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Management Theory And Practice: Ethics

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Question:

Discuss about the Management Theory and Practice for Ethics.

 

Answer:

Introduction

Ethics forms a fundamental part of the management theory which is practiced in different organizations of the world. Business practices and their models are governed by ethical rules and philosophies stated by moral thinkers on the basis of which the right practice of business is modeled (Aguirre, Hyman & Hamilton, 2017). In any organization, ethical codes determine the value of business done to maximize the response of the firm towards its customers as well as towards the business fraternity. It becomes evident for every company to follow the ethical norms in planning business structures and executing business operations.

Ethics is a vast and subjective topic which varies from person to person and its compliance depends on the circumstances in which a company operates. In management theory, generally,normative ethics proves to be instrumental which is related to the justification and application criteria of good and bad and practices which are right or wrong (Aßländer & Gössling, 2017). This raises a question that what practices are considered to be right and in which circumstance and wrong in which context. Hence, identification of moral virtues in a person or an organization is required to know that an entity will do the morally right thing or not. Furthermore, thesecond aspect is that how will the society be made to do ethical things and how they perceive the ethical agenda (Bell, Dyck & Neubert, 2017). The third dimension is that what intrinsic values are required for an entity to consider ethical practices in work. 

In the following discussion, ethical dilemmas of a car manufacturing company are analyzed keeping in mind the practices and issues the company has and how it will transform to comply with the ethics and overcome its dilemma (Bell, Dyck & Neubert, 2017). Toyota Australia is the company under consideration which manufactures fast cars for motorsports which have to face some ethical dilemmas in their organization.

 

Deontology Vs Teleology

There is a difference between the ethical principles of deontology and teleology which creates a dilemma in the working culture and operations in Toyota Australia. People who follow or believe in the deontological theory have a moral tendency to act. Every action performed by them is based on the moral principles of ethics (Bishop & Lee, 2017). This makes their ethical outlook narrow and they are bound to rules which decide that any action is good or bad. It is after this determination of good or bad, they are ought to perform any action. Deontologists believe that some practices are wrong in itself and they are not to perform those actions even if its consequence yields better results (Bowie, 2017). It makes a boundary of restrictions in the minds of people who follow deontological ethics and refrain from performing or even thinking out of the scope of its philosophy.

Some views of the deontological theory state that any entity should perform actions on the basis of its principles which are considered inherently right. Deontological ethics has absolute obligations which are sacrosanct and cannot be violated to maintain the virtue of the work being done (Broome, 2017). There is also a presence of formal criteria which is relational. This criterion involves the concept of impartiality and equality. Deontologists also advocate the distributive criteria which consist of the allocation of goods and evils in the nature of men (Burke, 2017). This does the identification of person’s virtues and vices which conclusively determines the ethical purity of the work. Another criteria followed by deontologists is that of pluralism and unitary which suggests thecapacity of a person to be adamant on its values. 

Whereas the teleological theory of ethics preaches that the right or wrong practice applied by an entity is determined by comparing the outcomes of the final work. Teleologists believe that any action performed by an entity is not bounded by any rules or regulation about the rightness and wrongness of the act. But the main thing which counts is that the consequence of the actions. Teleology is result oriented and it scrutinizes the final outcome of the actions taken (Carr, 2017). If a right action results in the wrong outcome then that action is considered ethically wrong and that practice is restricted for further repetition. Besides, if a wrong action results in the right outcome then that act is termed as ethically right as it yields right results which were needed at that time (Cicmil, Crawford & Richardson, 2017). The absence of moral rules gives theory more leverage and freedom in performing actions which prove to be more efficient in getting the job done. Some views related to teleological theory states that it is all about doing performing actions keeping the consequences in mind.

In Teleology, there are conditional obligations which are specific to the time and environment in which the task in being done. It focuses on the materialistic criteria such as maximization of pleasure and attainment of happiness (Crossan, Monzani & Gandz, 2017). It is concerned with aggregating the concept of good and evil in which maximization of both these elements can be done. It advocates only the unitary criteria which imply that doing the greatest good in every action is the only thing that matters without thinking about the righteousness of the actions.

Ethical Dilemmas 

The matter of discussion in the following essay is about the ethical dilemmas in the organization of Toyota Australia which has launched fast cars for the purpose of motorsports. Advertisements of the new range of cars have been criticized by the Australian Advertising Agency which has kept its point stating that ads which promote fast cars have agrave impact on the mind of consumers (Daspit, Pearson & Long, 2017). According to the road safety department,these ads will increase the chances of people driving cars at faster speeds which will compromise the safety of drives as well and people on the roads. There have been a lot of fuss over last two years about these appealing ads and their encouragement towards unsafe driving. In this context, the Deontological ethics states that portrayal of these ads can harm the lives and health of the citizens of Australia and thus should be banned (Delos Reyes, Kim & Weaver, 2017). Whereas, according to Teleological ethics, these ads may or may not harm the lives of people but a regulation must be made on display of such ads. These theories have made a difference in the advertisement styles of other automobile companies which have to comply with certain regulations before displaying such ads. 

 

Major Sources of Ethical Dilemmas from Managerial Point of view

Apart from the deontological and teleological ethics, there are a number of ethical dilemmas a manager has to face in the organization of Toyota Australia (Waal Malefyt & Morais, 2017). Since the company is a multinational organization and top leader in automobile manufacturing its managers has to face various ethical issues and dilemmas in business operations. The detailed analysis of these dilemmas are mentioned below:

Corruption

Managers of executive level, as well as the middle management level of Toyota Australia, has to face a major ethical dilemma in the face of Corruption. To get the work done and keep the flow of operations in the organization managers have to bribe the government clerks to make business deals, to clear the employment of local labors, for enhancing the working efficiency and even for raising the standard of living of the executives (Grandy & Sliwa, 2017). In many developed countries like Australia, abribe is an indivisible part of thebusiness where government payments are required. It has become a conventional and accepted way of doing successful business. These unfair practices are not only confined to government payments and employees but are also encouraged by the competitors to stay ahead in the market. Moreover, corporations of Australia are governed by laws of business in which there is certain regulation about the bribery practices (Grant, Arjoon & McGhee, 2017). There are legal documents which state that the practices of bribery and related actions are prohibited from obtaining business gains and there may be serious legal consequences if any company is caught for having involved in these practices. Managers have to pay to the political parties and government officials (Medeiros, Mumford & Connelly, 2017). A bribe is not restricted only to money, payment in cash in one mode of bribery. Payment in the face of good and services and even in the way of jobs are the types of bribes the managers have to pay. Now, this creates a huge ethical dilemma for the managers, who tend to practice unfair means as a part and parcel of business operations knowing the laws against such actions. These ethical issues create a conflict between the philosophies and teachings of the moral thinkers about ethical conduct in business operations. But practicality alters their thinking and behavior towards ethics.

 

Industrial Espionage

It is the most illegal and unfair practice which has become popular among the large business organizations around the world. A company like Toyota Australia has been the victim of this unethical practice and also has been involved in such affairs. Industrial espionage is one of the transnational operations in which a company acquires trade secrets, designs and operational plans of the competitor company to stay ahead in the market (Michalos, 2017). Large organizations like Toyota Australia tend to make subsidiary companies and those subsidiary companies have their own small firms. Employees of those small firms go to the establishments of competitor companies to do industrial tours and gather information about the new innovations and plans of the competitors. The entire planning and research of the competitors were known to the Toyota Australia which used the information to speed up their manufacturing and launched new cars in the market which was supposed to be the competitors USP.

When the top management of Toyota Australia found out about these unethical practices then they fired the entire set of managers responsible for theorchestration of such method. Ethical violation is evident in this practice as it is a kind of stealing which companies do use corporate spies and insiders who tend to behave as an employee of the target company but have their roots and loyalty to their parent company for whom they report the insider information (Moore, Calvo-Amodio & Junker, 2017). Managers who are involved in these practices are on the edge of law and are threatened for their job security in case the matter gets disclosed in front of the world. But still, getting stuck in anethical dilemma they tend to do such things to maintain the efficiency of the organization. If the act is caught in between then it is called a crime, if not then managers are rewarded for their efficient work.

Relation with the Environment

Due to change in climatic conditions, greenhouse gas emissions, post-war capitalism expansion, use of non-renewable energy, carbon footprint and other such environmental elements, large business and corporate companies like Toyota Australia has to comply with the regulations of the environment (Nielsen, Klyver & Bager, 2017). They are under the radar of world health and environmental protection agencies who issue data and statistics about the pollution caused by companies like Toyota Australia in their manufacturing and other industrial processes. Countries, where these companies are established such as Australia in this context, have to comply with the national rules and regulations about the environment protection. There are carbon emission rules, waste disposal rules and other industrial standards which need to be fulfilled in order to keep the balance between production and environment maintenance. Managers of Toyota Australia have to look into the targets of manufacturing which they get from higher management and they have to complete those targets in time to stay competitive in the market.

This creates an ethical dilemma for the managers as continuous production results in more carbon and other harmful gases emissions which cannot be avoided and at the same time, there are limitations of pollution control which are applied in Australia. To synchronize both the situations managers resort to unethical practices, where they manipulate the data of production for industrial audits so that they do not come on the radar of government agencies of pollution control (Powell, 2017). If they get caught for exceeding the prescribed limit then the organization faces legal action for which the manager is held liable. The company fires the managers for getting involved in unfair means for which they are not fully responsible. Managers have to pave a middle path to cope up with these ethical dilemmas so that they work efficiently and prove their morality towards their work practices as well.

 

Relation with the Employees

Large multinational companies like Toyota Australia have their offices and production units in many countries some of which are developing and underdeveloped countries. People or employees of those countries are poor and have to work overtime to meet their basic needs. Taking the viewpoint of the company, they always try to pay less and make profits by cutting the cost of production (Prasad, Kumar & Kapoor, 2017). Salary of the employees at the lower level becomes a matter of concern for the managers of Toyota Australia. Workers demand justified salaries for their hard work which is their right but sometimes when the company is not willing to pay them then those workers appeal to the managers for their reimbursement. This creates a situation of anethical dilemma for the managers as they know that workers are right in the demands but they themselves are the staff of Toyota Australia and they have kept the interest of the company first.

Managers by their own will cannot raise the salaries of the workers nether they can ignore the rightful demands of the workers. If the workers are not paid well then their attitude towards work depreciates which results in lower production. This hampers the business and profitability of Toyota Australia for which the managers are answerable (Sanders, Brock & Barho, 2017). In these situations, managers have to work it out with the workers and the company by negotiating with both of them keeping ethical reasons in theforefront. Another angle of human rights also come in between which calls for legal action against the company. Managers have to convince the company to fulfill the basic requirements of human rights on ethical grounds to keep the moral of the workers high.

Relation with the Consumers

Any multinational company like Toyota Australia applies almost all the unethical practices in the book when it comes to maintaining a relationship with the consumers (Sison, 2017). There is a vast diaspora of unethical practices such as keeping exaggerated prices on the products and then keeping discounts on them, spending large amount of money on advertisements and promotions which are also vague and have no real base, practicing cheating methods in packaging and other eye-catching stunts, manufacturing products which do not comply with the actual security and safety measures and keeping consumers in a deliberate dilemma about the services offered after buying the products. 

All the above-mentioned practices are unethical which are clearly for customer manipulation. Promotional videos which contain false notions that owners of Toyota cars attract women towards them is a completely false belief which is used to get into the minds of consumers (Tsoukas, 2017). Managers are themselves involved in making such videos and programs even after knowing the reality. They are affected by the ethical dilemma as they are bound to work on these projects to increase the sale of companies’ products so that they can get promotions and raises for their work.

Consequences of Ethical Dilemmas

            Ethical dilemmas and practices which are executed in thecontext of those have consequences on the Toyota Australia. There is a significant risk in the execution of these unethical means of business which Toyota Australia understands but still is willing to do (Prasad, Kumar & Kapoor, 2017). There are many unethical issues in international business than in national tradeand the laws are stricter. But to be on top of the market Toyota Australia ignores those consequences and continues to do what they consider best for business.Some of the consequences of practicing unethical means are:

  • Practicing unethical means increases the expenses of the organization. As those practices get exposed then Toyota Australia has to spend a good chunk of money to get it covered.
  • The reputation of the company gets charred in the eyes of its consumers as well as fellow competitors who tend to rely on ethical means of business.
  • Clients and business partners get separated from the core management if they get convinced about the unethical practices of the company.This is a huge cost which Toyota Australia has to pay for just to stay in the market competition.
  • Investors refrain from making any capital investments in new projects of Toyota Australia as they know about the company’s depleted integrity.

Conclusion

In the above discussion, the ethical dilemmas of the managers of Toyota Australiawere analyzed as in what circumstances they need to execute unethical practices willingly or unwillingly. As observed in the above essay that business ethics is a very important topic for managing a multinational company like Toyota Australia. In past two years, the company has been involved in many unethical means of business which has hampered its reputation in the automobile market. Consumers are refraining from buying cars of Toyota after knowing about the internal business tactics of the company. Accountability and integrity of such a huge company like Toyota Australia have been shattered due to the above mentioned unfair means of business.

It is not always necessary thatindulging in unethical practices to get the work done will increase the efficiency of production and will enhance the position of thecompany in the market. Whatever may be the results of these unfair practices a wrong thing will always remain wrong. It takes decades for a company to build a reputation in the global market, with lots of hard work and sacrifices. But diminishing the work of orally sound employees by practicing unethical means is unjust and should be discouraged.

On the contrary, if Toyota Australia respects the ethical practices of business and complies with the philosophies of moral thinkers for business practices then it earns great respect from its competitors and sets an example in the field of management. Moreover, the managers of Toyota Australia will also feel proud of working on the ethical principles which will enhance their moral and zeal of working which will yield greater efficiency than working on unethical principles. To conclude the discussion it can be said that a company should always be ethically and morally correct in its business practices.

 

References

Aguirre, G., Hyman, M. R., Goudge, D., Genchev, S., Carrell, A., & Hamilton, C. (2017). Teaching ethics to marketing and logistics majors: A transformative learning experiment. Journal of Education for Business, 92(3), 121-128.

Aßländer, M. S., &Gössling, T. (2017). Thematic Symposium: Business Ethics, Peace and Environmental Issues (T0004). Bernstein, E. S. (2017). Making transparency transparent: The evolution of observation in management theory. Academy of Management Annals, 11(1), 217-266.

Bell, G. G., Dyck, B., &Neubert, M. J. (2017). ETHICAL LEADERSHIP, VIRTUE THEORY, AND GENERIC STRATEGIES. Radical Thoughts on Ethical Leadership, 113.

Bishop, D. L., & Lee, D. S. (2017). Business Ethics: Ethical Decision Making and Cases (Asia Edition).

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

Broome, B. J. (2017). Negotiating the nexus: Symbiotic relationship of theory and practice in conflict management. Negotiation and Conflict Management Research.

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

Carr, D. (2017). Educating for the Wisdom of Virtue. In Varieties of Virtue Ethics (pp. 319-335). Palgrave Macmillan UK.

Cicmil, S., Cooke-Davies, T., Crawford, L., & Richardson, K. (2017, April). Exploring the complexity of projects: Implications of complexity theory for project management practice. Project Management Institute.

Crossan, M. M., Byrne, A., Seijts, G. H., Reno, M., Monzani, L., &Gandz, J. (2017). Toward a framework of leader character in organizations. Journal of Management Studies.

Daspit, J. J., Chrisman, J. J., Sharma, P., Pearson, A. W., & Long, R. G. (2017). A Strategic Management Perspective of the Family Firm: Past Trends, New Insights, and Future Directions. Journal of Managerial Issues, 29(1), 6-29.

delos Reyes, G., Kim, T. W., & Weaver, G. R. (2017). Teaching ethics in business schools: A conversation on disciplinary differences, academic provincialism, and the case for integrated pedagogy. Academy of Management Learning & Education, 16(2), 314-336.

de Waal Malefyt, T., &Morais, R. J. (Eds.). (2017). Ethics in the Anthropology of Business: Explorations in Theory, Practice, and Pedagogy. Taylor & Francis.

Grandy, G., &Sliwa, M. (2017). Contemplative leadership: The possibilities for the ethics of leadership theory and practice. Journal of Business Ethics, 143(3), 423-440.

Grant, P., Arjoon, S., & McGhee, P. (2017). Reconciling Ethical Theory and Practice: Toward Developing a Business Ethics Pedagogical Model. Business and Professional Ethics Journal, 36(1), 41-65.

Medeiros, K. E., Watts, L. L., Mulhearn, T. J., Steele, L. M., Mumford, M. D., & Connelly, S. (2017). What is Working, What is Not, and What We Need to Know: a Meta-Analytic Review of Business Ethics Instruction. Journal of Academic Ethics, 1-31.

Michalos, A. C. (2017). Issues for business ethics in the nineties and beyond. In How Good Policies and Business Ethics Enhance Good Quality of Life (pp. 197-212). Springer International Publishing.

Moore, B., Calvo-Amodio, J., & Junker, J. F. (2017). Applying a Framework for Complementarist Intervention Approaches to Service Organizations to Achieve a Sustainable Holistic Management Model. Systemic Practice and Action Research, 30(5), 487-513.

Nielsen, S. L., Klyver, K., Evald, M. R., &Bager, T. (2017). Entrepreneurship in theory and practice: paradoxes in play. Edward Elgar Publishing.

Powell, T. C. (2017). Strategy as Diligence: Putting Behavioral Strategy into Practice. California Management Review, 59(3), 162-190.

Prasad, N., Kumar, V., & Kapoor, S. (2017). Business Ethics: A Decision Between Right or Wrong. Journal of Public Policy & Environmental Management, 1(1), 20-30.

Sanders, E. J., Hay, G. W., Brock, B., & Barho, E. (2017). Ramkrishnan (Ram) V. Tenkasi: Expanding and Bridging the Boundaries of Theory, Practice, and Method. The Palgrave Handbook of Organizational Change Thinkers, 1291.

Sison, A. (2017). Handbook of virtue ethics in business and management.

Tsoukas, H. (2017). Strategy and virtue: Developing strategy-as-practice through virtue ethics. Strategic Organization, 1476127017733142.

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