Research a company (Walgreens). Find a minimum of one library source which siupp

Question

Research a company (Walgreens). Find a minimum of one library source which siupport thesis statement. Review weekly lecture and text reading. Select 3-5 concepts which will also support your thesis. In a 2-3 page paper, describe some of the key decision its management has faced within the past two years. Identify an ethical issu the organization either faces or has faced in the past. If it has not been resolved, provide an analysis of how the issue should be addressed If it has been resolved critique how the organization resolved the issue based on materials reviewed on ethical decision making.

Explanation / Answer

Notes/concepts from readings

Criteria for Ethical Decision Making

Most ethical dilemmas involve a conflict between the needs of the part and the whole—the individual versus the organization or the organization versus society as a whole. For example, should a company scrutinize job candidates' or employees' social media postings, which might benefit the organization as a whole but reduce the individual freedom of employees? Or should products that fail to meet tough Food and Drug Administration (FDA) standards be exported to other countries where government standards are lower, benefiting the company but potentially harming world citizens? Sometimes ethical decisions entail a conflict between two groups. For example, should the potential for local health problems resulting from a company's effluents take precedence over the jobs it creates as the town's leading employer?

   Managers faced with these kinds of tough ethical choices often benefit from a normative strategy—one based on norms and values—to guide their decision making. Normative ethics uses several approaches to describe values for guiding ethical decision making. Five approaches that are relevant to managers are the utilitarian approach, individualism approach, moral-rights approach, justice approach, and practical approach.27

Utilitarian Approach

The utilitarian approach, espoused by the nineteenth-century philosophers Jeremy Bentham and John Stuart Mill, holds that moral behavior produces the greatest good for the greatest number. Under this approach, a decision maker is expected to consider the effect of each decision alternative on all parties and select the one that optimizes the benefits for the greatest number of people. In the trolley dilemma earlier in this chapter, for instance, the utilitarian approach would hold that it would be moral to push one person to his death in order to save five. The utilitarian ethic is cited as the basis for the recent trend among companies to monitor employee use of the Internet and police personal habits such as alcohol and tobacco consumption, because such behavior affects the entire workplace.28

Individualism Approach

The individualism approach contends that acts are moral when they promote the individual's best long-term interests.29 In theory, with everyone pursuing self-direction, the greater good is ultimately served because people learn to accommodate each other in their own long-term interest. Individualism is believed to lead to honesty and integrity because that works best in the long run. Lying and cheating for immediate self-interest just causes business associates to lie and cheat in return. Thus, proponents say, individualism ultimately leads to behavior toward others that fits standards of behavior that people want toward themselves.30 However, because individualism is easily misinterpreted to support immediate self-gain, it is not popular in the highly organized and group-oriented society of today.

Concept Connection

Protective Life Corporation shows its commitment to ethics through its corporate strategy: “Offer great products at highly competitive prices and provide the kind of attentive service we'd hope to get from others.” Treating others the way you want to be treated is one approach to making ethically responsible decisions and handling ethical dilemmas. However, insurance companies often have to rely on a utilitarian approach to ethical decision making that considers how to provide the greatest good to the greatest number of policyholders.

Moral-Rights Approach

The moral-rights approach asserts that human beings have fundamental rights and liberties that cannot be taken away by an individual's decision. Thus, an ethically correct decision is one that best maintains the rights of those affected by it. To make ethical decisions, managers need to avoid interfering with the fundamental rights of others, such as the right to privacy, the right of free consent, or the right to freedom of speech. Performing experimental treatments on unconscious trauma patients, for example, might be construed to violate the right to free consent. A decision to monitor employees' nonwork activities violates the right to privacy. The right of free speech would support whistle-blowers who call attention to illegal or inappropriate actions within a company.

Justice Approach

The justice approach holds that moral decisions must be based on standards of equity, fairness, and impartiality. Three types of justice are of concern to managers. Distributive justice requires that different treatment of people not be based on arbitrary characteristics. For example, men and women should not receive different salaries if they have the same qualifications and are performing the same job. Procedural justice requires that rules be administered fairly. Rules should be clearly stated and consistently and impartially enforced. Compensatory justice argues that individuals should be compensated for the cost of their injuries by the party responsible. The justice approach is closest to the thinking underlying the domain of law in Exhibit 5.1 because it assumes that justice is applied through rules and regulations. Managers are expected to define attributes on which different treatment of employees is acceptable.

Practical Approach

The approaches discussed so far presume to determine what is “right” or good in a moral sense. However, as has been mentioned, ethical issues are frequently not clear-cut and there are disagreements over what is the ethical choice. The practical approach sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account.

With the practical approach, a decision would be considered ethical if it is one that would be considered acceptable by the professional community, one that the manager would not hesitate to publicize on the evening news, and one that a person would typically feel comfortable explaining to family and friends. One Secret Service agency director offered this practical advice to his staff in a recent memo: “You should always assume you are being watched when on an official assignment. Do not put yourself in a situation in your personal or professional life that would cause embarrassment to you, your family, or the Secret Service.”33 Using the practical approach, managers may combine elements of the utilitarian, moral rights, and justice approaches in their thinking and decision making. For example, one expert on business ethics suggests managers can ask themselves the following five questions to help resolve ethical dilemmas.34 Note that these questions cover a variety of the approaches discussed above.

                 5. What will be the long term impact for myself and important stakeholders?

The Business Case for Ethics and Social Responsibility

Most managers now realize that paying attention to ethics and social responsibility is as important a business issue as paying attention to costs, profits, and growth. For one thing, in today's information age, bad behavior is increasingly hard to hide, and “outbehaving the competition” can provide a real competitive advantage.73

   Naturally, the relationship of a corporation's ethics and social responsibility to its financial performance concerns both managers and management scholars and has generated a lively debate.74 One concern of managers is whether good citizenship will hurt performance—after all, ethics programs and social responsibility cost money. A commitment to sustainability means that things often have to be done in a more costly way. Hundreds of studies have been undertaken to determine whether heightened ethical and social responsiveness increases or decreases a company's financial performance. Studies have provided varying results, but they have generally found a positive relationship between ethical and socially responsible behavior and firm financial performance.75 For example, a recent study of the top 100 sustainable global companies found that they had significantly higher sales growth, return on assets, profits, and cash flow from operations in at least some areas of business.76 Another review of the financial performance of large U.S. corporations considered “best corporate citizens” found that they enjoy both superior reputations and superior financial performance.77 Similarly, Governance Metrics International, an independent corporate governance ratings agency in New York, reports that the stocks of companies run on more selfless principles perform better than those run in a self-serving manner.78 Although results from these studies are not proof, they do provide an indication that using resources for ethics and social responsibility does not hurt companies.

Companies are also making an effort to measure the nonfinancial factors that create value. Researchers find, for example, that people prefer to work for sustainable companies or companies that demonstrate a high level of ethics and social responsibility; thus, these organizations can attract and retain high-quality employees.80 Customers pay attention too. A study by Walker Research indicates that, price and quality being equal, two-thirds of customers say they would switch brands to do business with a company that is ethical and socially responsible.81 Another series of experiments by Remi Trudel and June Cotte of the University of Western Ontario's Ivey School of Business found that consumers were willing to pay slightly more for products they were told had been made using high ethical standards.82

   Enlightened managers realize that integrity and trust are essential elements in sustaining successful and profitable business relationships with an increasingly connected and well-informed web of employees, customers, suppliers, and partners. Although doing the right thing might not always be profitable in the short run, many managers believe that it can provide a competitive advantage by developing a level of trust that money can't buy.

Remember This

                 • One study found that sustainable companies have significantly higher sales growth, return on assets, and profits than companies that are not run on a philosophy of sustainability.

Management decisions typically fall into one of two categories: programmed and nonprogrammed. Programmed decisions involve situations that have occurred often enough to enable decision rules to be developed and applied in the future.6 Programmed decisions are made in response to recurring organizational problems. The decision to reorder paper and other office supplies when inventories drop to a certain level is a programmed decision. Other programmed decisions concern the types of skills required to fill certain jobs, the reorder point for manufacturing inventory, and selection of freight routes for product deliveries. Once managers formulate decision rules, subordinates and others can make the decision, freeing managers for other tasks. For example, when staffing banquets, many hotels use a rule that specifies having one server per 30 guests for a sit-down function and one server per 20 guests for a buffet.7

Green Power

Revitalizing Small Farms

PepsiCo executives discovered for themselves that sustainability decisions can be observed and measured in the lives of individuals. Management's decision to launch a pilot project cutting the middleman from the supply chain for Sabritas, its Mexican line of snacks, by initiating direct purchase of corn from 300 small farmers in Mexico brought unimagined benefits.

   The decision resulted in visible, measureable outcomes, including lower transportation costs and a stronger relationship with small farmers, who were able to develop pride and a businesslike approach to farming. The arrangement with PepsiCo gave farmers a financial edge in securing much-needed credit for purchasing equipment, fertilizer, and other necessities, resulting in higher crop yields. New levels of financial security also reduced the once-rampant and highly dangerous treks back and forth across the U.S. border that farmers made at great personal risk as they sought ways to support their families. Within three years, PepsiCo's pilot program was expanded to 850 farmers.

Source: Stephanie Strom, “For Pepsi, a Business Decision with Social Benefits,” The New York Times, February 21, 2011, www.nytimes.com/ 2011/02/22/business/global/22pepsi.html?pagewanted=all (accessed August 2, 2012).

   Nonprogrammed decisions are made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization. Sprint Nextel's decision about carrying the iPhone is a good example of a nonprogrammed decision. Apple has power over wireless carriers right now and is requiring them to make long-term volume commitments. Sprint managers had to decide whether to agree to purchase at least 30.5 million iPhones over a period of four years at a cost of $20 billion or more—regardless of whether the company could find customers to buy them. For Sprint, the stakes were high. The company was losing customers and hadn't turned a profit for years. To sell that many iPhones, Sprint managers realized they would have to double their contract customers and commit all of them to purchasing iPhones. However, not carrying the iPhone might mean Sprint wouldn't stand a chance against other carriers like AT&T and Verizon. As one person said of Sprint's decision process, it was “a bet-the-company kind of thing.” Managers eventually decided to go with the Apple contract.

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