Friday, January 19, 2007

Whistle blowing

Whistle blowing mat be defined as the attempt by an employee or former employee of an organization to disclose what he or she believes to be wrong-doing in or by the organization. Like blowing a whistle to call attention to a thief, whistle blowing is an effort to make others aware of practices one considers illegal or immoral or unethical. If it is reported t someone higher in the organization it is said to be internal. If it is reported to outside groups such as reporters, public interest groups or regulatory agencies, it is said to be external.

Under what conditions is WB justified? There are varied views to this
(i) Some have argued that WB is never justified because employees have absolute obligations of confidentiality and loyalty to the organization for which they work
(ii) It has also been argued that WB is always justified because it is an exercise of the right to freedom of speech.

The criteria for justifiable WB-
(a) The firm through its product/policy will do serious and considerable harm to the public
(b) Once an employee identifies the threat, he/she should report it to his/her immediate superior and make his/her moral concern known
(c) If one’s immediate superior does not act, the employee should exhaust internal procedures within the firm-take it up to the manager, board of directors etc
(d) The WBlower should have evidence to back his claims

Factors to consider in WB

(a) Make sure that the situation is one that warrants WB-Situation should involve immoral actions which are harmful to others
(b) Examine your motives
(c) Verify and document your information
(d) Determine the type of wrong doing involved and to whom it should be reported
(e) State your allegations in an appropriate way
(f) Stick to the facts
(g) Decide if WB has to be internal or external
(h) Decide if WB has to be open or anonymous
(i) Consult lawyer
(j) Anticipate and document retaliation

You can cite examples of Dr. Subba Rao, Admiral Vishnu Bhagwat, Arthur Andersen, Dr. Fitzgerald
How bureaucrats can shape the Morality of Politicians? (.Khairnar,.TN Seshan,Chandrasekhar,Mun com of Surat Rao Puncutality,Services,etc )

Personal Values maketh the man

Both managers and academics have often asked whether Values/Ethics can be taught. People are born with certain values, Certain Values are cultured at home, Certain Values are internal and certain Values are shaped by external environment, certain values are relative. Therefore formal discussion on values for adults is pointless.

As to the question of whether ethics/values can be taught, a frequently stated view is that these are learned from one’s parents and are fully formed in early life, so that later efforts at teaching are really pointless. The final caveat however is that modes of ethical analysis ina business context can be taught.

Personal values can be evaluated in three distinct categories (a) Mother & Son relationship - Bhakti (b) Student & teacher relationship - Yukthi & (c) Grandchild & Grandfather Relationship - Mukthi

(a) Mother and Son relationship (Bhakti)

The mother and chilld relationship is the sweetest, most trusting and least calculating relationship. Moreover most of us can relate effectively only to a personality and not any abstract concept. Can a mother knowingly giver her child stale food? Does she feel most blessed when able to feed and clothe her child well even if she herself has to go hungry and remain ill-clad? These initiate the laying of the foundation for integral power for ethico-moral motivation. The ultimate basis of healthy ethico-moral transactions and relationships at any level and any sphere lies in the depth and sweep of the unitive feeling amongst personalities involved.

(b) Student & teacher relationship – (Yukthi)

The comprehension of meaning is dependent on study, and teaching is for the preservation of that memory and for the increase of virtue. This statement can be dovetailed with the modern management process of student-teacher relationship in the leader-team members context. It is a distinct possibility that if a leader were to assume the role of a teacher on a regular basis, he/she would be spurred to internalize and project higher values more deeply and genuinely than if job were delegated to other specialists. The teaching process can provide a strong moral drive to practice what is preached, especially when the leader accepts the mentorship role. Owing to the very process of mental reflection involved in the preparation for the teaching session and the necessity of participating in the ensuing question-answer session, the subject matter is imprinted more clearly in the teachers own mind. Therefore since all behavioral is preceded by thought-change, this study cum teaching methodology can be a head start for the self-transformation process of the leader himself.

(c) Grandchild & Grandfather Relationship – (Mukthi) May need some more explaining of the concept…

Consider the following example:

The grandfather is waiting for his son to return home from work and finds that his son has been overworking himself for a long time and this has him worried. He is concerned about his sons health and well being. He takes his grandson and makes him stand in the sun with a brick on his head. When the son sees this, he questions his father how can you do this?, the father says that if this is how you feel about your son, don’t you think I too will have the same feeling about you?!.

Why good managers make bad ethical decisions?

There are internal as well as external factors which induce good managers to make bad ethical decisions. Internal factors could be – The boss wants you to reach your targets by hook or crook, Peer pressure, Others don’t catch me on the wrong foot & till such time I am not caught, I will do it AND external factors could be – Strict govt. regulations, Tax policies, Maximum benefits to maximum number of people.

Managers at various levels very frequently cite the following examples of having to quash their ethical sentiments in order to keep the organization/business running:-

(a) I have to satisfy an inspector from the electricity board to maintain adequate power supplies in times of recurrent shortage
(b) I am obliged to entertain and enrich an important customer to keep him from switching over to our competitor
(c) I have to fiddle around with year-end inventories to show a higher profit figure to the board of directors
(d) I have to produce fake securities and bills receivable to procure ready cash
(e) I have to over-invoice import bills and under-invoice export bills to oblige overseas owners
(f) I have to oblige a monopoly supplier, at an individual level, to ensure supplies of a critical component.
(g) I have to sign the transfer order of an officer to satisfy the prejudice of a higher-level boss.
(h) I have to arrange for cash payments to retired high court / supreme judges who are on the informal rolls of our company – at the instance of owners.
(i) I have to manipulate data to understate the profit figures for the purpose of trade negotiations
(j) I have to manipulate data when preparing the project report to meet the hurdle rate of financial institution.

These are invoked to circumvent the conflict between the instant, relative values and enduring universal values (honesty, responsibility etc). This side-stepping is also an excuse at times to subvert personal ethics in favor of company goals, under the argument that personal values are inappropriate as standards for corporate decisions.

D G Jones states that ‘managerial ethics’ is a subset of ‘business ethics’ and those aspects of managerial relationships which involve employees and other market agents like suppliers, vendors, customers, creditors and competitors. Managerial ethics deals with practical management problems that have an ethical strand interwoven with internal & external factors.

Morality in Advertising

Anyone who has worked in business organizations learns that the specific challenges thrown up in the marketing area are amongst the most taxing. Promise, large promise, is the soul of an advertisement. Should advertising make the promises it does make? And does it deliver the promise?

The economic case for advertising is fairly clear when it is considered as a necessary component of the competitive marketing system. It draws attention to goods and services which are available and by stimulating purchases it contributes to return of costs, increases market share etc etc etc

There may be a grey area in the distinction between, on the one hand, misrepresentation, or making claims which are false and on the other hand omitting certain facts about the product or being economical with the truth

Exaggerations and unwarranted claims about the efficacy of the product also fall into consideration in assessing the truth factor in advertising, whether those claims have to do with one’s health, or one’s sex-appeal, or one’s social status, or ones general well-being in the society.

Drinking a special brand of Whisky will transport one into a fairyland or harem of delights. The unspoken pre-supposition here of course is that the potential customer will be not only resistant but also sensible and reasonable in assessing the claims for various goods and services and will not take it all absolutely literally.

It is in such areas particularly that regulation and monitoring of advertisements have an important social function by protecting the vulnerable in the society from being exploited.

Another more ethically interesting sphere in which advertising needs to be scrutinized is the area of pressure on individuals to make particular choices

The final and underlying consideration concerning the ethics of advertising is to what extent advertising responds to demand OR on the contrary actually creates demand?

The objective of advertising any goods or services should be:
· To inform the consumers about the goods and services,
· Persuade them to buy the goods and services AND
· Remind them about the goods and services

The most important pre-requisite i.e. remember the 3 As (i) Acquisition, (ii) Allurement & (iii) Advantage.

While advertising, a business house should also keep the environment in mind. When we say environment, we mean Economical elements, Social elements, Ethical elements and regulatory elements.

Morality (It is basically being right or wrong in conduct.) And Ethics (Whether you conform to moral standards?) are synonyms.

There are basically two issues in advertising

(i) Dilemma
(ii) Lapses

Dilemma is the unresolved question. The consumer is in tow minds about the advertised product or service. The advertisement has confused him and hence decision making becomes that much more difficult. E.g. Reliance India Mobile... Actually it is a fixed line phone with Limited mobility, however it is proclaimed as a mobile phone...

Recruitment advertisements by large corporate houses often begin in bold print with words to the effect “We are looking for people with sharp analytical minds. For the right person the sky is the limit” But we are yet to see one announcement which seeks individuals with synthesizing capabilities. Does effectiveness in the long run not require analysis and synthesis?

Lapses are unethical decisions like (1) Advertising unhealthy products (Cigarettes) (2) Advertising to Children (Cola ads—injurious to a child’s health in the long run and (3) Using Puffery in advertising (Free Dental Insurance if you buy Rs. 20 worth tooth paste, In reality there are strings attached!

Can Profitability & Morality co-exist

Profitability is of two types: Tangible and Intangible

(a) Tangible

Return on Investment
Cash flows

(b) Intangible

Trust of the consumers of the organization
Evaluation of the Organizations profits
Status of the people behind the organization

Morality The only definition which can be given to morality is “That which is selfish is immoral and that which is unselfish is moral”. The natural tendency of every human being; taking everything from everywhere and heaping it around one centre, that centre being mans own individual self. When this tendency begins to break, then begins morality. This is fundamental basis of all morality.

We find that as knowledge comes, man grows, morality is evolved and the ides of non-separateness begins. Morality can be either cultivated or inherited. A smile from the air hostess is morality cultivated and a smile from a child is inherited.

Co-existence of Profitability and Morality (Yes they can and they should)

There is one and only social responsibility of business and that is to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say engages in open and free competition without deception or fraud.

The question is of whether, in defining the business and understanding it as a moral reality, we should focus primarily on its goal of producing goods and services or of generating profits. A single concept of profit is not by itself sufficient to define what we mean by business.

Even goods and services have to be really goods and services from the view point of enhancing total human existence (P F Camenisch). While quoting the anti-social responsibility perspective of the business Evans reasons that since the society supplies the mandate and power to business, it must respond to social obligations while earning profits.

This is no way means that ethics in business is a means to profit. Morality is an end, a justification in itself. The fundamental basis of trust is moral.