General Motors Company Ethical Issues

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Table of Contents

Definition of the issue
Its basis
The main ground rule
The cause of the problem
Ethical systems
The role of leaders and employees
The plan that can address the problem
Conclusion
Reference List

Definition of the issue

This paper is aimed at discussing the current scandal in which General Motors is involved. In particular, the company failed to recall more than a million of vehicles, even though the representatives of the company knew about the flaws in their design (Rushe, 2014). So, this controversial decision is the main issue that should be discussed in greater detail. It should be noted that this decision might have led to many traffic accidents and 13 deaths (Rushe, 2014). Overall, the discussion of this question can throw light on the decision-making in modern corporations and its impact on the lives of other people.

Its basis

Overall, the basis of this issue is the unwillingness of the management to consider the interests of the main stakeholders who can affect the performance of this corporation. In particular, one should first speak about customers who put their trust in the integrity and efficiency of General Motors.

Secondly, one should keep in mind that the release of defective vehicles could endanger those people, who might not even be the clients of this corporation. To a great extent, this behavior can be described as the breach of trust (Destri, 2013, p. 13). One should keep in mind that General Motors is not the first car-manufacturer, involved in such a scandal. Nevertheless, such cases continue to attract the interest of many people.

The main ground rule

The main ground rule, which is applicable to this situation, is the responsibility of businesses. In particular, the managers of these organizations should be accountable for their decisions. In turn, these organizations should make sure that their policies do not pose any threat to other people. So, this is the main rule according to which the decisions of the managers should be evaluated.

The cause of the problem

It is possible to change that this issue was brought about by the absence of ethical safeguards that could prevent the release of defective vehicles. According to the investigation, carried out by governmental officials, the engineers and managers were aware of the defect in the ignition (Rushe, 2014). Nevertheless, the company did not decide to redesign the vehicles.

In their opinion, this step could eventually undermine the economic efficiency of the project. It should be noted that this issue was revealed in the course of different governmental investigations that were caused by numerous complaints about the safety of vehicles produced by General Motors. Nevertheless, there was no internal audit that could reveal this problem. This is one of one of the aspects that can be identified.

Ethical systems

Much attention should be paid to the ethical systems that could shape the decisions of the main stakeholder. In particular, the senior managers followed a utilitarian ethics according to which a person should focus primarily on the consequences of an action (Mizzoni, 2009, p. 82). They attempted to weigh the positive and negative consequences of releasing a vehicle that could pose a threat to the lives of users.

In turn, they accepted the risks of this decision. The main problem is that they did not consider the interest of customers. In contrast, employees and middle-managers accepted this choice. They did not want to oppose the decisions of the managers since in this way, they could endanger their career. These are the main points that should be taken into account.

The role of leaders and employees

It should be noted that the role of senior leadership is currently investigated. However, according to the governmental investigation, the project engineering manager of General Motors knew about the flaw in design (Rushe, 2014). Yet, the role of the CEO should be examined more closely. In turn, those people, who did not occupy the positions of authority, might know about this problem. Nevertheless, they did not want to questions the moral aspects of the decision taken by the senior management.

The plan that can address the problem

On the whole, it is possible to provide several recommendations that can reduce the risk of such an event in the future. In particular, the corporate governance of this organization should declare the safety of customers as the top priority for the decision-makers. According to the company statutes, every decision that can compromise the safety of clients should be blocked.

To some degree, this precaution is based on the prescriptive approach to ethics which shows how a person should act when he/she faces a moral dilemma. Yet, it is also critical to consider the psychological approach to ethics. According to this framework, it is necessary to help employees recognize potential ethical framework (Trevino & Nelson, 2010, p. 72). This step is also important because in many cases, people do not reflect on the ethical implications of their decisions. As a result, they can forget about the risks associated with the policies of a company.

In order to implement this plan, one should develop a set of rules that will be distributed to employees and frontline managers. These professionals should know what kind of behavioral norms they will need to follow. Secondly, it is important to provide training to employees and managers who should know what kind of ethical risks that they will need to manage. Apart from that, the implementation of this plan will require the establishment of an ethics committee that assist people who may face a moral problem.

Every employee should be able to express his/her concerns about the policies of the company or the decisions of the management. On the whole, this new policy will significantly affect the work of managers and employees. In particular, these people will have more opportunities for identifying and stopping unethical practices within a company. Nevertheless, they will not be able to shift the responsibility on the management. They will not be able to say that a certain issue was not related to their professional duties. This is one of the main details that should be identified.

The compliance with the new rules can be measured with the help of various procedures. For instance, the management of this company can focus on the number of potential cases reported to the ethics committee. Moreover, the long-term compliance with the new rules will be reflected in the performance of the company and the demand for its products.

Conclusion

Overall, these examples indicate that the functioning of businesses requires the use of ethical safeguards that can minimize the risk to various stakeholders. The plan, which has been proposed, can assist General Motors in avoiding various pitfalls. It is possible to say that in many cases, the cost of non-compliance with ethical rules can exceed the alleged benefits (Schwartz, 2011). These are the main points that can be made.

Reference List

Destri, M. (2014). Managerial irresponsibility and firm survival. Pivoting the company in the aftermath of a social scandal: Pivoting the company in the aftermath of a social scandal. New York, NY: FrancoAngeli.

Mizzoni, J. (2009). Ethics: The Basics. New York, NY: John Wiley & Sons.

Rushe, D. (2014, March 31). General Motors executives to face Congress over car recall scandal. The Guardian.

Schwartz, M. (2011). Corporate Social Responsibility: An Ethical Approach. New York, NY: Broadview Press.

Trevino, L., & Nelson, K. (2010) Managing Business Ethics. New York, NY: John Wiley & Sons.

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