Operations and Customer Relations at Optimotors Company - Report Example

Business Ethics Name: Tutor: 1.0 Executive Summary This report reviews ethical issues in the operations and customer relations at OptiMotors Company. The report seeks to establish the extent to which customer and potential investors treatments is unethical. From the case study, the report singles out, potential investors’ treatments in stripper clubs and employees’ overstretching as key ethical issues. Further, the report compares and contrasts the four ethical perspectives namely the utilitarian, virtual ethics, deontological and libertarian approaches. The four are classified into consequential, utilitarian and virtual ethics, and non-consequential, deontological and libertarian. In forming recommendations, the report recommends the adoption of both the utilitarian and virtual ethics perspectives. Table of Contents 1.0 Executive Summary 1 Table of Contents 2 2.0 Ethical Dilemmas 3 3.0 Ethical Perspectives Comparison and Contrast 5 4.0 Resolution Recommendations 0 5.0 Conclusion 2 Bibliography 3 2.0 Ethical Dilemmas An ethical dilemma is a conflict involving a moral issue in which any alternative results into a moral obligation and a risk of violation. Consequently, ethical dilemmas present a challenge to a majority of businesses today. The private sector is composed of organisations and enterprises that are purely profit oriented. As such, the organisations delve into this sector with an aim of attaining profits. However, at times they face ethical dilemmas between their obligations to the society, and customers on one hand, and their profit obligation to the shareholders on the other hand (Price 2000). OptiMotors Industries is an engine manufacturing company that has over the years outgrown its local influence to exert a global influence. However, despite its increased regional influence and increased competitiveness, the organisation currently faces an ethical dilemma on the extent to which customer entertainment is ethical in enticing new business partners. The organisation has a brilliant management team comprised on the CEO Bob and the head of sales Mr. Galen. The two officers work jointly towards building and elevating the company status. Although the efforts and hard work contribution of Mr. Galen, the company has secured a range of contracts with influential national motor vehicle and parts dealers. A recent one is the company’s signing in of Kinan Motors as their area supplier. These developments have increased the organisations influence and competitiveness in the market. Moreover, it has enhanced increased shareholders satisfaction due to increased organisational profitability. However, in the provision and attainment of these high profile achievements, the organisations employ a range of strategies that can be regarded as unethical. On one hand, the sales head, hedges partners influence on entertainment and off the premises meetings. In this case, the sales budget provides for out of the company premises meetings. This is an important step towards enhancing increased bonding between the negotiating team. However, the sales department has resulted into exclusive mitigations of wooing the partners. For instance, in a bid to influence the Kinan Motors team into engaging in partnership with the company, the sales department treated them into a night out at Red Ruby, a renowned strippers club. This presents the first ethical dilemma on the extent to which the sales department should stretch to woe the organisational customers. The questions arising from this scenario are, is treating customers to any extent justified as long as it earns the enterprise business? Are the extents to which the organisational sales force engaging in morally justified? While, on one hand, it is imperative to be creative to earn business, the adopted processes violate societal values, either way, there are gains and losses. Additionally, the resignation by Hartley and the impending resignation by Joan, both employees in the sales department, present the organisation with an additional ethical dilemma between its responsibility to its employees and that to its shareholders. On one hand, an organisation has a responsibility of ensuring maximum return on investment for the shareholders. In this regard, such a process requires that the full exploitation of the organisational resources, including its employees. However, as evidenced by the employees’ plea, the sales department lays high expectations and goals for its employees, thus overstretching them. This leads to an ethical dilemma on the extent to which employee exploitation is justified to earn organisations increased profit margins. In particular, the question is what is the line between employee exploitation of full potential realisation? 3.0 Ethical Perspectives Comparison and Contrast Ethical perspectives can be compared and contrasted based on their approach and resultant outcomes. As such, perspectives are broadly categorised as consequential and non-consequential. Under the consequential approach, the utilitarian and the virtual ethics theories emerge. On one hand, the utilitarian theory holds that the means end justifies the means. In this case, actions outcomes justify or discredit the means previously adopted. As such, the theory holds that the sole aim of the action is to gain and derive utility. Consequently, the justification parameter for such actions is hedged on whether or not and to what extent the action derives utility. If it does, the action is ethically justified. In the above case dilemmas, the utilitarian perspective views the adopted actions as ethical. In this case, the utility in both cases is to achieve increased organizational profitability as well as increase the shareholder return on investment. Therefore, under the utilitarian theory, the ethicality of treating potential partners and stretching the sales force is evaluated based on the outcomes of forming partnerships and delivering increased sales respectively. In this scenario, both utilities are met. Bailey and Porter (2008) argue that, the ethical perspective holds that, for maximum utility to be attained, it is imperative to adopt unique measures and strategies. In this case, the theory justifies the adoption of unique measures for unique situations. In this case, the perspective justifies treating potential partners at a stripper club. As the sales head argues, the negotiating team was unique and required unique treatment, an argument supported by the theory. In similar consequences, based approach emerges the virtual ethics approach. Similar to the utilitarian approach, Aristotle developed the virtual ethics theory and perspective on societal ethics. On its part, Spence and Wadsworth (2002) elaborate that the perspective greatly differs from both the utilitarian and deontological approaches. As such, the theory argues on the use of means to justify the end in actions. In this regard, the theory states that in order to establish if an action is ethical, it is imperative to look beyond the outcomes. In this case, the theory holds that despite the fact that the outcomes on an action could be positive; the means used to achieve them could be unjustifiable. Further, the theory holds that the application of action should respect and honour the existing principles in the society (Seddon, John and Seddon 2013). With respect to the case study dilemmas, the theory classifies both listed actions as unethical. On one hand, the treating of potential customers in a stripper club is a violation of morals. In this case, the revelation of such actions to the public would significantly damage the organizations reputation. Moreover, with respect to employees overstretching, this is a violation of the employees’ rights. Although the employees are obligated to deliver tangible results to the organization, the organization has an obligation to ensure their well-being. The virtue ethics theory holds that the overall outcomes of ethical actions should be increased satisfaction for all participants The actions by the sales department does not result into a mutual happiness by the management, shareholders and employees. Consequently, this implies that the actions, though benefiting the shareholders, oppress the employees. As such, the actions are unethical. A major contrast to the consequential perspective on ethics is the development of a non-consequential approach in the libertarian and deontological perspective. On one hand, the libertarian perspective is hedged on respect for other people’s choice of behaviour and approach in life. In this case, actions and behaviour rationality are based on respect for respective individual liberties. The perspective holds that individuals have the right and liberty to choose, act and live as they wish. As such, personal choices are paramount and should be respected. In this case, unlike its peer under this category the deontological perspective, the theory does not classify actions as either moral, ethical or not. Instead, it perceives actions as paramount and overriding any systems order as long as perpetrators willingly choose them. Such rationality is based on the individuals’ willingness to partake in the actions (Haydar 2002). In the case study dilemma, the director of sales willingly chooses to treat potential investors in a stripper club. In this case, the management and society should respect this decision. Moreover, the potential investors’ treated into these clubs accept the offers willingly. As such, the action is justified under the libertarian approach. However, the sales force strained working conditions are not on their own free will. Consequently, under the libertarian approach, the actions by the sales department is not justified as it goes against thee employees free will and coarse them to increase sales. Similarly, the deontological perspective to ethical issues adopts a divergent view from the utilitarian approach. On its part, the theory perceives actions as a list of roles and obligations. In this case, as DeConinck and Lewis (1997) state, the perspective argues that actions ethicality is hedged on its congruence with fulfilment of responsibility and mandated duties. As such, any action, performed and executed in line of duty is justified. This approach is especially adopted by the legal enforcing agencies, where killing is justified in line of duty. Moreover, the theory holds that an actions motive is an imperative part in the determination of actions ethicality. As such, if the motive was right, then the action is by default justified (Haydar 2002). Concerning the case study dilemmas, the approach justifies the potential treatment of potential suppliers. In this regard, such treatment is done with a motive to increase organizational profitability and is done in line with sales force duties of enhancing bonding with existing and potential partners. However, the theory fails to justify the overstretching of the sales force. In this case, the action of overstretching is not in line of duty of the sales managers. Consequently, such an act is perceived as unethical and should be rectified. 4.0 Resolution Recommendations The case study situation as already established presents a range of ethical issues that need approach. In this case, in resolving the ethical dilemma, this essay analysis recommends the adoption of both the utilitarian and virtual ethics perspectives. The blend of these two perspectives would enhance increased ethicality in adopted actions while at the same time increasing the organizations social responsibility (Voskuijl and Evers 2007). The current competitive economic situation and highly competitive global markets call for change in organizational business models. In this case, changes in the organizational models imply simultaneous changes in the adopted strategies. In this regard, organizations have evolved to incorporate social responsibility programs (CSR) in their operations. Such programs seek to ensure that, besides the establishment and attainment of profits, organizational actions supports stakeholders both internal and externally. Internally, CSR programs seek to improve employees’ welfare, as well as motivation. This approach is based on the principles of virtual ethics theory (French 2011). As already discussed, the theory supports the adoption of actions that enhance mutual stakeholders’ gains. As such, CSR programs enhance stakeholders’ satisfaction, as organizations earn profits and increased goodwill. However, an argument by Pyo and Lee (2013) challenges the application of the virtual ethics theory, under CSR programs, due to its increased costs. As such, this presents a challenge for the virtual ethics perspectives to resolve organizational ethical dilemmas. As such, it is imperative to blend it with alternative perspectives in order to remedy the identified weaknesses. This enhances the need to incorporate the utilitarian theory. The theory holds that actions should be based on gained utility. In this case, the application of the theory on CSR programs would ensure that the executed actions are accounted for with respect to gained utilities. Consequently, through the application of this theory, only CSR programs deriving tangible utility to the organization will be supported and executed (Torugsa, O'donohue and Hecker 2012). With respect to the case study OptiMotors Industries Company ethical dilemma, it is imperative to apply the theories blend as established. On one hand, with respect to employees’ exploitation, the organization should establish an internal CSR program for its employees. In this program, the organization should enumerate the limits to which employees should provide their services. Moreover, it should offer packages for increased performance to stimulate increased employee performance. However, it is imperative to note that the development of such programs is an organizational expense. Thus, if left unchecked, it could result into increase expenses reducing organizational profitability. Therefore, this should be based on the utilitarian theory on utility. As such, each program costs should match with gains that supersede the costs. Through this, the organization will increase employee performance while simultaneously increasing their motivation. On the other hand, about treating potential investors in strippers clubs, the organization should employ the consequential approach in the virtual ethics theory. In this regard, the financial gains obtained, should be evaluated against non-financial implications on the originations reputation both internal and external upon the revelation of such activities. Due to the high associated risks, the treatment plan should be curtailed to morally acceptable levels regardless of the financial gains. 5.0 Conclusion Conclusively, this report establishes that it is imperative to adopt a blend of ethical perspectives in business. In this regard, the adoption and consideration of diverse perspectives allows for the reduction of negative implications as evidenced in the OptiMotors case. Thus, the report concludes that ethical business dealings enhance business success and sustainability in the long run. Bibliography Bailey, Jeffrey J. and Jason C. Porter. 2008. "Utilitarian Ethics and the Purposeful Creation of Dissatisfaction." Journal of Global Business Issues 2 (1): 23-30 DeConinck, James B. and William F. Lewis. 1997. "The Influence of Deontological and Teleological Considerations and Ethical Climate on Sales Managers' Intentions to Reward Or Punish Sales Force Behavior." Journal of Business Ethics 16 (5): 497-506. French, Ray. 2011. Organizational behaviour. Hoboken, N.J.: Wiley. Haydar, Bashshar. 2002. "Forced Supererogation and Deontological Restrictions." Journal of Value Inquiry 36 (4): 445. orugsa, Nuttaneeya Ann, Wayne O'donohue, and Rob Hecker. 2012. "Capabilities, Proactive CSR and Financial Performance in SMEs: Empirical Evidence from an Australian Manufacturing Industry Sector." Journal of Business Ethics 109 (4): 483-500. Price, Terry L. 2000. "Explaining Ethical Failures of Leadership." Leadership & Organization Development Journal 21 (4): 177-184 Pyo, Gyungmin, PhD. and Ho-Young Lee PhD. 2013. "The Association between Corporate Social Responsibility Activities and Earnings Quality: Evidence from Donations and Voluntary Issuance of CSR Reports." Journal of Applied Business Research 29 (3): 945-962. Seddon, Robert Francis, John, and John Seddon. 2013. "Getting 'Virtual' Wrongs Right." Ethics and Information Technology 15 (1): 1-11. Spence, Laura J. and David Wadsworth. 2002. "Using an Electronic Bulletin Board in Teaching Business Ethics: En Route to a Virtual Agora." Teaching Business Ethics 6 (3): 335. Voskuijl, Olga and Arne Evers. 2007. "Tensions between the Prescriptive and Descriptive Ethics of Psychologists." 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