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Sample Research Paper on Ethical Dilemma in the Workplace

Ethical Dilemma in the Workplace

The ethical dilemma of focus in this paper concerns employee theft, which is the behavior of stealing, misuse, or use of assets belonging to the employer or the customers of an organization without permission or relevant authorization. The term “assets” in this case is essential because it implies that theft could involve resources other than cash. Employee theft could take many forms, including embezzlement, fraud, and skimming. Additionally, it is a major problem in the workplace because of greed and preoccupation with material success. It is a problem for organizations because it diverts resources from their intended use, such that the organization incurs financial losses and losses in terms of efficiency and productivity. Employee theft is also a significant problem from the perspective of ethics because it undermines and contradicts the interests of different stakeholders - the organization, the management, other employees, customers, and the broader society. The purpose of this project is to analyze the ethical dilemma in a real-life workplace situation, applying ethical theory and the law, and considering potential solutions and impacts to offer a suitable solution. The dilemma of focus in the project is that of the theft of more than $400,000 in customers' unreturned refunds by an employee, Suraj Samaroo, at IKEA in the late 2000s.

The case

Suraj Samaroo was a 24-year old male employee at IKEA’s call center at White Marsh, Baltimore, in Maryland. He used a fake name, a false address, and his own bank routing number to access the sales records of customers who had ordered furniture over the phone to steal more than $400,000 from the company. He committed this theft by issuing refunds to himself that customers had not returned. The arrest of Samaroo, from Middle River, occurred after indictment on charges of theft and theft scheme (McMenamin, 2008). In September 2008, authorities were holding Samaroo at the Baltimore County Detention Center on a cash bond of $300,000.

Samaroo had worked for the IKEA call center at White Marsh for about one year - handling customer returns and complaints. Using customer records, he issued unauthorized returns to himself using legitimate customer purchases and transferred those refunds to his bank account. The prosecutor of the case against him, Adam Lippe, observed that Samaroo issued the unauthorized returns to himself steadily- two or three times a week every week, for a year (McMenamin, 2008). The discovery of Samaroo’s activities occurred when his bank noticed the unusual series of deposits and reported the matter to the police. Such reports were requisite for banks to make for any transfer above $10,000.

The choice of this case is appropriate because it illustrates the damage that unethical behavior among employees could cause in an organizational setting and the importance of maintaining effective supervisory structures at the organizational level. Samaroo’s unethical behavior at IKEA caused a loss of $400,000 and occurred for a year without detection at the organizational level. Even Samaroo’s defense attorney in the theft case, Wray McCurdy, expressed shock at the fact that IKEA did not detect the behavior of its employee for a year (McMenamin, 2008). The employee’s success in stealing from the company for a year is reflective of the failure of IKEA’s supervisory structures.

Ethical dilemma

The core issue in the case of Suraj Samaroo’s theft of more than $400,000 in customers’ unreturned refunds at IKEA is the lack of adequate supervision and managerial controls at the company to detect and prevent the employee’s crime for a year. Samaroo, who was a call center employee at the firm, issued unauthorized returns to himself using legitimate customer purchases and transferred the refunds to his bank account on a regular basis for about a year. The discovery of this crime only occurred after Samaroo’s bank noticed the unusual series of deposits and made a report to the police, particularly after a transfer of over $10,000. The ethical problem in the case is whether IKEA should take responsibility for the crimes of its employee, Samaroo, owing to its failure to establish a culture of managerial control over the actions of its employees, hence facilitating the theft of money from its customers.

Application of ethical theory

Three prominent ethical theories could apply in this case and help to analyze and resolve the identified ethical problem. These are Kant’s deontological, John Stuart Mill’s utilitarian, and John Rawls’ justice theories.

Kant’s Deontological Theory

Deontological ethical theories judge the morality/appropriateness of actions according to their innate nature (the nature of actions in themselves), and it can be used to judge the case in question. This focus of judgment contrasts with the criterion of the basis of the consequences of actions. Kant's theory holds that all human beings have a universal rational duty to respect one another's humanity. All human beings merit dignity and respect. Based on this theory, the duties of human beings towards one another form the basis/origin of all morality (Johnson, 2016). The theory considers acting beneficently and morally as involving the effort of individuals (or entities) to seek the happiness of others through choices that collaborate in the achievement of their desires/objectives. Based on this position in Kant’s theory, IKEA’s failure to establish an effective culture of managerial control over the actions of its employees breached its duty as an entity to respect the dignity, humanity, and needs of its employees because this failure facilitated the theft of money from customers' legitimate purchases. In effect, IKEA has to take responsibility for the failure to seek the happiness of its customers and collaborate in the achievement of their desires and objectives.

John Stuart Mill’s Utilitarian Theory

The utilitarian theory of ethics holds that the most appropriate/best choices/actions are those that yield maximum levels of utility, and based on it, IKEA should is liable for the mistakes of the employee. Mills argued that utility concerns the choice and performance of actions that yield social utility - the wellbeing of the majority of affected individuals/stakeholders who the problem or action affects (Patrick & Werkhoven, 2017). The most appropriate choices are those that influence the highest levels of happiness/pleasure for most stakeholders. Based on this theory, IKEA ought to take responsibility for its failure to establish an effective culture of managerial control over the actions of its employees because this action would yield happiness/pleasure for its customers and the broader society (the majority) relative to its harm for IKEA, its management, and owners. IKEA’s responsibility would be beneficial for the broader society and customers because it would promote improved supervisory structures in companies to safeguard customers’ interests.

John Rawls’ Theory of Justice

Rawls’ theory holds that all individuals in a society have equal rights to fundamental liberties that are inalienable, based on this theory, IKEA’s customers had certain rights and freedoms that are impossible to change, violate, or override. Rights that are more fundamental override others - certain rights and freedoms are critically fundamental, such that it is impossible to amend, remove, or violate them in the lives of individuals. The principles of justice, fairness, and equality ought to form the primary foundations of basic institutions in society (Wenar, 2017). Rawls argued that the foundation of institutions in society on these fundamental liberties underlies the crucial structure of society. In the IKEA case, these rights and freedoms are those of justice and fairness. Fairness and justice ought to be the primary foundations of IKEA's operations. The failure to establish an effective culture of managerial control over the actions of employees makes IKEA liable for a breach of this fundamental duty. Therefore, IKEA ought to take responsibility for this failure.

The Law and Code of Ethics

Organizations develop a code of ethics to govern decision-making and the behaviors of their employees. This code spells out the responsibilities and obligations of employees to the company and towards one another and defines the behaviors of employees that are acceptable and those that are not. Provisions of codes of conduct address both legal expectations of conduct and ethical values on an organizational level. Violations of codes of ethics could have or not have legal ramifications depending on the type of crime and its effect. In relation to the dilemma at IKEA, the ramifications of employee theft and fraud extend beyond disciplinary actions at the organization level because these crimes involve intentional misappropriation of company and clients’ resources. The law in the U.S. is applicable in the case of Samaroo’s theft at IKEA, especially if the organization pursues legal action against the employee for breach of the terms of employment (including behavioral expectations for employees).

Potential Solutions and Impacts

Efforts to address the dilemma include the development and enforcement of a code of conduct for employees and stricter regulatory and legal oversight controls over the activities and operations of financial organizations and businesses. A code of conduct is a potential solution to the dilemma at IKEA in terms of providing written benchmarks for measurement and evaluation of the behaviors and performances of employees. A code of conduct outlines the rules, norms, proper practices, and responsibilities of individual members of organizations. The impact of this code as a solution for the dilemma concerns the liability of the employee (Samaroo) for damages to IKEA owing to his breach of the laid-out rules, norms, and responsibilities in IKEA’s code of conduct for employees. Knowledge of the risk of personal liability in case of breach of the rules, norms, and responsibilities in a code of conduct is likely to promote discipline and restraint in the choices and behaviors of employees. The code of conduct is likely to affect the employee in case of a breach because of liability for damages and disciplinary measures for failure to abide by rules of employees’ conduct (Boghraty, 2018). It is likely to help customers and society by enforcing the legal liability of individuals for conduct and choices that violate established rules and responsibilities in organizations. It is likely to harm employees who engage in misconduct by imposing legal liabilities to pay for relevant damages.

Regulatory and oversight controls over the activities and operations of financial organizations and businesses are a potential solution in the dilemma concerning IKEA's response to the actions of its employee in terms of the pressure that they put on the organization to enforce effective controls over its operations and the conduct of employees. These controls place responsibility for employees’ misconduct on businesses/organizations. The impact of these controls as a solution for the dilemma concerns the liability of IKEA to pay damages to relevant regulatory authorities and government structures for the misconduct of its employee. The impact of these regulations is to pressurize organizations to control and monitor the conduct of their employees more effectively. The regulations are likely to affect IKEA and other organizations in case of breaches because of the liability to pay for damages relating to failure to control and monitor business operations and decisions and employees' conduct effectively (Barak, 2015). It is likely to help customers and society through pressure on organizations to control and monitor their employees effectively to prevent misconduct. It is likely to harm organizations whose employees engage in misconduct by imposing regulatory and legal liabilities to pay for relevant damages.

An unacceptable solution could involve the dismissal of employees who commit fraud and other crimes in businesses without further action at the organizational and/or regulatory authority level to prevent such behavior among other employees. At IKEA, such a solution is unacceptable because it would not provide adequate and sustainable measures to prevent a repetition of the misconduct in the future. Such a solution would be a reactive measure that is insufficient to prevent other employees from committing similar offenses. An effective solution should involve active and continuous oversight or controls at organizational or regulatory levels to track employees’ behavior and prevent breaches with significant consequences on customers and the wider society.

Decision

IKEA’s acceptance of responsibility for the failure to establish an effective culture of managerial control over the actions of its employees is the best alternative to solve the dilemma. The firm should agree to pay all relevant damages to relevant authorities and parties. This alternative is the best one because of the need to promote a sense of responsibility to enforce and oversee ethical behavior among employees and in organizational operations among companies. IKEA’s acceptance to take responsibility for the behavior of its employee would be a lesson for other organizations to take serious measures to control and oversee the actions of their employees. It would also be a positive step in the efforts of society to protect the interests of customers and clients. It would sensitize organizations about the effects of their failures on stakeholders, including clients/customers and the broader society.

Critics could argue that IKEA’s acceptance of responsibility for the actions of its employee is unfair and that the employee himself (Samaroo) ought to take full and exclusive responsibility for the theft. Nonetheless, this argument is unsound because the culture at IKEA contributed to Samaroo’s actions directly. IKEA’s failure to enforce a culture of managerial control over employees’ actions provided a supportive environment for the employee’s actions. Furthermore, the alternative of IKEA taking responsibility for the actions of its employee does not preclude blame for the employee himself for his actions. IKEA’s acceptance of responsibility is appropriate because its failure affected the lives and interests of customers and the broader society, rather than just its own operations. The company’s provision of services to the public implied its responsibility to protect the interests of customers from breaches in its operations. Its failure to enforce a culture of control over employees’ decisions and actions breached this responsibility.

This alternative involves the readiness of IKEA to pay for any damages that may arise from the actions of its employee. These damages may include fines to regulatory authorities and damages sought in courts by clients and other stakeholders. It would be prudent for IKEA to put out a public statement expressing the acceptance of responsibility for Samaroo’s actions and outlining practical measures to prevent a repetition of the breach. The company would also need to welcome and cooperate with any regulatory investigations of its culture and operations. Additionally, as part of the acceptance of responsibility and the effort to change its culture, IKEA should consider changes in its leadership and managerial structure. These changes would be prudent to communicate to the public and other stakeholders about IKEA’s acceptance of blame and readiness to improve its culture and managerial control structures to prevent a repeat of the breach.

Objections to the decision may come from IKEA’s owners (shareholders) and management because the decision would have adverse consequences on the interests of these groups. The owners/shareholders would suffer from adverse perceptions of IKEA’s brand in the market, especially because of the potential for a loss in market performance and profitability. Acceptance of responsibility would also affect the careers of IKEA’s management adversely because its leaders are likely to lose their positions or influence in the company’s operations through demotions or terminations.

One weakness of the decision is that it does not guarantee that another case of employee theft will not occur either at IKEA or another firm because the decision of whether or not to steal resources from a company is personal. Such a decision is based on the personal values of employees and their assessments of the relative outcomes of their choices and behaviors. My defense of the decision is that it represents a way forward in the effort to protect clients and organizations from employees’ unethical behaviors. The alternative of IKEA not taking responsibility for its failure is undesirable because it would promote a culture of laxity in organizations and support unethical behavior and decisions among employees.

The solution of IKEA taking responsibility in the case is ethical and legal. Corporations have an ethical responsibility to ensure that their operations serve, rather than undermine. When it comes to the legal aspect of the matter, the interests of customers and the public and protection of the interests of all individuals and prevention of crimes, such as theft, are important obligations of governments and societies.

 

References

Barak, G. (2015). The Routledge international handbook of the crimes of the powerful. London, UK: Routledge.

Boghraty, B. (2018). Organizational compliance and ethics. Frederick, MD: Wolters Kluwer Law and Business.

Johnson, R. (2016). Kant’s moral philosophy. Stanford Encyclopedia of Philosophy. Retrieved from: https://plato.stanford.edu/entries/kant-moral/

McMenamin, J. (2008, September 10). IKEA worker accused of giving himself fake refunds. The Baltimore Sun. Retrieved from https://www.baltimoresun.com/news/bs-xpm-2008-09-10-0809090107-story.html

Patrick, T., & Werkhoven, S. (2017). An analysis of John Stuart Mills’ utilitarianism. London: CRC Press.

Wenar, L. (2017). John Rawls. Stanford Encyclopedia of Philosophy. Retrieved from https://plato.stanford.edu/entries/rawls/#JusFaiJusWitLibSoc

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