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Introduction
Modern business enterprises can expect to spend more time on the quality of life issues-on consumer/environmental and social concerns-than their predecessors. The case study portrays that management’s new task is to balance traditional profit and rate of returns on investment criteria with new definitions of social costs, social purpose, and social conscience. It was to discover the source of those principles which, if consistently applied, would ensure that all of our marketing decisions would be ethical and would, in fact, contribute to the public welfare. But the path to this objective seemed murky indeed.
Case Study Analysis
The case study and situation in Clive Peeters vividly portrays that ethical principles are not equally followed and understood by all employees. Sonya Causer, an accountant of the company, stole $20 million dollars for personal purposes. The identification of these primary sources of ethical control leads to a natural question: What are the adequacies and the limitations of each of these sources for the marketing executive? Let us move in for a closer look. The businessman must act. And often, in acting, he may be surprised at the range of subjects which are viewed by some segment of the U.S. public as having important ethical implications. My associates and I concluded that the individual conscience is absolutely essential to ethics in marketing behavior, but it is by no means adequate to serve as a guide. For which individual conscience would you follow? And how would you sustain it against all of the individual consciences in the marketplace? (Beauchamp and Bowie, 2003).
Analysis
In terms of the stewardship theory of corporate governance, the case with Clive Peeters shows that lack of personal and professional qualities lead to fraud and dishonesty. The case study shows that the company probed many of the traditional well springs from which business ethics supposed to flow, and in which the public welfare is supposed to find its protection. From this examination emerged an approach to business ethics which the company would like to propose. The purpose of this approach is to build up the policy and control measures through retracing the route. The first step is to examine those sources which, it seemed to us, most often contributed the ethical content of our marketing decisions (Buchholz and Rosenthal, 2000). The company has to ensure that every employee responsible for financial resources possesses the following qualities:
- Personal conscience, molded and formed by the ethical traditions of our society, this in combination with high personal standards, was quickly singled out as exerting a major influence on the marketing behavior of a large corporation.
- The law and its corollary an articulated corporate philosophy and explicit statements of policy.
- Organization structure and procedures that ensure the interjection of the ethical component into decision making through a system of checks and balances.
- Professional knowledge the business and technical expertise which allows one to know what is good for someone else, even when the other is unaware of the factors and ethics involved.
- Wants and acceptance; full, free, and open communication between managers and low level employees, which in itself represents a kind of ethic (Carroll and Gannon, 2004)
In terms of Agency theory, the essential element of the process is to create an atmosphere of openness in which people feel free to express their moral commitments and ethical viewpoints. They must feel free to interact with one another in healthy conflict (Carroll and Gannon, 2004). Clive Peters behaved unethical towards other stakeholders and colleagues creating a possibility of bankruptcy and business failure.
Evaluation of the Conditions
Following corporate governance code, the conditions inside Clive Peeters permit fraud and accounting manipulations. Lack of double controls and regular checks led to fraudulent actions and $20 million loss. The manager wisely admits that “How can you not notice $20 million is missing? Ironically, Smith says, the upheaval of the company’s restructuring, to fix the problems caused by Causer’s alleged actions, meant the discrepancies went undetected for longer” (case study). Ethical problems arise when a man’s assignment forces him to emphasize a single job objective–say, maintaining the profit margin on a particular product. But suppose that in order to meet this objective his only alternative is to sacrifice quality (Donaldson et al, 2002). This conclusion led us directly to consider the case of the general manager who must make ethical decisions which balance profit and product quality (Crane and Matten, 2004). Organizational structure, with its system of checks and balances and built-in auditing functions, becomes a less effective control device as you move up the ladder of responsibility. Like personal conscience and personal standards, and like the law and corporate policy, it is an important, but not totally adequate, source of ethical control for the corporate manager. It does not supply all of the answers to all of the questions he must face (Froomkin, 2000). The issues of transparency approach helps to explain that a combination of technical knowledge and expertise as a manufacturer can be an important contributor to ethical decision making. In this sense you apply for the consumer the kinds of tests and standards which she cannot apply for herself (Gogoi, 2008). Out of the clashings and collisions of individual consciences, a group consensus can emerge which cuts broader and deeper in its search for an ethical decision than would any individual conscience working in isolation.
In terms of value of compliance approach, the company should introduce means for controlling accounting behavior as this approach substitutes personal involvement, and individual commitment for external control. The standards should be set by general management, in consultation with our technical and commercial research people.
References
Beauchamp, T., and Bowie, N. (eds). 2003. Ethical Theory and Business, 7th edn, Upper Saddle River, NJ: Prentice Hall.
Buchholz, R. and Rosenthal, S. 2000. Business Ethics, Upper Saddle River, NJ: Prentice Hall.
Carroll, S. and Gannon, M. 2004. Ethical Dimensions of International Management, Thousand Oaks, CA: Sage.
Crane, A. and Matten, D. 2004. Business Ethics: A European Perspective, Oxford: Oxford University Press.
Donaldson, T., et al. 2002. Ethical Issues in Business, 7th edn, Upper Saddle River, NJ: Prentice Hall.
Froomkin, M. 2000. The Death of Privacy? Stanford Law Review, vol. 52, p. 1461.
Gogoi, P. 2008. The Trouble With Business Ethics. The Business Week Online. 2007.
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