Decision-Making in Business and the Repercussions of Unethical Choices
In business, managers must attempt to take ethical approaches to all areas of work so as not to compromise the company, the employees, or the organization’s consumers. Specific criteria have been established for managers to follow in order to remain ethical, even when faced with unethical situations. Ivancevich, Konopaske and Mattseson identify these criteria as the following:
1. Utilitarian outcomes. The manager’s behavior results in optimization of satisfaction of people inside and outside the organization. In other words, it results in the greatest good for the greatest number of people.
2. Individual rights. The ...view middle of the document...
358). The authors include a decision-tree approach to the application of these criteria as an aid to managerial decision-making, included in Appendix A.
A number of companies have been accused of ethics violations, from Enron to BP; news articles and reports present these violations as an epidemic, indicative of a larger problem within the corporate structure. One company that had been lauded as having an impeccable reputation for quality and reliability was Toyota, until 2009, when both design flaws as well as corporate structuring errors came to light.
In August of 2009 a Toyota Lexus malfunctioned in San Diego, causing a crash and killing four people, a CHP officer and his family (Taylor, 2009). While Toyota issued a statement within two days of the accident acknowledging the accident and expressing concern and regret, they failed to take immediate action in the manner of issuing consumer warnings or product recalls. Specifically, Toyota failed to issue a customer warning about its all-weather floor mats, despite these being implicated in fatal accidents two years previously (Dietz and Gillespie, 2012: 17). Furthermore, Toyota continued to fail to issue appropriate and timely warnings even after the regulator’s preliminary investigation into the crash in San Diego cited the floor mats as the likely cause, Toyota did not implement a precautionary rectification until five days later when the National Highway Traffic Safety Administration (NHTSA) confirmed their analysis, nineteen days after the San Diego fatalities (Dietz and Gillespie, 2012: 17). In addition, Toyota dealers were instructed merely to inspect any returned floor mats, rather than issue a direct customer safety warning (Dietz and Gillespie, 2012: 17). In fact, Toyota did not issue any explicit warnings and advice to customers until after NHTSA issued an alert regarding the floor mats on September 29th, 2009; Toyota also finally announced a recall of 3.8 million affected vehicles on the same day, though the actual recall did not begin until a month later (Dietz and Gillespie, 2012: 17-18).
Interestingly, while Toyota did encounter a number of design flaws, including the accelerator pedal in some vehicles, as well as the floor mats, the problems cited by many were not the design flaws but rather issues within the company. Toyota’s aggressive growth strategy had, as stated by the company President, impaired the company’s culture of ‘kaizen’ (continuous improvement) and ‘genchi genbutsu’ (inspecting problems at the source) (Dietz and Gillespie, 2012: 18). In addition, Toyota’s own internal reports noted its tendency to dismiss customer complaints, that is had a poor accountability for safety, and poor safety-response procedures, as well as an “adversarial” relationship with regulators (Dietz and Gillespie, 2012: 18). Furthermore, the company’s corporate culture, while efficient, systematic and dedicated, was also conservative, rigidly centralized, and mono-national, meaning that...