Big name brands like Volkswagen, Wells Fargo and United Airlines have been in the news and for all the wrong reasons. How could anyone believe that knowingly creating diesel engine software to pass laboratory emissions tests and then belch out dangerous nitrogen oxides far in excess of what the NOx regulations allow, was the right thing to do?
Or should company officers just stand by while 5000 staff at Wells Fargo open false accounts to boost sales figures.
United Airlines was doing well as it came under the spot light when a passenger was violently dragged from flight 3411. Although United is legally allowed to remove passengers from flights, it apparently paid little attention to the impact this might have on the person involved, or of the public reaction. It didn’t help that initially CEO Oscar Monoz said ‘I apologise for having to re-accommodate these customers’ which many on social media regarded as ‘tone deaf and insensitive’. United Airlines shares fell by 6.3% when the video footage went viral. With Monoz standing to lose up to $500,000 of his CEO bonus if United customer satisfaction trends fell, he later apologised and accepted responsibility.
The United share price has since partially recovered. Although sales figures do not seem to have been affected, it is too soon to gauge how the United brand has been damaged. I am left wanting answers to some questions;
Boards and officers in charge of organisations need to be careful. While they must make bottom lines they do not have to be ethical while doing it. However, to ignore the ethics involved in making decisions is becoming increasingly foolish. With the rise of social media and the improved connectedness of people means that shareholders, customers and the public across the globe will see every move that you make. There is a growing confidence of the power that shareholders and other stakeholders wield. You may have the law on your side, but you need also to question whether your actions are ethical? Do the wrong thing by one of these stakeholders and you run the risk of a backlash that can impact the bottom line and have serious consequences for the viability of your business.
I was brought up with the belief that before taking action, you should always check whether what you were about to do was ethical by asking yourself the question ‘would I be proud to talk to my grandmother about what I have done?'
I wonder how much better off companies like Volkswagen, Wells Fargo and United Airlines would be today had the officers in charge have asked this question before taking the action they took.
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Michael posts on topics relating to organisational growth and excellence
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