MGT4028 Ethics and Business: The One Cent Ethical Dilemma

Questions:

Locate the following case study: Interpersonal Relations Case – The One Cent Ethical Dilemma.

Complete the case study by showing your understanding of the content in addressing the question:

1. What actions do you recommend Rajah take about his concerns with respect to the new one-cent-in-change policy?

2. Explain whether you think Rajah should blow the whistle on his employer.

3. What is your opinion of the ethics of the new policy about withholding one-cent-in-change?

4. Is there a need for ethics training? If so, why?

5. How often should ethics training take place? Why?

6. By having ethics training, what can the employer and employees learn? 

Answers:

1.

In the case study provided, Rajah has been working as a retail manager of a discount general store. After three months, he received orders from his regional manager that cashiers at the store would not indulge in returning one cent to the customers in case the bill was an amount like 2.99 dollars. However, if customers objected, the cashiers would give them the back change. It was estimated that such a policy would increase the overall profits of the company. However, Rajah finds it ethically wrong and equivalent to stealing from customers. As per the instructions given to Rajah by his regional manager, Rajah had unwillingly instructed his subordinates to impose the one cent in change policy with respect to the customers. However, he knew that such a policy was unethical and unfair as far as the customers are concerned. However, he was scared to raise his voice against his superiors, because he was new to the job and did not want to come across as rebellious. It could even cost him his job. Yet, a code of ethics must always be maintained in business (Trevino & Nelson, 2016). However, since Rajah knows that the business practices of his company are unethical, staying silent would make him an accomplice. Thus, Rajah must raise his voice against the unfair policies imposed by the manager and take it up with the management of the company.

2.

Whistleblowing may be defined as the process of exposing the unethical or illegal practices within an organization to the general public (Bartuli, Mir Djawadi & Fahr, 2016). A whistleblower is usually someone internal – like an employee or a manager who has witnessed the unethical practices firsthand (Gao, Greenberg & Wong-On-Wing, 2015). Rajah has been the witness to the unethical practices of his retail store. He knows that his subordinates are being made to commit actions which are extremely unfair and unethical, not to mention illegal. Before blowing the whistle on his organization, the first step on Rajah’s part would be to consult with the management. If required, Rajah would even have to take up the issue with higher authorities and inform them about the unfairness of the policies. If Rajah fails to secure the support of the higher authorities, whistleblowing would be the only way out. It is, however, the last resort since Rajah’s loyalties lie with the company. The question arises as to whether the practices of whistleblowing are illegal or not. Whistleblowing would not be considered unethical if it has been used for the greater good of the stakeholders involved (the customers, in this case).

3.

The one cent policy imposed by the company is extremely unethical in nature. Ethics in business refers to the individual judgments of a person about the rights and wrongs in the operations of a company (Joshi, Sharma & Kumari, 2016). For instance, businesses often take decisions which might improve the profitability of the company, irrespective of the ethicalness of the decision (Bednarz, 2013). For instance, in this case, the retail store is clearly ignoring the interests of the customers. It is not a matter of one cent; on the other hand, it is the ethicalness of the situation that must be assessed. The customers have a right to that one cent, and thus it must be returned to them, irrespective of how small the amount is.

4.

Without a doubt, every employee of the retail store must be made to partake in ethics training. The main purpose of ethics training is to ensure that a positive working culture is maintained in the organization. It would also ensure better responses in the case of ethical dilemmas. Since Rajah lacked ethics training, he was in a dilemma as to how to act or what to do. Had he been provided adequate ethics training at the beginning of his employment, he would have been able to take the right decision and avoided such an ethical issue in the first place.

5.

Ethics training should ideally take place twice every year. This is primarily for two reasons. One, it would help existing employees stay up to date with ethics and moral philosophies in business. Two, it would also ensure that the new employees of the business are aware of the ethical issues that may arise and their expected responses in such situations.

6.

Ethical training would be beneficial for both the employee and the employer. For instance, the employers would be able to get better understanding of where their employees stand as far as ethics are concerned (Wang & Calvano, 2015). They would also be able to understand the concerns of the employees with relation to ethical and unethical practices. As far as the employees are concerned, they would be clear as to the expectations of the employers and their stance on ethicalness of business decisions.

References:

Bartuli, J., Mir Djawadi, B., & Fahr, R. (2016). Business ethics in organizations: an experimental examination of whistleblowing and personality.

Bednarz, T. F. (2013). Ethics in business. Practical Ethics for Food Professionals: Ethics in Research, Education and the Workplace, 52.

Gao, J., Greenberg, R., & Wong-On-Wing, B. (2015). Whistleblowing intentions of lower-level employees: The effect of reporting channel, bystanders, and wrongdoer power status. Journal of Business Ethics, 126(1), 85-99.

Joshi, T., Sharma, S., & Kumari, S. (2016). Ethics in Business. E-Commerce for future & Trends, 1(3), 1-2.

Trevino, L. K., & Nelson, K. A. (2016). Managing business ethics: Straight talk about how to do it right. John Wiley & Sons.

Wang, L. C., & Calvano, L. (2015). Is business ethics education effective? An analysis of gender, personal ethical perspectives, and moral judgment. Journal of Business Ethics, 126(4), 591-602.