Posted: December 1st, 2015

Now assume that Sarah wants to behave ethically, consider how she might go about addressing the situation ethically

Scenario C
Sarah has just joined a firm of independent financial consultants. She finds out that the advisors, who are supposed to be independent as they are paid by their client, always steer their clients towards the financial products where they receive the highest commission, rather than the one that is best for their client. This seems to be a clear conflict of interest, but when she queries this practice, she is told that it isn�t commission as the consultants don�t get paid this directly. However, it�s a small company and this practice affects the profits and thus has a big effect on the size of the annual bonus which can be as much as 20% of salary.
Now answer the following questions:
1. Which stakeholders are harmed by the present situation? (10%)
2. What rights do the stakeholders have and what duties does the firm owe to these stakeholders? (10%)
3. Is this practice ethical? If not, why not? (10%)
4. What organisational factors might make it easy/difficult for Sarah to behave ethically? (20%)
5. What individual factors might make it easy/difficult for Sarah to behave ethically? (15%)
6. Now assume that Sarah wants to behave ethically, consider how she might go about addressing the situation ethically. (15%)
7. Now assume you are the manager in charge: assuming you want the company to operate ethically, how might you go about ensuring more ethical conduct on the part of your employees? (20%)
Guidance for exam
Answers that just repeat the question in different ways and which show no sign of additional learning will not pass. It is necessary to read and understand the power-point slides and to follow up concepts, references, terms etc. so you are fully familiar with the content and how it might apply. You should not just remember and copy power-point slides or extracts from articles � you should demonstrate understanding of how certain content relates to the questions asked. But remember the lectures and power point slides are just meant as a starting point for you as an independent student to do your own research. You will not get a good mark if you rely on these alone. Do your own research. For example:
– Look up company CSR/sustainability reports to get examples of what companies actually do. Another useful resource may be to look up sustainability/CSR/ethics awards to get examples of good practice.
– Google key terms and concepts mentioned to find out what they mean and how they are applied. For example do you know what ISO14001 is? It is in the slides, if you do not know what it means look it up. Do you know what the WBCSD is? It is in the slides, look it up and explore the website for ideas and examples.
– Make use of the resources provided such as corporate critic and ethical consumer websites and the e-newsletters to see what constitutes good and bad practice in the relevant sectors
– Read the articles listed on blackboard � or at least their abstracts
– Most importantly � think! In particular when you have to consider how to address an ethical problem in the work place, it may take creative thinking or creative solutions and there will definitely be more than one right answer or approach. Your opinion is valuable, as long as it is clearly informed by your reading both of the academic literature, but also relating to what business actually does and what solutions have been adopted by existing organisations, and how effective these have been.
Guidance advice for a first class answer
Make sure that when you make a key point in your answer that you fully explain it. There are many ways of backing up a point you want to make. In the following examples I will give guidance on style, not content, so X will be used to mean the specific idea, issue, citation etc. These suggestions apply to the questions where you will be explaining how to enable a solution to an ethical issue
1. Explain your answer e.g. one way to enable a more ethical practice is to X� This is because X enables �. and encourages �..
2. Provide a concrete example e.g. one way to enable a more ethical practice is to X� For example the company X adopted this practice in order to ��
3. Provide a citation e.g. the article X (name/date) provides many useful illustrations of how to enable responsible leadership. The example most useful in this context is to X�. This is because �..
4. Provide a critical analysis of a specific practice e.g. one way to enable a more ethical practice is to X� However in a study of �.. (reference) it was found that X was ineffective because �.. This means that if X is to be an effective solution, it would need to be supported by �..