Description of the Ethical Issue - Case Study Example

of the ethical issue Mr Fixit, the organisation I work specifically deals with supplying, fixing and offering cleaning services of carpets. For all the services offered, the price charged is inclusive of labour, material supplied as well as transport costs. In the event that the customer prefers to use his or her own transport, a certain amount is discounted but of late I have noticed my Financial Director ignoring this requirement as per company policy. Being still new in the finance department, one day I asked him if I was supposed to offer a discount to a customer who had purchased a lot of stuff and was willing to use his own transport and he bluntly told me that if a customer does not ask about it, then I can as well ignore the issue. “We are in business to make money, if a customer does not ask about transport costs, leave it!” he said to me one day. This led me to rethink the issue of business ethics and found myself in a dilemma. Basically, business ethics refers to values, principles and standards that operate within business and these attempt to make a distinction between something that is morally good from bad (Rossouw 2004). The concept of business ethics mainly derive from the value system obtaining from a business set up. Basically, values are described as the “essential and enduring tenets” that help define the company and are “not to be compromised for financial gain or short term expediency,” (DesJardins 2006:5). Simply put, these are regarded as beliefs that often incline businesses to act in certain ways which are different from the others. Values range from financial, political as well as religious among others and these often shape the way an organisation operates towards the attainment of its goals. In pursuing these different values in business, there is need to take into consideration the concept of business ethics which is more concerned with serving the ends of human well being. In theory, truthfulness and being honest in business are two major tenets that shape and guide the way people in an organisation ought to operate. However, incidents sometimes arise in business where people are no longer certain whether some actions should be considered right or wrong (Hiti 1999). When people look at the same thing and some would regard it as morally right while others would regard it as morally wrong which is one typical example of an ethical dilemma in business. In this regard, the financial director sees as if there is nothing wrong to profiteer using double standards whereby the customers will pay for their own transport which should be covered by the organisation. Indeed, the main objective of any business is to gain profit from its operations. However, as far as the issue of profit is concerned, it can be noted that in some cases, ethical values are not given the due prominence they deserve as is the case in my organisation. It can thus be seen that this aspect of ethics is controversial at times since it often conflicts with the organisation’s goals of making profits from its operations. The director of finance is mollified by the fact that the customers in some cases are ignorant of the arrangement whereby they will be entitled to get discounts should they use their own transport. As already noted, the term ethics is primarily concerned with distinguishing between something that is good and bad while special attention is focused on issues of morality and professional conduct in an organisation where honesty and integrity should be seen as the guiding principles. Of notable concern is to get an answer for this simple but complicated question; “Is it ethical to lie?” When ethics is applied to business, we tend to consider the implications of economic activity on the interests of all those who are affected by it. In this case, the major ethical dilemma is about gaining money through unfair means while at the same time the organisation will be risking to lose the trust of the customers once they discover that they were entitled to get a discount from using their own transport. In this way, there is need to identify and implement standards of conduct that will ensure that business does not negatively impact on the interests of the stakeholders. Stakeholder analysis The customers as well as the other potential buyers are likely to be impacted by this practice which is not fair. Fair trade practices in business entail that all transactions taking place between the sellers of particular products as well as the buyers should be conducted in a fair and transparent manner whereby there is no one party that will seek to gain unfair advantage over the other. In this case, the customers will be affected in that they will risk losing their hard earned cash through deals that are supposed to be done in an honest and transparent manner. Taking advantage of the customers’ ignorance is not advocated in business. In other words, the action by Mr Fixit is tantamount to reaping off the suspecting customers which is not a good thing to do in business. A distinction between something bad from good should always be made for the sake of both the organisation and the customers. On the other hand, the finance officer who directly witnesses this kind of action taking place is another stakeholder who is affected by the whole situation. He will have a guilty conscience in that he is forced to do something that he fully knows is wrong for the sake of the director who instructs him that the main purpose of being in business is to make money. This will have a psychological impact on his day to day operations in that he will always feel guilty over something beyond his control. At the end of the day, this person will not have peace of mind which can negatively affect on the way he performs at workplace which may be counterproductive. It can also be seen that the organisation as a whole is likely to be impacted on by this uncouth behaviour towards short changing the unsuspecting customers. The danger lies in that when the customers discover that they were being taken for granted, they are likely to lose trust with the organisation which will negatively impact on its long term viability. Where there is lack of trust between the organisation and the customers, there is likely to be a decline of business which will negatively impact on the growth and development of the organisation. One advantage of building trust among the customers is that they will develop loyalty towards the organisation in the long run which will ensure its sustainability. Whenever there is no trust between the organisation and its customers, business is likely to be impacted on negatively. It can be seen that there is a close link between the organisation and its customers in terms of its long term survival hence the need to establish mutual understanding between the two. Recommendations It is recommended that the person who is directly experiencing this dilemma at the help of the financial director should try to use the other angle and approach probably the management and try to convince them that they ought to implement a full scale investigation into some cases involving the customers losing their money unexpectedly because of their ignorance over issues regarding to transportation issue pertaining to their purchased goods. It is recommendable that action should be taken for the sake of the organisation and the citizens at large, since it will be noble to do the right thing. In the long run, the company will likely lose the trust of the customers if they discover that the organisation has been covering up something they knew was tantamount to reaping off the unsuspecting customers for the sake of financial gains. In some cases, people in the organisation may be biased towards short term financial gains at the expense of the long term survival of the organisation so it is recommended that such unfair practices be investigated. It is also recommended to the management of the organisation to ensure that transparency prevail in the organisation all the time. These should stamp authority on the operations of all the other employees in the organisation so as to ensure that there is compliance with the ethical standards set by the organisation. The responsible authorities must make their operations transparent so that they will gain the trust of the customers. This is beneficial in the long run in that loyalty among the customers is likely to be created if the organisation operates in a transparent manner. It is recommended in this case that those who deal directly with the customers must make it a policy that they explain the terms and conditions of their sale of products so that there is mutual understanding between them. It is also recommended that a special committee must be set in the organisation to oversee such cases given that in most cases, they often go unreported because they are practiced by senior people within the hierarchy of authority in the organisation. Junior employees are afraid of being victimized in some instances the reason why they may decide to keep quite even if they know that the practice being done by their superiors will be bad. For instance, a complaints committee can be set in the organisation so that such issues can be dealt with in a manner that will not jeopardize the security of the junior employees in terms of their employment. Such sensitive issues often require special attention as they are not visible to different stakeholders which means that the juniors in the organisation should not fall victim to such cases if they report them to the other responsible authorities. References DesJardins J. (2006). An introduction to business ethics. 2nd Edition. Boston. McGraw Hill international Edition. Hiti S. (1999). “Fundamentalism and family values inside corporations.” Visions of ethical business. Financial times, Prentice Hall in association with Price Water House Coopers. Rossouw D. (2004). Business Ethics: 3rd Edition. Oxford. Cape Town. Oxford University Press. Weiss J. W. ( 1994). Business ethics: A managerial, stakeholder approach. California. International Thompson Publishing. Read More