Ethical Crisis amid Conflicting Stakeholder Interest - Research Paper Example

• An Introduction

Today, organisations have to face the reality of the new era; one that has suddenly shifted from Friedman’s (1970) stockholder maximisation stance (that business obligation is to maximise profit for the stakeholder) to Freeman’s (1999, 2001) shareholder maximisation philosophy (that business sustains itself by maximising stakeholder value creation). I never appreciated Friedman's stakeholder theoretical proposition than I did that the scenario I came across while working at a local mini-mart store in Leicester. Backed by videos taken next to the store's loading zone, a local animal rights group had run a spirited social campaign against the store-portraying the store as being insensitive to a cat that 'innocently' sort refuge at our store. The video and images showed one kitten hit and bleeding, as some employees appear to shove the cat and its kittens. The group's social media accounts had a massive following among locals, so their campaign quickly spread, attracting constant attacks on the organisation within the day. It was all pressure: the store's image was at stake, online communities were enraged promising boycott, and the employees impugned were not sure what next for them. The management was under pressure from the activists and the general public to take stern action to show ethical commitment. The civil societies and activists are known to be resilient in their attack, and some businesses had gone down owing to their spirited campaigns, so actions had to be taken. No one was sacked, the store grew in popularity, the entire staff became united, and the ethical consciousness of the management became clear.

B. Overview and background.

Setting

The organisation, Al-Mart Store (a pseudonym used to safeguard confidentiality), operated in Albert Village, Leicester, as a local retail store, attracting many retail consumers. It was quickly developing small-scale mini-mart. The fast growth and customer loyalty were achieved on being 'locally bred,' ethically-oriented. Besides, proprietor happened to have been a charismatic businessman, widely known for his philanthropic acts to the local development initiative. We also had a robust social media campaign, seeking to leverage social media to widen our online market base and consolidate customer loyalty. Despite being relatively small and not accessible in the wider Leicester, the locals in the more extensive Albert village considered it not just a place to shop but also to a worthy employer with humane working culture. The store had barely 20 employees, with the proprietor serving as the General Manager and team leader. With such a lean team, we remained a relatively stable team, committed to helping in the best interest of the business and the customers.

One incident that we later came to call 'the black cat incident' presented an unprecedented ethical dilemma and leadership test to the organisation. A black cat had just taken refuge in the loading area, in the rear end of the store, sleeping with her relatively young kittens- four of them. My colleagues working in the loading section discovered it in the morning while starting their routine off-loading from suppliers. One kitten appeared to have suffered a cut, as it was bleeding. It was not possible to ascertain where the cat came from and how it got its way into the store's secluded part. They were not sure of what to do with the animals, or action to take. They still had to work, so they had to find a way to get rid of it. However, one thing was clear; the animal had to be handled with care to safeguard it or young ones from further accidents. First, the GM always liked pets, especially cats, so he would take an offence to learn of the cruel treatment of the stray cat. Another sensitive issue is that the activism for animal rights was gaining momentum locally, so any hostility to the cat could be politicised. The cat was raising attention, and some employees, including myself, got distracted from their routine duties to have a stare. The store master decided to act; he tried to shove the cat aside to clear the way for loads to ensure it was not hurt. Unknown to us, one of the employees had taken the video of the incidence and shared it with a friend, who later posted it in a Whatsapp group.

The following day, the video and several images of the cat and its kittens were trending, focusing on the hurt kitten and the cat carrying it on the mouth. An animal's rights group had posted a sponsored statement in their Facebook condemning the cruel act of the store. They keenly attacked the company's ethical image, describing it as a store with the most ‘unethical sense’ and ‘callous attitude’ towards defenceless animals. What followed was a massive social media attack, describing the company and its officials in all sorts of cruel names. One commentator said that Al-Store was ‘hypocrisy at its best.’ They demanded: robust investigation, explanations, a public apology, and stern actions on culpable staff. The activists demanded public accountability and demonstrable commitment to animal rights. Consistently for a whole week, they ran a campaign to call for boycotts of our products until the management became 'accountable.' The sales drastically reduced soon after launching negative social media publicity.

The detachment of the management exacerbated the problem from social media engagement. It took three days for the GM to learn of the trending videos-when he got tagged by some commentators. We did not have a public relations team, so detection of the negative publicity and response to manage the issue was sort of slow. Possible aggravating factors included a lack of monitoring sentiments of the online community. Besides, there was a lack of experience in managing a similar crisis and the unpredictability of the outcome of managerial actions. The GM directed the supervisor in charge of operations to investigate the matter and report back to him expeditiously. One thing was not forthcoming: who took the video. It must have been someone who works within the organisation, since the 'scene of the event' was a restricted area only accessible to the staff. I knew the employee, but I feared she would look at the job. Being a single parent, I felt for her, much as we detested the trouble she had brought about. The investigative processes turned out to be another test for team solidarity- employees were not willing to ‘sell out’ one another.

Ethics codes

The organisation was operating informally with no alignment written code of conduct. Being a small organisation, the management did not find an overwhelming reason to implement a written ethical system. To the extent that employee conduct was under investigation, it would have been in order following the Acas Code of Practice on disciplinary and grievance procedures (ACAS, 2015). This code specifies the procedures for resolving disciplinary issues at the workplace, including setting up a grievance management system and fair hearing when such problems arise. Further, we had a healthy organisational culture pegged on team spirit, the collegial relationship among employees, discipline, and deep respect for the organisation's leadership. Consistently, we were further guided by ethical consciousness and responsibility to all stakeholders as our moral campus. We were working in a setting such as a store that requires collective responsibility to safeguard the organisation's interest. The tragedy with an open ethical environment is that people may view similar situations differently, resulting in conflicting moral stance (Tejedor, 2020). For instance, the employee who shared the video found nothing terrible in sharing it. From a consequentialist (utilitarian) ethical, theoretical stance, her action was wrong. It had an adverse consequence on a large number (Gluchman, 2017); access to the video eventually affected the company, all the employees, and shareholders. As employees, we were the organisation's agents, and that required avoiding putting the organisation’s interest at reputational risks. Where the sense of responsibility fails, action needs to be taken for ethics to be enforced.

Several factors and processes were key to resolving the dilemma: delicate leadership commitment to managing team spirit, careful stakeholder engagement, effective communication, and sustained contacts with critical stakeholders to contain the emerging backlash. In the scenario, there was supposed to be a disciplinary procedure, given that the campaign impugned the ‘unethical conduct’ of the employees. By practice, the supervisor in charge would always handle disciplinary issues and grievances, possibly explaining why the GM delegated investigations to him. At the time the incidence arose, we already had a firm organisational culture that propelled the organisation to be known for its ethical identity. Mature and instructional leadership was crucial to contain the shock, upholding team participation, and give directions (Shaked, 2018). Since the employees were all involved, internal resolution processes required involving the entire management in the investigative process, and the employees be given a hearing. The effective leadership strategy in an organization in such situations enhances the performance of the individual member in service delivery and resource consumption.

There was both internal and external obstacle to resolving the dilemma. Internally, the threat of managerial hostility and fear of reprisal deterred truthful revelation. As one employee put it, it was a testing moment and a time to 'protect one of our own.' I found myself in the most precarious situation, as I was known to be fond of taking videos and photographs at work, so I was a suspect. I eventually make a secret appointment with the GM. Acting on the instinct of egoist ethics, I felt there was a need to clear my name. I still do not regret this; from the stance of ageist ethics, the first responsibility is to protect myself, so it would not have been unethical to disclose my fellow employee to protect myself from undeserved adverse attacks (Breen, 2018). Externally, it was difficult to counter activist’s negative media publicity. They had better human resource capacity, well-grounded in public relations, and advocacy. It was so hard to counter their attack, however outrageous. A carefully crafted media campaign or presser was required to let the public know the truth.

• Stakeholder analysis.

Many stakeholders were involved in the case. In this case, the primary stakeholders were the employees, shareholders of the company, the management, the animal rights activists, and the local communities in Albert Village Leicester, various operational teams the management, and the leadership of the organisation. Primary stakeholders have a significant vested interest in a course or organisation's activity (Kim et al., 2018). The store's operations depended on its employees and management, making them primary. The activists got the video of the cat through employees, showing the extent of their influence. If the administration failed to manage employee expectations, then the operations would be stalled. The management often relied on the formidable team founded on the stable principles of ethical commitment and customer-value to control individual members' satisfactory performance. This makes the working teams, the management and leadership primary stakeholders. The development of a strong team in an organization promotes efficiency in service delivery, and the leadership of the enterprise focused on the role model leadership strategy (West, 2012). The situation threatened team culture we had long built, it was not known who among the employee would be a betrayer’ as to reveal the source of the video. The role of management and leadership was integral. Besides, leaders inculcate positive attributes emulated by the team members for the organization's success through collective participation. They also devise a strategy to address external threats and internal weaknesses.

The activists and customers were also primary stakeholders. The activists framed the negative publicity, using their following and evidence (videos and photographs) to sustain an attack. It was their account that the kitten was hurt while at the store, and it was a systematic attack intentionally done by the staff and condoned by the leadership of the store. In more image-denting terms, the public appeared persuaded, describing the store as the 'home of green washing.' Attacks targeted the organisation's brand image and ethical platform of our brand development. Members of the public were the customers, and their loyalty was core to business success. The media are secondary stakeholders, as they have no vested interest, but offered a platform for the ethical discourse.

C.Solution.

The matter was investigated internally by the supervisor, and acting on the outcome; the GM diffused the pressure and fear we had by assuring everyone that he would deal with the situation. While the investigation confirmed to the active participation of the staff in harming the cat, no one could admit having taken the images. It was indisputable that the images were from the insider, a puzzle that could not be unraveled by the supervisor. I opted to play the role of a whistle-blower. After assurance that there will be no reprisal of any employee based on a revelation of truth, I explained to him my version of what transpired-and identified the employee who took the work. I ensured my fear about reprisal was allayed before revelation, which was ethically responsible, considering that it would protect my interest (I stood to be suspected) while still ensuring my colleagues are not at risk (Breen, 2018). We had a briefing the same evening, attended by the GM and the entire management. The GM sought to engage with us. Surprisingly, he never gave anyone a chance, not even the managers. He opted to address us directly, with a message to encourage us to commit to out duties as they dealt with the outside pressure. Given the tension in place, deliberative engagement would not materialise, and the best was to take charge to assure the inside stakeholders (employees, management, and shareholders) that they were protected.

Looking back, GM's handling of the situation was excellent. Autocracy in leadership works best in times of crisis when everyone lacks an idea of what to do (Peker et al., 2018). We felt assured that we had the leadership to consolidate us as one team- the management and the employees amid difficulty. The cohesive feeling and team spirit enabled members to cope with one another and actively participate in the enterprise's activities, even when crisis, such as the one we faced, arises. Through assurance and adequate communication, the entire team would remain committed to reaching the targets (Conyne, 2013). Besides, contact in such moments creates sufficient conflict resolution and decision making paths. Thus, fostering unity leads to satisfaction and motivation for better service delivery. Bringing everyone together created a group think and sense of solidarity. The approach of groupthink in decision making enables the team to encourage positive attributes while suppressing negative views to preserve group harmony. The strategy helped the organization to remain intact and record positive performance. He inspired everyone to be an ambassador of ethics and commit to maintaining such an image. The intensive implementation of role identity among the teammates enhances specialization that provides the capability required for achieving the organizational goals. The role identification helped the team function and perform well through reduced redundancy and shear competition that affected the group members' positive participation in service delivery.

In the day, we learned that the GM issued a press statement on the organisation's Facebook Page, Twitter, and Whatsapp Groups, signed by him. It was a relief. In the report, he explained the organisation's account of the event, countering the activists' framing. He recalled multiple ethical initiatives that the company had started, as small as possible, as a demonstration of continued commitment to ethical dealings. The online community appeared appeased. That countered the previous trolling. It emerged later that the GM had engaged leading PR professionals, who advised on how to address the crisis. This autocratic decision was necessary, given the complexity of the matter and the need to urgently address it (Peker et al., 2016). PR experts know how to manipulate the public image, the very aspect that the store stood to lose.

In retrospect, I have learned some lessons for the future. First, one needs not to engage with every stakeholder. The GM disregarded the activists all together but joined effectively with his supervisors and the staff first. He then got experts to help engage with the community and customers. For a leader, priority should be in keeping team cohesion and effective communication in moments of crisis. The enhanced team culture through effective communication protocols serves the team by eliminating the severity of ineffective team dynamics (Brown, 2014). The implementation of a steady communication protocol and feedback loops enhance the team's performance that receives clear information through an exact method in a comfortable environment, thus promoting collective participation (West, 2012). For the group with ineffective dynamics, the leadership has to conduct diagnosis and establish potential loopholes. However, weak leadership creates room for conflict and a lack of direction for the team. At the same time, the dynamics of excessive defines to the authority tend to limit the group (West, 2012). Besides, the blocking and free-riding behaviour affects the group as members steadily retard information dissipation and overburden their colleagues in the policy implementation.

Further, ethics matters in addressing the organisational problem. Ethical considerations do not only apply to employees; it could be argued to be more burdensome at the leadership level. There was a need to exercise effective leadership in the organisation to shield the store from incessant cyber-attacks and boycott campaigns. This would hold together the team unity already built while at the same time responding to the emerging stakeholder concerns. In the moments of ethical crises such as the one we faced, managers that the employees from unmerited public attack would translate the external pressure into a bonding factor where we combat a common enemy (Kurakin et al., 2018. Safeguarding team spirit enhances teamwork and boosts service delivery and overall performance even in the moment of crisis

D.Conclusion.

Ethics has become a crucial issue across disciplines in the wake of the 21st century. Even the profit-making business organisations that were firmly founded on profit-maximisation thinking must now think ethically and meet diverse stakeholders' ethical expectations. It took moral consciousness, moderate leadership, painstaking stakeholder engagement, and painful sacrifices to resolve the matter. Leaders play an essential role in influencing the achievement of an organization's business objectives, especially in times of crisis. In the present case, the GM employed various leadership styles to give directions to employees and resolve the crisis. He delegated on conflict resolution but took arbitrary decisions in dealing with external stakeholders and the issues. His leadership styles motivated workers and the whole team. He carefully navigated the ethical crisis, protecting employees from undeserved attacks, and eventually boosting their morale. The GM contributed to the company's success and popularity by treating stakeholders differently depending on the context, engaging (employees) where team spirit was threatened, informing (customers) in detail where there is misinformation, and countering where there was an unwarranted attack. By knowing how to engage, especially in a crisis, the leader would promote service delivery and ensure work satisfaction. The corrective measure to the ethical dilemma lies in drastic resolution to the problem through discussions and maintenance of stakeholder engagement and duty delegation and containment of the level of conflicts with critical stakeholders.