Analysis of “Resolution of Ethical Conflict”

Analysis of “Resolution of Ethical Conflict”
Misty Filippelli
Communication and Conflict
Dr. Pedersen
July 20, 2009


Introduction

The Institute of Management Accountants (IMA) has provided a Statement of ethical professional practice in its website in line with its ethics program. Rushworth Kidder, President of the Institute for Global Ethics, asserted the importance of ethics to the IMA. He noted that ethics should be followed essentially according to its definition: “Ethics in its broader sense, deals with human conduct in relation to what is morally good and bad, right and wrong. It is the application of values to decision making. These values include honesty, fairness, responsibility, respect and compassion” (IMA, 2008a). IMA’s Statement of ethical professional practice includes three courses of action when dealing with ethical conflicts, especially when the organization does not have policies that deal with ethical conflicts (IMA, 2008b). The courses of action are made to support IMA's overarching ethical principles which include Honesty, Fairness, Objectivity, and Responsibility. This paper will explain the purpose and provide suggestions on how the policy could be improved. It will also examine the three courses of action from the communications perspective.

Purposes of courses of action

Analysis of the purposes of courses of action of the IMA will be done per statement of each action. The IMA’s first course of action advises that when there are ethical conflicts, the employee should discuss the issue with the direct supervisor, unless he or she is involved (IMA, 2008b). Reporting to the supervisor is in line with the ethical principle of honesty. If there is something wrong going on in the workplace, and it is under the supervisory level, then the supervisor must be informed of the problem. This way, he or she can handle the situation, presumably using company policies. This statement also reinforces the ethical principle of responsibility. It is the responsibility of the supervisor to ensure that all subordinates are acting ethically also while performing their roles and responsibilities. Furthermore, this statement also supports the ethical principles of objectivity and fairness. It is possible that the employee might be biased and having a third and neutral party in the form of the supervisor can make the analysis of the ethical conflict more objective and fair.

The second statement of the first course of action is: If there is no immediate resolution or when the supervisor is involved in the ethical dilemma, then the next management level should be consulted (IMA, 2008b). This statement supports the principle of responsibility. If the supervisor has not acted upon the matter or is involved in the ethical problem, then it is the responsibility of the next management level to step in and manage the conflict. A higher management level can also act more objectively and fairly on the matter provided that he or she is not emotionally connected to the people involved as a higher up management level.

The third statement of the first course of action is: Contacting levels above the supervisor should only be done upon knowledge of the supervisor and telling the problem to other people who are not part of the organization is considered “not appropriate” (IMA, 2008b). It is an act of fairness to inform the supervisor regarding the move of informing higher management level, because it will prepare him or her for any inquiries from the management. It is also not always proper to whistle blow the problem outside the company, unless “there is a clear violation of law” (IMA, 2008b). Verschoor (2005b) noted the hardships of whistle blowing but indicated that it is a choice that should be done only when all means are exhausted in resolving the problem within the organization.
The second course of action states: “Clarify relevant ethical issues by initiating a confidential discussion with an IMA Ethics Counselor or other impartial advisor to obtain a better understanding of possible courses of action” (IMA, 2008b). This is already consulting a third party regarding the problem and best for complicated ethical conflicts that can hardly be resolved inside the company because of involved management levels. This can be justified under the ethical principle of objectivity. It can be possible that a third party can render a deeper analysis of the ethical situation and provide more neutral alternative solutions to the ethical situations.

The third course of action states: “Consult your own attorney as to legal obligations and rights concerning the ethical conflict” (IMA, 2008b). This is a second option that involves a third party and legal help. It can support also the ethical principle of objectivity because a lawyer is more informed of the legal dimension of the problem.

Communications perspective

From a communications perspective, the first thing communicated is the most important and memorable. This means that speaking with the supervisor first indicates the importance of tying up the nature and effects of the ethical conflict to the team managed by the supervisor. It is critical to report the nature of the problem, causes, and people involved, and then discuss the impact of the conflict to the team and company.

The communication with higher management levels, on the other hand, indicates that it now more important to communicate with other uninvolved and more objective, and indeed, more powerful management levels, to resolve the conflict. This also shows the need for upper management to check supervisory levels in the latter’s responsibility in handling ethical conflicts.

The communication with the IMA Ethics Counselor or other impartial advisor indicates the complexity of the problem. It may be that the upper management is also involved, or that other employees have reported the same problem and were only demoted or transferred to another department. This consultation also shows the lack of ethical climate in the company. Having no one to consult the company demonstrates that reporting unethical behavior is not supported in the company.The communication with a lawyer also follows the same problems noted when consulting an IMA Ethics Counselor or other impartial advisor. In addition, it supplies the employee with more legal knowledge and support, in case the report backfires, such as through being demoted or not promoted and other negative effects of reporting unethical acts.

Recommendations

The courses of action do not need to be re-ordered even after the analysis using the communications perspective. It is proper and ethical to follow the chain of command when reporting ethical conflicts. It is also ethical to try resolving the problem internally as much as possible, not because it is more important to protect the company, but because it is possible to manage the conflict better internally than under the eyes of media when the problem is escalated outside the company. It is, nonetheless, important to create an ethical climate in the company to ensure that the courses of action suggested by the IMA work effectively in resolving ethical conflicts (Verschoor, 2005b). Verschoor (2005b) noted many companies who developed performance and employee retention and morale through having a strong ethical climate. This means having a climate that openly discusses and resolves ethical problems without fears of reprisal and retaliation. With an ethical climate, reporting to company managers will be the best option for the employees.

Conclusion

Ethical conflicts entail reporting wrong acts so that they can be corrected and never happen again. Resolving it means having the right management level intervene so that proper actions can be done to manage ethical issues. The communication perspective shows the importance of “containing” the conflict to the smallest level, because supervisors can effectively handle such problems that are within their scope of authority. It also shows that the chain of command reporting is also an ethical way of reporting ethical problems. It is suggested to have an ethical climate so that the courses of action will have a maximized effectiveness, and there will be less need of using outside help.


References

Institute of Management Accountants (IMA). (2008a). Ethics center. Retrieved July 20, 2009, from http://www.imanet.org/about_ethics.asp
---. (2008b). Statement of ethical professional practice. Retrieved July 20, 2009, from http://www.imanet.org/about_ethics_statement.asp

Verschoor, C.C. (2005a, October). To blow the whistle or not is a tough decision! Strategic Finance: Ethics, 21-22. Retrieved July 20, 2009, from http://www.imanet.org/pdf/3522.pdf

Verschoor, C.C. (2005b, December). Ethical culture: Most important barrier to ethical misconduct. Strategic Finance: Ethics, 19-20. Retrieved July 20, 2009, from http://www.imanet.org/pdf/3524.pdf