Real Sales or Wishful Thinking? Essay Example

Ethical Considerations HRM

In the case study reviewed below, the sales manager faces a difficult situation: he needs to comply with the orders of his supervisor to increase sales and knows that it is almost impossible to do it given the market conditions (Gusdorf, 2010, p. 12). He needs to take into consideration the interest of all stakeholders.

Stakeholders

The stakeholders identified in the current case are: workers who are handling orders, salespersons who get orders for the company, managers, investors, and the public. While it is evident that all employees’ bonus would be affected by low quarterly sales figures, it is also important to note that if the sales manager went ahead with the plan to get orders on the sheets before they are completed, the reputation of the company would suffer, provided that the management found out about his actions. This would cause more loss for the organization and workers long term than simply getting lower bonuses.

Possible Solutions

Getting orders in early and getting the sales figures up, cheating the system

Applying the Utilitarian theory, Marty, the sales manager would think that he would not do harm for anyone by getting the orders in early. He would make the management pay out higher bonuses for everyone across the business unit, while – if nobody finds out about his maneuver – nobody would get hurt. However, there is a risk involved in taking this step, and stakeholders could lose a substantial proportion of their investment if the unethical practices of the sales department came to light. Greenwood (2002) states that people are motivated by pleasure and pain, and immediate pain (losing bonuses) is a greater threat than the possibility of getting orders in on paper early. Avoiding pain and simply manipulating sales figures seems like the most evident decision, however, it would have negative consequences for the entire organization.

Explaining the management that this quarter is generally slow and making promises that the department will make up for the lower sales in the next quarter

Applying the Rights theory, the sales manager should acknowledge that there is a conflict between the interest of shareholders and the workers and managers. While the workers and managers would like to receive higher bonuses, this short term goal could jeopardize the investment of investors. Phillips (1997) state that the organization has a moral duty towards all stakeholders, and the interests need to be harmonized. Therefore, negotiating with the higher management a higher bonus for the current quarter and a lower one for everyone for the next quarter, adjusting targets would be reasonable. It is likely that the targets that are set for the current quarter are not realistic, and need to be adjusted accordingly. While revising the targets would impact the company’s performance, the impact would not be as strong as a scandal about sales figures fraud. The above solution also utilizes the Virtue theory, and different stakeholders would need to compromise to avoid taking unethical steps.

Working together with salespersons to try and achieve the targets set by the management against the odds.

Dessler (2006) states that ethical decisions are based on normative judgments and moral principles. Further, the author also concludes that ethical behavior in the organization is determining the principles of governing workers. By making salespersons commit fraud, they would be forced to go against their will. Applying virtue ethics theory, Marty can do what he thinks is right, and does not harm any stakeholders. He does not have to commit fraud, risk his own job and salespersons who would be involved in his scheme. Finally, by providing extra support and training for the most vulnerable members of the team, just like Robert, he could utilize the caring theory. The company would benefit from improved sales figures, salespersons could have a higher bonus, and improve their skills. By empowering Robert through recognizing his efforts to bring in sales despite his disability, Marty could motivate him to work harder. Asking questions like: how could we improve the sales figures by creating a strategy together and asking Robert individually if the company could do anything to help him, Marty would increase commitment, avoid compliance risks and would not endanger anybody’s job.

Recommendations

As it has been shown above, the application of the Virtue ethics, motivation, and caring theory in human resources management would be the best approach to increasing sales figures and acting in a way that it is in line with business ethics. Hersey and Blanchard (1993) found that recognition, achievement, and responsibility can motivate workers to hit targets more than financial rewards. While in this case all salespersons would lose out on their bonus, they are not likely to try and hit the targets, unless they are motivated to do so. The sales manager, Marty should empower workers to try and take responsibility for improving the sales figures. He could meet Robert and ask for advice, and appoint him as a project manager among other salespersons to create ideas that would help them hit the targets. Marty should also talk to Robert to ask how the company could help him get to meetings faster, and whether or not he would need any help with making adjustments. Him and Robert could work together on a strategy, as Robert knows the needs, challenges, and struggles of salespersons more than Marty. By providing responsibility, recognition, and a sense of achievement, Marty could motivate Robert to work faster, and he would become a role model for other salespersons. The potential outcomes of this approach are: increased sales figures, higher bonuses, and the elimination of compliance risks that would affect the whole organization.

Conclusion

The above case study featured a situation which was highlighting the fact that the interest of stakeholders often clash, and in these cases ethical decisions need to be made. While it is unethical to set unrealistic targets, it is not confirmed by the case study that the higher management did engage in that behavior. However, by manipulating sales figures to get short term rewards, Marty would endanger the jobs of workers who would participate in his plan, as well as his own. Above all, if the management found out about the sales figure manipulation, the whole organization would suffer reputation loss, lower sales, and it is possible that many of the salespersons in question would need to take a salary cut or lose their job. Using Virtue ethics principles, however, he could help both the company executives achieve their goals and salespersons hitting targets, improving their skills through training, and getting higher recognition for their work. Through motivation, he could hit the targets, without committing corporate fraud.

References

Deckop, J.R. (Ed.) Human Resource Management Ethics, 2006. Greenwich, CT: Information Age Publishers.

Dessler, G. (2010) Human resource management. Chapter 14. 10^th Ed. Upper Saddle River, NJ Prentice Hall.

Greenwood, M. (2002) Ethics and HRM: A review and conceptual analysis. Journal of Business Ethics. Vol 36. pp. 261-278

Gusdorf, M. (2010) Ethics in human resource management. Society for Human Resource Management.

Hersey P & Blanchard K.H (1993) Management of organizational behaviour – utilizing human resources, Sixth Edition, Prentice Hall International

Phillips, Robert (1997) Stakeholder theory and a principle of fairness. Business Ethics Quarterly 7(1): 51–66