"It is impossible for ideas to
compete in the marketplace if no forum for
their presentation is provided or available."
Thomas Mann, 1896
The Business Forum
Based Decision Making
"Ethical evils" may
occur when an organization is anxious to introduce a new product or
a new service, or, as in the case of Toyota, when faced with
situations that seem to be out of control. The pressure to release
the new product or service, or to first deny and then to correct
product/service problems may result in an inappropriate decision:
release before ready, or deny that correction are required.
Companies are sometimes willing to bring out the product before all
of the bugs have been worked out, before all of the problems have
been addressed and reconciled. The automobile makers have, for
years, been guilty of too early releases, based on the premise that
the consumer will alert the manufacturer to the problems that
should have been corrected before delivery; often, these problems
were known and understood, again, Toyota.
Ethical evils abound
in the market place. They exist in all sectors of the economy.
They are prevalent in government (at all levels) they exist in
education and in the not-for-profit world. Ethical evils seem to be
all around us. They encourage expediency based
Here is a
case-in-point. Recently, a large community college in California
announced the installation and implementation of a state-of-the-art
telephonic registration system. A student could dial the school's
telephone number on a touch-tone phone, enter his or her student
identification number, as prompted by the registration computer and
enter the ticket numbers of the students' desired courses. The
system's computer would check to see if the classes were available,
add the students' names to the roster and calculate the required
fees. Payments were to be made by credit/debit card, the card's to
be keyed into the system via the telephone. If the desired class(es)
were not full or otherwise not available, the system would suggest
alternatives. The students would receive hard copies the
transactions through the mail or, if requested, via fax. Sounds
great, right? Wrong! There were only two in-coming telephone lines
to handle registrations for nearly 30,000 students.
The school's desire
to put the new registration system into service hid the fact that
there were insufficient telephone lines. The phone company was back
logged and had scheduled new line installation later in the year.
In order to look good, the community college ended up looking very
bad. A well publicized promise had not, could not been kept. The
students had been led to believe, unethically, that the system was
open to handle the registrations and that the long lines which were
usually associated with the beginnings of a new semester were gone
forever, hence, the "ethical evil." Again, sounds like Toyota and
the failure of brakes and/or uncontrolled acceleration.
At the same time, we
must guard against providing simple answers to complex issues. What
is the point of always waiting for perfection? Expediency-based
decisions often emphasize short-term profitability while sacrificing
long-term satisfaction. Expediency based decisions may try to cover
up mistakes, on the theory that the customer might not notice the
product's short-comings. A few months ago, a large bank's computer
doubled all ATM transactions. When a customer withdrew twenty
dollars from an Automatic Teller Machine, the computer debited the
account twice, i. e., two transactions showing twenty dollars each
for a total of forty dollars coming out of the account. This
continued, unnoticed, for several days. Several thousand dollars
were involved. Customers who had made large ATM withdrawals, of
course, suffered the most. Checks trying to clear those accounts
were returned for "not sufficient funds" (NSF).
Many of the bank's
customers were unaware of the problem until the bank began mailing
out routine debit memos charging those customers a returned check
charge of twenty dollars. The bank, of course, reversed all of the
incorrect entries and returned the fees, but the problem remained.
The bank did not see fit to issue letters explaining the situation,
leaving many customers trying to account for the duplicate entries
on their monthly statements. The bank felt that by not
"advertising" their errors, no one would notice. The "ethical evil"
was that if the bank admitted the mistake via letters to their
affected customers, the bank would have appeared to be less than
competent. There was also a belief that those customers with large
balances might not even realize what had happened. One wonders if
there was not a similar situation at Toyota or at Ford Motor Company
and the Pinto whose misplaced fuel tanks tended to explode
Clearly, these are
only examples of what might well be the tip of a very large
iceberg. Expediency based decision making is far more prevalent
than one might expect.
This sort of decision
making places far greater value on the short-term results than on
the means to achieve those results. Organizations must ethically
ask, "what does the customer really want?" "How can we best serve
the customer?" "How can we avoid the blue sky that comes with and
through expediency based decisions?"
The ethical issues
involved are clear. They must be brought to the consumers'
attention. It is not enough to pledge high ethical standards. The
"ethical evils" must be eliminated.
Henry H. Goldman
a Fellow of The Business Forum Institute and
is the Managing Director of the Goldman Nelson Group. Henry got
his Masters Degree at the University of Iowa and did his Doctoral
Studies at the University of Southern California. He is a
Certified Professional Consultant to Management (CPCM); and has
published numerous articles in trade journals and was Associate
Editor of Taking Stock: A Survey on the Practice and Future of
Change Management (Berlin, Germany). He is a member of the
American Society for Training and Development (ASTD); Association of
Professional Consultants (APC) and the Institute of Management
Consultants (IMC). Henry has consulted and/or offered training in
South Africa, Tanzania, China, Hong Kong, Indonesia, Macau,
Malaysia, Philippines, Singapore, Barbados, Georgia, Kosovo,
Tajikistan, Turkey, Saudi Arabia, the United Arab Emirates and of
course North America. He has also taught at Baker University:
Lee’s Summit, MO, 2008, Adjunct Professor of International Business;
National Graduate School: Falmouth, MA, 2004-2008, Adjunct Professor
of Quality Management; California State University: Fullerton,
2005-2006, Lecturer on Taxation; University of California: Berkeley,
2002, Adjunct Professor of Management; University of Macau (China),
Adjunct Professor of Management, 2001-2003.
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