Saturday, January 11, 2020

A Critique on the Article: Avoiding Ethical Danger Zones Essay

According to the Business Roundtable Institute for Corporate Ethics (â€Å"BRICE†) business leaders of the 21st century face a number of difficult and complex challenges that greatly affect their businesses as well as the various stakeholders (Messick, Bazerman, & Stewart, 2006). This is nothing new considering the fallout of the recent global financial crisis as well as the events preceding which can be summarized by unethical business practices perpetuated by giant corporations like Enron, WorldCom, Tyco and many more (Kiviat, 2008). However, these three companies only represent the tip of the iceberg when it comes to unethical business practices. There are many firms with secrets that are kept hidden but not for long. In this regard BRICE suggested that the problems related to business ethics can be remedied by going to the root of the matter which is the process of making decisions. BRICE asserted that there are â€Å"ethical danger zones† that a leader must learn to avoid when making crucial decisions. Furthermore, BRICE added that this can be achieved by focusing on three areas: quality, breadth, and honesty. This paper will analyze how these principles can be applied in the real world. Quality   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   According to BRICE the quality of the decision making process is determined by the collection and consideration of all meaningful facts regarding a decision’s consequences (Messick, Bazerman, & Stewart, 2006). This is a good idea but the question is how will the leader know that nothing was left out? According to the said resource this can be done by identifying danger zones such as ethnocentrism, stereotypes, inability to perceive the correct cause of a problem, sin of omission, and the inability to focus on people.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The authors were doing just fine up until they added the concept of sin of omission and the inability to focus on people. It is easy to understand why they pinpointed ethnocentrism, stereotypes and wrong perception of causes as pitfalls in achieving quality in decision making. This is due to the fact that ethnocentrism automatically creates a biased worldview. The leader automatically has this false sense of security, that his or her system of beliefs and values are the best and he or she need not adapt to a rapidly changing world. The same thing can be said about using stereotypes especially in a global economy where the headquarters of a particular firm can be found in the United States but its factories are located in China.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The ability to know for certain the root cause of a problem is also a useful skill in decision making but when the authors added the need to focus on people and to watch out for the sin of omission the discussion suddenly went off course. There should have been more discussion in clarifying the three aforementioned principles to help explain in detail how to improve the quality of the decision making process because the authors stated clearly in the very beginning that quality can only be achieved by considering and collecting pertinent information. But the added sub-topic immediately went to the details of how to solve a particular problem.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The authors should have clarified the reason why leaders make assumptions. In other words they should have added more explanation and illustrations why leaders are unable to collect and consider necessary information to help them in making accurate judgments and creating solutions to their problems. It was too early to go into specifics, and more importantly, the authors were only able to scratch the surface when they attempted to go in-depth when it comes to the discussion of perception of causes. If they are not willing to develop the discussion even further they should have stayed with generalizations and not start off with a quest that they could not complete. Breadth   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   According to the authors, another way to improve the decision making process is to consider the potential effects of a particular decision on all stakeholders (Messick, Bazerman, & Stewart, 2006). They even contended that leaders must utilize their imagination to determine possible moral implications of their decisions that could impact other stakeholders; these are stakeholders that may lie outside their sphere of responsibility. This is a good point. Clearly the leaders of Enron, WorldCom, and Tyco did not consider the impact of their unethical behavior (Thomas, 2006). However, the authors did not clarify the boundaries for this principle to work effectively.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   If there are no limitations then corporate leaders will be hard presses to please everyone. In a global economy it is impossible to know the exact implication of a corporate decision. This should make CEOs extra cautious when it comes to making crucial decisions but an objective assessment of the market will lead to the conclusion that it is impossible to consider the opinion of everyone. More importantly nothing has been said when it comes to priorities. It is nice to hear that a company is doing its best to be produce environmentally friendly products so that it can lessen its impact on the environment and therefore create positive impact for future generations, however, their number one priority should be the investors and the stockholders of the company.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   No one is foolish enough to make an investment without making a reasonable profit in return. Although the authors clarified that a leader must have a realistic worldview, nothing was said regarding the firm’s bottom line. These statements are even harder to accept if it turns out that the authors never had any experience when it comes to making decisions in the corporate level or at least as an entrepreneur. They may have no idea what it feels like to put everything on the line only to find out that the business venture is losing money.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   It is important to have leaders that think beyond dollars and cents and perform in such a way that they are not only thinking about the wishes and commands of investors and shareholders. On the other hand it must be made clear that a firm has to have revenues and increase its value or else it will cease to exist. Examining every decision made in light of moral and ethical principles is the best way to do business; nevertheless the primary commitment of the company is not with outsiders but the shareholders and the employees. The CEO must keep in mind that the moment the company is no longer making profit then employees will no longer have jobs and those who come to depend upon their products and services will be greatly inconvenienced.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The authors were correct in saying that it is unwise to assume that the public may never find out. But there is really no need to devote much space regarding this topic. It is an important topic by the way; nevertheless, it does not seem to fit the target audience of BRICE. The message makes sense but it is not what top corporate leaders are interested in reading. In the foreword the authors stated that BRICE has come into partnership with Business Roundtable – an association of chief executive officers of leading corporations with a combined workforce of more than ten million people and $4 trillion in revenues (Messick, Bazerman, & Stewart, 2006). These are the type of leaders that will read this document and they will never assume that the general public will never find out.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The authors may have been trying to say that even if the fall of greedy corporate executives such as the former CEOs of Enron and Tyco are well known there are still leaders who are not afraid to walk the same path and so they assumed that these leaders are not conscious of the fact that their actions will never be made public. There could be a better way to discuss this issue and it is to find out why CEOs are sometimes forced to ignore the low-probability events and other waning signs. It is because they are under tremendous pressure to perform, to make money for the firm. Corporate leaders managing multinational companies with a global presence will never assume that the general public will never find out. The authors should have explained why some CEOs are willing to walk near the edge when they know that they are courting disaster. The authors should have delved deeper into the psychology behind bending the rules for the sake of profit. There is an explanation why CEOs find it hard to resist the temptation to use a scheme that will guarantee a sudden increase in profit even if they knew that somehow they had to break a few rules. If the authors focused on this angle instead of giving generalizations then the article could have been an interesting read for CEOs leading multi-million dollar companies. The authors should have focused more on the tension that exists when leaders are pulled into different directions – the company’s bottom line is pulling the company that way while business ethics is pulling the other way. The authors should have elaborated more on what Mulcahy the CEO of Xerox said regarding the proper way to manage this tension and it can be truncated into this one statement: The company will pay for performance but the company will hire, promote, and fire based on values; employees will have to deliver the top line and the bottom line and do it in the most ethical manner (Messick, Bazerman, & Stewart, 2006). The authors should have expounded more on this. Honesty   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The last portion of the article dealt with the concept of honesty, integrity, and overconfidence. It is easy to see that the last word does not belong to the previous statement. Honesty, integrity and moral compass are like complimentary objects and deserve to be grouped together. The question remains why overconfidence was a sub-topic that was used to elucidate the meaning of honesty. The authors linked honesty and overconfidence by stating that a leader must be honest about his or her overconfidence. With great effort this premise will work but there is a less strenuous way to get the point across. There is a much better way to communicate without forcing the reader to perform some extreme mental calisthenics. Quite frankly there is really nothing wrong with the said statement but it just does not sound right and it is confusing for those whose who may not have time to go through the document more than one time.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Those who are expected to read this document are CEOs, and although they appreciate statistics and factual reporting they also like simplicity in the presentation of ideas. By using tough to digest words like ethical danger zones and not provide a clear explanation of what it is all about can frustrate many of them and they will never finish reading the whole article. The article can be seen as an assemblage of disjointed parts. Conclusion   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The authors started out strong by stating that there are ethical danger zones that corporate leaders should avoid especially during these difficult and challenging times. However, they were unable to give new information that would be of great help to leaders of multinational corporations. Instead they settled with generalizations and used oft-repeated statements that are already well-known in the international business community. It can be argued that members of the Business Roundtable came into partnership with BRICE to learn more about business ethics. They surely did not expect an article or a manifesto telling them something that they know already. These leaders are aware of the dangers that exist when an organization ignores business ethics. What they need to understand is how to balance the need for profit and the need to perform at the highest levels without compromising the organization’s core values. References Kiviat, B. (2008). â€Å"Reassessing Risk.† Retrieved 03 August 2010 from time/magazine/article/0,9171,1856998,00.html Messick, D., M. Bazerman, & L. Stewart. (2006). Avoiding Ethical Danger Zones. Business Rountable Institute for Corporate Ethics. Retrieved from Thomas, C. (2006). â€Å"The Enron Effect.† Accessed 03 August 2010 from,9171,1198917,00.html

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