Confusion over conflicting ethical standards may suggest one reason for the lack
ID: 384845 • Letter: C
Question
Confusion over conflicting ethical standards may suggest one reason for the lack of an effective moral compass in business dealings and why certain elements of an organization's strategy may be unethical. But apart from this, three main drivers of unethical business behaviour stand out: - Faulty oversight that implicitly allows the overzealous pursuit of personal gain, wealth and self-interest. - Heavy pressures on managers to meet or beat short-term performance targets. - An organizational culture that puts profitability and business performance ahead of ethical behaviour. Choosing one of these three drivers outlined above, discuss how this can lead to unethical behaviour and use an example to illustrate your answer.
Explanation / Answer
The most common driver of unethical behavior is heavy pressure on managers to meet the short term performance targets. Such behavior stems from the unrealistic expectations of the top management of the organization who are either unaware of ground realities of marketplace, or pretend to be so. They believe that customers have short term memories and it is posible to get away with unethical behavior in initial stages, and later make up for it somehow when their market condition stabilises, but more often than not, it is not the case. The management believes that their highly paid managers will beat the mammoth targets, because they are paid to do so. Poor managers make false promises, dish out a bundle of lies and make fool of customers, only to be lamented later. Company pays huge price later,which may not be visible in the short term, often reassuring the management that their trick has worked. Once everyone is aware of the tricks, the ship starts sinking and the managers are the first to jump off.
An example of such behavior is an organisation in education space, operating out of India. This company is often called the only marketing driven organization that is always criticized for its poor service. The products are sold by agressive marketing, false promises, false results and fake testimonials by profiles that never existed. The managers try every trick in the book and out of it, to meet the stiff targets. There have been numerous complaints against the organization, but such companies always take advantage of the fragmented state of the industry and lack of regulation and enforcement.