Response Post to Ethical Challenges

Can you help me understand this Management question?

1 page Response to Discussion Post Needed

The purpose of this assignment is for you to share an ethical challenge related to workplace behavior

In your response to a class peer, offer alternative options for handling the challenges or situation that they have presented; as an outsider, you will be able to offer a different perspective.

APA formatting, proper in-text citations, and references are required as applicable.

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Option 2: Summarize a questionably or surely unethical situation that you have experienced or know of in a workplace environment (preferably in your industry), and explain the perceived implications of this situation, and how it could have been handled differently for a more ethical outcome.

Having worked almost two decades in the financial industry, the story that Bolman & Deal discuss in the start of the first chapter about the Wells Fargo and Volkswagen employee scandals really resonated with me. Issues around goal setting and financial targets have long been present in the insurance industry, and I think continue apace in other financial services areas (and really any company that is aggressively attempting to hit a top-line revenue target). At stake for many carrier employees in the commercial property and casualty space has been extreme pressure at points to convert accounts, and book premiums to hit an aggressive revenue target. This creates a major issue for underwriters and insurance companies, as aggressively writing accounts often lowers the premium to bring the account in the door, usually at a level that is well below the expected future losses. But because those losses sometimes don’t occur for some time (workers compensation, liability, etc), the issues don’t immediately emerge. That ultimately puts extreme pressures on employees to risk their reputations, and the client’s insurance stability as well, all for the company to meet its top line short-term target. The insurance industry has seen many companies go insolvent for mismatching premiums to losses, and while employee pressure to meet targets wasn’t likely the only driving force – it probably contributed. While I speak of this in insurance industry terms, I think there are direct parallels for many other companies under these pressures.

Two ways I have seen companies attempt to deal with this is participatory goal setting, and the internal control/accounting unit’s involvement. For participatory goal setting, essentially the employee and manager must agree on the goals that the employee puts forth. There is some negotiating, and a pull towards the company’s objections – but there is a paper trail created of the interaction over the exchange. The thinking is that a manager might push back harder upwards once it becomes clear that goals are unattainable, and employee has documented it. Second, on the accounting side – there was a recent update to the COSO ERM framework that encourages an alignment between company strategy and risk appetite at all levels. As internal auditors and the accounting committee set the company’s financials and auditing practices, often a question now asked is if the business goals on the employees are too harsh, and to what degree is the company willing to suffer financial risks if it stays with those goals. Notating a negative amount makes real the concerns to executives in establishing objectives – and often a reconsideration on the goals.

All of that said, I still think issues around goal setting is going to continue for companies just due to the nature and pressures of meeting revenue to meet targets and pay down leverage. How companies handle that will be key to their operational success in many cases.

Readings & Resources

Bolman, L.G., & Deal, T.E. (2017). Reframing Organizations. (6th ed.) San Francisco, Jossey-Bass.

  • Chapter 19: Reframing Ethics and Spirit

This chapter highlights real world examples of ethical challenges, and how they might be viewed through the perspective of each organizational frame.

Optional Resources:

The text below is only supplemental and the readings in this book are completely optional. This book is helpful if you have been away from the world of organizational behavior for a long time and need a refresher on terms, concepts, etc… These chapters explain how structure, culture, and change contribute to organizational behavior.

Robbins, S. P., & Judge, T. A. (2018). Essentials of Organizational Behavior. (14th ed.). New York, Pearson.

  • Chapter 15: Foundations of Organizational Structure
  • Chapter 16: Organizational Culture
  • Chapter 17: Organizational Change and Stress Management

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