Case Study on "Comprehensive Original Ethical Situation"

Case Study 15 pages (4454 words) Sources: 3

[EXCERPT] . . . .

Business Ethics Case

The Examination of a Business Ethics Dilemma: A Case History of a Medical Supply Company

Introduction of Dilemma:

The functionality and long-term viability of an organization may be as much contingent upon the strength of its ethical resolve as on the quality of its physical output. This is a reality which I became distinctly aware of during my two-year tenure as the head manager for Allied Medical Products. A company which specialized in the production and sale of products specifically geared toward wound-care, Allied Medical was only three years old at the time that I joined its staff. It was fraught with operational problems that I soon learned stemmed primarily from the ineffectiveness of my boss. Mr. Caldwell, as we will fictionally refer to was the founder, owner and CEO of Allied.

In addition to being somewhat difficult to communicate with, Mr. Caldwell was extremely dishonest with both clients and debt collectors. While Allied was a legitimate business, Mr. Caldwell's willingness to lie to clients about the availability of products as well as to creditors about the status of payments was a major detraction to the company's credibility. He was extremely unethical as a provider of services to customers, causing inconvenience and even crisis for medical device suppliers by failing to meet orders and likewise failing to inform said suppliers of this condition. Often, Allied was unable to meet its orders due to Mr. Caldwell's being in financial arrears with suppliers of materials needed for the manufacture of products.

This condition was one resultant both from Caldwell's poor business acumen and the developmental stage in which the company was then operating. It created a difficult and permeating management dilemma. I found myself in the difficult position of having to contend with the circumstances created by Mr. Caldwell's ethical faults. Herein arose the major ethical dilemma upon which this research is trained to focus. As the manager of an organization with an important social role, I was divided by my loyalty and responsibility to Mr. Caldwell and by my desire to behave only in advocacy of ethically-based behavior.

Case History:

Management systems theorist Craig Johnson identifies five major bases for the ability to levy authority over others, with said bases varying in their dependence upon structural parameters such as in the relationship between a boss and an employee. Citing coercive, reward, legitimate, expert and referent power all as potential characteristics within a hierarchical relationship, Johnson illustrates that our motives for submitting to the demands or others are highly contingent upon context, relational definitions and the specific nature of such demands. Likewise, our ability to brandish such authority as to compel the compliance of others will be highly reliant upon these same variables. (Johnson, 10).

In practice, at Allied Health Products, there existed a highly fluctuating dynamic with regard to such conditions. The relationship between myself and Mr. Caldwell was subject to the conditions of a reward-based relationship with his power extending from his ability to provide me with a satisfactory salary, a professionally reputable title, the prospect of advances and raises, the provision of healthcare and the general offer that organizational growth would translate to personal ascension.

The relationship between myself and the staff of six workers over whom I presided was one based in a combination of expert and referent power. Due to the highly applied nature of my position, a managerial title endowed with many of the practical labor responsibilities as are given to lower ranking members of the team, I was able to develop a close relationship with my staff that enabled me to earn their loyalty and confidence through example. Engaging in the production, task-orientation and scheduling of day-to-day operations, I played a role in working directly with the staff in addition to serving as its leader. In this capacity, I most often served as the communicational liaison between the CEO and my staff.

These characteristics, as they apply both to the relationship between myself and Mr. Caldwell, and between myself and the staff, are central to the investigation of the ethical dilemma there. The loyalty which I have to Mr. Caldwell is defined by the relationship articulated above. Likewise, as the Ethics Triangle will further illustrate, the relationship between myself and my staff will be crucial to addressing these ethical concerns. In the face of the dynamics described here, the dilemma is enforced by the unwavering condition of the practicality in ethical business practice: "For discerning the needs of clients, monitoring the moves of competitors, benefiting from the experience of associates, and serving others well, it's hard to see how there could be anything ultimately more important than truth." (Morris, 26)

Dilemma Evaluation Through the Ethics Triangle:

Findings and Recommendations for Allied Medical Products:

In his 1996 text on leadership Integrity, author Stephen Carter describes this title quality as something which is subject to a collective favor and a multi-layered matrix of hypocrisy. On the topic of integrity in the public sector, he explains this paradox:

Scarcely a politician kicks off a campaign without promising to bring it to government; a few years later, more often than is healthy for our democracy, the politician slinks cravenly from office, having been lambasted by the press for lacking that self-same integrity; and then the press, in turn, is skewered for holding public figures to a measure of integrity that its own reporters, editors, producers, and most particularly, owners could not possibly meet. And for refusing to turn that critical eye inward, the press is mocked for -- what else? -- a lack of integrity. (Carter, 6)

Carter's characterization here is indicative of an almost universal dilemma within any industry which has the potential to command large capital investment and return. The private sector is given over to a wide array of inter-organizational dependencies, such as those which develop between retail companies, their clients and their creditors. In any of these relationships, there is a level of contractual submission which each makes to the accountability of the other. Whether this is a system dependent upon regular payment upon receipt of services, dutiful fulfillment of promised services or the efficient execution of any number of contracted obligations, a business organization is subject to the conceits of its partners and its trade.

One of the troubling revelations which I came upon during my experiences at Allied was that my employer's ethical condition was not uncommon. To the contrary, it was directly reflective of the way in which many of the proprietors within the industry were prone to behave. The clients with whom we conducted much of our business-- nursing homes, long-term care facilities and large-scale medical-supply concerns -- were often as likely to commit to lapses in honesty. As the chief customer relations officer for the organization, I was given direct exposure to both the impact of my employer's ethical shortcomings and the proportional behaviors present in our business partners. They often behaved to scale with one another, conducting business with a hostile logic that exists outside the traditional governing principles of morality.

As a prime example, my employer's failure to fill a client's order in a timely and efficient fashion would result in said client's withholding on payments for previous orders. In this relationship, 'wrongs' are being committed according to contract by both parties. However, there are no victims. It is the entitlement of either party to discontinue a dissatisfying relationship. It was often the case though, given the nature of Allied Medical's extremely affordable product, that the financial benefits to the client outweighed the detriments of the poor service. The resulting rationale would be the strong-arming approach which involved a system of verbal deceit, tactical aggression and a financial dependency. Within the scope of Craig Johnson's power-base discussion, there is evidence that the relationship between client and provider in the small-scale medical supply business is based in part on a coercive-power structure and in part a rewards structure. Therefore, my employer's behavior seemed generally reflective of the integrity-shortfall which dominates the trade. With the increasing competitiveness to supply low-cost medical supplies that contend with a national nursing shortage and rising healthcare expenses, the capacity for power to be brokered by petty economic coercion and a pricing rewards system has given over to widespread ethical abuse. It is an abuse which is generally tolerated, providing root for one of the more difficult dilemmas to assimilate into strategy.

The corruption within a small business, especially one that has a variety of comparatively large business partners, can often be so institutionalized and seemingly inconsequential that the notion of acting as a whistleblower is entirely impractical.

In his 2001 book on the topic, business analyst C. Alford characterizes such a dilemma, especially within the context that one has acknowledged the futility in addressing the issues of integrity in the absence of a central force for the implementation thereof. To Alford's view, it can be a revelation to find that those in roles of leadership or industry pacesetting are often at… READ MORE

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