ETHICAL PROBLEMS OF ORGANIZATIONS
Introduction
Early in the first decade of the new century, the news of the greed and plain stupidity at companies like Enron, Arthur Andersen, Citigroup, Adelphia, and even banks was shocking as well as heartbreaking. Despite the number of actual wrongdoers being small, the effect was sure to be substantial on the economy. These crises therefore have clearly made the need for managing ethical behavior for the long term, a necessity. Though some of the problems may be minimal, denial and mismanagement led to mushrooming of ethical and public relations nightmares.
Current times have changed the game for business owners, striking away the “iron hand”, this done by the increase of stakeholders whose interests need to be met. A balancing act by the businesses is thus essential to ensure due care is honored for instance, in the case of consumer interests. The ethical problems faced by organizations included;
Conflicts of interests
Creation of a series of off-the-books partnerships to hide the company’s huge debt and inflate its stock prices. Further, use of aggressive accounting practices to bolster statements has been witnessed, mostly as schemes of executives (CEO’s) so as make personal gains. Investment banks have also been involved in lots of conflicts in the recent years. Given their nature banks are constantly fighting potential conflict of interest as they are focused on helping organizations make money in the markets, thus consequently keeping a client company’s stock prices as high as possible. Simultaneously these same banks also are serving as investors, interested in purchasing stocks at the lowest prices possible. But the one the major conflicts was during the housing bubble in the last decade where banks created bundled mortgages many of which represented subprime mortgages at higher risk of default than other “normal” mortgages.
Product safety
Producing a quality product or service is obviously a major ethical obligation of an organization. Competition and regulatory bodies help ensure that goods and services are of a quality acceptable and safe to consumers. Sometimes, however a company is the victim of external sabotage (like Johnson & Johnson), leading to making of wrong decisions the result being an unsafe product. This is usually by ignorance of the long-term consequences of a decision.
Advertising
Ethics in advertising is quite tricky, this due to varying opinions of the limits of responsibility and the truth. Questions whose answers are vague are often left unanswered. Does the lotion make the 40 year old younger? Does the company have a responsibility to respect all consumers irrespective of the geographical location? There is a thin line between excitement for a product and the sales tactics employed, between targeting a given market and possibly tempting that given group into unfortunate activities. I think what should remain clear is what the companies’ ethical responsibilities are and thus should be observed.
Employee safety
The most basic employee safety is to work without being killed or maimed, thus regulations to protect workers against possible harm in the work place are to be put in place by the employer.
Employee downsizing
This can be because of economic depressions, increased competition, or even unmet corporate objectives and since they are bound by the ethical obligation of “to hire and fire responsibly”. Their decisions on laying off workers are constrained. If it may the laying of is supposed to be in a dignified, unbiased, and respectful manner.
Conclusion
No company is way safe from the ethical ills and it has been painful to endure for the huge impact of selfish behaviors of a few. Many companies however, are now devoted to conducting their businesses in an honorable way. Furthermore, better ways of nurturing their values throughout their beliefs through inspiring managers and employees alike to innovation, and excellence.
Works Cited
Treviño, Linda Klebe, and Katherine A. Nelson. "CHAPTER 10: ETHICAL PROBLEMS OF ORGANIZATIONS." Managing business ethics: straight talk about how to do it right. 5. ed. Hoboken, NJ: Wiley, 2011. 354-394. Print.
