There is general agreement that ‘organisations’ and their managers should behave ‘ethically’ towards their
employees. This applies even to small organisations and employers (see attached “Trump-like” employer
concedes HR operation not “Rolls-Royce”).
Some say managers should behave ethically because it’s the right thing to do, and it has the added benefit of
building employee commitment, improving their performance, and thereby contributing to organisational
success. Conservative, pro-business advocates, more interested in the bottom line, also argue for ethical
behaviour, but on the simple grounds that it is good for business:
The business that treats its customers contemptuously, or its staff unjustly, or its suppliers dishonestly, will
often find them hard to retain. In a free market, the most productive staff, the finest suppliers and the
cheapest and most flexible sources of finance can do better than to stay with a business that cheats or
treats them unfairly … In the long run, unethical business is less likely to succeed (Sternberg, 2000:19).
It is possible that both views are wrong. Lafer finds it striking [notable] that these two groups “share this central
conviction: that the drive to maximize long-term profits naturally overlaps with the imperative to treat employees
justly. … [This shared conviction, he says] begs for explanation, because … it is so palpably at odds with
evidence from the business world” (Lafer 2005:288).
In other words, Lafer says that while the ‘rhetoric’ in business and management is frequently about how it’s in
everyone’s interests for employees to be treated fairly and equitably, there are a wealth of examples to show
that many organisations survive and actually prosper while treating their employees very poorly.
Can the interest of employees and the interests of business really coincide? What happens when they are in
conflict? And what should HR managers do when this happens?
Suggested References:
Lafer, G (2005) The critical failure of workplace ethics, in Budd, J and Scoville, J (eds), The Ethics of Human
Resources and Industrial Relations, Illinois, Labor and Employment Relations Association, pp. 273-297
Lowry, D (2006) HR Managers as Ethical Decision-makers, Asia-Pacific Journal of Human Resources,
44(2):171-193
Sternberg, E (2000) Just Business: Business Ethics in Action, 2nd edition, New York, Oxford University Press
Winstanley, D and Woodall, J (2000). The ethical dimension of human resource management, Human
Resource Management Journal 10(2): 5-20
Task:
1. Find a current example (that is, within the last 12 months) of a situation in which it seems that the interests
of senior management/owners are clearly in conflict with the interests of some or all of their employees.
(NB. Choose an example described in the media/public domain. The attached “Trump-like” employer concedes
HR operation not “Rolls-Royce” is excluded from your choices. When you submit your paper, you must append
at least one key news article in English providing an independent description of the situation.)
2. Imagine you are an HRM professional in this situation. What are three options available to you to
address the conflict? Which option would you choose and why? Defend your choice in relation to what
constitutes ethical and professional behaviour.