Quiz 2: Defining Business Ethics


Business Ethics Business ethics involves an application of ethical standards to the business situation. Business people should not apply business ethics as a separate set of ethics concepts but it must be followed on both inside or outside of the business situation. In this case study, Automobile Company F needed to develop a competitive vehicle under affordable price to capture the market segment of baby boom generation. In the test, this new model identified the potential safety issue called aerosol, retrofitting of that model is not done as it met all the safety regulations of that country. However, all the export vehicles were made necessary modifications based the demands from that country. Further, company faced hundreds of lawsuit after it is being proved that F is aware of the safety issue. It also claimed that fixing the safety issue is also inexpensive. The car making company identified that there is a potential safety hazard introducing those cars in the market. Though the current design meets the government standards, not fixing the safety issue is against to the business ethics. This indicates that the company is concerned about making an early entry in the market to meet the competition but not about the safety issues that a customer can face with that product. As it is ethical for a company to consider customer safety while selling the product, it is suggested for a manufacturer to go beyond government standard.

About Stakeholders There will be list of stakeholders in every organization, where each stakeholder plays a different role. The list includes: Stockholders or shareholders, customers, employees, retailers, wholesalers, suppliers, community and government. Every organization does not have all these stakeholders. For example: some companies do not deal with wholesalers. Any unethical behavior in the business affects all these stakeholders. In this case study, C works as a shift leader in the fast food restaurant. The store manager D had announced that company has a proposal to launch new healthy menu with low prices to attract the new customers. But at the end of the meeting D told the staff to make limited supply of healthy in order to push their regular menu to maintain their sales and revenue. C gets amazed as D is neglecting the company's great push for this new menu and only concerned about his sales and bonus. The D's decision to limit the supply of new healthy menu with lower prices would impact the customers, shareholders and community. Customer satisfaction gets impacted as they visit the store expecting to order healthy and if the stock is not available then they would end up ordering something else or leave the store. If the customers are pushed to "up-size" menu options for sales that too unhealthy food options, it shows negligence towards the community. Anything that affects the customers would directly affect the shareholders. Customer satisfaction is key for the sales and revenue of the store, which is major for the shareholders.

Resolution of an ethical dilemma Ethical dilemma can be resolved by recognizing the type of conflict. These are mentioned below: • Truth versus loyalty, • Short term versus long term • Justice versus mercy • Individual versus community In this case study, D plan to sell their unhealthy profitable items by limiting the supply of new healthy menu options. C feels that advertising the items and deliberately running out of these items is not correct. So, C decided to work on this potential disaster, in which D is shortsighted. In the first week of new menu choices, C worked so hard and covered drive-thru window for lunch, breakfast and dinner to ensure that supply of new menu choices never ran out. At the end of the week, the results show that all new items are hit without affecting the sales of traditional items. C identified the ethical concerns in D's decision. She addressed her ethical dilemma by recognizing the conflict type as truth versus loyalty (i.e. when the organization is advertising the new healthier menu, then it is not correct if the items ran out for a wrong cause) and individual versus community (i.e. D's decision is not affecting a single person, but it is risk for stakeholders as well as the community). Thus, her decision to work hard in the first week against the D decision and prove that sales of new items can be hit without affecting the sales of traditional items is correct.