Interpersonal Relations Case 151: The One-Cent Ethica 288288

Interpersonal Relations Case151the One Cent Ethical Dilemmarajah Maj

Interpersonal Relations Case 15.1 The One-Cent Ethical Dilemma Rajah majored in business administration and marketing at college, and looked forward to a career in retail management. While attending community college, he worked an average of 30 hours per week at retail stores, thereby taking him an additional year and one half to attain his degree. Still only 23 years old, Rajah received a job offer as the manager of a branch of a discount general store. He thought this would be a fine opportunity to begin his career in retail management. Although the store was referred to as a dollar store, the prices of individual merchandise ran as high as $30.

About three months into the job, his regional manager Lauren explained that cashiers were from here on not to give customers back change of only one cent. For example, if a customer’s bill were $2.99 and he gave the cashier a $5.00 bill, the cashier was supposed to give the customer change of $2.00 and smile at the same time. Yet if the customer demanded the penny in change, the cashier should grant the request. Rajah asked Lauren, “Why should our store do something that nasty? It’s like stealing pennies from customers." Lauren replied, “We have approximately 1,200 stores across the country, and all our stores are busy. Few customers care about one penny, but if we add up all those pennies, the company’s profit for the years has a nice bump up." Rajah was not happy with the new policy, but agreed to go ahead and encourage his cashiers to withhold the penny change unless a customer objected. Yet after a week, this new policy began to disturb Rajah. He felt he was forcing his cashiers into unethical if not illegal behavior. He did not want to lose his job by complaining about or not complying with company policy.

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The ethical concerns surrounding the "one-cent" policy in retail operations pose significant moral dilemmas for managers like Rajah. This case exemplifies the tension between corporate profit motives and personal ethics, highlighting the complex decision-making processes faced by managerial personnel in ethically ambiguous situations.

Firstly, from an ethical standpoint, the policy to withhold one-cent change appears to be deceptive and potentially illegal. It suggests a form of penny-precipice stealing—taking advantage of customer ignorance regarding small sums. While the amount is minimal per transaction, the aggregate impact for the company is substantial, as Lauren notes about the cumulative profits. However, ethical principles such as honesty, fairness, and consumer trust conflict with this policy. The practice of intentionally withholding change even when customers request it infringes on the moral obligation of truthful transactions, risking erosion of customer trust and the company's reputation if revealed.

Furthermore, Rajah's discomfort stems from an awareness that the policy promotes dishonest behavior. As a manager, he bears responsibility not only for compliance but also for setting an ethical tone in his store. By encouraging cashiers to withhold change, Rajah faces an internal conflict: whether to uphold personal integrity and ethical standards or to follow corporate directives designed solely for profit maximization. This internal conflict is often at the core of many ethical dilemmas faced in managerial roles, emphasizing the importance of ethical leadership and the moral responsibilities of managers beyond mere compliance.

Considering whether Rajah should blow the whistle involves understanding the potential consequences and the ethical imperatives involved. Whistleblowing entails exposing unethical practices, often at personal risk. Given the small amount involved and the potential professional repercussions, Rajah must weigh the importance of ethical integrity against career stability. Ethically, if the practice is illegal or constitutes consumer fraud, there is an obligation to report. From a utilitarian perspective, exposing the policy may prevent further unethical conduct and protect consumer rights, despite risks. Conversely, the potential damage to his career and the company's response may deter whistleblowing, illustrating the classic conflict between ethics and self-interest.

In evaluating the ethics of the policy itself, it is clear that withholding one-cent in change as a standard practice is morally questionable. Although the amount is small, the intentional deception confronts ethical theories emphasizing honesty and integrity. Kantian ethics, which stress treating individuals with respect and never merely as means to an end, would condemn such practices because they involve manipulating customers’ perceptions of fairness for profit. From a consequentialist or utilitarian perspective, the practice might generate short-term gains but could harm long-term trust and legitimacy of the business. Therefore,, the policy is ethically unjustifiable because it relies on deception and undermines the moral fabric of honest commerce.

In conclusion, managers like Rajah are placed at critical ethical crossroads where organizational profit motives conflict with personal and societal ethical standards. The decision to challenge or support such policies hinges on evaluating the principles of honesty, consumer rights, and legal compliance. Ultimately, promoting transparency and fairness not only aligns with moral integrity but sustains trust in commerce practices. Encouraging ethical behavior in managerial roles is essential for fostering a resilient and reputable retail environment that values integrity over short-term profits.

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