KLM Company Responsibilities Ethical Dilemma Essay

Ethical Problem

KLM Company has a decade-long practice of engaging in corporate social responsibilities every year. The average cost of each social responsibility based on the previous budgets was $ 12,500. The firm was planning to expand its operations to India, and it needed all the resources to be channeled to this new business venture. Ethically, the firm had to finance social responsibilities. In this case, the expansion had to be postponed, a move that would have jeopardized its ability to make a successful entry into the new market. On the other hand, the management could have chosen to suspend financing social responsibilities in that year, a move that could have brought harm to the firm’s relationship with the local community. As the marketing director of this firm, the researcher had to decide on how this ethical dilemma had to be resolved.

The solution to the Problem

This ethical dilemma was brought to the attention of the top management because of its financial implications. The senior managers made a unanimous decision that a solution should come from the marketing director. Making a decision when faced with a dilemma can be very challenging. One has to view the pros and cons of each choice and choose an option that brings fewer consequences and more benefits. This case presented several complexities because of the stakes that were to be lost when either of the options was ignored. To make an informed choice, the marketing directors summoned all the mid-managers for a lengthy deliberation about the most appropriate decision that was to be made. Unfortunately, there was no agreement among the panel members.

After a voting process, it was clear that the number of people who supported expansion plans was just as many as those who were in support of continuing with corporate social responsibility. The weight of making an important decision was left to the managing director. After deliberating on the arguments given by the panel members and personal experiences on the issue, the marketing director decided to suspend the expansion plan. A report was written to the top managers that the firm would finance its corporate social responsibilities as has been its tradition for the last decade. An expansion plan could be implemented at a later date when finances are available. To ensure that the expansion plan remained alive, the director suggested that a small team of employees should be a commission to start surveying the new market to identify the location where the firm would operate from. Other market dynamics as the management worked on the issue of sourcing for the needed funds.

Integration of Course Content

This course has been fundamental in enhancing the researcher’s knowledge when it comes to solving ethical dilemmas. According to Donaldson (1996), when faced with an ethical dilemma, one should strive to follow the principles of moral intelligence. The first principle states that one should strive not to do any harm. It is important to appreciate that in some practical contexts, such as the one presented in this case, it may be impossible to avoid damage entirely when one option has to be taken over the other. The choice that is made should bring as little cost as possible compared to the possibility that it is left out.

The second principle demands that one should strive to make things better. Before making a critical decision, one should ask if the preferred option will make things better. Any action that fails to improve the current situations should be considered undesirable. It is important to note that the focus of making things better should not just be based on short term interests. Weinstein (2012) says that the option should be sustainable in current and future contexts. Respect for others is another essential principle of ethical intelligence. This principle demands that when making decisions, it is important to respect everyone’s opinion. Sometimes their advice may not reflect what the decision-maker thinks, but taking them into consideration may be relevant anyway. If one decides to make a decision that others do not agree with, then he should explain the reason why the options were taken and the benefits expected out of it.

The fourth principle emphasizes on being fair to everyone. In the case provided, the marketing director found himself in a very challenging situation. A section of the employees of this firm has been responsible for organizing corporate social responsibilities yearly. Cutting off their finances would be seen as an unfair act to them. On the other hand, the team of employees working on the new Indian project would also want to see their interests taken into consideration. To be fair, the director had to make a decision that will be acceptable to both parties. The trade-offs had to be seen as appropriate to all the parties. The last principle demands that leaders must be seen to be loving and caring when making their decision. There should be no malice when coming up with the best alternative when faced with a challenging decision to make (Cropanzano, Bowen, & Gilliland, 2007).

The course materials could have made the process of deciding the case above simpler than it was to the managing director. The five principles would have guided the director on what was right and fair under the circumstances presented above. Expanding to the global market at the expense of its social responsibilities would be seen as an unfair and selfish move only meant to increase income for the firm. As Weinstein (2012) observes, a firm operating in a competitive market, should strive to avoid giving the impression that it is only interesting in its profitability. The other two pillars of sustainability- the environment and people- are also essential and should never be ignored.

Ethical Dilemma Model

When addressing a moral dilemma, Terry, Schermerhorn, and Dienhart (2004) warn that it is crucial to avoid making decisions based on emotions. This is especially so when the decision may affect others or the prosperity of a firm. The best way of preventing clouded judgments when making such critical decisions is to have an ethical dilemma model that defines what should be done at every stage. The figure below shows the model that one should follow when making such decisions.

Figure 1: Ethical Dilemma Model.

The figure above shows a model that could have been used in solving the ethical dilemma presented in this case. The first step in this model is the definition of the Problem and the collection of relevant facts. At this stage, the marketing director was right when he brought in his junior officers to understand the facts about the dilemma the firm was facing. After gathering the circumstances, the next step is the identification of the feasible options. The options chosen should be fair and sensitive to all the environmental forces within the firm. The third step is to assess the possible impacts of each option on various stakeholders within the firm. The shareholders, employees, customers, the government, and society are the stakeholders whose interests must be taken into consideration in this case. The aim is to meet their needs in the long run. The fourth step is to develop useful criteria that can be used to determine appropriate actions that should be taken. The requirements should be acceptable and simple to understand. In the final step, the leader should use the criteria developed to select the best option out of those that were identified. The choice should have maximum benefits for the stakeholders.

Lessons from the Ethical Dilemma

The ethical dilemma presented in this case, and the course materials enabled the researcher to understand important facts about themself. The first lesson is that the researcher is futuristic. This was evident when he decided to protect the image and future of the firm in the local market instead of opting for quick profits. It is also clear that the researcher is keen on protecting its current cordial relationship with the public. It is also evident that the researcher is considerate about the interests of others in this firm. This is seen when he commissioned a team of experts to survey the new market in preparation for a future entry. He knew that a section of the stakeholders of this firm was very keen on expanding to the global market.

Plan for the Future

The knowledge and skills acquired in this course will be very useful for the researcher in the future. As an organizational team leader, the researcher will have a better knowledge of how to addressing ethical dilemmas in corporate settings. It is now clear how one should plan when faced with the dilemma, the options to be taken, and how to involve other stakeholders in making such critical decisions. In the future, the researcher will have a better knowledge of how to address conflicting interests within an organization without offending anyone. To achieve sustained development, a leader should always ensure that the benefits of its stakeholders are taken care of at all times. This approach not only ensures that every team member of satisfied, but also encourages them to be part of the decision-making processes within the firm. They will know that their interests will be respected, and opinions are taken into consideration by the leader. This course will help the researcher become a better leader who embraces the principles of transformational leadership.

Conclusion

Ethical dilemmas are problems that leaders have to face on some occasions in an organizational setting. When making a decision in such circumstances, it is vital to take into consideration some factors. The principles of ethical intelligence offer a guideline that a leader should follow when making decisions. The dilemma presented in this case could easily be solved using these principles. Developing an ethical dilemma model is also very important, especially when the decision is expected to affect many stakeholders within the firm.

References

Cropanzano, R., Bowen, D., & Gilliland, S. (2007). The Management of Organizational Justice. Academy of Management Perspectives 6(11), 34-45.

Donaldson, T. (1996). When is different just different, and when is different wrong. Harvard Business Review 9(10), 48-62.

Terry, T., Schermerhorn, J., & Dienhart, J. (2004). Strategic leadership of ethical behavior in business. Academy of Management Executive 18(2), 56-66.

Weinstein, B. (2012). Ethical Intelligence: Five Principles for Untangling Your Toughest Problems at Work and Beyond. Business Book Summaries 12(1), 1-7.