I write this article based on a real-life story. The person I speak about was working for ING; he was a manager there and had a senior manager above him where he worked closely together with for the past years. He found out something about his senior manager which later would have severe influences on his job and personal life.
The senior manager was near retirement, throughout the years he was rewarded for his performance by stocks. Companies do not see the negative side effects of rewarding by stocks. “Unlike salary and cash bonuses, options don't have to be counted as an expense on a company's income statement when they are issued.” (Washingtonpost, 2005) Negative side effects occur, employees will have an incentive to boost company stocks, and this could lead to “risky or fraudulent behavior and contribution to a wave of accounting manipulations”. Nevertheless, these stock rewarded bonuses create an environment where managers have an incentive to act morally wrong. ‘Right’ in this setting is what companies envy as very important themselves, namely act in the best interest of the company and not out of self-interests. Like described in the business perspective of the four perspectives, the individual should take the business perspective and should act in the best way for the company.
The ING senior manager was going to make decisions that would positively influence stock prices. The junior manager found out about this and reported it. This was a hard decision, the junior manager thought he should act morally Right to report misbehavior within the company, despite the fact that he worked for quite a while together with this manager. The board of ING however considered this as being a traitor and the manager’s only option was to leave the company. The question arises: ”In what way ‘should’ he have acted?” The junior manager noticed some behavior, he could do two things, report it or not. Not reporting it would have made him guilty because he would have indirectly assisted, however reporting it seemed to be a wrong decision as well.
http://www.washingtonpost.com/wp-dyn/content/article/2005/06/26/AR2005062600662.html
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4 comments:
Based on the story as written down in this principal comment, my opinion is that the junior manager should have acted the way he did.
Since the senior manager is influencing the stock prices in such a way that they look better than they actually are in order to create financial advantages for himself, is in my opinion very wrong behaviour. This because human beings are rational and practical beings who can make decisions with respect to their own behaviour. They can choose their own practical/ action guiding discourses. In this case (as is the case in the article posted by Mandy Bosma) the senior manager had a choice between an economic discourse and a moral discourse. The senior mannager decided to choose the economic discourse over the moral discoure, which damaged the general company well-being. And this is wrong.
Furhermore, in the article of Waters (1978), which can be found in the reader, there are a few organizational "blocks" described which make it more likely that employees in a business setting make morally wrong decisions, whereas they would not have done so outside a business setting. Two of these blocks are strong role models and strict line of command. These blocks explain that junior managers do not report morally wrong conduct because of a very advanced socialization process with senior managers and because of the threats of for example tranferring to lesser positions if they report on the morally wrong conduct of senior managers. The junior employee in this case was brave enough to go against these two "organizational blocks", and this is in my opinion the right action. Therefore, in my opinion, the board of directors made the wrong decision with respect to the junior manager and they should alter this decision.
I agree with s244744 that the board of directors made the wrong decision to fire the young manager. The fact that he was brave enough to 'blow the whistle', I think, only shows how good and honest an employee the young manager is. Someone ING wants to keep on board.
Instead they fire him and I think this shows that the top managers show no responsibility for ethics in the organizational culture. Doing this could be troublesome for ING because (according to the social learning theory in chapter about 'managing for ethical conduct' in the reader) people learn a great deal from observing the rewards and punishments of others. In this case they see that the 'whistle blowers' get punished, so other people are going to think twice before reporting immoral behavior.
So what the board of directors does is stupid in two different ways: they fire an honest employee (who could be an example to the rest of the company, also according to the social learning theory) and they send a wrong signal to the rest of the employees.
If they would have fired the senior manager they would have turned the whole thing around and send a right moral signal to the rest of the company.
I don't believe many people here would argue for the action of the board. As we have so far learned it would be ethically wrong not to 'blow the whistle'.
This makes you think about the reasons the board of directors fired this man. Do they really not care about ethics at all, as s672126 suggested, or are there others reasons. For example; do they do not want negative publicity in the press? Or do the approve the behaviour of the senior manager?
The question arises what can be done to get rid of this kind of behaviour in the future. The approval of whistle-blowing is one thing that could help, but how is it then that when someone is a whistleblower, he has more trouble getting a job after his noble actions (as stated in the article of Waters).
I believe this all requires a change of thought in the minds of managers in general. Ethics should be more actively used in business in general. Question is; how will we accomplish this...
In my opinion the junior manager acted in a right way. The contradiction is acting from a business perspective or acting from a moral perspective. And relating the business and moral perspective: in my opinion the most important is the moral perspective, since morality issues categorical commandments, it assumes priority. So I would have done the same as the junior manager, reporting it.
For the company it is also a difficult situation. From the one hand side the junior manager has proven to be loyal to the company, for reporting the immoral actions of his senior manager. And from the other hand he is not loyal to his boss, the senior manager, and the junior manager can be seen as whistleblower. Looking to the past years, one thing companies are not keen on is a whistleblower... However, that the junior manager is fired, for just doing the right thing and reporting it, is a bloody shame.... In this case can be stated that doing the right thing, isn't always the right thing to do....
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