Just as with Volkswagen, there are many examples of unethical business actions over the past few decades that have made headlines. It is important to understand unethical practices to make ethical business decisions.
Your task this week is to prepare a timeline to document and evaluate a recent business case of unethical behavior with which you are familiar. You may create your timeline using Word or another program that would allow you to create a visually appealing format such as an infographic. Begin by researching the case to learn the history of the company or companies involved, dates of operation, and how these unethical behaviors were discovered.
Be sure to include the following in your timeline:
Introduce the historical scenario surrounding your selected case. Include any available dates.
Explain how these unethical behaviors occurred for as long as they did. Include any conflicting objectives you discovered among involved business leaders.
Evaluate the outcome of events, including relations with internal and external stakeholders.
Determine if the punishment was justified.
Explain why it may be difficult for business professionals to identify ethical breaches that they committed.
Support your timeline with a minimum of three scholarly resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 3-page timeline, not including the reference page. Your references can be included within the timeline or submitted in a separate Word document.
Your timeline should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards
Week 1 – Assignment: Evaluate The Price Of Unethical Behavior
Today, several firms have been implicated for their involvement in unethical business practices, some ranging from sexual harassment among employees to actions that put the public’s safety at risk. One such company is General Motors (GM) which faced fierce criticism and lawsuits for manufacturing and installing ignition switches that did not meet the required specifications in some of its car models, leading to deaths and injuries of several drivers. Although GM faced legal suits and committed to compensating its victims, the outcomes of the events had far-reaching effects, including compromising its relationship with internal and external stakeholders and worsening its financial performance.
Historical Scenario
While lawsuits facing GM escalated in 2015, the literature reveals that the ignition-switch problem began several years before. The majority of the stakeholders failed to play their role in curbing the situation explaining why the issue occurred for an extended period. Most notably, Wanasika and Conner (2018) state that the problem started in 2002 after the company’s engineer, Ray DeGiorgio, approved the new ignition switch manufacturing. Despite other engineers recognizing the switch’s defect’s the engineer approved its installation in some car models. Besides, the company failed to disclose the issue to the public and advised its dealers to tell customers complaining about the stalls to reduce weight on their key rings (Wanasika & Conner, 2018). In essence, approval of the manufacture of a defect switch by the company’s contractor, its installation in cars that landed into the market, and failure to inform consumers about the defect set in motion the issues surrounding GM.
Besides approval of a defective component, the stakeholder’s failure to review the reports and take timely action also set in motion the issues surrounding GM’s case. For example, Wanasika and Conner (2018) observe that after reviewing the ignition-switch failure reports in 2004, the GM engineers argued that the problem was trivial and lacked safety issues. When the GM brand quality group learned about the moving stalls in 2005, it failed to identify the problem. Similarly, despite the numerous accidents associated with the ignition switch and Young’s report about non-deployment of the airbags, the Executive Field Action Decision Committee (EFADC) refused to authorize the vehicle recall, arguing that there lacked sufficient information (Wanasika & Conner, 2018). Fundamentally, GM’s issues that lead to bankruptcy and lawsuits can be traced back to the involved parties’ reluctance to solve the problem despite the numerous trail of accidents and injuries related to the ignition switch.
Prevalence of the Unethical Behavior
An analysis of the GM case suggests that guanxi practices within the firm may account for the occurrence of the unethical behavior for as long as it did. Wu, Ming, and Huang (2019) describe guanxi practice as the “use of social relationships to make exchanges, manufacture indebtedness, or accomplish tasks, particularly in human resources management” (p.2). Put differently; guanxi practices are strong relationships built with others, which may deem an exchange of favors or a moral obligation towards others. In this context, the prevalence of the unethical behavior in GM was likely triggered by guanxi practices among the executive team and other employees. As is evident from the case study, the management wrote a confidential memo to its staff urging them to avoid using “judgment words” for the company’s reports and presentations. The article also reveals that, ultimately, fifteen workers were fired and five disciplined after being deemed at fault in the Valukas report (Wanasika & Conner, 2018). Arguably, the transactional relationship between GM’s executive team and the staff generated a moral obligation for the latter to follow the management’s instructions regardless of whether they approved the decision.
Besides guanxi behavior, unethical leadership likely promoted unethical behaviors in GM. Findings from current research reveal that ethical leadership and coworker’s ethicality with ethical outcomes such as organizational citizenship behavior (OCB) and intentions are positively related to ethical leadership (O’Keefe et al., 2017). Findings by Owens et al. (2019) also show that leaders are responsible for cultivating their followers’ moral capacity in terms of moral self-efficacy and behaviors. These findings imply that leaders play a critical role in fostering ethical or unethical behavior among the staff. In this context, some of GM’s higher-level employees that might have been considered role models to the junior team were involved in the unethical practices. The example set by the high-level employees may have led to the infiltration of the unethical practice in all levels of management, contributing to its prevalence for almost five years.
Outcomes of the Events
Furthermore, an evaluation of the case study suggests that GM’s outcome had a detrimental effect on its performance and its relationship with internal and external stakeholders. For example, research shows that the firm’s financial performance worsened in 2006, leading it to file for bankruptcy (Wanasika & Conner, 2018). In addition, the company experienced a fall out with external stakeholders such as consumers, the NHTSA, and contractors because the former failed to meet the quality requirement. In essence, the outcomes of events in GM did not only adversely affect its financial performance but also its relationship with internal and external stakeholders. Besides, the firm’s punishment in the form of remedial action might not have been justified because it may have mitigated the damages to consumers and loss of lives through timely action.
Conclusion
Despite firms such as GM being implicated in unethical practices, it is typical of professionals in such organizations to fail to understand their ethical breaches. This issue may mainly emerge because ethics are primarily personal rather than global principles. Arguably, one person’s ethics may differ from another. Therefore, it may be difficult for business professionals to identify ethical breaches because of the variation of ethics in the business environment.
References
O’Keefe, D. F., Messervey, D., & Squires, E. C. (2017). Promoting Ethical and Prosocial Behavior: The Combined Effect of Ethical Leadership and Coworker Ethicality. Ethics & Behavior, 28(3), 235–260. https://doi.org/10.1080/10508422.2017.1365607
Owens, B. P., Yam, K. C., Bednar, J. S., Mao, J., & Hart, D. W. (2019). The impact of leader moral humility on follower moral self-efficacy and behavior. Journal of Applied Psychology, 104(1), 146–163. https://doi.org/10.1037/apl0000353
Wanasika, I., & Conner, S.L. (2018). General Motors: The ignition switch from hell. Journal of Case Studies, 36(2), 66-81. http://www.sfcrjcs.org/
Wu, R., Ming, S., & Huang, F. (2019). Guanxi and Unethical Behavior in the Chinese Workplace: Job Satisfaction As a Mediator. Social Behavior and Personality: An International Journal, 47(3), 1–14. https://doi.org/10.2224/sbp.7294
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