Business Ethical Dilemma
Introduction
Nowadays, the business field is highly controversial, and the professionals have to face an extended variety of ethical issues. For instance, the actions of managers are often associated with misconduct, and complying with morals becomes an important concern (Jamnik 141). Subsequently, dealing with these challenges assists in overcoming ethical dilemma. Nonetheless, managers are not the only segment, which has to face controversies of the business environment and ethics. For example, the most common issue is marketing misinformation (Painter-Morland and Bos 221). The typical situation is the fact that the salesperson has to decide whether to lie to a client or explain the real drawbacks of the product and lose the sale. In the context of this paper, a salesperson, John, decided that he could maximize company’s revenue and exaggerated the main features of the product. The product was purchased, but it was unclear whether the consequences of John’s actions were either positive or negative. Consequently, the primary goal of this paper is to analyze the case study presented above with the assistance of the eight steps of the ethical decision-making process.
Gathering the Facts
One of the first aspects to consider when assessing the consistency of the decision-making is collecting the information about the issue. As it was mentioned earlier, John was presenting and selling goods to the customers in the pharmaceutical sector. He cherished the company’s goals and values and wanted to contribute to its financial prosperity. To support his positive intentions, he often lied to the clients, did not tell them about the products’ significant drawbacks, and exaggerated their positive features.
The factors reflected above offer only basic information about the situation. Consequently, some of the aspects were generalized to acquire an overall image. The primary assumption is the fact that, in the end, the customers were not satisfied with the product and its features. The company received numerous complaints about misinformation and false advertising. Nevertheless, it could be assumed that the actions of the salesperson had a positive influence on the overall financial stability and increased the percentage of sales. Despite the abstract nature of the case, these assumptions will help define the stakeholders and potential negative and positive consequences.
Defining Ethical Issues
Based on the analysis of the factors presented above, it is possible to define the major ethical issue. As it was mentioned earlier, the problem can be determined as misinformation of the clients about the main features of the products. The ethical background can be viewed from dissimilar angles. For instance, not informing the client about the risks and dangers of the medical goods may have a negative impact on one’s health (Kessel 985). Simultaneously, it may damage company’s image and question its desire to help its customers (Kessel 983). Despite the gravity of these adverse factors, shop assistants and managers still face a dilemma whether or not lie about the product’s features, and the critical driver for it is the potential increase in the revenue.
The Affected Parties
It is apparent that the ethical issues have an extended influence on various constituents of the company. In this instance, the presented ethical dilemma differently affected various stakeholders. In the context of the described case, the primary stakeholders are employees, customers, and community. In the first place, this section affects the employee, John, who is responsible for sales of this product line. It could be said that increasing the percentage of sales not only assisted in shifting the overall company’s revenue but also strengthened his reputation among the management. Nonetheless, the quality complaints of the customers damaged his reputation and questioned the positive intentions of his actions. The rest of the employees will be affected since their actions will be monitored. As for the customers and community, they will be influenced in a negative way. For instance, now, they are highly concerned with the potential impact of these pharmaceutical products on health and are scared to use any goods of the company (Kessel 983).
Speaking of secondary stakeholders, the overall adverse perception of the firm cultivated with the assistance of this case had an adverse impact on the volumes of the revenue (Willard 46). Consequently, managers, executives, and shareholders will be concerned about the situation since the value of the company in the capital market will decrease. Alternatively, policy makers will be interested in this situation. They will conduct research of the situation and refer to the fact that the current FDA packaging policies do not have strict requirements for labeling and marketing (Kessel 983).
The Consequences
Speaking of the consequences, the actions of the salesperson can have an influence on the company in long and short-terms, but they may have a different level of probability. For instance, the activities of the shop assistant may affect the company in the long-term, as they influence company’s revenue’s due to a plethora of complaints and the damaged reputation. This consequence can be viewed as of high magnitude, as its outcomes affect the whole organization and its functioning mechanism. Simultaneously, these actions may affect the consumers’ health and image of the firm in the community.
Despite the actual negative influence on the stakeholders, one cannot underestimate the initial positive intentions of these matters. For instance, the actions of the salesperson increased the revenues of the company in the short-term and created a perception that John was a skillful professional, who deserved a raise. It could be said that these consequences had a low magnitude, as they mainly affected John’s salary and increased his contribution to the volumes of sales.
Speaking of the social phenomena such as egoism and utilitarianism, both of them have a reflection on the presented case study. John’s actions were egoistic, as he wanted to exceed the expected KPIs but, at the same time, his activities were aimed at reaching the organizational goals and maximizing profits. In this case, considering cognitive barriers and biases can explain John’s beliefs. For instance, the intentions of John’s actions pertain to the logical and cognitive fallacies. In this case, he experienced the issue of anchoring, focused on the particular source of information, and explained it to the client (Friedman 7). The presence of this barrier led to misinforming the customer and being unable to take into account the consequences of these actions.
Based on the factors highlighted above, using consequentialist approach is one of the suitable instruments for decision-making. The adverse effects outweigh the positive outcomes. Consequently, the attempts of similar actions have to be eliminated, as they affect the majority of stakeholders in a negative way. Nonetheless, one has to pay particular attention to the cognitive biases, as they are the primary causes of these actions.
Obligations
Furthermore, it is critical to describe the key duties, principles, and rights associated with the ethical issue of misinformation and false marketing. In this case, the primary obligation is to deliver the right information to the customer to comply with the FDA (Kessel 983). The law of categorical imperative introduced by Kant implies that a particular solution applies to any case of action (Walker 100). In the context of the presented instance, respecting customers and their rights can be viewed as an example of the categorical imperative.
Simultaneously, this matter is associated with the specific rights of the stakeholders such as customers and community. Consequently, the rights of these groups are significant and have to take precedent over others. At the same time, this situation can be resolved with the principles of procedural justice, as the fair treatment and unbiased decision-making will help find a suitable solution to this issue (Tornblom and Vermunt 126). In this instance, apologizing to consumers and resolving this issue will be the most relevant approach.
Nonetheless, the primary cognitive barrier is the fact that the customers can highly rely on assuming that they are always right. This matter will create misunderstandings, and the most suitable decision is to explain the importance of FDA, customers’ rights, and the company’s obligations.
Character and Integrity
As being viewed as an individual of integrity among the members of the community, the management has to apologize to the customers, control the actions of shop assistants, and have a conversation with John. In this case, the decision will be honest and consider different stakeholders. As for the specific virtues, one of them is paying critical attention to the fact that clients are informed about both positive and negative features of the products. In turn, the management has to prioritize the essentiality of quality and having appropriate conversation with the customers. Another virtue is meeting customers’ expectations, as this critical group of stakeholders is a vital contributor to the company’s revenue. As for the disclosure rule, the newspapers can feel free to report the solution to this issue to the public. It will help restore company’s reputation and minimize the occurrence of similar issues in future.
It could be said that if the company selects to apologize, fixes its mistakes, and improves the quality of information delivered to the customers, it will be regarded as the organization with the well-developed sustainability campaign. Nonetheless, this managerial decision may be biased and apologizing to consumers may not be enough to regain the market share. Consequently, referring to the drawbacks of FDA, explaining the actions of the employees, and apologizing are the most suitable actions.
Creativity and Potential Actions
The analysis of the consequences and interests of primary and secondary stakeholders assists in identifying actions to be taken to resolve this ethical dilemma. One of the solutions is to apologize to the consumers with the help of the social media. This matter will deliver the message effectively and explain them the main reasons for the conflict. Alternatively, the company can refer to the different side of the problem and imply that the restrictions of FDA have to be modified to avoid similar situations in future. Additionally, the management of the organization can apologize to the customers and have a conversation with John at the same time. Finding the rationale for his actions will assist in resolving the issue for consumers, employees, and management.
Furthermore, the company can highlight that the actions of the shop assistants will be monitored. This matter will imply deeper changes than the previous alternatives. Nonetheless, it can be viewed as the most effective one, as it will ensure that the services and products comply with the customer’s expectations.
Checking Your ‘Gut’ and Facing the Opposition
Nevertheless, one cannot underestimate the role of intuition in the decision-making process. I believe that apologizing to the customers, monitoring the actions of sales personnel, and having a conversation with John will resolve the issue. At the same time, it could be said that my perception of the solution to the issue clearly complies with the consequential, obligations’, and character analyses. In this case, it remains apparent that all matters review the ethical dilemma from similar perspectives and help check the appropriateness of consequentialist approach.
In spite of the clarity of the action plan and well-defined steps to be taken. The management of the company has to be prepared to respond the opposition. In the first place, using the procedural approach will help consider the rights and obligations of all stakeholders and ensure that their needs are satisfied. As for the arguments to protect my position from the ethical perspective, the current decision clearly complies with the common rule of prioritizing the clients’ needs and preferences. Lastly, it offers a clear basis for the development of the company’s sustainability strategy while using the concept of three bottom lines. Explaining these matters to the opponents of this decision will help clarify my rationale for making these decisions.
Works Cited
Friedman, Howard. Encyclopedia of Mental Health. Oxford: Elsevier Inc., 2015. Print.
Jamnik, Anton. “The Challenges of Business Ethics – Management and the Question of Ethics.” Tourism and Hospitality Management 17.1 (2011): 141-152. Print.
Kessel, Mark. “Restoring the Pharmaceutical Industry’s Reputation.” Nature Biotechnology 32.1 (2014): 983-990. Print.
Painter-Morland, Mollie, and Rene Bos. Business Ethics and Continental Philosophy. Cambridge: Cambridge University Press, 2011. Print.
Tornblom, Kjell, and Riel Vermunt. Distributive and Procedural Justice: Research and Social Applications. New York: Routledge, 2016. Print.
Walker, Mark. Kant, Schopenhauer and Morality: Recovering the Categorical Imperative. Hampshire: Palgrave McMillan, 2012. Print.
Willard, Bob. The New Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line. Gabriola Island: New Society Publishers, 2012. Print.
...(download the rest of the essay above)