Minicase Management 09 Business Ethics Program 1992 Arthur A

Minicase Mgmt 09 Business Ethics Program1992 Arthur Andersen Co

Joe, the District Manager of Computer Operations, is confronted by his supervisor Mary, the Division Manager of Information Systems, regarding a potentially unethical situation. The CEO has received an anonymous letter criticizing the performance of a recently installed, expensive system, claiming it does not deliver as expected. Joe has prior knowledge that the system indeed underperforms and has reported this to Mary previously. Despite this, Mary has publicly supported the system's performance and instructed Joe to draft a reply to the CEO stating that the system is performing as projected and that the expected savings are being realized. She wants supporting documentation to back these claims.

Joe feels that providing a false report would be unethical, as it would mislead upper management and conceal the system’s true performance issues. When he expresses his concerns to Mary, she responds by implying that his inability to produce the requested reply could jeopardize his standing and future at the company.

This scenario presents a complex ethical dilemma involving honesty, transparency, and professional integrity. Joe faces the challenge of balancing loyalty to his employer with his obligation to truthfulness. It raises questions about the ethical responsibilities of managers in reporting accurate information and whether it is acceptable to distort facts to protect corporate interests.

Paper For Above instruction

The scenario involving Joe, Mary, and the CEO at Arthur Andersen underscores a fundamental conflict in corporate ethics—balancing honesty with organizational loyalty and the pressure to conform to managerial expectations. This case exemplifies the ethical responsibilities of managerswhen faced with potential misrepresentation of information, and it raises important questions about the integrity of business decision-making processes.

First, the core ethical issue in this case revolves around honesty and integrity. Joe is aware that the system does not perform as claimed, and he previously reported this issue. However, Mary expects him to produce documentation that supports the falsehoods presented to the CEO. This creates a dilemma for Joe: should he adhere to ethical standards and refuse to distort the facts, or should he comply with Mary’s directive to protect his job and the company’s image? The ethical principle of honesty, as outlined by professional codes of conduct such as the American Management Association’s Principles of Ethical Business Practice, emphasizes the importance of truthful communication in organizational settings (AMA, 2004).

Secondly, this case highlights the potential consequences of ethical misconduct. If Joe succumbs to pressure and falsifies reports, it can lead to several negative outcomes, including reputational damage, loss of stakeholder trust, legal liabilities, and internal organizational harm. On the other hand, adhering to truthfulness, although potentially risking his job, supports the long-term integrity and credibility of the organization. Ethical decision-making in such situations requires an appraisal of these consequences and a commitment to transparency (Trevino & Nelson, 2017).

Another critical aspect involves organizational culture and ethics climate. A workplace that implicitly encourages dishonesty or manipulates data fosters unethical behavior. Research indicates that organizational pressures, such as the desire to meet targets or protect managerial reputations, can lead employees to justify unethical acts (Murphy & Laczniak, 2016). An ethical organizational culture promotes openness, accountability, and adherence to moral standards, which could help mitigate such dilemmas.

From a practical perspective, managers like Joe should consider ethical frameworks such as Kantian ethics, which emphasizes the importance of acting according to moral principles like truthfulness, regardless of the consequences. Alternatively, utilitarian approaches would weigh the overall benefits and harms of falsifying information, likely favoring honesty to sustain trust and integrity. Ethical leadership entails setting an example and encouraging transparent communication, thereby fostering a culture where ethical issues are openly addressed (Brown & Treviño, 2006).

Addressing such dilemmas also calls for organizational policies that support ethical conduct. Companies should establish clear channels for reporting unethical practices without fear of retaliation and provide training to help managers and employees navigate complex ethical situations. As noted by Ferrell, Fraedrich, and Ferrell (2018), robust ethical policies act as safeguards against misconduct and reinforce the importance of integrity in organizational operations.

In conclusion, Joe’s dilemma encapsulates a critical issue in business ethics: the obligation of managers to uphold truth and transparency in reporting, even under pressure from superiors. Ethical decision-making requires balancing loyalty to the organization with adherence to moral principles. Organizations must foster an ethical culture that prioritizes honesty, supports whistleblowing, and provides clear guidance on handling such dilemmas. By doing so, they contribute to sustainable and trustworthy business practices that benefit stakeholders, employees, and society at large.

References

• American Management Association (AMA). (2004). Principles of Ethical Business Practice. AMA.
• Brown, M. E., & Treviño, L. K. (2006). Ethical Leadership: A Review and Future Directions. Leadership Quarterly, 17(6), 595–616.
• Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2018). Business Ethics: Ethical Decision Making & Cases. Cengage Learning.
• Murphy, P. E., & Laczniak, G. R. (2016). Ethical organizational climates and ethical behavior. Journal of Business Ethics, 132(4), 771–780.
• Trevino, L. K., & Nelson, K. A. (2017). Managing Business Ethics: Straight Talk about How to Do It Right. Wiley.