Situational Business Ethics - Essay Example

Table of Contents Introduction……………………………………………………………………… 3 Question 1…………………………………………………………………………4 Question 2………………………………………………………………………… 5 Question 3………………………………………………………………………….8 Question 4………………………………………………………………………….9 Conclusion…………………………………………………………………………11 References…………………………………………………………………………. 11 Introduction Ethical management is as ancient as the concept of trading and financial dealings. Even though most economic ventures choose not to communicate their code of ethics, employers hold on to their own ethical standards. A code of conduct is intended to sum up an organization’s principles and values, which should be highly respected and employed as a guide in all training programs, provided to all newly hired employees, and clarified thoroughly. It is indeed component of the corporate culture. It should turn into a priority in conducting business (Megone & Robinson 2002). The hospitality industry, such as hotels and restaurants, has to a certain extent a form of unwritten code of ethics, which inexplicably nestle in the heads of employers or managers. Hence, a code of conduct expressing a restaurant’s ethics is as significant as a successful marketing plan (Sims 2003). When a restaurant chain enlarges its operation globally, local talent should be employed and trained in relation to: honesty, responsibility, harmony, understanding, and quality. Moreover, equality of all employees in relation to human rights should be addressed justly, promptly and rightfully to the contentment of all involved (Rosenthal & Buchholz 2000). The objective of this paper is to analyze and discuss a case which presents ethical dilemmas for all stakeholders. The case is all about a waitress, Ruth Hatton, who was dismissed from her post because of stealing a guest-comment card. The subsequent reaction of the customer and the management to Hatton’s actions contributed to the ethical dilemmas that the company has to resolve through the peer-review process. In this case study ethical issues and possible problem or conflict resolutions will be discussed. Of course, there is a necessity to communicate ethical practices and an effective management is not possible if ethical conducts are not forcefully carried out. Serving others is a dignified line of work and can be exercised in a polite and honest fashion with sensible ethical imperatives to gain the advantages of growth, prosperity, and success. Question 1: Who are the various stakeholders in the case and what are their stakes and moral obligations? Discuss. The primary stakeholders in the study are Ruth Hatton, the customer, and Diane Canant, the supervisor. Ruth Hatton’s responsibility is to be well-informed with their Code of Business Ethics and Conduct and conform to all policies and procedures of the company. Claims of lack of knowledge, poor judgment, or good intentions will not be tolerated as reasons for failure to comply (Brown 1990). In other words, it is the responsibility of Ms. Hatton to maintain ethical standards. Moreover, it is her ethical responsibility to be honest and cooperate fully with the established set of confidentiality and proprietorship guidelines of the company (Daniel 1996). She should provide all associated facts and materials regarding alleged violation of the company’s ethical rules. She should guarantee that the information she provides is truthful, complete, accurate, and is not deceptive. On the other hand, it is reasonable for Ms. Hatton to expect such rights as right to due process, job security, right to privacy, freedom from harassment, and workplace safety. Alternatively, the management has the ethical responsibility to guarantee that every employee has regular performance assessments and ensure that employees are focused in the task they are performing and empowered to progress further within the company. Performance assessments help to recognise any insights employees have for the company, or domains of the business that they wish to participate in (Goodwin 2000). Facilitating an open communication medium should be the core of management’s ethical responsibility. Guaranteeing that employees are persuaded to raise concerns, ask questions, and discuss about how they feel about their work is essential (Heath 2002). This way will help the management avoid any ethical dilemmas accumulating over time since any employees will be attended to and resolved immediately. On the other hand, a customer has an ethical duty to check for service facilities, attitude and procedure of a company before purchasing its products and services. S/he can easily learn about a company’s ethical practices through the Internet. In case of a negative status, it is the ethical responsibility of the customers to discontinue the purchase from that company. The customers have an ethical responsibility to be careful in their attitude. They are the only individuals who can compel a company to adjust its practices, environmental and/or social (Piper 1993). If the customers are unified and campaign for an ethically just practice, nobody will be capable of violating the laws associated to environment or workers (Solomon 1999). Question 2: What are the ethical issues in this case from an employee’s point of view? From management’s point of view? From a consumer’s point of view? (Figure 1: acquired in http://images.google.com.ph/images?hl=tl&source=hp&q=diagram%20of%20business%20ethics&um=1&ie=UTF-8&sa=N&tab=wi) The above figure shows some of the most common ethical violations in organisations. All of these violations involve one thing: breach of trust. In the Hatton’s case, trust has been seriously violated. The firing of Ms. Hatton poses a serious ethical issue. In an employee’s point of view, unless the employee’s actions demand an immediate discharge from the workplace, gradually more forceful feedback to the work performance of an employee is in order (Velasquez 2005). The supervisor, Diane Canant, should have obtained feedback first from Ms. Hatton. It should be kept in mind that the objective of the feedback is to assist the employee in improving. If Ms. Canant sees that Ms. Hatton is reluctant or incapable of improving her performance, she could initiate a continuous disciplinary action. Documentation is very important so Ms. Canant should have a record of the procedures they performed in the process. Adhering to the procedures in continuous discipline must be in line with each employee that Ms. Canant fires unless an unusual incident takes place. Ms. Canant could also present to Ms. Hatton several alternatives, beginning with the performance improvement plan. She could have asked Ms. Hatton if she wants to quit voluntarily rather than become involved in disciplinary action. Ms. Canant can consent that, for whatever reason, Ms. Hatton is unable to do the job, give several weeks of severance pay, and then fire her. Then she can discuss the issue with a lawyer to understand all of her alternatives. In instances where Ms. Canant give any severance pay, for instance, she will want to ask the fired Ms. Hatton to sign a discharge that is dissimilar for employees under age forty and older than forty. On the other hand, Ms. Hatton should be aware of the company’s possession of confidential information and should make appropriate decisions to guarantee that such information is rigorously protected. Ms. Hatton shall safeguard the confidentiality of information handed over to them by the company, from whatever source, in her capability as an employee, except when disclosure is approved or legally authorised. This particular information comprises non-public information concerning the company classified as proprietary or confidential. Hence in the management’s point of view Ms. Hatton had committed a serious ethical violation since she has stolen the guest-comment card of a customer who was displeased with her service (Guy 1990). The guest-comment card is confidential information owned by the Red Lobster restaurant thus Ms. Hatton is stealing a company property. Confidential, sensitive and proprietary business information should be treated with understanding and good judgment and only be disclosed on a need-to-know basis (Guy 1990). No employee shall make use of confidential information for saving face or personal agenda, benefit or interest. Ms. Hatton’s claim that she has forgotten about the guest-comment card on her pocket and threw it away is in fact beyond the point of the actual ethical violation. The mere act of stealing the guest-comment card already states Ms. Hatton’s intention, and that is to escape reprimand from the management. Employees are forbidden to make use of confidential information outside the company except if it is carried out along with a contractual agreement consented by the company (Carroll & Bucholtz 2000). In the management’s point of view, Ms. Hatton misused inside confidential information. The management may impose a serious ethical violation to Ms. Hatton since the latter did not comply with the directive regarding the use of inside confidential information: Until the inside information has been openly disclosed by the company, Ms. Hatton should not use the information except those individuals in the company whose positions necessitate the use of the information. In the customer’s point of view, Ms. Hatton has obviously violated the ethical rule on privacy and confidential information. This relates to information about the company’s own affairs and other employees. Particular reports, documents, plans and processes of the company are proprietary and confidential, and must not be disclosed or give to anyone without appropriate authorisation (Goodwin 2000). While respecting the requirements for honest, open communications with customers, Red Lobster will not, except if mandated by law, publicly release information which could harm its own competitive advantage or disobey the individual private rights (Jackson 2004). Ms. Hatton should adhere to the Red Lobster’s policies concerning the retention and methodical destruction of information or records belonging to the company. In the customer’s point of view, customers are a very important component of the company’s success. Their confidence and trust should be protected and sustained. Caution should be taken not to give guarantees that Red Lobster cannot fulfil. Ms. Hatton should not have made misleading or false statements about Red Lobster’s prime rib; she should not have told the customer that prime rib is supposedly ‘fatty’. Lastly, the customer is entitled to truthful and detailed accounts of the terms and conditions of purchases and any assurances. Question 3: As a peer review panel member, how would you judge this case? Do you think Ms.Hatton stole company property? Do you think the discharge should be upheld? Provide detailed discussion and support for your answer. If I would be given the opportunity to take part on the Hatton’s case I will reconsider Ms. Hatton’s defence. Ms. Canant’s decision to immediately fire her is obviously unethical. A manager should only consider dismissing the employee only if s/he has provided the employee unambiguous suggestion of what s/he originally expected from the employee through a documented or written job description given to the employee beforehand; have clearly documented employee policies which indicate courses and conditions about firing employees and the latter agreed to the policies in the handbook to confirm that she had read and understood the policies; informed the employee in consecutive and dated notes which visibly defined deteriorating performance over a given period of time in spite of the manager’s recorded and particular recommendations of support and any training; and the manager clearly observe and monitor the employee still having problems in ethical responsibilities. If Ms. Hatton is being discharged within a provisional period detailed in the company’s employee policies, Ms. Canant may not have to satisfy all of the abovementioned conditions. Ms Canant should have done the following steps before firing Ms. Hatton (Sims 2003): 1) Consult with the board members. 2) Promptly firing Ms. Hatton by taking into account the management’s and other employee’s integrity and so as not start delaying about this rather agonising, impending incident. 3) Write a termination letter to Ms. Hatton. Ms. Canant should be unambiguous about the observed performance and behaviours of Ms. Hatton, previous advices and their implications, and the consequence that should now be performed in accordance to the company’s policies. 4) Inform the computer system personnel to change the password of Ms. Hatton and claim that this action should be performed punctually and in absolute confidence. 5) Meet with Ms. Hatton. Give her the letter. Clarify how the termination will take place, also when, and what they should do. Inquire about any keys. Provide Ms. Hatton time to remove personal belongings (Ms. Canant may decide to monitor Ms. Hatton during this removal, relying on the nature of the reason for discharge). Consider changing the phone system’s passwords and entry locks to the facilities, if applicable. 6) Just like with other sessions, note what was mentioned and exchanged. Organise them in documents or records. Question 4: Do you think the peer review method of resolving work complaints is a desirable substitute for lawsuits? What its strengths and weaknesses? The peer review panel’s function is to review the actions of management concerning the understanding and use of procedures, practices, policies and work regulations to guarantee that the directive, practice or policy was followed properly and constantly. For instance, if an employee has a problem at work, such a disciplinary counsel for ethical violations or performance, or a termination notice, they could ask for review of the problem by a peer review panel (Jackson 2004), just like what Ms. Hatton did. I think the peer review process is a desirable substitute for lawsuits since it is inexpensive and is available to all classes of workers, whether high-ranking or rank-and-file. One of the advantages of the peer review method is that it is made up of co-workers who have been prepared and verified in the peer review procedure. Capable panel members should not have had any motive or involvement in the problem or be related to the employee who asked for a review (Jackson 2004). The panel of the peer review can make suggestions to management to explain policies and procedures; though, they cannot perform the following (Velasquez 2005): 1) create or amend company policy; 2) create or amend work rules; 3) determine or amend compensation rates or benefits; 4) amend performance assessments or ratings; 5) and illegally show prejudice against the employee or disobey any federal or state decrees. Another advantage is that, provided that the process is performed appropriately, the peer review process guarantees impartial decisions or judgments. Panelists could not change the preliminary management decision that encouraged the peer review to make it harsher than the first decision. Also, decisions and actions made by the panel can be absolute and compulsory. Peer review starts with a documented request for employee review, then by the assignment of a facilitator which is frequently the human resources manager. When the peer review process is done, the employee is given a copy of the concluding and absolute decision (Jackson 2004). All involved parties in the review process: the facilitator, the employee requesting for a review and the panellists, have assigned duties. The facilitator and the human resource department are accountable for administering the peer review process. The facilitator plans meetings, organises panel documents and employee and guarantees that all meetings abide by the peer review guidelines. Duties of the facilitator are comprised of the following (Jackson 2004): Since open-door guidelines and peer review processes do not entail external intervention, such as lawyers, juries and judges, they authorise employers to maintain problems internally. All documents, from the complaint’s nature through the investigation and concluding decision, are privately maintained in-house and there are no public documents of the problem, as there are with lawsuits. Moreover, employers who employ these more unofficial techniques are capable of resolving disputes promptly and with the barest interruption (Jackson 2004). The best strategy for dealing with employee issues is through consistent, effective and open communication that enables both the management and employees to deal with concerns and conflicts immediately and before they build up into more complicated problems, or what is referred to as the ‘nip-it in the bud’ (Megone & Robinson 2002: 45) strategy. Lastly, these initiatives should safeguard any employees who become involved in any form of reprisals. This strategy may not be effective in every employer and situation and may have to take into account the options of peer review or negotiation. Conclusion The Hatton’s case is mainly a violation of trust, both in the customer’s and management’s point of view. Hatton’s stealing of the guest-comment card is a serious violation of confidentiality or proprietary policies, whereas the immediate discharge of Ms. Hatton by Ms. Canant is a violation of the ethical guidelines regarding firing an employee. Ms. Canant take on a drastic step solely based on the customer’s complaint and the reported stealing of the guest-comment card by Ms. Hatton. Ms. Canant’s decision and action regarding the issue evidently adheres to the outdated saying ‘the customer is always right’. Ms. Canant, being the supervisor, has the responsibility to grant Ms. Hatton a chance to defend herself and to assure that fairness will prevail. The peer review process is advantageous in resolving in-house problems such as the Hatton’s case but major problems concerning other stakeholders outside of the company may require lawsuits. Since the stakeholders involved in the case are directly connected to the Red Lobster the ethical violations should be discussed first with panel members who have direct knowledge and experience with the company’s operations and past ethical dilemmas. Moreover, the customer should be part of the peer review process since she is the one who can relate the incident accurately. But Ms. Hatton’s version of the story should not be discounted. The case will not be resolved successfully until all the directly involved relate the incident and their opinion on it truthfully and impartially. References Badaracco, J., (1997) Defining moments: when managers must choose between right and right, Boston, MA: Harvard Business School Press. Brown, M. T., (1990) Working ethics: strategies for decision making and organizational responsibility, San Francisco, CA: Jossey-Bass. 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Solomon, R., (1999) A Better Way to Think about Business: How Personal Integrity Leads to Corporate Success, New York: Oxford University Press. Velasquez, M., (2005) Business Ethics, New York: Prentice Hall. Read More