The Moral Challenge - Essay Example

• Case Synopsis

The moral challenge of this case brief revolves around disclosing or concealing confidential information from the external environment. Competitive rivalry often prevents a business organization from maintaining transparency about operational performance. The moral challenge of this case is characterized by values such as loyalty, justice, care and most importantly ‘truth’. On the other hand, the facts encompassed in this case brief are from practical experience, whereas, similar real-world corporate situations are also incorporated to portray prevalence of such moral challenge. It can be claimed that judgments which characterize the moral issue are two-fold such as employee welfare and protection of brand image, and gaining customer loyalty through maintaining transparency. The chosen moral challenge is important because it is a sensitive issue which either can completely spoil brand image in the marketplace or influence consumer market segment to blindly trust the brand in long-run.

• Key Facts

The identified ethical challenge is based on a past experience. Business leadership is often subjected to wide set of ethical dilemmas. For instance, business leaders are often faced with a dilemma as to whether consider corporate goodwill or safeguard human rights in relation to offered service or products. The main moral challenge considered for this case brief is the pros and cons associated with retaining greater degree of corporate performance. It can be claimed that some form of contextual knowledge is essential so as to better understand the defined problem. To be more precise, transparency in corporate performance can yield two outcomes such as development of a large base of loyal customers or provision for competitors to gain a competitive edge (Weiss, 2014). The stated ethical challenge revolves around the dilemma encountered by the management whether to disclose real product quality information to investors/customers or to encapsulate performance-related initiatives so as to ensure that it is not easily imitated by competitors. Some contextual knowledge is necessary for dealing with such ethical situations. For instance, gaining knowledge about long-term and short-term implications regarding transparency of corporate information would enable the moral actors to undertake better decisions. Other relevant evidence is taking into account legislation mandating business activities. U.S. government has undertaken various strict measures in order to prevent business organizations from violating human rights. The other evidence will be product quality reports and details about press releases where false commitments were made to the target group. For this case brief, personal experience has been incorporated along with inclusion of qualitative sources such as research articles, government websites, etc., where similar ethical challenge in real-world scenario has been outlined. Qualitative sources are highly reliable since they encompass real-time evidence. On the other hand, case is based on experience or practical observation which facilitates to successfully undertake moral analysis.

• Moral Analysis

The main moral issue in this case is about disclosing corporate performance to public which can either enable customers to make sensible choices or disrupt the brand image completely. At times, managers are faced with an ethical dilemma in context of whether to consider customers first or to focus more on business gains (Institute for Human Rights and Business, 2016). To be more precise, the major moral issue is - maintaining transparency would have caused huge loss of customer base, whereas, avoiding product recall or concealing information about product recall along with making required internal changes would have secured short-term profits. The trust of customers on the brand is highly at stake.

The moral actor for this case is the product manager. It is evident that the department head is the one who can encourage product recall in a situation where major quality issue can completely disrupt brand image. Transparency in the production process can only be maintained by the product manager. The moral resolution of the highlighted case is solely dependent on decisions and actions undertaken by the product manager (Hartman, DesJardins, & MacDonald, 2014). It can be claimed that product manager needs to analyze an ethically challenging scenario in order to separate short-term and long-term implications of retaining transparency about product quality standard.

From personal perspective, there are two dimensions which should be considered prior to making a final moral judgment. For instance, any product recall case would disrupt brand image, result into huge financial loss along with adversely affecting career of employees. On other hand, transparency in corporate performance and abiding by the U.S. law would enable the company to build a loyal base of customers in long-run. The moral judgment for this case will be in favor of customers who blindly trust a brand. There are some important values that are involved in this case such as loyalty, care, justice, human life and truth (Michaelson, Pratt, Grant, & Dunn, 2014). The classification about such values can be stated as – loyalty towards customers by revealing actual corporate performance, care for well-being of external stakeholders, justice in terms of not hiding real operational performance, safeguarding human life from business motives and promoting truth even at the cost of lump-sum financial loss.

The values and moral judgment conflict with one another. It can be argued that values are mainly centered towards truth, loyalty, justice, etc. However, moral judgment indicates taking into consideration customers’ blind trust and making further operational changes. It is a type of right/right conflict because both possibilities have merit and value. For instance, values denote maintaining high degree of transparency, whereas, moral judgment is inclined towards taking care of customers without communicating corporate performance but exhibiting further operational changes.

The other moral perspective is in terms of considering goodwill of employees and the company. It can be argued that quality defect was witnessed in a small sample of products. Hence, avoiding transparency would safeguard the brand from losing its competitive edge as well as investors. The moral understanding in context of outlined challenge can be illuminated through perspectives of universal moral value. For instance ‘care’ reflects the concern towards both internal and external stakeholders. ‘Liberty’ signifies retaining confidentiality about corporate information as long as it does not affect customers’ trust. ‘Fairness’ is about considering customers’ interest prior to securing profit margins. ‘Loyalty’ is one of the important components for resolving this moral challenge (Crane, Palazzo, Spence, & Matten, 2014). As per the case scenario, ‘loyalty’ towards company or customers would deliver long-term gains. ‘Authority’ is another perspective which indicates the personnel who can resolve such issues. Product manager holds the authoritative position in this case and should be able to decide between brand value and lifelong customer loyalty. ‘Sanctity’ is the final perspective which denotes considering well-being of others prior to own selfish motives. On the basis of the given case scenario, it is evident that ‘sanctity’ lies in safeguarding trust of customers rather than being conscious about loss of employees or investors. The moral understanding of this case challenge can be explored from ethical standpoints. In this case, there lies a two-fold perspective. On one end, transparency of corporate performance in terms of product quality would disrupt brand image, adversely affect career of employees and result into lost faith of shareholders. Arguably, the other perspective is all about maintaining transparency to enhance customer loyalty. On grounds of ‘common humanity’, ethically the management needs to consider customers’ right of being knowledgeable about product quality. However ‘character’ as an ethical standpoint indicates that the manager is solely responsible for employees’ well-being and corporate goodwill in the industry (Shaw & Barry, 2015). Arguably, duty of the management also revolves around well-being of the revenue generating source i.e. customers. ‘Consequences’ of an ethical challenge also should be taken into account. It is evident that proclaiming quality defects would harm brand image, lead to huge financial loss but provide benefit by securing trust of existing customers. On the contrary, avoiding transparency would benefit the company by not undergoing any financial loss but shall cost higher in terms of lost customers’ trust. Long-term consequences are high in the second option compared to the first one. The values and code of wisdom tradition can be applied in a manner to identify the actual impact on involved stakeholders. As per the wisdom tradition, it is not justified to hide facts or convey a false image (DesJardins & McCall, 2014). Hence, in this case scenario, it is inappropriate to avoid transparency or conceal essential information from customers. The moral challenge is definitely aligned with the core values of my wisdom tradition. According to my wisdom tradition, concealing information for own profit or harming others is a sin. To a great extent, the moral challenge is not aligned with values of stakeholders’ wisdom tradition. It can be witnessed that main stakeholders involved in this case such as employees, suppliers, etc., will be inclined towards safeguarding brand image and modifying internal operations for improving quality standards. Moral challenge conflicts the core values of stakeholders, since the issue is all about overcoming self-interests.

• Stakeholder Analysis

The outlined ethical problem is complicated because both the moral claims are justified. Human rights in terms of gaining actual knowledge about product characteristics are equally justifiable as duty of employees to improve internal operations without affecting brand image. The main stakeholders are employees, managers and other internal stakeholders. Internal stakeholders claim that it is justifiable to maintain only a certain degree of transparency which will prevent other industry players from gaining a competitive edge. Their moral arguments are in favor of considering quality defects in small product sample for further operational improvement, rather than communicating such product flaws directly to customers and disrupt the brand image. The core values of these stakeholders are inclined towards ‘respect’, ‘concern’ or ‘care’ for their fellow members or the brand itself (Clifton & Amran, 2011). In some context, the claims are valid because it focuses on overall brand image which has been developed over a period of time. On the other hand, their claims can also be supported by James 4:17 stating that individuals who know what is meant to be done and still avoids, ultimately sins. Team members claim that preventing quality defects should be the only area of concern, rather than developing a transparent system.

There are some competing duties, values or claims which further complicate this case on ethical challenge. Precisely, the competing values are in favor of customers. As per the Christian wisdom tradition (Isaiah 56:1), one needs to be fair and just to all and always focus on doing what is good and right. Customers’ claims complicate this case because the company providing misleading information is not an appropriate mechanism. The duties of external stakeholders are associated with encouraging the company to reveal actual facts or figures in order to make sound or feasible purchase decision (Wright & Quick, 2011). In overall context, external stakeholders have more compelling claims because consumption of products with poor quality standards might adversely affect one’s health conditions. It is evident that if customers’ claims are not addressed properly then it will give liberty to the management to communicate misleading product-related information without considering its future impacts.

There are some similar cases or situations that can be taken into account for evaluating the moral challenge case. In contemporary business world, managers or CEOs has often encountered the dilemma of addressing customer’s concerns at first or undertaking strategic decisions to obtain short-term gains. For instance, Apple's PowerBook team had also encountered similar challenge where quality problems were observed in small product sample. The product manager took a sensible decision by opting for product recall so as to retain customers’ trust on the brand. In case of Mattel, the use of hazardous materials in toy manufacturing was a major cause behind brand image disruption (Palmeri, 2007). The company had to recall products due to customer complaints at the later stage, but it eventually disrupted the base of loyal customers. Such real-world cases can be taken as analogues in order to predict future outcome of the mentioned ethical challenge.

• Option Analysis

The moral actor can resolve the moral challenge from three different angles. Firstly, without disclosing confidential information, the product manager can efficiently identify area of defects and avoid such quality problems from next time. The stated option is morally justified on the grounds of ‘character’ (duty or principle). As a product manager, it is one’s duty to protect brand image and prevent competitors from exploiting such business scenario. The second feasible option is to convey details about product flaws along with highlighting the steps to be undertaken by the company for rectifying quality problems to stakeholders, i.e. customers and investors. On common humanity grounds, the second option is highly valid because it would help in addressing fairness of the situation, provide justice and take care of customers’ well-being (Wagner Mainardes, Alves, & Raposo, 2011). The third option which can be undertaken by the moral actor is to secure short-term gains through the dispatched product sample and utilize profit margin for re-launching a new superior quality product for customers. Arguably, the third option might appear to be morally incorrect. However, on common humanity grounds, particularly in terms of providing justice to employees or factory workers, the stated option is morally justified. The small product sample would not adversely affect many lives, but disrupted brand image might affect career of employees. It shall be difficult to regain the brand image in an intensely competitive marketplace.

• Decision

The most valid ethical decision as per the given case scenario will be to maintain transparency of company performance irrespective of short-term or long-term gains or loss. Hence, the second recommended option shall be most feasible where customers will be knowledgeable about product defects and the strategic actions to be undertaken by the management. On the basis of press releases, it would be convenient to reach out to customers regarding product defects. From both the ethical standpoints, i.e. common humanity and consequences of the moral challenge, the chosen moral decision is highly justified. It is often argued that actions of an individual reflect one’s core values. In the given case scenario, the recommended action also portrays core values in relation to care, truth, sanctity, loyalty and justice. Customers usually show blind trust towards communicated product information or facts about company performance (Ciulla, 2013). The only medium by which internal core values can be safeguarded is through respecting that loyalty or trust of customers on the brand. Self-interests should be undoubtedly kept aside when such ethical dilemma arises.

• Summary Argument

The option or action plan is inclined towards organizing a press release where the problem of product quality defect will be disclosed in front of media. However, the action plan is not restricted to disclosing confidential details but also conveying strategies to overcome the identified problem. As observed in some real-world cases, product recall due to concealing quality problems further disrupts corporate reputation. Hence, the recommended option takes into consideration future business challenges because of hiding actual operational information from public. Customers’ loyalty towards the brand would not be lost if transparency is consistently maintained by an organization irrespective of financial loss or gain. An ethical behavior in business context can be defined as one where more than mutual benefit well-being of the other party is primarily considered. In this case, without disclosing operational default the company could have upgraded current operational conditions. Arguably, the courage for standing up for customers would deliver long-term value.