The Role of Ethics in Business - Coursework Example

The relevant facts Neerson is not receiving fees for a consumer satisfaction survey being done for a community organization. However, they are preparing codes so that the information of the respondents can be extracted to be sold later to another sporting goods store opening in the same locality. The justification given by the director is that they have not promised anonymity to the respondents in their cover letter. Since the community organization is not paying for the survey, according to the Director, they do not have exclusive rights over the results. Moreover, Neerson is not a non-profit organization and hence can sell the data to recover the expenses incurred for conducting the survey. This would help the sporting goods store to decide on their advertising campaigns and also the inventory based on the consumer choices. The assistant project manager is in a dilemma whether the decisions taken by the organization and the director are ethical. The ethical issues Not receiving fees for any market research, does not relieve an organization of the obligation of not complying with the national and international laws pertaining to market research. Coding to identify the respondents, when the survey is supposed to be anonymous, is unethical, against the principles of ESOMAR, and can damage the reputation of the market research. Not promising anonymity in this case in intentional and hence cannot be deemed to be legal. Worse still, the data collected for the community organization would be sold to a third party who will be opening a sporting goods store in the same locality as the community organization. This is a corporate issue and demonstrates the culture of the organization. The respondents’ right to privacy is being encroached upon. It is also against the code of ESOMAR to allow the personal data to be used for any purpose other than market research. The primary stake holders The stakeholders are those individuals or groups that have an interest in and are affected by the performance of the company or the way it uses its resources (Joyce, 2005). The stakeholders in any business include the employees, the customers, the community, the government, and the shareholders. In this case, the primary stakeholders are the workers. The primary stakeholders vary in their willingness and their power to make contributions to resolve the threats (Akpinar, 2009). The willingness of the primary stakeholder depends upon the compensation it earns from the firm. It also depends upon the relation specific investments it has with the firm. Akpinar also finds that when a threat is perceived, the primary stakeholders collaborate to shape the threat at its source. When it becomes clear that the threat is unlikely to be shaped, the powerful actors turn the threat to an opportunity at the expense of the other weaker actors. Here too, at Neerson, Steffan is taking advantage of Lauren, who has just been promoted and who does not have experience in this regard. Steffan is hence trying to use this opportunity to make money as it may be possible that he is not receiving adequate compensation from the firm. Those in power have a tendency to chase wealth for personal gains and this has affected several top companies in the world recently. Profits become the main motive for a concern to violate norms and become unethical. Lauren is affected because she has just been promoted and as such does not have a voice in the matter. The other stakeholder is the community organization that has requested for the consumer survey. They are being forced to share valuable information and would lose the benefit of the survey altogether. They are not being told of the manner of data collection or that the information would be sold to a private organization. Demands of the stakeholders have to be of prime importance and the organization must maintain high morality. Possible alternatives Laureen is unsure how to proceed in the matter. She is in a dilemma as she is lost between ethics, responsibility and duty. All of these are intertwined and ethics determines the success of an organization. Robinson (2002) contends that ethics is a set of moral principles held by an individual or a group, encompassing individual behavior, staff policy, and corporate social responsibility. In this case they are also bound by the ESOMAR principles. Any organization should not apply business ethics merely as a corporate code but it should be implemented as a corporate philosophy (Svensson & Wood, 2004). The deontological theory states that people should adhere to their obligations and duties when analyzing ethical dilemma (Media, 2006). Laureen has a duty towards the community organization as well as towards the respondents, and upholding one’s duty is ethically correct. If this theory is followed, the decisions will be correct. Hence Laureen should inform the management of Steffan’s stand even if it amounts to whistle blowing. By not informing the management, Laureen would be jeopardizing not just her own job but also the reputation of the company. Besides, firms exist for the society and have a moral obligation to satisfy the needs of the society (Carrigan, Marinova & Szmigin, 2006). Immanuel Kent states that duties cannot be associated with self-interest and rewards or payoffs (Carrigan et al). The moral worth of an action depends wholly on its intention. To act rightly is to act from duty. The intention of Steffan is to suppress the facts and reveal what is meant to be kept confidential. Thus, this action would be against the duty of the company. Duty has to be imposed by the self, on the self; it is internal. Categorical imperatives - that is action from duty, are moral actions. If actions from duty cannot be followed by everyone as universal law, then it is not a moral act; the action is wrong. While Steffan wants to sell the data, Laureen is against it and hence the action is wrong. Steffan is acting in self-interest and if such values are communicated to the employees, they would assume that values and motives are less benevolent and accurate (Navram, 2002). Hence the decision to sell the data would be against the duty. Besides, the respondents may agree to the survey, may understand the purpose of the research but this still does not waive the respondents’ rights to privacy and confidentiality. The respondents have the right to expect that their responses would remain confidential and safe (Smadi, 2008). The respondents’ personal details, under no circumstances, should be revealed to any third party. The notion of informed consent also implies that the respondents are fully informed of all concerns in the beginning itself. Steffan’s claim that they have not promised anonymity, hence, amounts to deception. Ethics of the alternatives When people ask why one should be ethical, they want to know what the motivation for being good is. The deontological theory is not concerned with the benefit of others. It springs from duty that is imposed by the self. Conflicting obligations may deter a worker from an ethically correct resolution. In any organization, the workers have to be encouraged to be discriminative and understand the difference between what the leaders demand and what is demanded by the system (Navram, 2002). The company’s views have to be congruent with others’ views where others include the customers, suppliers and/or other publics. “Business ethics gap” arises when the views of the company do not match with the views of others. This gap can be either positive or negative. A positive gap is desirable because it denotes that the company is a step ahead of the market norms while a negative gap places the company a step behind the market norms. It basically depends on how the business activity is perceived by those that matter most for the success of the organization – its stakeholders. If Laureen decides not to go against Steffan, the company has a negative business ethics gap. According to the Utilitarian principle, an act is right if it leads to greater net social benefits than social harm. This implies greatest good for the greatest number. In this case, more people will be benefited than not benefited. Steffan or the company would benefit and so would the sporting goods company. However, the Greatest Happiness Principle also states that the end result should give least pain and maximum happiness to the greatest number of people (Mill, 1863). The end result would end in pain to greatest number of people because in the end morality pays (Hooker, 2003). Unethical acts cannot be hidden for long and once revealed, brings greatest pain to the maximum number of people. Utilitarianism says we must always do what has the best consequences and in this case the consequences are not good as the intention itself is not ethical. Actions are judged based on their intentions. Actions are right when they promote happiness and happiness should be the sole end of every human action. The sole end of human action is the standard of morality, which defines the rules and precepts of human conduct. In taking a decision for happiness, there should not be any vested desires. Abiding by the codes of conduct would result in richer dividends for the firm because at the end, consumers will perceive its operations as ethical. The casuist ethical theory compares a current ethical dilemma with examples of similar ethical dilemmas and their outcomes. This helps one to understand the severity of the situation and to create the best possible solution (Media, 2006). Here a compromise is reached based on the wisdom gained from past experiences. This ethical theory has a drawback because there may not be a similar set of situation on which to base the current ethical decision. This situation for Laureen is certainly new because she has just been promoted and for her this situation is controversial and questionable. This theory has drawbacks because it assumes that the results of the current ethical dilemmas will be similar to the previous experiences. Practical constraints Ethics is not the same as self-interest. Orme and Ashton (2003) contend that taking an ethical stand involves taking action to ensure that right rules and practices are applied consistently in all day-to-day business situations. This sometimes poses practical constraints. For instance, Laureen risks her job is she blows the whistle. The teaching of business ethics is inherently pluralistic. This suggests that that than one basic principle operates equally in an area of human endeavor (Burton, Dunn & Goldsby, 2006). Firms conveniently resort to pluralism so that in different situations they can fall back on different principles. Steffan can always deny Laureen’s allegations if confronted. Or else, based on past experiences of the company, he could even point out that they had taken this stand earlier. Actions to be taken Business ethics is important but ethical behaviour has to come naturally. It cannot be taught. Studying business ethics cannot change behaviour because the basic human character is formed in childhood. Ethical choices and conflicts are inherent in business decision-making. Almost three-fourths of the managers at some point in their career feel a conflict between profit considerations and being ethical (Laczniak, 1983). Under the circumstances, the cost to a company for being unethical stretches beyond the monetary sums and it takes different forms (Vogl, 2007). The scandals weaken the public confidence in the company. It is quite likely that Steffan has not contemplated to determine the consequences of such an action and hence Laureen should attempt to first make him understand the consequences. The company’s reputation is at stake too. If Steffan is determined, the Laureen would have to report to the management and be prepared for the consequences. If exposed by the Financial Times, I would have to defend myself, even though I do not agree with the decision to sell the data collected. I would take the plea that since the community organization was not being charged, we had come to an agreement that we could use art of the data collected for another survey. Besides, we have not promised anonymity to the respondents, and hence nothing illegal has been done. Conclusion Business ethics has to be applied as a corporate philosophy and nor merely as a corporate code. All the different ethical theories state support that ethical stand has to be taken. Since firms exist for the society, they have a moral obligation to satisfy the needs of the society. Action from duty is a moral action and any action should bring happiness to the maximum number of people. Morality is what pays at the end and hence, Laureen should act from moral duty. References Akpinar, M. (2009). Understanding primary stakeholders of a firm crucial in the EU market. Retrieved online 17 November 2009 from http://www.tse.fi/EN/media/news/Pages/thesis_akpinar.aspx Burton, B. K., Dunn, C. P., & Goldsby, M. (2006). Moral Pluralism in Business Ethics Education: It is About Time. Journal of Management Education, 30 (90). Carrigan, M Marinova, S & Szmigin, I 2006, Ethics and international marketing, International Marketing Review, vol. 22, no. 5, pp. 481-493 Hooker, J. (2003). Why business ethics? Retrieved online 17 November 2009 from http://web.tepper.cmu.edu/ethics/whybizethics.pdf Joyce, W. B. (2005). ACCOUNTING AND SOCIAL RESPONSIBILITY. Journal of Accounting and Finance Research, 13 (3), 1-8 Laczniak, G. (1983). Business Ethics: a managers primer. Retrieved online 17 November 2009 from http://www.cba.ua.edu/~aturner/MGT341/MGT341%20Readings/Business%20Ethics%20A%20Managers%20Primer.pdf Media. (2006). THE MARKETING RESEARCH INDUSTRY AND RESEARCH ETHICS. Retrieved online 17 November 2009 from http://media.wiley.com/product_data/excerpt/81/04717552/0471755281.pdf Mill J S (1863), UTILITARIANISM, What Utilitarianism Is. Navran, F 2002, Ethical Conflicts in Ethical Companies, retrieved online March 10, 2009 from http://www.ethics.org/resource/ethical-conflicts-ethical-companies Orme, G., & Ashton, C. (2003). Ethics - a foundation competency. Industrial and Commercial Training. 35 (5). 184-190 Robinson, K. 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