Serious consequences ensue when managers do not manage in an ethical way. At stake are jobs, reputations, wealth creation, efficiency, effectiveness, and whole livelihoods.
1. By Aaron S. Robertson With supplemental notes and a small group activity to enhance discussion Copyright 2011 Aaron S. Robertson
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Editor's Notes
The explanation advanced by Jones & George as to why we should manage in an ethical way seems to hold even more credence for today. Granted, I respectfully submit that all business dealings should be (or should have been) conducted ethically, no matter what century, decade, etc. we are talking about. However, with such a greater dependence on one another today for our economic health, it is especially important today that ethics be practiced in business, because “collective disasters” are far more likely to happen.
“ Taliban Toyota” – This is a news story that broke on November 2, 2011, written by Reuters correspondent Kelli Dugan. In short, a sales manager and sales representative from one Toyota dealership attempted to snag potential customers away from a rival Toyota dealership by telling them that the rival dealership’s owner, a gentleman who is Iranian-born, supports terrorism. The truth is that he fled Iran in 1980, just as the leaders of the Islamic Revolution were coming to power, and has been a U.S. citizen for some time now. A jury awarded him $7.5 million in damages. This act, which is ignorant, unconscionable, and frankly un-American, not only victimized this man, along with his business and employees, but it will undoubtedly cause long-lasting repercussions for the other dealership and its employees, as well. Not only does the offending dealership have to hand over $7.5 million, but it could also face a long-lasting public relations nightmare that may cost it numerous potential customers, which in turn jeopardizes the livelihoods of all its employees and hurts suppliers who depend on the relationship they have with the dealership. All of this because of malicious and false accusations made by a rogue sales manager and a sales representative who went along with it. Enron – Thousands upon thousands of jobs lost, life savings and retirement accounts wiped out, complete infrastructures destroyed, all because a few managers, executives, and accountants at the very top got greedy. “ The Great Recession” – Banks and other lending and investment institutions get greedy, start lending to just about anyone, regardless of true ability to repay on these loans and mortgages. Naturally, many of these consumers start defaulting on these loans, and the ramifications spill into other sectors and industries. The result is Enron on a global scale. Millions of jobs vanish, life savings and retirement nest eggs lost, governments around the world have to bail out large corporations, even whole industries. The world is still feeling the effects in 2011. Experience at a fast food restaurant – As an undergraduate student, I spent around 2.5 years working at a fast food restaurant, which was owned by a franchisee. A couple supervisors got greedy, start helping themselves and their friends to free food on a fairly regular basis and not taking their jobs very seriously. Naturally, a number of non-supervisory employees begin to follow suit. Though there were other reasons that also contributed to the owner eventually having to close his doors (price wars, heavy brand competition, overhead, etc.), I have very little doubt that this played a significant role. The effects: not only were jobs lost, but suppliers and local charities and organizations were hurt, as well. One less business sponsor for the local little league team, less donations to the local food pantry, etc.