Ethical Dilemma in Management

The ‘gray zone ‘of business and professional life is organizational dilemma, and it is very much clear that the things are not black or white when ethics is playing its vital role. ‘Dilemma is a situation that requires a choice between equally balanced arguments, which gives a satisfactory solution’*

Ethical issues “ A problem or situation that requires a person or organization to choose between alternatives that must be evaluated as right (ethical) or wrong (unethical).

Ethical Dilemma

A situation in which two or more options for action with different interests, which seem equally arguable, and where the decision is given most importance but which is not so simple and clear is called ‘Dilemma.’

In this the alternatives are very close to each other and seem to be equally balanced, that is why it becomes very difficult to take correct and clear decisions. And one thing which is also very important about ethical dilemma is that the decision for action when it is made will have the important impact on the welfare of the people.

The number of scandals are increasing everyday and it becomes more necessary for the organizations to adopt ethical codes of ethics. The business schools are also doing the efforts to control these scandals by developing ethics courses and by appointing consultants to put integrity into corporate culture.

Ethical dilemma is the mental conflict between moral imperatives. Conflict arises when one moral imperative disobeys another moral imperative. Ethical dilemmas are often cited in an attempt to refute an ethical system or moral code, as well as the worldview that encompasses or grows from it.

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Examples of Ethical Dilemma

Discriminationtion

If a male employee is the boss in an organization. There may arise the conflict if a new female employee comes to join, because the organization is dominated by male employees. The reason of this conflict is that the company has not had a chance to conduct sensitivity training. Some of the male employees make inappropriate remarks to the new employee. She complains to the boss ; in response, he sanctions those responsible for the conduct.

The boss also wonder if it would be wise to move new female employee to another position where she would be less likely to draw attention. But if he chooses the option of treating the female employee differently ,it may be considered discriminatory and unethical conduct.

Side Deals

A business manager with an employment contract may also have some ethical decision problem. The requirement of the contract is that the manager has to work solely for the employer and he wants to use the talents of the manager to attract new clients to the business.

If the manager starts attracting more clients than the expectation of the employer, then it is in favour of organization and the manager may be rewarded, but if the manager diverts that excess business elsewhere and takes the commission, then it becomes an ethical issue. If he does not at minimum, disclose the idea to the employer, the manager will likely be in breach of both his contractual and ethical duties.

Partners

If Mr. X is the a partner in a business and sees a great deal of profitability on the horizon. He does not believe that his partner deserves to profit from the business’ future success, because his personality is not liked by Mr. X,, who may also be wondering if he could simply take his partner’s name off the bank accounts, change the locks and continue without him.

Mr. X proceeds with this course of action, he would be found violating of his ethical and legal obligation to act in good faith concerning his partner. The better course of action may be to simply buy out his interest in the business.

Gross Negligence

Mr. X is on the board of directors for a publicly traded corporation. Mr. X and his fellow board members have the hopes of heading off early for the holidays, for the reason they rush through the investigatory process involved in a much-anticipated merger.

It is the responsibility of Mr. X, as a board member, to exercise the utmost care, respecting decisions that affect the corporation and its shareholders. But if he fails to investigate the matter properly, his action is viewed as gross negligence supporting a breach.

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Ethical Issues Concerning Coca-cola in India, 2003

Situation Analysis

Coca-cola faced a protest by the community near the Coca-Cola bottling plant in Kerala, India. This protest was against the water scarcity and polluted water that resulted from its bottling operations. The Protestants put the allegations on the company and it resulted in the form of the closure of the bottling plant. The state banned the plant of Coca-Cola because they were practicing business unethically.

Soon after the incident, the Centre for Science and Environment (CSE), a Delhi-based environmental NGO, released a report, which indicated the presence of pesticides, greatly exceeding European standards, in a dozen popular beverages sold under the brand names of the Coca-Cola Company and Pepsi Co. A serious protest was faced by not only Coca-Cola but the whole soft drink industries. But Coca-Cola and PepsiCo were the main plant who faced the protest. Together, the companies have 90% of the India’s soft drink market.

Coca-Cola was needed to reply the protest, and in response to the allegations, Coca-Cola denies them by saying their products are safe and questions the lab reports presented by CSE. Coca-Cola was asked to do self and independent assessment of its operations in India by University of Michigan, and university placed the Coca-Cola Company on probation in 2006, The soft drinks were examined by an independent lab, The Energy and Resources Institute (TERI).

According to the reports the soft drinks were declared safe and pesticide free. However, the CSE claimed that only the water was tested and not the other ingredients; ingredients such as artificial flavors and sugar. After the reports from TERI were published the government declared soft drinks as safe. However, the problems with some bottling plants still remain, due to the depleting levels of ground water, day by day .

Critical Issues/Problems

Solid waste and water issue

It was complained by the communities living near the bottling plant in India that the passage of sludge as fertilizer was causing health and environmental damage. The depletion of water levels was the most important issue, which was faced the community because of the Coca-Cola bottling operations which have drastically reduced availability of water for irrigation purposes.

Pesticides in soft drinks

One more important issue was raised in the meantime which was related to human health. The problem was caused by Coca-Cola concerning health is that their bottled water and soft drinks contain pesticides which were tested by the reputed NGO, CSE. No doubt these pesticides cause a great damage to the health of the user of the product.

Dual product standards

It is world known now that Coca-Cola is accused of having dual standards in terms of their products and safety measures concerning human health with respect to USA, Europe and India. (d) Community issue: Number of allegations resulted in the form of closure of one of their bottling plants in Kerala, India. These allegations also affected Coca-Cola largely with its sales, and in addition to this Coca-Cola’s products are banned in the state of Kerala.

Action Taken

The Coca-Cola Company, India was in a great need of taking some important decision regarding sales losses. It thoughtseriously about its corporate responsibility and witnessing huge sales losses. They started doing efforts in order to gain trust among the local communities near the bottling plan. They improved their business practices and reduced the water usage by 34%. Through the practice of rainwater harvesting, Coca-Cola returned substantial water to the aquifers.

They have stopped distributing sludge as Biosolids (fertilizers) to farmers for agriculture use, and have taken initiatives with the Indian government to encourage the development of additional solid waste disposal sites. They treat the water with activated carbon filtration,which is used for making soft drinks and run through a purification process to ensure that the water is free of pesticide residue. The quality checks are given more importance now and ingredients are also closely monitored. According to the company’s factsheet, they strictly follow the product standards which are the same all over the world.

The company also committed itself to environment responsibility through its business operations Coca-Cola has also partnered with the NGO’s and the government to provide medical access to poor people through regular health camps. Conservation of energy and adherence to the ban on purchasing CFCs are the example of greater corporate responsibility.

Here we can say that Coca-Cola got the favourable result in return of the allegations, because these allegations helped Coca-Cola Company, India to show their corporate social responsibility and to maintain good product quality standards. They took the allegations initiatively all over India which helped them reach villages for a good cause, this also indirectly marketed their products with establishing a trust among the public.

After all these allegations, the CSE is still not convinced of the quality of the product. Therefore, Coca-Cola must prove that they have upgraded their lab with sophisticated instrument which is capable of measuring pesticide residue in soft drinks. As per the recent reports by CSE, they claim that the pesticide residue has gone up 27 times higher than expected level by the Bureau of Indian Standards (BIS) (in 2006).

Ethical Dilemmas: Some Soutions

All the societies throughout the world are facing the problem of the moral degradation and ethical degradation. It is vast prevalent in the corporate world. Strategies are not strong enough to check the degradation, still they work and try to sort the problems aroused due to unethical practices. The action strategies to control this spreading evil are as follows :

If one gets an ethical dilemma on his hands. How does he figure out what to do? Generally speaking, there are two major approaches that philosophers use in handling ethical dilemmas. The focuses of one approach is on the practical consequences of what one has to do; the other concentrates on the actions themselves. “No harm, no foul”; is the basic thought of the first school the second claims that some actions are simply wrong. For centuries the thinkers have debated the relative merits of these approaches, but for the purpose of getting help with handling ethical dilemmas, think of them as complementary strategies for analyzing and resolving problems.

If there are any laws involved, one has to plan to obey them. To break the law is not always morally wrong. But in ethical dilemmas that arise in corporate, the laws generally establish at least a bare minimum for how one should act. A corporate becomes anti social power if it breaks laws. The size of business and the money involved is not the matter of importance while one talks about the business and organised crime.

Step 1: Analyze the Consequences

If one wants to follow law the next step becomes probably easier to start by looking at the consequences of the actions one is considering. So if the decision maker has the number of or variety of options then he need to consider the range of both positive and negative consequences connected with each one.

• Who will be helped by what you do?
  
  
• Who will be hurt? Because this is the responsibility of the decision maker to get that type of result which is no harmful in for any person and any society.
  
  
• What kind of benefits and harms are we talking about? It is not the matter of discussion that some “goods” are more important (health) than the other goods (T.V .). An small favourable decision in favour of the high quality goods (Ex. health) can outweigh a larger amount of “lower quality” good. And in the same way if one harms “ high quality goods” in small quantity can outweigh the larger amount of “lower quality” pain.
  
  
• What will be result in the long run as well as short run. And it is very much clear that the decision is made keeping in mind the short run and one wants to give short shift to long run, then he may be facing the number of negative long run consequences.( like air and water pollution and the cost of the S&L bailout) that people before you thought weren’t important enough to worry about.

After looking at all of your options, which one produces the best mix of benefits over harms?

Step 2: Analyze the Actions

All the options must be considered from a completely different perspective. One need not to think about the consequences. He has to concentrate strictly on the actions.

How all the options measure up against moral principles like honesty, fairness, equality, respecting the dignity of others, respecting people’s rights, and recognizing the vulnerability of individuals weaker or less fortunate than others? One can do any of the actions which he considers “cross the line,” in terms of anything from simple decency to an important ethical principle? If there’s a conflict between principles or between the rights of different people involved, is there a way to see one principle as more important than the others?

What you’re looking for is the option whose actions are least problematic.

Step 3: Make a Decision

After both part of the analysis are taken into account then decision is made.

This strategy provides at least some basic steps which can be followed.