Ethical dilemma defines the situation, where there is a confliction between the moral imperatives. It is choice between two options, neither of which can resolve a situation in an ethically acceptable situation (May et al., 2014). Ethical Dilemma makes its necessary to make a distinction between values, ethics, polices and laws. Ethical dilemma is managerial practice is happened, when the managers of an organization become unable to maintain the ethical standard in their practice (Resick et al., 2013). Unethical practice leads to towards being opaque in dealing with the employees. Moreover, ethical dilemma in managerial practice becomes harmful for the employees working in an organization. Unethical managerial practice enhances the level of pain among the employees and enhances their level of frustration in the workplace (Beckmann et al., 2014).
This study will select an organization for identifying its ethical dilemma. Moreover, the organization chosen for this study is 7 Eleven in Australia. The organization is facing ethical dilemma in regards to wage scandal provided to the employees. The study will discuss the ethical dilemma happened to the organization. The study will also justify the ethical dilemma through two ethical theories applied on managerial practice of the organization. Apart from that, the study will also analyze the influence of these two theoretical frameworks on the managerial practice of this organization. Furthermore, some suitable suggestions for the organizational leaders will also be provided in this study for ensuring ethical decision making.
Ethical dilemma defines the situation, where people are more likely to violate the moral principles for their personal benefits. Managerial ethical dilemma is associated with violation of organizational principles and code of conducts (Kuntz et al., 2013). Moreover, ethical dilemma can performed by an organization and its managers can actually cause serious harm to the stakeholders. Moreover, ethical dilemma causes in an organization, when it is intended to make only their own profit even by harming the stakeholders.
Such an ethical dilemma has been happened in 7 Eleven of Australia. This ethical dilemma is related to the wage scandal happened in the organization. It has been found that around 2/3 of 7 Eleven’s shops are actually underpaying its employees (Ferguson & Danckert, 2017). Most of the employees are the students, who have come from foreign countries and work in this organization for earning some extra money. As per The Guardian.com, (2017), Fair work has raided 20 stores of this organization in Sydney, Melbourne and Brisbane. The fair work committee has checked their time sheets, taking rosters and CCTV footage. From their investigation, it has been found that 60% of the 7 Eleven shops are actually underpaying the employees. Moreover, Karp, (2017) opined stated that 7 Eleven has been alleged with the claim that the stores are paying just $10 an hour to the Australian staffs. The stores of the organization are actually treating the employees like slave and paying them the half wage as per their working hours.
In most cases, it has been found that the organization is hiring foreign students and sending them to the franchisees stores for providing training. However, such employees are being forced to provide training without any salary for first week. Furthermore, Ferguson, (2017) pointed out that 7 Eleven is also sending some managers to those stores towards manipulating the payrolls and records. Moreover, they are misrepresenting the wage structure of the employees for avoiding legal complications. They are trying to demonstrate that they are paying adequately to the employees, but actually, in reality, they are not paying adequately to the employees. In this way, the organization is violating the ethical principles and causing ethical dilemma (ABC.net.au, 2017). Moreover, the organization is also forcing the employees to work for long hours. It is actually hampering the physical and mental condition of the employees. Moreover, the employees are being incapable of balancing their work life, which is causing ethical dilemma in the organization.
The behavior of the leaders with the Australian employees is very rude. Moreover, the leaders are not willing to provide leaves to the employees and inclined to keep the employee working without any break. In this way, the organizational leaders are violating the ethical principles and causing ethical dilemma in the workplace. Many of foreign students has claimed against 7 Eleven for underpaying as per their working hours. However, News.com.au, (2017) opined that the organization has threatened those foreign students with the policies of immigration. In this policy, it is written that no foreign student can work more than 20 hours a week. Therefore, such threatening is scaring the students with the fear of legal complications. In this way, they are being forced to withdraw their allegations against the organization.
Through the threats, the organization is actually damaging the educational life of the students, who are working in this organization for their survival in foreign country. The long working hours is also causing serious health issues to the employees. After all such claims and allegations; the head office of 7-Eleven is completely blind about the allegations. Gottliebsen and Gottliebsen, (2017) pointed out that the head office is not taking steps further for eliminating the allegations and provide maintain ethical behavior with the employees. Moreover, they are even trying to justify such unethical practice in the organization. As per Karp, (2017), such behavior of the management of the organization is actually demonstrating the irresponsibility of the management towards the wellbeing of the employees. They are not even bothered about the improving the conditions, which are causing serious ethical dilemma (Gottliebsend & Gottliebsen, 2017). The leaders are not even providing instructions to the leaders for improving their leadership practice and maintain their work life balance.
Theoretical concepts of managerial ethics provide the guidelines for conducting any business or management ethically. Such ethical theories can also be applied for examining the ethical dilemma of 7 Eleven. Utilitarianism is the most common concept of ethical, which can also be applied in managerial ethics. As per this theory, the best action is the one which can maximize the utility to the people (Winkler & Duminy, 2016). Utility is actually defined as the well being of the people through a specific action. This theory relies on the concept that the ethicality or morality of an action is actually dependent on its consequences.
According to Craft, (2013), ethical action actually enhances the well being of the human beings. However, the managerial practice of underpaying the employees as per their working hours. Therefore, this managerial practice is actually hampering the wellbeing of the employees in the organization. On the other hand, Jones and Felps, (2013) opined that ethical actions maximizes the pleasures and minimizes the pain of the employees. Moreover, it is the sum of all pleasures minus the sum of all pains resulted from an action. However, the managerial practice of 7 Eleven is increasing the pain of the employees. They are not getting adequate pay as per their contribution level in the organization. Moreover, the long working hours of the employees are actually causing physical pain to them (Ferguson & Danckert, 2017). Apart from that, inadequate payment is causing financial crisis for the employees. This is way, there is no balance between the pleasure and pain level of the managerial practice of 7 Eleven for its employees. Moreover, such managerial practice is actually increasing the sum of pain for the employees, which is causing ethical dilemma in the organization.
In the contrary to other forms of consequentialism, Utilitarianism considers the interest of all stakeholders equally. According to Ayios et al., (2014), ethical actions are more likely to promote happiness among the people. However, the organizational leaders of 7-Eleven are incapable of considering the interest of all stakeholders equally. They are not taking the interest of the foreign students, who are working with them for their survival in foreign country. Moreover, the leadership practice of this organization is also incapable of promoting actually happiness of the employees by meeting their interest. On the other hand, Yazdani and Murad, (2015) opined that ethical decision making always strives for the benefits of all stakeholders in an organization. However, in case of the decision making of 7-Eleven, the leadership decision making is actually reducing the quality of life of the employees.
Virtue theory of ethics indicates the approach of ethics, which considers the character of an individual as an important element for ethical thinking towards providing moral value. Therefore, this theory can best be applied on the managerial ethics for identifying the level of ethical thinking of managers in 7 Eleven. According to Ives and Bekessy, (2015), virtue is considered to the general character in a human being, which can be like settled sentiment or habitual actions. Moreover, a virtue can be positive, when it can make its processor a good human being (Ayios et al., 2014). It is the level of honesty and generosity among the people, which creates the enthusiasm for doing the honest and generous activity. However, in case of 7-Eleven, the managers are not holding an honest virtue for showing honesty towards managing people. The organization is actually underpaying the employees of the stores in Australia. However, the managers are manipulating the wage record of the employees for avoiding the legal complications from Government (Ferguson, 2017). In this way, the mangers of the organization are actually demonstrating unethical thinking for the employees.
Jones and Felps, (2013) pointed out that the primary goal of human being is eudaimonism, which forms the classic formulation of the virtue theory. Moreover, every individual is willing to get happiness, well-being and good life. However, such quality of life can actually be possible achieve through practicing virtue in whole life. This theory explores the subject of practical wisdom for handling any ethical dilemma (Fernando & Moore, 2015). However, the managerial practice of 7-Eleven is actually intended to lower the quality of life of the employees. Moreover, after the claims of underpayment raised from the employees, the managers are threatening them with the fear of the rule in immigration (Gottliebsen & Gottliebsen, 2017). In this way, the managers are actually destroying the life of the foreign student, who works in their organization for earning some money.
According to Kahane, (2015), Utilitarianism considers an action as best, when it can provide maximum utility to the people. Moreover, it can also act as the standard between the right and wrong in doing an action. Therefore, this theory can better guide the managerial practice of an organization. The managers of 7-Eleven do not follow the concepts and ideas of this theory. However, this theory can have major influence on the managerial practice of 7-Eleven. This theory sets the standards between the right and wrong of any action (Ives & Bekessy, 2015). Moreover, the result of any action and practice must provide greatest good. Therefore, this theory can better guide the managers towards practicing best managerial practice for the employees. On the other hand, Lehnert et al., (2015) opined that Utilitarianism theory believes that the intention of morality is to make life better through enhancing the amount of good things for the people. Moreover, it decreases the level of pain of the people. It rejects the moral codes, which are consisted of commands and taboos based on traditions, orders and customs (Yazdani & Murad, 2015). True or justifiable morality contributes only positivity among human beings. Therefore, this theory can influence the managerial practice of 7-Eleven towards better dealing with the employees. Such managerial practice can enhance the wellbeing of the employees within the organization.
This theory focuses on interest level of specific groups or individuals. Blome and Paulraj, (2013) stated that the moral judgment based on this theory is based on the consideration of equal consideration of interest. Moreover, this theory always calculates the utility of every action, policy and law. Therefore, this theory can have influence on the managerial practice of 7-Eleven in regards for policy framing. The managers can better frame the organizational policies and implement actions, which can enhance the wellbeing of both the employees and the organization (Jones & Felps, 2013). Furthermore, Jones and Felps, (2013) opined that the managers will be able to frame policies depending on the interest level of all groups within the organization. The managers of 7-Eleven can also enhance the happiness of the employees through following this theory. In this way, this particular theory would influence the managerial practice of this organization towards contributing greatest level of good among the employees as well as organization (Jones & Felps, 2013).
Virtue theory represents virtue as a character with the human beings, which can be a settled sentiment or habitual action (Bright et al., 2014). This theory fosters positive trait with human being, which can lead the human being towards doing good action. According to Bright et al., (2014), Virtue is the tendency towards being honest and generous, which leads people towards contributing moral valuable action. Therefore, this theory would create good virtue with the managers of 7-Eleven. This good virtue within the managers of this organization would lead them towards practicing good managerial practice for the employees. On the other hand, Garcia Ruiz and Rodriguez Lluesma, (2014) pointed out that the managers can better understand the emotions and issues of the employees through following this theory. Moreover, the good virtue within the mangers would create the intension within them towards doing well for the employees.
According to Fernando and Moore, (2015), this theory inspires a person towards fostering happiness, wellbeing and good life within himself as well as others. Furthermore, it also helps people to apply practical knowledge towards solving any dilemma and issues. In this way, this theory also assists the managers of 7-Eleven towards applying practical knowledge for solving any organization issue. Furthermore, Blome and Paulraj, (2013) pointed out that the good trait within the managers can enhance the well being of the employees. It will keep the managers away from the doing any unethical behavior in the workplace. Furthermore, this theory also develops kindness and generosity within the managers of this organization. Therefore, they can better manage the people and organization ethically.
Conclusion
While concluding the study, it can be said that 7-Eleven has been faced with an ethical dilemma related to the wage scandal provided to the employees of Australian stores. The organization is underpaying the employees as compared to their working hours. They are mostly hiring the foreign students and sending them to provide training to different franchise stores with any salary for the first week. Moreover, the organization is also manipulating the wage structure of the employees and misinterpreting their wage structure for avoiding any legal complication. In this way, the organization is actually causing ethical issues in their business and managerial practice. Many foreign students have claimed against 7-Elevn for their underpayment. However, the organization has threatened those students with the fear of visa related to their immigration.
As the ethical theory of utilitarianism, the best action is the one, which can maximize the utility and contribute greater happiness among the people. However, the managerial practice of underpayment and long working hours is actually harming the employees physically and mentally. Therefore, this managerial practice of the organization is actually unethical. On the other hand, virtual theory of ethic highlight that a person can act ethically, when they have good virtue for doing well for the people. However, the intention of the managers of 7-Eleven is not having good virtue. Therefore, they are conducting unethical practice with the employees.
Organizational leaders have greater role in ensuring ethical decision making within organization. In this way, the organizational leaders of 7-Eleven has major role in ensuring ethical decision making within the organization. The organizational leaders of this organization should comply with the rules and regulations of the organization. They should set clear boundaries between the risk and ethical standard for business practice. Moreover, the leaders should frame an ethical framework for the employees towards making ethical decisions. Apart from that, the organizational leaders should be highly transparent in making their organizational decisions. The value of the organizational decisions should be clear enough and conveyed among the employees properly. Moreover, the opinions of the employees should be properly considered in decision making process. The interest level of the employees must be maintained throughout the decision making process of the organization. In this way, the organizational leaders of 7-Eleven will be able to ensure ethical decision making process within the organization.
The organization leaders of this organization should regularly examine the complaints made by the employees. Moreover, they should properly identify the issues of the employees and try to solve them immediately. They must determine that their organizational practices are effectively aligned with the organizational values. It will lead them towards framing ethical decision making process. Furthermore, the organizational leaders of 7-Eleven should be accountable enough with the employees. They should provide proper access to the important information of the organization. The organizational strategies should be clear enough to the employees and the leaders should keep their promise and commitment as per the organizational values. They should highly maintain the truthfulness of organizational policies and support organizational transparency. In this way, the organizational leaders of this organization can better manage ethical decision making.
The organizational leaders should also set proper ethical statement for themselves as well as others. Being a proactive ethical leader, the leaders of this organization should maintain an ethical standard consistently, while dealing with others. In this way, they will be able to treat others with high respect and authenticity. Moreover, they should build trust and cultivate ethical and respectful environment with the organization. Furthermore, they should make clear policies towards maintaining ethical decision making and practice within the organization. The leaders should be honest enough in building fair relationship with the employees. All the policies should have clear meaning explained to the employees for avoiding any kind of ethical dilemma within the organization. Moreover, the organizational leaders of 7 Eleven should reshape their organizational policies and procedures towards avoiding any kind of ethical dilemma.
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