full self-ownership; the ability and right of individual agents to control their person allow them to be transferrable. An individual agent such as an employee can sell their autonomy out of their own free will. But as some libertarians have argued, such actions are usually bound to cause conflict. The individual autonomy, the core of libertarianism, is greatly undermined (Barnett, 1998; 2004). On the other hand, utilitarianism is based on judging actions as morally good based on the consequences it will have on the greater majority. That is, rather than maximize individual benefits in order to be considered morally good, actions of utilitarian is only morally good if it maximizes benefits for the greatest number (Bentham, 2009). Benefits are defined as happiness minus pain. Individual rights may not count if they hinder the ability to maximize good for the majority (Quinton, 2007). Full self-ownership therefore becomes almost impossible while the rights and benefits are not transferable. Promotion of one’s own happiness and welfare; individual benefits ceases (Rosen, 2003). Maximizing good for a great majority may lead to patronization of individuals and offering of simplistic explanations and limited information or ideas. Such a philosophy is commonly used in governance and is described as Government House utilitarianism where the citizens are given limited knowledge and information as to the extent of their rights and liberties (Kymlicka, 2001). In this case, this scenario can be seen playing out in some cases. The employees and therefore, the potential whistleblowers have not be trained on ethics and reporting of ethical misconduct. Therefore, the likes of Mike end up losing their jobs without a fair hearing after just blowing the whistle on Greg. Therefore, utilitarianism is intrinsic consequentialism which advocates for the end justifying the means. Unlike libertarianism, it is based on logics and measurable parameters (Bredeson, 2011). As a non-consequentialist ethical perspective, deontology judges the morality of choices and actions based on norms defined as duties and obligations. As a normative ethical theory, deontology therefore defines an actions as morally permitted, required or forbidden (Alexander, 2000). The results of actions, no matter how well they maximize benefits, is judged based on what the individual ought to do. That is, the obligation and duties of the individual is conforming to set norms. It is exclusive of individual rights and liberties nor maximization of benefits for the common good. Deontologists are norm keepers and therefore elevates right over good. These norms may be based on obligations of the agent or permission given to the agent (Moore, 2008; Schaffer, 2012). Therefore, Mike has the agent-relative obligation to report misconduct; it is morally right and the result will be morally good too. Similarly, it is the norm that underperforming employees are fired, demoted or transferred. Therefore, even though it infringes upon the rights of Mike or diminishes the common good for the company, Terry acts by enforcing his duties as permitted by the organizational laws. Utilitarianism Deontology Libertarianism Virtue Ethics Fairness Utilitarianism calls for sacrificing individual rights and liberties for the common good of all. This kills the notion of fairness as fairness calls for consideration of individual rights and benefits. Majority rights undermine rights and benefits of individuals. It is the duty and obligation of the employees to report misconduct (Moore, 2008) The management also has a duty to maintain organizational performance. It is within their duties to demote, transfer or fire non-performing staff. It will be fair to the organization. However, such duties must be performed fairly: in consideration of the welfare and predicaments of Mike Employees of the company are free to increase their chances of getting rewards and bonuses But such freedoms does not include engaging in illegal activities such as corruption It will cause injustice and unfairness to others competing for the same or those incapacitated by circumstances such as Mike Virtues create a culture based on considering the rights and liberties of both individual and company. Virtues call for fair hearing and following of due procedure in hiring, demoting, firing or transferring employees. Virtue is acting justly and fairly in relating to the external and internal business environment. Loyalty Loyalty calls for acting in the best interest of the company. The whistleblowing is an act of loyalty to the company by Mike. Loyalty duties and obligations. Mike has obligations and duties to the company as well as family leading Terry’s loyalty is with the company and his duty and obligation is ensure the company performs even if it means firing Mike. Libertarianism and loyalty conflicts: individual freedom affects their loyalty Being loyal to the company sometimes calls for forgoing individual benefits Therefore, loyalty becomes a cost to the individual and a benefit to the company (Barnett, 2004) Loyalty is a virtue but in this case it becomes a cost to Mike but a benefit to the company Terry has a virtue: loyalty and therefore can fire underperforming workers (Mike) Mike is also loyal and reports misconduct but he is fired because he is ‘underperforming’. Overjustification effect Overjustification and corruption of the quest for rewards and bonuses conflict with common good for the majority. Greg engaged in the scheme because he wanted rewards and bonuses but ended up bringing the image of the company into disrepute. Obsession with duty and obligations and too much goal orientation negates the expected outcomes and goals of the duties and goals. Greg is obsessed with his duties as a sales manager while Terry is obsessed with his duty as vice president for sales. This has led to conflict and ethical dilemma Overjustification effect conflicts with individual rights and liberties Over-exertion to accomplish duties and goals by Terry leads to the firing of Mike Mike’s individual rights are therefore infringed upon (Barnett, 2004) Overjustification corrupts individual virtues Greg’s virtues are negated by his quest to gain rewards Terry’s virtues are negated by his quest to ensure improved performance for the organization And Mike becomes a victim of the two. Table 2: Showing combination of the ethical perspectives Deontology Libertarianism Virtue Ethics Utilitarianism Deontology and utilitarianism focus on the costs and benefits to the organization. However, whereas utilitarianism uses facts to justify actions that benefits the greater majority, deontology is based on the unpredictable individual duties and obligations to the organization which generate benefits for the greater (Moore, 2008; Bredeson, 2011) A combination of libertarianism and utilitarianism aims at striking a balance between benefits for individuals and the greater majority. Therefore, a libertarian actions can only be morally right if both the company and the individuals benefits. Individual sacrifices can therefore only be morally justifiable if the individuals are also bound to gain (Barnett, 2004) Utilitarian view such individual rights and liberties as only important and morally right if the company is bound to benefit. Combining virtues and utilitarianism will either erode the virtue ethics or consequences for the common of all Virtues or a common good for all therefore becomes the opportunity cost. Deontology While duty calls for loyalty and carrying out the dictates of Harry’s and Terry’s office to fire Mike, they negate the individual liberties of Mike. Upholding Mike’s individual rights and liberties will also negate the duties of the two even though Mike make is carrying out his loyal duty of whistleblowing (Shaw and Barry, 1995; (Barnett, 2004) While duties and obligations can form a good platform for forming deep lying virtues, they must view the issue at hand from a common perspective otherwise they are bound to conflict Virtues will form the bedrock upon which duties and obligations are carried out ethically Libertarianism Virtues form a foundation upon which individual rights and liberties can be pursued (Scriven 1997, 18). Virtues are therefore capable of forming a culture. The combinations shown in the table give possible explanation and solution path for tackling the ethical dilemma the company faces. There is a general lack of communication across management levels and with employees. Moreover, the communication channel between the company and its external environment is not very effective. By and large, every individual and players in the external environment especially the customers have adopted a libertarian and sometimes utilitarian approach in their relations. The customers did not feel obliged to report the stuff-channeling scheme to the management of the organization. Seemingly, the deal also favored them despite its otherwise lack of ethics. To them, the end justifies: they have to maximize profits the means notwithstanding. Harry considered the matter but referred it to Terry Samples; a deontological consideration. It was Terry’s duty to handle the matter. However, Mike was a loyal employee who considered it his duty to report the scheme; something that every employee did not consider reporting. Deontological theory posits that an individual’s decision in the face of dilemma is based on his or her obligations and duties or law wherever applicable. Sticking to one’s obligation, duty or law in such a case would be considered ethically correct (Penslar, 1995). Utilitarianism ethical theory, which argues that the end of an action justifies the means used to achieve the end can also be used to explain the decision making process in this case. It best explains the decision making process and reasoning of Terry, Harry and Greg. They believe that profit maximization and completion of task is important while the means used to achieve such and the welfare of the employees is not entirely important. Individual rights and liberties ceases while pleasure for the company is maximized. Mike was driven by the virtue of honesty. Therefore, as a loyal employee of the company he reported a perceived misconduct by a fellow employee. However, Harry’s actions are devoid of responsibility virtue. Instead of handling the matter, he referred to Terry. Virtue ethics demands that Terry recognize that Mike needed help; his personal life was interfering with his work performance. By firing, demoting or demoting Mike without a fair hearing, Terry showed a lack of moral character. He was driven by his duties, rules and obligation (deontological view) and also the consequences that Mike’s low productivity and his inability to act decisively will attract (Audi, 2009). However, the combination of deontological and virtue ethics provides a better approach towards tackling the ethical problem now and in the future. This is they combine both individual and organizational interests and creates an organizational culture based on virtues. Cultures are about interactions and relationships based on a set of behaviors, values and attitudes. These behaviors occur in a given environment and for businesses, it is a competitive corporate environment full of pitfalls and tempests. Equally, there are beacons of hope and opportunities which if utilized effectively can lead to progression and survival. However, it is the ability of any organization to cut a niche for itself culturally by having the right mix of values, attitudes and behaviors in response to their environment that will ensure that they identify the opportunities, identify and avoid the pitfalls and finally attain financial success and build a reputation and image necessary for survival. Therefore, various organizations have various cultures but only those with brave and unique cultures can survive. While values and attitudes are unique to individuals and organizations by extension, the behaviors and relationships which they form in a unique environment are also unique (Janicijevic, 2012; Lee & Yu, 2004). Moreover, cultures are easy to acquire and propagate. This combination will enable the company develop a culture of organizational learning where information and knowledge is freely created and shared within the organization and across all management levels and with the external environment. Whistleblowers like Mike will find it easier not only to report cases of misconduct but also be protected from possible witch hunting. They can report their personal problems that affect their productivity and therefore avoid being fired or demoted. References Alexander, L. (2000). “Deontology at the Threshold.” San Diego Law Review, 37(4): 893–912. Audi, R. (2009). “Moral Virtue and Reasons for Action”. Philosophical Issues 19: 1–20. Barnett, R. E. (1998). The Structure of Liberty: Justice and the Rule of Law. Oxford: Clarendon Press. Barnett, R. E. (2004). “The Moral Foundations of Modern Libertarianism.” In P. Berkowitz (ed.), Varieties of Conservatism in America. Stanford: Hoover Press. Bentham, J. (2009). An Introduction to the Principles of Morals and Legislation (Dover Philosophical Classics). New York: Dover Publications Inc. Bredeson, D. (2011). "Utilitarianism vs. Deontological Ethics". In Applied Business Ethics: A Skills-Based Approach. Boston, MA: Cengage Learning. Brown, M.T. (2000). Working ethics: Strategies for decision making and organizational responsibility. Oakland, CA: Regent Press. Hoffman, W.M. & Driscoll, D-M. (1999). Ethics matters: How to implement values-driven management. Waltham, MA: Bentley College Janicijevic, N. (2012). The impact of organizational culture on control of behavior in organizations. University of Belgrade, Faculty of Economics, ‘Economic Themes’, Year 50, no. 3, pp 289-308. Kymlicka, W. (2001). Contemporary Political Philosophy: An Introduction (2nd ed.). New York: Oxford University Press. Lee, SKJ & Yu, K. (2004). “Corporate culture and organizational performance.” Journal of Management Psychology, vol. 19, no. 4, pp 340-359. Marquardt, M. J. (2011). Building the learning organization: Achieving strategic advantage through a commitment to learning (3rd ed.). Boston, MA: Nicholas Brealey. Moore, M. (2008). “Patrolling the Borders of Consequentialist Justifications: The Scope of Agent-Relative Obligations.” Law and Philosophy 27(1): 35–96. Quinton, A. (2007). Utilitarian Ethics (2nd ed.). London: Duckworth. Schaffer, J. (2012). “Disconnection and Responsibility.” Legal Theory 18: 399–435. Rosen, F. (2003). Classical Utilitarianism from Hume to Mill. London: Routledge Penslar, R. L. (1995). Research Ethics: Cases and Materials. Bloomington: Indiana University Press. Read More

The main issues identified in Hasson (2007) The Business problem In order to identify the ethical dilemmas of Galvatrens as presented in Hasson (2007), it is imperative that the contentious issue(s) are first identified and then the ethical perspective given. This is because it is these contentious issues that lead to ethical problems. That is, there is not clear cut disconnect between a business problem and ethical dilemma; one leads to the other. The company is faced with the problem of lack of organizational learning which has hindered effective information and knowledge creation and sharing across all management levels, throughout the organization and with the external environment (Marquardt, 2011).

This has led to a potential unfair termination of contract suit, mistrust amongst management and employees especially whistleblowers and possibly, the resignation of some key members of staff. Ethical Dilemmas The three ethical dilemmas identified are: 1. Notion of fairness 2. Loyalty 3. Achievability and competition or the overjustification effect Generally, the ethical dilemmas that arise within the corporate world are as a result of increased competition not only within the marketplace but also within the internal business environment.

Employees are constantly jostling for recognition, power and increased wages. The management is constantly under pressure to deliver according to the industry standards, meet the complex customer demands and ensure that the company stays afloat in the ever turbulent waters on the globalized economic environment. When such heat is passed on to the employees, it generates a great deal of internal competition with each other and with time. Moreover, the society in general has become very sensitive when it comes to issues governing respect for human dignity and freedoms and liberties which are guaranteed and protected by the constitution (Weston, 2013).

In all these conundrum of pressure, drawing the line between what is fair or not; what is moral accepted or not may become a significant challenge. When such moral thinking is applied within the workplace, the question of ethical conduct and behavior within the workplace therefore arises. The ethical issues are also tempting for they open windows of opportunities for the individual involved to deceive the participant(s) or even manipulate them to do their whim. Teleopathy or tunnel vision or goal sickness is a common phenomenon in offices today where workers and management are obsessed with goals.

Rewards and bonuses has a corrupting influence as the employees will go a great length to justify their positions and earn more rewards and bonuses. Management sets goals as per the market conditions. The onus is on the employee to exhaust all possible ways to meet them. This over justification effect, apparently pushed Greg Wilson, a divisional sales manager at Galvatrens to enter into stuff-channeling scheme with a few of his bigger customers. It will “meet quarterly sales targets and trigger bonuses” (Hasson, 2007).

Mike Fields, the whistleblower who has launched a wrongful dismissal case against the company inherits the ethical dilemma of responsibility. Is it his responsibility to report such a case? Moreover, was it morally acceptable for Terry Samples, senior vice president of sales, to demote Mike immediately after he reported the case? Was Mike’s demotion and transfer on the grounds of poor fair considering that he had just reported a case of misconduct by a fellow employee and also considering his current personal predicaments?

His dismissal was procedural: the administration reserves the right to dismiss an employee if it deems he/she has failed to perform or meet the set targets. However, job satisfaction and therefore productivity goes beyond reporting work. It is determined by a complex web of interpersonal and office related factors which make Mike’s dismissal potentially unfair. Cultures are about interactions and relationships based on a set of behaviors, values and attitudes.

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