Ethics, Management, and
the Corporation’s Reputation
Turnitin Originality Score: 8%
Ethics and ethical standards are very important to an organization’s way of life. If something goes wrong and its standards are broken, it can be very detrimental to the company’s reputation among investors, customers, employees, and competitors. It is the duties of management to make sure an organization’s ethical standards are being met and that the reputation of the organization is preserved.
The case, “The CEO’s Private Investigation” by Joseph Finder, is a fictional look at a new CEO coming into a company and realizing that rumors she heard at her previous employer
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Sheffert (2001) gives two example of management behavior in a time of crisis, Firestone Tire Company and Johnson & Johnson. The creator of Firestone had built a great reputation for the company and after his death, the management team did not effectively handle a crisis when Firestone tires became defective while customers were using them. The behavior of management caused consumers to lose confidence in the product and move on to competitor’s products, causing loss of money and customers to Firestone (p. 57). On the other hand, Johnson & Johnson handled their company crisis better. While producing Tylenol, Johnson & Johnson found themselves in a product tampering scandal. With seven deaths linked to cyanide-laced Tylenol, the company contacted the media and alerted the whole country to stop taking Tylenol and to not purchase any new product. They recalled and destroyed over 30 million bottles of Tylenol. In the short term, the J&J stock declined, but over time, it rebounded due to J&J’s proactive ethical behavior and how they handled the crisis with consumers. Consumers were able to regain confidence in J&J’s products and company (p. 57).
I believe Sheffert’s examples of management’s behavior in an ethical crisis proves a good point that, in crisis mode, the way management handles the situation could severely damage or help the reputation and image of said company. Firestone’s management did not handle the scandal very…