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Business Ethics in Practice

Gerald Sy manages a pre-need educational institution. Every 5th and 20th of the month, he is tasked to oversee the payroll process, ensuring that the instructors are being paid according to their actual work hours by having the class schedule of each instructor counter checked against each of their timekeeping record. When this counter-checking begun, Sy and the accounting staff discovered that almost 50% of their instructors were being paid in full despite their tardiness.

“There were teachers who start 7-am classes at 9 or 10 am. At worst, they also end their class way ahead of time… and I am paying them for the full six hours of their schedules!”

He adds, “It was very bad for the business… the impression we were making to our client… the impression that they pass on by word of mouth to their friends… that’s why we had to do something fast. The longer the employees cheat on the company, the more the company cheats on the client without it knowing.”

Sy started off by meeting with each class, soliciting grievances and offering alternative ways so that the clients can communicate with his office should the need arise. He figured that there could be more underlying

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problems that need to be attended to. He then took in effect a ruling wherein instructors are given only 30 minutes of grace period to begin their respective classes, and showing up later than the grace period will mean deductions on their salaries. In a month, each instructor can only have 11 tardiness. Warnings are given on their 6th, and dismissal is served on the 12th. However, Sy stressed that he tries to be corrective than punitive.

“I criticize constructively, if that’s what you want to know. I am more of a writing manager than a screaming manager. I just want them to be honest,” Sy says referring to the memos that he uses to correct his employees, and the employee mailbox he has on his table should his employees need to write anything to him.

Sy is not the only manager who is experiencing ethical issues at his workplace. Amanda Wyatt has the same problem, only hers is bigger and harder to correct. Supervising a record store selling music and movie titles, Wyatt is growing concerned against piracy.

“It’s getting bigger, and though authorities are trying to stop it I can see, personally, that there is no clear way to really stop the problem as long as there are manufacturers and buyers.”

Wyatt’s company used to have a small branch in Asia, which had to close down after it failed to meet its sales expectations. She states that the problem is bigger than it seems, affecting not only record store owners. “There are people who work behind the movies and song recordings, and of course the artists… (and) producers who have to pay everything…”

To stop the decline in their sales, Wyatt’s team had to put on regular price drops. They put old titles on sale most of the year, and when the profit margin is in good standing they randomly select new titles and put them on sale. Even if it means sacrificing a few dollars, Wyatt says that the loyalty the customers develop when they get good finds benefits them more.

There was also a time when Wyatt considered sponsoring anti-piracy concerts such as those hosted by MTV, but the cost of sponsoring was way up their marketing budget. “But if I had it my way, I’d really support these things. You know, just to let the people know that if they love music or movies, they should stop piracy. But money is of the essence.” So, Wyatt keeps the sales on to have clients come back for cheaper yet original CDs and DVDs.

The business world is already one tough nut to crack. New enterprises know how difficult it is to penetrate an already saturated market. Mix in ethics and business gets more complicated. As the competition in many industries get tighter, the chances of a capitalist to cheat for the sake of winning the game is far from running out. Likewise, businesses are faced with employees who have passion for earning but not for work.

Sy’s honesty issue with his instructors was solved by close monitoring of their attendances and strict regulations should they fail to meet the standards. But how long can the system hold effective? Until when will the instructors obey until they find a way to cheat again?

More than a short-term solution, it is important for employees to realize the importance of their profession and instill in them the value that their clients have. Surprise bonuses may also be used as well as variety on the activities of instructors. These, tied with the strict implementation of clearly set regulations, will give a long-term solution to the problem.

Wyatt’s problem is broader, and harder to solve. Piracy is a worldwide honesty issue in the entertainment industry and no effective way has ever been slated. Thus smaller enterprises, like Wyatt’s, can only contribute in meager ways. Price drops and sales are effective ways to combat sale decline in stores while acquiring loyalty from clients to purchase the originals and do away with the pirated copies.

However, the continuous drop of prices of pirated discs and the wide availability despite strict regulations pose problems. Thus, smaller companies should ally together to influence the bigger companies, specifically recording labels, to devise ways to put the price of original discs at par with the pirated ones. Hard, yet competition in this way will definitely help alleviate piracy problems.

Ethics in business is an important aspect that managers need to address. It should be in their visions and missions. While difficult to uplift, cooperation from the employees, close monitoring, setting clear objectives for the employees, and implementing clearly set plans to alleviate the problem will go a long way. No one person can change a business. No one company can change a stereotype in an industry. Yet, every company like Sy’s and Wyatt’s, can do something to aid the problem and make the business world a better place.

Appendix

Interview Questions:

  1. What industry are you in?
  2. What major ethical issue is your company or industry facing right now?
  3. How is this ethical problem affecting your company/industry?
  4. How are you coping with the problem?
  5. How did you communicate with the other people concerned in solving the problem?
  6. What measures did you take to ensure that the problem ceases?
  7. Do you think that your company or the industry you are in is doing enough to solve the problem?
  8. Do you feel that your company or your industry is on top of things? What else do you wish can be done?

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