Consequentialist and Deontological Ethical Issues Term Paper

Pages: 10 (2715 words)  ·  Bibliography Sources: 1  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business - Management


It makes no difference whether the corporation did everything in its power to prevent it.

Corporate managers know that no set of internal controls can guarantee there will be no intentional wrongdoing by employees. In the current highly regulated business environment, they certainly cannot guarantee that no employees will inadvertently commit an offense. Responsible managers must therefore guard against the possibility that their employees will violate the law.

Most corporations solicit sensitive information from their employees by promising confidentiality, either through employee "hotlines" or pursuant to the firm's attorney-client privilege. Refusing to waive attorney-client privilege or otherwise breach confidentiality can subject the corporation to indictment and greatly increased fines. But disclosing the incriminating information to the government reduces the firm's promise of confidentiality to a fraud. Worse, managers cannot escape this dilemma by refusing to promise confidentiality in the first place. Doing so would forgo one of the most effective means of monitoring employee conduct, which itself would increase the risk of indictment and increased penalties.

Justice seems to require that employees who are suspected of wrongdoing not be sanctioned without adequate evidence of guilt. But the government requires that a corporation accept responsibility for criminal conduct to be regarded as cooperating. Since corporations act only through their employees, accepting responsibility means that the corporation is declaring that its employees violated the law.

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When employees view the corporate environment as one in which trustworthy behavior is rewarded and management follows through on its ethical commitments, they adhere to rules more strongly and are more willing to inform management about those who do not. As a result, firms that honor their promises, respect employees' privacy and rigorously adhere to programs of procedural justice have a measurably lower incidence of rule breaking than those that do not. Yet this is precisely the type of corporate behavior that current federal law and law enforcement policy punish. (John Hasnas)

TOPIC: Term Paper on Consequentialist and Deontological Ethical Issues. Assignment

Although many argue that Ethics is a "gray area" where circumstances are highly interpretive, clearly there is a choice between "right" and "wrong" that one makes when facing an ethical dilemma.

In the case of Sears and Roebuck, although management justified unethical sales practices with wanting to achieve in a down market, they should be disciplined based on making the wrong choice. The commission structure change, as well many of the pressures that made it easy for false repairs to occur in the auto center, were top-down decisions. In other words, the CEO set a goal at the top of the organization to streamline as much as possible. Similar to most corporations, unethical decisions were spearheaded by middle managers. They acted as intermediaries in a corporation like the size of Sears. Employees also had a responsibility to act ethically. The change in sales commissions was not an employee decision.

However, the mechanics, and inspectors that purposely charged customers more money or identified repairs that were not present to boost commission, should be disciplined, just like the executives and middle managers that acted unethically.

Sears Could Have Increased Sales By Increasing Value.

With more and more cars being sold and competition for existing new and used car sales at all time high, the ability to increase car sales and to develop customer loyalty would be the number one. Many auto dealerships still are clueless about how to develop customer loyalty. Also, their sales' practices continue to reaffirm the public's negative opinion about people who sell cars. This behavior transfers to companies that repair vehicles as well.

Within the new and used vehicle sales industry, selling a car and developing customer loyalty happen almost simultaneously. For example, when someone buys a new car from an auto dealer, they negotiate a price based upon the desired features. The negotiation goes through a time consuming and complicated approval process. Then a customer makes a decision. Since most people need a car to get to the grocery store, to work, to school, to church, to restaurants, to shopping, to whatever, selling cars should be the easiest sale in the world. The need is there. Budget is sometimes not as large as the seller is lead to believe and a high degree of inclination. However, until the general managers, sales managers, sales staff and support staff align all behaviors to the desired goals, auto sales will fall well below target. (Leanne Hogland Smith)

The auto repair business is often driven by vehicle purchase rates. The consistency of sales in auto repair is usually better due to the fact that people have to have their cars fixed, but customers are still leery.

In order to increase sales dramatically, Sears should have focused less on attracting new customers and more on retaining faithful ones. Had they focused on the sales efforts of proven customers, they would have been able to increase your sales dramatically. This is a sure way to build customer loyalty. Below are several specific steps that Sears could have taken, in stead of pressuring employees to the extent they did.

1. Set up a sales incentive program.

Incentive programs are an inherent part of a good sales program. This is very different from a commission-only structure. Sears had to give employees a reason to get out there and sell.

2. Encourage staff to upsell.

Essentially, upselling involves adding related products and services to the product line and making it convenient and necessary for customer to buy them. Just placing more products near feature products will not increase sales much. To upsell successfully, the customer has to be persuaded of the benefit.

3. Give customers the inside scoop.

An example would be informing customers of upcoming sales. "We're having a sale next week and all our wiper blades will be 20% off." Now a customer has a reason to return.

4. Tier customers.

Sears should have trained employees to tier custoemers. There is a clear and obvious difference between regular customers and other customers -- a difference that your regular customers perceive as showing that you value them. There are all kinds of ways that you can show your regular customers that you value them, from small things such as greeting them by name through larger benefits such as giving regulars extended credit or discounts.

5. Set up a customer rewards program.

Many large businesses have rewards programs place. It can be as simple as a discount on a customer's birthday or as complex as a points system that earns various rewards such as discounts on merchandise. If done correctly, rewards programs could have really helped Sears build customer loyalty and increase sales. (Susan Ward)


Gibney, Alex. "Ask Why: Enron, "the diffusion of responsibility," and the Atlantic Yards parallels (will anyone look at the Development Agreement?)" [Online] Available:

Hoagland-Smith, Leanne. "Car Dealerships Still Are Still Clueless in How to Increase Car Sales & Develop Customer Loyalty. [Online] Available at:

Murdarasi, Karen. "Deontology and Consequentialism: Two Opposing Ethical Theories and Their Main Criticisms" [Online] Available at:

Roosevelt, Theodore. Den of Hydralisks. [Online] Available at:

Taylor, Joe. "Paid Commission vs. Minimum Wage" Demandia Media.

Ward, Susan. 6 Sure Ways to Increase Sales. [Online] Available at: [END OF PREVIEW] . . . READ MORE

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