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Ethical Dilemma Faced by organization and Theoretical Aspects

Discuss About The Ethical Leadership Decision The Education?

Each and every organization has its unique behavioral processes and characteristics. An organization develops its corporate culture by incorporating its different values and ethics. Ethical dilemma is a trait that is found in the organization and it has clear connection with moral dilemmas. In a company, ethical dilemma leads the human resources to make wrong decisions because of difficulties. Specifically, ethical issue arises when an employee has to distinguish between immoral and moral act. For an organization, it is very important to find the morality while making the decisions on the basis of significant aspects of business. There are various organizations, which have faced different ethical dilemmas. These ethical dilemmas have adverse impact on image and reputation of firm and its business processes (Braswell, McCarthy, & McCarthy, 2017).

The major objective of this essay is to analyze the ethical dilemma that is faced by Uber Technologies Company. This essay provides brief discussion about the Uber Company that is engaged in ethically wrong doings with its employees. It also includes some theoretical concepts of management ethics, which can be used to examine the ethical issues. Moreover, it discusses the impact of these concepts on managerial practices of Uber. At the end, it describes leadership decision making concepts, which can be considered by Uber to ensure integrity and morality of organizational decisions.

Uber Inc. is an American Organization that is offering transportation services and operating its business in more than 630 cities. Since its establishment in 2009, the organization is connecting transportation industry with the information technology through its mobile application (Elliott, 2015). According to the recent data and figures, the brand value of Uber Company is more than a taxi service provider in America and all over the world. Under its operations, the drivers run their own cars or they can take a cab on rent. Uber offers very easy, convenient and affordable rides to the people, so that can arrive to their location safely. In addition to transportation services, the organization is offering online food delivery services to its potential customers (Casadesus-Masanell, Makenzie, & Didiomov, 2015). One of the unique characteristics of organization is that they offer its services through mobile application. The organization is constantly looking for different ways to renovate its services and expand the range of vehicles. In this industry, the major competitors of the company are Lyft and Sidecar, which are also operating their business effectively.

Further discussing about the ethical issue that is faced by Uber Inc., it can be noticed that there are various issues, in which this organization has involved. For example, one of the major issues is the scandal, in which Uber’s top management has dismissed over 20 employees due to case of sexual harassment. In Past few years, it has been noted that the people of organization are involved in harassment doings with the colleagues (Crane, and Matten, 2016). Recently, a former Susan Fowler revealed to the media that she was assaulted sexually by a co-worker. Another ethical dilemma, which was the part of Uber’s business processes and operations, is that organization adopted a contractor relationship with its drivers. The major issue is that organization is breaking the rights of its drivers by considering as them drivers, not like real employees. Due to contractor relationship, the employees were unable to access and enjoy most of their rights being employees. A case of unfair dismissal was filed against Uber Inc. by disabled drivers, who thought that these practices of company are not justified (Yoo, 2017).

Uber believed it very innovative that it didn’t call its drivers as employees as they are known as its drive-partners of company. Due to this, drivers feel isolated and don’t have family-like relation with the organization. According to Fair Work Commission, contractor relationship should not be implemented by Uber’s management because this practice is beneficial for the organization, but it neglects the rights and interests of company’s employees. This is the major reason behind the ethical dilemma, faced by Uber Technologies and it is related to its employee management process. Thus, this is one of the major situations, where Uber Organization has faced the ethical dilemma (Chikweche, & Fletcher, 2013). Due to this, the drivers were very disappointed and Rideshare Drivers Association of Australia filed a case against Uber on behalf of drivers. This ethical dilemma leads its drivers to lower morale and they lose their loyalty towards Uber as they are not employed on permanent basis. The firm has received several driver complaints; this indicates that other competitors have a chance to acquire the services of these drivers. This movement of other organizations will impact the brand image and revenues of Uber Inc. This above mentioned ethical dilemma positions Uber’s competitors such as Lyft in a competitive position to stay in market as it improves the screening of drivers and make sure they are maintaining high ethical standards on service (Clegg, Kornberger, & Pitsis, 2015).

To deal and examine this ethical dilemma of Uber, different ethical theories can be used. These ethical concepts assist a company to handle this type of ethical issues. Every organization should follow these theoretical aspects of management ethics to overcome ethical dilemma (DesJardins, and McCall, 2014). Each and every person, who is connected with organization directly or indirectly, is known as stakeholder. Thus, the situation of company can be examined using stakeholder theory. According to stakeholder theory, a business or organization should focus on creating the value for its both internal and external stakeholders (Ferrell, & Fraedrich, 2015). Under the term “stakeholder”, it includes employees, customers, suppliers, shareholders, communities etc. The idea of this theory states that the top managers of organization have the responsibility and duty to maximize the interests of its all employees in a manner, which is permitted by social and ethical values. This theory states that it is the social responsibility of Uber to supervise and take care of its drivers. It should investigate all the information about the drivers. The company needs to be cautious about how they can work in the interests of its drivers by considering them employees. This theory states that if the company will not take the responsibility for its drivers and society, then it may face the decline in business in long run (Harris, 2014). From this analysis, it can be stated that Uber is failed in stakeholder engagement with its drivers. Complying with this theoretical aspect, the company will be able to consider the drivers as employees and develop the strategies for effective management of drivers’ interests.


In the case of Uber, Right Theory of Management Ethics can be used for examining the issue, because this theory can be effective in unfair treatment with its drivers. By considering another aspect of management ethics i.e. rights, it can be stated that rights are the privileges, which a person receives while employed by an organization. There are certain rights, which are given by organization, when a person works in an organization by becoming its part (Huddleston, 2014). For example, employees get the power to use their human rights as they are living in the community. These human rights are the fundamental rights, which an individual always have. Moreover, these rights assist the employees in saving themselves, while working with an organization.

The rights to employees are ethical, because they assist the people to secure themselves from misleading and fraud practices. It is legal and ethical that employees can access some specific rights in a company. It assists the organization in keeping the interest of stakeholders in business processes and activities. In addition to this, it also supports the organization in developing and imposing the code of conduct and laws. According to the right theory of ethics, the people of an organization have some rights that no one can take from them (Hunt, 2014). For instance, these rights are like; right to involve, right to get information, right to speak, right to involve in decision making process etc. Moreover, it is the responsibility of a company to give these rights to its internal and external stakeholders. The stakeholder can access these rights effectively and no one can restrict them from doing so.

Discussing about the chosen case in this essay Uber Inc., the news stated that this organization is developing contractor relationship with its drivers and these drivers are not on permanent employment arrangement. It has given a new name to its drivers, i.e. “driving partners” instead of considering them as employees. In this context, Fair Work Commission has stated that this is against fundamental rights of organization’s people that they should treat their drivers equally, like they treat other front and back office staff. At Uber, the management has played a game or tactics by calling its drivers as partners in place of employees. This action of company ceased all the employee rights of drivers at Uber. They become insecure about their job, as they can be disabled by its top management any time (LeBaron, 2014). Due to company’s this step, they were unable to access their employee rights while working with Uber Inc. Right theory of managerial ethics indicates that this action of company is against its code of conduct and ethical procedures. Looking at the ethical rights of people, it is moral right of employees to be an integral part of company. At Uber, drivers are the important stakeholders, who assist the organization in generating revenues and profits by offering rides to customers. Thus, it is the obligation of Uber Inc. to give the rights and privileges to the human resources (Litschka, Suske, & Brandtweiner, 2011).


Furthermore, the company can focus on the Kantianism theory of business ethics, which focuses on treating all the people equally. In this case, Uber Inc. is treating its drivers as drive partners only, not like its employees. The drivers were not having the rights like other front line and back office employees had. This theory complies with the aspect of humanity and states that Uber is unethical as it has the drivers only for generating profits and revenues for it. These drivers at Uber are driving cabs for many hours and still they are not treated as employees (Bowie, 2017). It indicates that these drivers are only meant to perform hardly for comparatively lower wages from Uber Inc. The implementation of this theory will have a large impact on enhancing the brand image of organization. With the effect of this theory, the company will be able to treat all the employees equally.

By complying with above given theories, Uber will be able to develop a positive environment and change in the business organization. Moreover, it also assists the external and internal stakeholders to gain and enjoy their fundamental rights, which they deserve as an integral part of organization. All of the above theoretical practices will influence the managerial practices of Uber Inc. If the company complies with the right theory, then it will have to give fundamental rights to its drivers (Macmillan, 2015). It will motivate the drivers on their job and engage them towards business practices. One of the major benefits of these theories will be sustainability and retention of employees. Higher motivation and stakeholder engagement will enhance the performance of drivers and they will be more loyal towards organization and its managerial practices. By understanding their duties and responsibilities towards drivers, Uber will be able to increase their morale and trust in the organization and they will feel security towards their job. In the process of decision making, it is significant to include all the stakeholders and employees and take their ideas and opinions.

After analyzing all the theories, it can be stated that stakeholder theory is the most significant and effective in case of Uber Inc. The company needs to understand that stakeholders are the primary assets for a company. The impact of stakeholder makes sure the sustainability of organization. The management of organization needs to become more concerned about the interests and rights of its stakeholders, including its drivers. The employees are required to be more satisfied and motivated. Specifically, the managerial ethics should be implied on the basis of satisfying the needs of customers (Mahadevan, 2015). In the case of Uber Inc., these allegations are more emphasized on unethical practices, which are not beneficial for both the organization and its employees, i.e. drivers. Thus, implementation of stakeholder theory is principally required for future development and existence of Uber Inc. The managers of company need to become more conscious about its actions towards drivers. If the actions of these managers will be justified and valued by others, it will be beneficial for the growth of Uber Inc. In addition to this, implementation of these theoretical aspects will enable the organization managing the work flow and business operations (Shapiro, & Stefkovich, 2016).

It can be noted that role of leadership styles on ethical decision making is very significant. There are different types of leadership theories, which are concerned with different decision making processes. In an organization, leadership and ethical decision making process are interrelated with each other. All these components of organization assist each other in developing workflow management. Management behavior is guided by the decision making process in the organization and decision making can be applied based on leadership characteristics and qualities (Upton, Teal & Felan, 2010). The effectiveness and level of decisions totally depends on the skills and qualities of leader. In an organization, a leader is an individual, who thinks more about his/her team than him/her. Leaders make the decision with responsibility and authority and they are accountable for their actions. Effective leaders not only assist the company to develop but also assist in attaining the virtue and rights. The ethical decisions, made by leaders assist the organization in attaining its business objectives. In context of stakeholders’ interests, it is the responsibility of leaders to provide their duties and rights in company. They should never cease the rights of employees and these decisions should not have adverse impact on the stakeholders’ interests and ethical rights. These decisions should be taken on the basis of code of conduct and ethical policies; otherwise it will lead them towards employee dissatisfaction (Weiss, 2014).

In the case of Uber, it can be noted that Uber Inc. has not applied the above aspects in its business processes. This is the major reason that it has confronted the issues related to employee dissatisfaction and dismissal. At Uber, the leaders and managers were unproductive to deal with the drivers as employees. Due to this, lower employee morale and dissatisfaction was developed among employees. It had an adverse impact on business environment. The organization has confronted the issue that it intentionally recruited the drivers on contractor relationship, i.e. not on permanent employment basis. So, these drivers are not getting their employee rights, being a part of organization. This decision of organization was not ethical and it was against its code of conduct and ethics, because they have ceased their fundamental rights (Burke, 2017). However, Uber is implementing this decision for attaining financial advantage and objectives. But it should not negotiate with employment rights of employees to gain their own benefits. Thus, the leaders at Uber may ensure that all the rights are given to its drivers and other employees.

At Uber, the leaders and manager have taken the financial advantage by becoming an autocratic leader. They ruled the drivers by posing this decision and did not consider the issues of drivers. Due to this, Uber drivers filed a case of unfair dismissal against the firm because of unequal treatment to them. A leader should ensure that company is making ethical decisios for its employees. As a leader, it was the responsibility of management team of Uber that it should consider the problems faced by drivers and eliminate them (Yoo, 2017). They should consider their drivers as employees and provide all the related rights. In addition to this, the organization should involve all the employees and stakeholders in its decision making process. It should create a code of conduct and ethical policy, which should be complied with while making important decisions of organization.

In this way, it depends on the leadership that how they comply with the theories of managerial ethics and code of conduct. About Uber, it is noted that company did not implement any policy or strategy for employee retention and sustainability. So, the leaders should consider the reasons behind employee dissatisfaction and then implement the effective procedures. The leaders at Uber need to adopt the leadership style and characteristics, which are beneficial for both the organization and its employees, including drivers. By doing this, the organization will be able to increase enhance the drivers’ motivation level and employee loyalty towards its services. It should not consider the drivers only as means of revenue generation, but also an integral part of organization (Burke, 2017).

Conclusion

From the above essay analysis, it can be noticed that Uber is engaged in various unethical practices and procedures, which affected the organizational image adversely. There are various events, where this organization was against its ethical code of conduct. One of the major issues is that company recruited its drivers on contract basis and it does not consider them as Uber’s employees. They are just known as Uber’s drive partners that affected the productivity and efficiency of its drivers. According to the Fair Work Commission, it is unethical and illegal not to treat the drivers like other employees of company. The essay focuses on the above mentioned ethical dilemma that is faced by Uber Inc. recently. The essay includes three theoretical concepts of management ethics, i.e. stakeholder theory, right theory and Kantianism theory. These theories can be used to examine and overcome the issue at Uber. Implementation of these theories will be beneficial for the organization to manage the workflow effectively. By looking at the above essay, it can be noticed that leaders play an important role in the process of ethical decision making.

Thus, the leaders should make efforts to improve organizational situations and develop a positive environment through ethical decision making. The management at Uber needs to give employee rights to its drivers, so that they can work with complete motivation and satisfaction. In this way, it is significant for the leaders to resolve the employee issues and adopt an effective leadership style. The leaders should make efforts to ensure that company is making ethical decisions, which are in the interest of both employees and entire organization. The ethical decision making process will fulfill the needs of external and internal stakeholders of Uber Inc.

References

Bowie, N. E. (2017). Business ethics: A Kantian perspective. Cambridge University Press.

Braswell, M. C., McCarthy, B. R., & McCarthy, B. J. (2017). Justice, crime, and ethics. Taylor & Francis.

Burke, W. W. (2017). operations change: Theory and practice. Sage Publications.

Casadesus-Masanell, R., Makenzie, I., & Didiomov, D. (2015). Uber and the Taxi Industry (pp. 1-12). Massachusetts: Harvard Business School.Print.

Chikweche, T., & Fletcher, R. (2013). Entrepreuneship and ethics under extreme conditions of poverty: Exploring the ethical realities faced by entrepreneurs. Academy of Entrepreneurship Journal, 19(2), 47.

Clegg, S. R., Kornberger, M., & Pitsis, T. (2015). Managing and organizations: An introduction to theory and practice. Sage.

Crane, A. and Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

DesJardins, J.R. and McCall, J.J. (2014). Contemporary issues in business ethics. Cengage Learning.

Elliott, R. E. (2015). Sharing App or Regulation Hackney: Defining Uber Technologies, Inc. J. Corp. L., 41, 727.

Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education.

Harris, D. (2014). That time Uber almost charged me $1,099 for a Boston-to-Cambridge trip". Boston Business Journal.

Huddleston, T. (2014). What you need to know about Uber's latest controversies. Fortune. 

Hunt, E. (2014). Uber's global expansion in five seconds. Forbes. Retrieved from https://www.forbes.com/sites/ellenhuet/2014/12/11/ubers-global-expansion/ (Accessed on 27 January 2018)

LeBaron, G. (2014). Subcontracting Is Not Illegal, But Is It Unethical? Business Ethics, Forced Labor, and Economic Success. The Brown Journal of World Affairs, 20(2), 237.

Litschka, M., Suske, M., & Brandtweiner, R. (2011). Decision criteria in ethical dilemma situations: Empirical examples from austrian managers. Journal of Business Ethics.

Macmillan, D. (2015). The $50 Billion Question: Can Uber Deliver? Wall Street Journal. 

Mahadevan, B. (2015). Operations management: Theory and practice. Pearson Education India.

Shapiro, J. P., & Stefkovich, J. A. (2016). Ethical leadership and decision making in education: Applying theoretical perspectives to complex dilemmas. Routledge.

Upton, N., Teal, E.J. & Felan, J.T. (2010). Strategic and Business Planning Practices of Fast Growth Family Firms. Journal of Small Business Management.

Weiss, J.W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.

Yoo, T., (2017). Uber Australia is settling unfair dismissal cases, despite insisting drivers are not employees. Retrieved from < https://www.businessinsider.com.au/uber-australia-is-settling-unfair-dismissal-cases-despite-insisting-drivers-are-not-employees-2017-6#jPewXpUjXzD5yDG3.99. (Accessed on 27 January 2018)

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