This paper uses a four-part analysis to discuss a case study on an ethical issue at SuperCom Company. The first part of this report explores the possible ethical pitfalls of the case. It analyses situations where ethical dilemmas could arise because of misunderstandings, lack of management directions and deliberate evasions. The second part discusses the possible solutions to the ethical dilemma. The third part explains how the ethical dilemma could have occurred and shows the possible solutions that SuperCom could have used to prevent it. Lastly, this paper explores how professional and corporate responsibilities apply to the case.
Possible Ethical Pitfalls
The SuperCom case study highlights different ethical pitfalls for the company. These pitfalls emerge from Ralph’s realisation that the company takes part in serious ethical violations by failing to adhere to agreed production processes. This section of the paper shows that the lack of informed consent, failure to report the ethical issue to authorities, and integrity issues are the possible ethical pitfalls in the case study.
Integrity is an important pillar of any successful business. However, some businesses often overlook this virtue and promote unethical business practices, without any consequences. Such was the case with SuperCom because it failed to show integrity by breaching its contractual terms of production. According to Ferrell and Fraedrich (2014, p. 64), integrity is the most important consideration for businesses. If they disregarded it, their future relations with external stakeholders would suffer.
There is little evidence to dispute the fact that integrity concerns are likely to occur in a person’s life, or a business life cycle. Dennis Levinne (a writer at Fortune Magazine) highlights this concern by analysing the education system and showing why it is important for students to show integrity because if they do not learn this important ethical principle, they are bound to lack the same virtue in their careers (Ferrell and Fraedrich 2014).
SuperCom faces serious integrity issues by pursuing a different production process for developing its test product. Based on its unwillingness to correct this mistake, clearly, greed and unrealistic ambitions (seem to) motivate the company (both have far-reaching and serious consequences for the company). Ralph’s failure to stop the unethical business practices in the company shows that SuperCom may dig itself deeper into the ethical pitfall (thereby affecting the company’s long-term sustainability). In fact, evidence shows that most companies, which pursue such unethical business practices, cannot survive for long. To affirm this view, Chuck Colson (a writer in Against the Night) said,
“A nation or a culture cannot endure for long unless common values, such as valour, concern for public welfare, and respect for others and for the law guide it. It cannot stand unless there are people who will act on motives that are superior to their immediate interests” (Smith, 2003, p. 6).
Based on the above statement, we can say that the lack of integrity at SuperCom is a serious ethical issue that needs immediate intervention. Concisely, the company’s failure to respect its contractual obligation highlights one of Gandhi’s seven social sins – commerce without morality.
Lack of Informed Consent
SuperCom had a contract to produce electronic equipment for the military. The contract stipulated the processes that would guide equipment production. However, the company used a different process to meet the same goal. Here, they used the “new” production process without informing the client about the changes. Therefore, if the client got the product, he would not know that SuperCom produced it using an “unknown” production process. This action is unethical and illegal because the company does not have the client’s consent to use a different production process to get the same results (regardless of the quality or reliability of the output). Therefore, without informing the client about the change process, SuperCom operates unethically.
Ralph had an ethical duty to report his findings to the relevant authorities, which he did, but the management took no action. Since SuperCom continued to violate its contractual terms, he could have escalated the matter to a higher authority above the upper-level management of the company, which he chose not to do. This is a potential ethical pitfall because he ignored his ethical duty to report the matter to a higher authority, thereby allowing the contractual violation to continue.
People have different reactions to ethical dilemmas. When they do not use any ethical theory to guide their reactions, they pursue the most ethical action based on their personal experiences. Basic knowledge of ethics informs some of these actions. For example, Stewart (2011) says that ordinary citizens use basic moral knowledge to make the best ethical decisions. Ralph also used his best judgment to manage the ethical dilemma in the case study. He chose to resign from the company and withdrew himself from its “deceptive” practices. In this regard, he was a faithful agent of the client’s interest.
However, his strategy departs from the best strategy for managing ethical dilemmas – preventing the ethical problem from occurring in the first place. Concisely, if he knew the ethical problem before it had occurred, his best action would have been to prevent it from happening. However, since this was not the case, his best course of action was value forgiveness. Although this approach is somewhat religious, it is the most effective alternative for managing the ethical problem.
Value forgiveness involves encouraging companies to recognise and admit to their mistakes. By doing so, they should seek help to improve their ethical guidelines (Stewart, 2011). Although this approach is straightforward, it has several challenges. For example, it could increase the number of ethical issues in the workplace because forgiveness is a new ethical issue. Moreover, people often do not like to involve themselves in complicated ethical issues. Although these challenges exist, it is crucial to understand that the best way to handle any ethical dilemma is pursuing ethical actions in the first place.
Secure the Support of the Chief Executive Officer (CEO)
A company’s CEO is an important pillar for the successful implementation of ethics programmes in an organisation. In this regard, Terris (2013) says it is difficult for organisations to develop successful ethical programmes if CEOs do not support the process. For example, if employees “sense” a CEO’s lack of interest in ethical programmes, they can be sceptical about the process. Such outcomes may leave an organisation worse-off than when it introduces the programmes. Ralph approached the upper-level management of SuperCom to stop the company’s unethical business practices unsuccessfully.
The reason for his failure was the unfocused approach he used to secure management support. He should have sought attention with the company’s CEO. This way, he could have introduced personal accountability to the process. Indeed, the CEO is the best-placed person to champion the development and implementation of ethical practices in the organisation. Particularly, he/she should provide the best example of ethical leadership by admitting mistakes when they happen.
Although it is important to adopt the best strategy for solving the above ethical issue, it is also important to recognise the influence of ethical theories in choosing Ralph’s best ethical action. Ethical theories and principles outline the pillars of an ethical analysis. They offer an effective framework for guiding people in decision-making processes.
Based on the above case study, the utilitarian theory provides the best course of action for Ralph. Relative to this assertion, Tittle (2000, p. 42) says many researchers have used this theory, in normative ethics, to support ethical actions that maximise the positive aspects of an ethical issue and minimise the negative effects of the same.
Although some people criticise the theory for ignoring justice, it explains how employees (who find themselves in ethical dilemmas) solve an ethical problem without worsening the situation (Tittle 2000). Since Ralph was in such a situation, it is important to explore the positive and negative outcomes of his ethical dilemma.
The negative outcomes of his dilemma would have sufficed if he had pursued the ethical issue beyond the upper management level. For example, if he could have escalated the matter to the client or a government agency, SuperCom would have experienced extreme actions from either of the parties. Indeed, if he had informed the client about the contract violation, the client could have cancelled the contract. The client could also have sued the company for contract violations thereby causing unplanned damage costs to the company.
Comparatively, if Ralph had reported the matter to a concerned government agency, it could have taken unspecified actions on SuperCom including license revocation. Such actions are extreme. Therefore, it was convenient for him to withdraw himself from the situation and allow the company to correct its mistake internally. This is the logic behind the utilitarian view. It prevents negative outcomes by pursuing the “least harmful” strategy for solving ethical dilemmas.
Code of Ethics
Ethical decision-making in the workplace is an elaborate process that requires excellent management acumen to prevent associated dilemmas. Based on a review of past ethical literatures, preventing ethical dilemmas from happening is the best way to manage them. Although this paper has already highlighted this recommendation, it still offers the best explanation for understanding how the SuperCom ethical dilemma happened. Particularly, this explanation shows an act of omission that possibly led to the dilemma.
The lack of an ethics code lies at the centre of this understanding because it explains how a vacuum in ethical leadership led to the above dilemma. A code of ethics is “a set of guidelines which companies design to set out acceptable behaviours for members of a particular group, association, or profession” (Smith, 2003, p. 9). Among other functions, the code of ethics defines acceptable company behaviours, promotes high standards of practice, provides a benchmark for employees to self-evaluate, establishes a framework for professional behaviours, provides a vehicle for occupational identity, and creates a mark for occupational maturity.
Many organisations use a code of ethics to guide their interactions with organisational stakeholders. Particularly, this is true for companies that offer goods and services to members of the public. Similarly, companies that manage sensitive issues, like health care and public financial investments, protect themselves from impropriety by adhering to a code of ethics. SuperCom lacked this set of guidelines.
Therefore, it was unable to prevent the ethical dilemma in the first place. If the company had the set of ethical guidelines, it would not allow its IT department to produce products that contradict the main terms of production. The set of ethical guidelines would have outlined the rules for reporting such incidences, shown which responsible parties should participate in the process, and explained how to mitigate such problems. Such elaborate rules would also have helped the concerned employee, who reported the issue to Ralph, to understand the rules to follow when reporting such incidents.
He would not have waited for a “receptive” manager to hear his concerns. The same set of rules would also have outlined the rules that Ralph would have followed to discuss the ethical issue. It would have prevented him from taking drastic actions, such as resigning from work because of the ethical issue. With such rules in place, the upper-level management would also not have ignored Sims’s concern. They would have acted on the matter, according to the company’s set of ethical rules.
Failure to Set up the Ombudsman Office
The failure to set up an ombudsman office is also another procedural omission that caused the SuperCom ethical issue. Establishing an ombudsman office complements the functions of a code of conduct because the office coordinates ethical policies that guide ethical processes in the workplace. This office helps to solve ethical issues in the organisation by interpreting the laws that surround the same. If this office had been in place, the ethical dilemma would not have occurred.
An ethical responsibility is an important function of successful ethical practices. Trevino & Nelson (2010, p. 322) say, that having an ethical responsibility is not a matter of following company regulations, but a concern about if an employee is doing what is right or not. Often, people think that ethical responsibilities are burdens or obligations to employees.
This is the reason why many people feel guilty for failing to follow ethical rules. However, the truth is further from this assumption because ethical responsibilities should create the pathway to true human freedom. Based on this understanding, it is crucial to understand how ethical responsibilities apply to Ralph’s ethical dilemma.
Professional responsibility stems from how Ralph managed the ethical dilemma, after the company’s management failed to address his concern. His professional obligations address his responsibility to colleagues, employers and clients (Jeffrey, 2012). Comparatively, in non-professional contexts, personal responsibility may include “house payments, car payments, student loans, medical bills, utilities, childcare and personal care” (Jeffrey, 2012, p. 6). In fact, Jeffrey (2012) says such responsibilities may surpass the above duties and include personal happiness and positive emotional well-being.
Nonetheless, Ralph’s professional responsibility included his ethical practices and moral considerations in the workplace. Although different types of professions require different levels of responsibility, Ralph had a professional responsibility of failing to take part in the unethical business practices. Since upper-level managers frustrated him, he had no option besides resigning from the organisation. This action outlined his professional responsibility to his career and integrity. He also demonstrated the same level of ethical acumen when he took a professional initiative to pursue the ethical matter after learning about it from a lower-ranking employee.
Based on the nature of the above case study, the corporate responsibility of SuperCom stems from understanding its management actions. Keen analyses of these actions show how blame responsibilities and role responsibilities outline the company’s corporate responsibilities. Unlike personal or professional responsibility, blame-responsibility is a negative one, which, in the engineering field, applies to parties taking blame for corporate wrongdoings. In the SuperCom case study, the upper-level managers should have taken the blame for violating contractual terms, but they did not.
Instead, they chose to ignore it and allow contract violations to continue. Fernando (2009) says this is a wrong approach because if an employee identifies something wrong in the workplace, the concerned party should take responsibility. Comparatively, Fernando (2009) says that role responsibility is a person’s duty to accept a specified role in an ethical problem.
Particularly, this responsibility closely relates to the actions of the upper-level managers, as described in the SuperCom case study, because the managers were responsible for the main company operations. Trevino and Nelson (2010) say role responsibility is both positive and negative. It is positive when managers accept their roles in an ethical dilemma and negative when they do not. In the SuperCom case study, the managers failed to accept their roles in stopping the contract breach. This is a negative role responsibility, which contributed to the unabated ethical problem.
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