Describe an ethical dilemma and its importance and relevance. Identify the vario

Question

• Describe an ethical dilemma and its importance and relevance.
• Identify the various stakeholders and their positions.
• Evaluate an ethical decision-making model, apply it to the chosen issue, and analyze options for resolving this ethical dilemma.
• Recommend a corporate policy for resolving the issue and support the recommendation with well-reasoned analyses and specific examples, including the impact on the various stakeholders.
• Recommend a policy that resolves the ethical dilemma and support the recommendation with well-reasoned analyses and specific examples.
• Analyze and recommend a strategy for communicating the policy to the organization in a manner that meets the needs of the audience.
• Specify potential limitations of the policy and strategies for monitoring and compliance.

Explanation / Answer

1-ANS-

Imagine that you are the Chief Financial Officer of a medium to large company. It is April and the Chief Executive Officer has just returned from a meeting with the company's bankers. She calls you to her office to discuss the results of the negotiations. As things stand, the company requires a fairly significant injection of capital which will be used to modernise plant and equipment. The company has been promised new orders if it can produce goods to an international standard. Existing machinery is incapable of manufacturing the required level of quality. Whilst the bank is sympathetic, current lending policies require borrowers to demonstrate an adequate current and projected cash flow, as well as a level of profitability sufficient to indicate a capacity to make repayments from an early date. The problem is that, largely because of some industrial problems, the business has not been performing at a level which realises even its 'unimproved' potential. Strictly speaking, the figures would not satisfy the bank's criteria.

The CEO reminds you of all of this and then mentions that she has told the bank that the company is in excellent shape, that she believes that its financial results will meet the criteria and that she will ask the Chief Financial Officer to deliver a financial report to the bank at the beginning of the next week. She tells you that it is up to you to decide upon the contents of that report.

Two final pieces of information; you have recently purchased a home - leveraged with a significant mortgage. Failure to invest and gain the promised new orders is almost certain to lead to major retrenchments of personnel.

What are some of the ethical issues arising in a case such as this? For the most part they are fairly obvious:

Whilst this presentation involves a fictional dilemma, it is not too far removed from the actual experience of many practitioners. Even so, it is important to realise that there is still something rather artificial about such a construction. It's not that the case is unreal. Rather, the problem arises from the fact that most ethical dilemmas are of a much smaller dimension, perhaps lacking the obvious significance of the type of 'big ticket' issue outlined above.

Indeed, one of the things that we need to recognise is that many people find it difficult to recognise an ethical dilemma as such. It is not that most people are inherently unethical. Instead, the problem is that many people are unconscious of the fact that nearly everything that they do has an ethical dimension. Before trying to explain the reason for this, it may be interesting to pause and consider some of the relatively 'invisible' cases where ethical questions seem to be ignored. Take a simple example; have you ever seen a person avoid taking a telephone call by telling someone else to answer and say that the person is not there. Even such a simple case has at least two aspects to consider. Firstly there is the matter of deceit and secondly there is the matter of getting someone else to do the 'dirty work".

Some might respond by saying that this sort of behaviour is quite harmless. But is it really? What sort of message does such behaviour give about the prevailing values of an organisation? How easy is it to accept an avowal of honesty from a person who is habitually deceitful for the sake of minor personal convenience?

Some people take a similar line when it comes to filling in a tax return, or when producing financial statements or when trying to do a cost benefit analysis that compares product safety with cost of production, retrenchments with increased dividends to shareholders. Practical concerns and pragmatic considerations can make one relatively blind when it comes to spotting ethical issues which arise.

The reason for mentioning these cases is to demonstrate how even simple forms of behaviour are loaded with ethical significance. This ceases to be any kind of mystery once it is realised that ethics is all about answering a very fundamental question; namely, "What ought one to do?". As you will appreciate, this ancient question is an immensely practical one that admits all manner of answers. Some of these answers are given in the form of established moralities, frequently expressed in the writings and teachings of great religions. Other answers have been generated by philosophers searching for theories that might give some rational underpinning to answers about the nature of 'right living".

As this audience will know, the different voices in the conversation about how to answer that fundamental question seem to be arguing quite different cases. However, although there are real differences to be observed there is also much that is shared in common - not least, a fundamental agreement that persons ought to be valued as ends in themselves and not simply as means to help realise the ends of others.

It is not just philosophers and theologians who have been in the business of developing ethical systems. Various groups in society have also been active in the development of rules of conduct that are sometimes referred to as Codes of Ethics. The rules of the Accounting profession represent one such attempt to codify principles that apply to a particular group of people engaged in a common activity. Before going on to look at the status of such rules, it may be useful to say something, in general, about what it means to claim the status of being considered a profession. There is a widely accepted definition that runs as follows:

The term refers to a group ... pursuing a learned art as a common calling in the spirit of public service - no less a public service because it may incidentally be a means of livelihood. Pursuit of the learned art in the spirit of public service is the primary purpose.

Dean Roscoe Pound

Thus, a profession is distinguished by having a:

The point should be made that to act

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