Business Ethics Article Review
Summary
Carucci (2016) of the Harvard Business Review explains why business people violate ethics. He basically says that the reason for this is that these people have good intentions but their bosses expect them to do certain things and doing them may not be ethical. Carucci (2016) says that progress has been made in business ethics, partly because of laws that control some of the unethical practices of yesteryear. However, he also says, “Despite progress, 41% of workers reported seeing ethical misconduct in the previous 12 months, and 10% felt organizational pressure to compromise ethical standards” (Carucci, 2016). He uses the recent Wells Fargo scandal as an example. In that issue, 5300 employees fraudulently opened over 1 million accounts without client permission to do so. This indicates a systematic issue rather than an employee ethics issue.
Carucci (2016) then goes on to list 5 ways that business organizations cause their employees to make unethical choices. These include making it unsafe to speak up against unethical practices, putting excessive pressure on employees to reach unrealistic performance standards, having conflicting goals that come off as unfairness, leaders not controlling employees behavior, and having no good examples to follow (Carucci, 2016). If a company has ethical policies that are upheld and there is an ethical culture, employees may not be so tempted to violate ethical standards to meet goals.
Article’s Contribution to Contemporary Thinking about Business Ethics
When consumers see scandals perpetuated by businesses such as Wells Fargo (or several others that could be named), they feel like business people do not care about their consumers except for about how much money they can get out of them. They may not want to do business with a company that has proven to be unethical. Fatima (2016) of ITIHAS The Journal of Indian Management says, “Customers trust the businessmen who implement ethical rules, thereby leading to repeat purchase behavior. This increases the lifetime of the business as one can cheat a customer only for a short period, which by word-of-mouth could lead to defamation of the company image” (Fatima, 2016, p. 64). With some businesses, such as banks that are too big to fail though, there is little fear of losing business when ethical issues do arise. Their reputation does not matter because there are few competitors and even fewer that can compete with the type of capital and power a corporation like Wells Fargo. That is the reality of today’s business world.
In the case of Wells Fargo, employees opened accounts in the names of customers without the customers knowledge just to bolster not only their sales quotas but also the appearance of the bank’s financial value. When over 5000 employees of one corporation commit the same ethical error, it is not the employees’ ethics that are in question but the corporation and the systematic lack of ethical throughout that should be looked into and halted. Carucci (2016) says, “Despite good intentions, organizations set themselves up for ethical catastrophes by creating environments in which people feel forced to make choices they could never have imagined” (Carucci, 2016). Organizations should have responsible leaders that do not allow unethical methods of achieving goals.
In Europe, the European Commission has broad conceptual authority that extends beyond compliance with rules, regulations and voluntary actions when it comes to Corporate Social Responsibility (CSR). Pless, Maak, and Waldman (2012) of the Academy of Management Perspectives quote the European Commission as saying, “Enterprises should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of: maximizing the creation of shared value for their owners/shareholders and for their other stakeholders and society at large; identifying, preventing and mitigating their possible adverse impacts” (Pless, Maak, & Waldman, 2012, p. 53). In other words, there should be some sort of procedure in place for preventing unethical acts and for mitigating the errors once they have been made so that society at large does not suffer from it. This requires strong and responsible leadership.
Application of Information to my Field
Unethical behavior by businesses can come in many different forms. One way is through the lack of safety precautions being taken that endanger workers. As a Safety Management professional, I can help to prevent businesses from unethical in their concern for their employees’ health and safety by making sure that the businesses for whom I work have the highest levels of safety standards and conditions. I can also act as the leader who is the good example to follow.
How Article Fits my Ethical View
I, like most people, was appalled when I heard about the Wells Fargo scandal. I did not understand how the company was able to have so many employees acting so unethically. However, after the facts came out and it was shown to be systemic behavior throughout the company, it made more sense. When a company’s culture is unethical and employees are pushed to meet unrealistic standards, then an “anything goes” approach will be standard and result in the issues that Wells Fargo has. Knowing that something is wrong should be a stronger compulsion than wanting to make a bonus. If an employer pushed me to do unethical acts to meet some sort of expectation, I would be looking for another job right away. I could not live with myself, so I am not going to work for an unethical company that expects me to be like they are.
References
Carucci, R. (2016, December 16). Why Ethical People Make Unethical Choices. Harvard Business Review. Retrieved from https://hbr.org/2016/12/why-et...
Fatima, T. (2016). Rule of Ethics in Corporates. ITIHAS The Journal of Indian Management, 63-66.
Pless, N. M., Maak, T., & Waldman, D. (2012). Different Approaches Toward Doing the Right Thing: Mapping the Responsibility Orientations of Leaders. Academy of Management Perspectives, 26(4), 51-65. Retrieved from http://content.ebscohost.com/C...
