A Manager's Ethical Dilemma - Essay Example

A new commission component was added to the compensation of mechanics. The mechanics after the changes were paid a base salary and could earn more based on commission incentives. This new system instead of helping the company it brought lots of troubles because the workers at the firm began to act in an unethical manner. Ethics can be defined as a system of moral principles that leads to decisions between right and wrong (Dictionary, 2012). In 1992 the California Department of consumer affairs accused Sears of violating the state’s Auto Repair Act.

The agency threatened to take away the firm’s license to operate. Soon thereafter other states began to take similar stances against Sears. The managerial changes at Sears created an unhealthy working environment that negatively impacted the actions of the workers. The mechanics at Sears began to act unethically because they saw an opportunity to cheat the system and earn more money based on the incentive plan the company created. The mechanics at the auto centers had been systematically misleading customers and charging them for unnecessary repairs.

The investigation made by the California department of consumer affairs concluded that the reason that the irregularities and consumer abuse occurred was based on the new compensation system. The actions of Sears leave a lot to be desired from this business entity. Sears created an undesirable working environment that gave incentives to the workers to cut corners and lower the quality of the service to the customers. The mechanics at the firm were a bit corrupt and they decided that their personal well being was more important than satisfying the auto repair needs of the customers.

The mechanics would overcharge the customers in order to increase their overall level of compensation. Sears should have prevented this behavior by providing adequate training and development in ethical manners. The company could have also prevented the unethical actions by establishing penalties to the mechanics for customers that are not satisfied. An unethical mechanic would think twice about overcharging a customer if the person knows that doing so might result in an economic penalty. Sears could improve the ethical conduct of its employees by applying deontological ethics to its business operations.

Deontological ethics deals with obligation as deriving from reason or as residing primarily in certain specific rules of conduct rather than in the maximization of some good (Thefreedictionary, 2012). In order to implement the use of deontological ethics Sears must develop a new code of ethics for its employees. The code of ethics will establish what is acceptable behavior by the employees and what it unacceptable behavior. The code of ethics will also incorporate rules that the employees must follow in regards to their ethical conduct.

The changes made by the Sears following the revelation of the scandal were not adequate due to the fact that the firm included within its new pay structure an incentive component that could be exploited by an unethical employee. The firm claimed it eliminated incentive pay, but following the changes an employee of the firm made a complaint to a senator that the firm was still using incentive pay to its mechanics and that the policies were hurting his ability to provide quality service to the customers without overcharging them.

The eight steps of Trevino and Nelson decision making framework can help Sears revolve the problem. The firm