There are numerous ethical issues that business organizations face in the current world. These issues pervade all sectors of the organizations operations. The grounding of economics suggests that production and business do not go hand-in-hand with societal and environmental ethics, because these two elements are mutually exclusive. The meeting points of these two elements are usually responsible for the creation of situations characterized by great dilemma. Recent happenings in corporate misconduct in corporate organizations such as Enron, WorldCom and Arthur Anderson among many others attest to the prevalence of ethical breaches among corporate organizations (Kurtz & Boone, 2010).
All organizations face ethical dilemmas each year and they have to clearly seek solutions that are befitting to various situations. Ethical issues are at times not positively addressed because they lack legal imperatives, and companies are not compelled to adhere. However, in order to maintain a positive corporate social responsibility image all business organizations seek to uphold a higher ethical standard. A part from image concerns the organization has a moral obligation to the society that supports and all the stakeholders including its customers, employees, shareholders as well as the government. As such, organizations are required to uphold good ethical standards in order to be part of a mutually coexisting society.
An ethical organization is highly likely to perform better and outdo many other organizations in the industry that may be less ethical. Ethical issues may pertain to record keeping, conflicts of interest, securities regulations, proprietary information, inside information and gifts and entertainment among many others. Basically, the universal principles on code of ethics proscribe two classes of activities. The first class of ethical issues is clearly illegal and they violate legal rules and regulations (Kurtz & Boone, 2010). These include violating regulations set by the securities regulation authority, employment laws and cheating on legal contracts among many others. The second category and one that is prevalent entails activities that may not be illegal but are not ethical in nature (Kurtz & Boone, 2010).
These issues present a lot of challenge because they are not illegal, but are morally wrong. As such, individuals have an obligation to avoid and prevent their occurrence, but they are not legally compelled to adhere to their observance. These are more likely to compromise an individual’s judgment and responsibilities. They may include activities such as using an organization’s buying power in coercion or awarding excessive gifts and allowances. It is good to be cognizant of the fact that codes of conduct in organizations limit themselves to crucial and obvious areas of concern where the employees are likely to face ethical dilemmas. They never cover everything because it is not possible to imagine all conceivable problems. This article reviews findings on a case study reviewing the ethical issues affecting a manufacturing organization-Gumdrop Northern.
Gumdrop’s operations reveal numerous ethical malpractices, but among all these practices, three of them emerge to be stronger and more morally offensive to the involved stakeholders. The first identifiable ethical problem in Gumdrop’s business practice is the compromise of the quality and safety of the products that it offers to its clients. The organization also lacks integrity, honesty and openness with regard to consumer relations and production. The company knowingly produces inferior quality armoured vehicles even though it is well paid by the military for its services. The use of inferior quality material lowers the protective quality of the armoured vehicles and thus exposing the occupants to more danger from anti personnel ammunition. Additionally, the company produces inferior quality landmines against legally established international treaties and laws. This not only goes against the laws and treaties, but it also exposes the users of this military equipment to danger.
The second ethical issue of concern is that the unlawful model of termination of employment that the company employs against a certain group of its employees. The process of hiring, retaining and terminating employees has to follow certain protocols and the breach of these protocols may be costly for any organization due to lawsuits that may ensue. However, Gumdrop North devises schemes that it uses to fire some of its employees for no cause at all. This is totally immoral and against the labour laws on employment, and as such it is against the ethical standards that organizations should observe. The manoeuvre of labour laws to fit an organization’s needs at the expense of employees is indeed not only illegal, but immoral in business organizations.
The third ethical issue of concern in Gumdrop’s case is the disclosure issue. The company knowingly hides information about the weakness of its armoured vehicles, simply because it fears losing its contract, but at the same time exposing the users of its products to greater danger. It also knowingly fails to disclose information about its relocation to its stakeholders such as the employees in order to avoid possible litigations against the layoffs that may result. Finally, it does the relocation without a legal ground of the suits, but through a cunning scheme that involves firing employees in order to reach a threshold in which it would legally escape litigation. It seeks legal justification, but at the expense of morals. This brings about the issue of legality and ethical standards into question, and whether some non-legal but unethical issues should be handled as illegal issues in order to prevent their proliferation (Kurtz & Boone, 2010).
In order to review these ethical concerns and develop positive recommendations through a memorandum, the following three sources shall be used in developing understanding about the ethical issues that organizations face and how to handle them.
Cockburn, T. (1996). Disclosure obligations in business relationships. Federation Press
This source gives a comprehensive review of all the legal and ethical obligations that a business has towards community and stakeholders in terms of disclosure. It details the essence of disclosure in a business and helps in the development of understanding about business information on all operations. The resource will be useful in revealing the shortcomings of the company in its operations.
Ferrell, F. J. and Ferrell, C. O. (2012). Business Ethics: Ethical Decision Making & Cases, 9th edition, Cengage Learning
This resource covers issues about the most recent ethical concerns in society. It reveals the problems that most businesses face whenever they cannot handle ethical issues and the challenges that come with it. The resource is useful in determining how well an organization can handle ethical issues in its operations.
Kurtz, L. D. and Boone, E.L. (2010). Contemporary Business, 13th edition, John Wiley and Sons, Hoboken, NJ
This resource proved useful in providing information about the general ethical issues of a business. The source sets the tempo in understanding the organizational obligations that relate to the maintenance of ethics. The source also offers insight into the general social issues that relate to ethics and how these can be handled within the organization.
Leech, J. M and Holloway, J. W. (1985). Employment termination: rights and remedies, BNA Books
This source extensively highlights the legal intricacies involved in employee termination. It offers thresholds within which these practices can be conducted legally and the reasons that may permit termination. On the other hand, it also offers advice on wrongful termination issues as well as possible consequences. The resource may be helpful in developing understanding about the wrong-doings of Gumdrop north.