Ethics Case
American Products Corporation participates in a highly competitive industry. In order to meet this competition and achieve profit goals, the company has chosen the decentralized form of organization. Each manager of a decentralized investment center is measured on the basis of profit contribution, market penetration, and return on investment. Failure to meet the objectives established by corporate management for these measures has not been acceptable and usually has resulted in demotion or dismissal of an investment center manager.
An anonymous survey of managers in the company revealed that the managers feel the pressure to compromise their personal ethical standards to achieve the corporate objectives. For example, at certain plant locations there was pressure to reduce quality control to a level which could not assure that all unsafe products would be rejected. Also, sales personnel were encouraged to use questionable sales tactics to obtain orders, including gifts and other incentives to purchasing agents.
The chief executive officer is disturbed by the survey findings. In his opinion, such behavior cannot be condoned by the company. He concludes that the company should do something about this problem.
Instructions
Identify the ethical implications, conflicts, or dilemmas in the above described situation.
(C)
What might the company do to reduce the pressures on managers and decrease the ethical conflicts?
(CMA adapted)
(a)
Who are the stakeholders (the affected parties) in this situation?
answer:
In this particular case we could say that , stakeholders (the affected parties) in this situation are employee and the manager of the company,because they are going to experience the harm and the benefit by companies decision
(b)
Identify the ethical implications, conflicts, or dilemmas in the above described situation.
answer:
In this case, the actual problem is between central management & manager of centralized investment center.
In each of the period, top managers gave particular goal to each division for achieving it. This is fine when the goal is ethical but it will make a big trouble if it is not. This happens in this particular company. Firstly, managers feel pressure for completing goal because managers are received much of unreasonable demand. and so that, managers are tending for engaging in unethical conduct for achieving goal. Secondly, ew could say that top manager also have action of the demotion or dismissal of an investment center managers if such objectives failed for meeting in particular period of the time. As result,rather then to lose their own jobs or being demoted, the employees may break rules. eaxmple, questionable sales tactics to obtain orders, reduce quality control,
(c)
What might the company do to reduce the pressures on managers and decrease the ethical conflicts?
(CMA adapted)
Answer:
Firstly, this company should open center for communication where the employees of the company may share their own opinion for corporate objectives. And therefore, top manager might receive response from companies employees in order for avoiding making unreasonable demands.
On second note we could say that, company might change their own policies about demotion & dismissal. If they continue for using that in to the response for failure to meet such objectives, some of the managers are likely for using an unethical behavior for achieving their goal. Finally, company should bring under regulation for making the demands so each of manager whenever they are making objectives should follow rule and ethical conduct
