Ethical conduct within organizations is an important aspect that directly impacts success. Therefore, ethical collapse in an organization can damage its reputation, cause financial losses, and alter public trust. Marianne Jennings was a professor of legal and ethical studies in business at Arizona state university and observed that many companies in America were constantly collapsing due to failure to follow ethics (Prestol, 2006). She focused on highlighting signs that leaders in conducting different organizations could look out for identify ethical collapse so they could timely work on the issues to control the damage that would affect their organizations. Marianne Jennings stated seven signs of ethical failure: pressure at the workplace to maintain numbers, fear and silence, weak board, conflicts, young’uns, a bigger-than-life CEO, innovation like no other, and goodness in some, creating room for evil in other areas. Organizations can identify and address the root causes of ethical breakdown by watching out for these signs to avoid business collapse.
Key questions addressed in the book
One of the critical questions addressed in the book is why many companies initially do well after setting up eventually collapse. The book addresses this issue as influenced by the desire of companies to achieve short-term benefits and the desire to remain in the market such that they compromise ethical considerations. Another key question addressed in the book is whether there are observable indicators of ethical decline in companies where the book highlights the seven signs of ethical failure. Stakeholders can recognize the signs of ethical collapse bu looking out for specific unusual behaviors, actions, and circumstances that occur within a company. The book also addresses a fundamental question of the implications of ethical collapse for companies and their stakeholders. Some of the critical consequences the book highlights include reputation, damage, loss of jobs to employees as a company gradually goes bankrupt, and dealing with legal matters (Gill, 2006). The book also addresses what steps stakeholders should take after detecting signs of ethical collapse to mitigate it. The book emphasizes properly examining an identified problem to confirm it signifies danger and the taking necessary actions. While addressing ethical failure, the book encourages stakeholders, especially company leaders, to make informed decisions and maintain open communication to address ethical compromises adequately.
Most important information in the book
The most crucial information in the book is the need to uphold ethical conduct within organizations. It emphasizes that ethical behavior is a business necessity, not just a moral requirement. The book portrays ethical conduct as an essential aspect that builds and maintains a company’s reputation and the trust of stakeholders such as customers and investors. Also, it helps companies avoid legal implications because ethical failures mean violating laws and regulations that could lead to penalties and fines, creating a negative financial impact on the organization. The book also notes that upholding ethical standards influences the long-term sustainability of a business as it supports growth (Munro & Thanem, 2018). Ethical behavior within companies positively impacts employee morale and increases engagement, increasing productivity. Another way ethical standards influence the long-term sustainability of companies is by creating positive relationships with stakeholders and promoting long-term loyalty. This implies that companies should make ethical considerations in their strategies and decision-making processes and promote an ethical organizational culture.
The key concepts that you/we need to understand in this book
The key concepts to understand in the book by Marianne Jennings on ethical collapse are the seven signs that indicate a failure in companies and how to actions to take. One of the signs companies should watch out for is pressure to maintain numbers. When companies find themselves experiencing pressure to maintain specific numbers, either production, sales, or profits, which they cannot achieve generally, it means they are a high possibility they would compromise their ethical standards to reach those numbers (Gill, 2006). This is because the intense focus on achieving high expectations that companies cannot legally meet can lead to unethical practices such as using low-quality raw materials, accounting fraud, manipulation of financial statements, or deceptive marketing tactics. In such cases, company leaders should avoid violating ethics by ensuring a company sets reasonably and legally attainable goals. Leaders can ensure company goals are achievable by including all stakeholders, especially employees, in the decision-making process so they can speak out on targets they can achieve without pressure (Carmeli et al., 2017). Also, leaders should lead as role models by ensuring their actions and behavior in achieving anything within the company are ethically upright.
The second sign of ethical failure is prevailing fear and silence in the company’s culture. Fear and silence exist in a company if those that try to speak up about concerns and opinions or speak on ethical dilemmas are fired, threatened, or turned down. When employees feel silenced, they fear speaking up, creating an environment where unethical behavior goes unreported and spreads throughout the organization (Roszkowska & Melé, 2021). Therefore, company leaders should create an environment that encourages open communication where employees can speak up whenever they have worries to protect a company’s ethical values. Leaders can take steps to expand communication channels, actively listen, and respond to employees’ concerns so they are not tempted to engage in unethical practices once their worries are not taken care of.
Young’uns and bigger-than-life CEO is another sign of ethical failure. Typically, this is a situation where a CEO gives inexperienced or relatively young individuals significant authority and responsibility within the organization due to their association (Ay & Oktay, 2020). However, young leaders may need more knowledge and confidence to make informed decisions, enforce ethical practices and challenge unethical behavior in a company (Jennings, 2006). As a result, a lack of experienced leadership leads to unethical decision-making or disregarding ethical standards. Notably, CEOs or older leaders may also be assumed to be knowledgeable yet make uninformed decisions and fail to reinforce ethical practices. Therefore, addressing this issue involves letting experienced people lead an organization but only partially relying on them to make decisions.
Another sign of ethical failure in companies is a weak board. A lack of independence, diversity, expertise, and active oversight characterizes a weak board of directors. Companies with such a board of directors have low engagement between the leaders, including missing meetings, which may compromise the company’s ethics due to failure to emphasize the observation of ethical codes (Browning et al., 2019). This makes it challenging for leaders to identify and address ethical issues since they cannot exercise effective governance. The necessary action to take in this case is creating a strong board that prioritizes open communication to work together in identifying and addressing ethical issues within a company.
The other indicator of ethical failure in a company is conflicts of interest. Conflicts of interest arise in a company when individuals in leadership positions have competing interests based on whether they have an added advantage working in a company or illegally acquiring the leadership positions (Xu, Loi & Ngo, 2016). When leaders do not manage conflicts, they influence biased decision-making, favoritism, or unethical actions, leading to ethical collapse. Therefore, not it is crucial those involved in a company’s decision-making process disclose any conflicts of interest to avoid promoting unethical practices.
The sixth sign that Marianne Jennings talked about was innovation like no other. Innovation is an essential practice in all companies but may influence ethical collapse if pursuing innovation and growth overshadows ethical considerations (Prestol, 2006). This may occur when a company prioritizes innovation at all costs, where overlooks legal requirements, or take shortcuts. Companies should review their ethical conduct with every innovation in such a case. It is also essential to balance the need to maintain ethical behavior and excitement for innovation.
In the seventh sign, Marianne Jennings talked about goodness in some areas atoning for evil in others. This sign highlights a situation where an organization may engage in unethical practices in certain areas while attempting to compensate for them through positive actions in other areas. Marianne stated that doing good while there are some areas where a business is ethically wrong does not cancel the wrong and leads to collapse in an organization’s ethical standards (Gill, 2006). Therefore, companies should create a strong ethical culture to ensure they do not violate ethical codes in some practices.
Importance of concepts and application in my life and career
These concepts are important because they provide insights into signs and causes of ethical collapse. Understanding these concepts makes monitoring and addressing ethical issues easier to avoid ethical failure (Munro & Thanem, 2018). They apply to my life and career to look for factors that trigger unethical practices and how to address them to build an ethical life and career. As a student, the conclusion I draw from this book is the importance of ethical decision-making because it is a crucial aspect later in business. As an employee, it encourages me to speak up about unethical practices to support an ethical organizational culture. As an employer, this book teaches me the need to be accountable for ethical conduct to establish a successful organization. As a citizen, I learned the impact of ethical collapse and the need to support businesses built on ethical practices.
Contribution of additional sources
Additional sources have contributed to my thoughts and analysis in various ways. Firstly, they have provided a broader perspective on practices that influence ethical collapse. These sources include case studies and research findings on ethical failure in organizations. The sources have also reinforced the concepts presented in the book, providing a broader understanding of the topic and its implications in various contexts.
In conclusion, ethical conduct is necessary for all companies for various reasons. It influences a good reputation and trusts in a company, ensures a company does not face legal implications, and enhances long-term sustainability. To identify ethical collapse, individuals should look for pressure to maintain numbers, fear and silence, weak board, conflicts, young’uns, and a bigger-than-life CEO, innovation like no other, and goodness in some, creating room for evil in other areas. These concepts help identify and address ethical issues to prevent organizational collapse.
References
Prestol, J. (2006). The seven signs of ethical collapse by Marianne M. Jennings. St, Martins Press
Gill, D.W. (2006). The seven signs of ethical collapse by Marianne M. Jennings. St, Martins Press
Ay, F. A., & Oktay, S. (2020). The Effect of Nepotism and Its Applications Leading to Ethical Collapse in Organizational Trust: A Research on Physicians and Nurses at a University Hospital. Is Ahlakı Dergisi, 13(1), 159-167. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/http://isahlakidergisi.com/content/6-sayilar/25-13-cilt-1-sayi/m0161/m0161_eng.pdf
Browning, N., Yang, S. U., Park, Y. E., Lee, E., & Kim, T. (2019). Do ethics matter? Investigating donor responses to primary and tertiary ethical violations. Journalism & Mass Communication Quarterly, 96(4), 1145-1171.
https://doi.org/10.1177/1077699019835903
Xu, A. J., Loi, R., & Ngo, H. Y. (2016). Ethical leadership behavior and employee justice perceptions: The mediating role of trust in organization. Journal of Business Ethics, 134, 493-504. https://link.springer.com/article/10.1007/s10551-014-2457-4
Roszkowska, P., & Melé, D. (2021). Organizational factors in the individual ethical behavior. The notion of the “organizational moral structure.” Humanistic Management Journal, 6, 187-209. https://link.springer.com/article/10.1007/s41463-020-00080-z
Munro, I., & Thanem, T. (2018). The ethics of effective leadership: Organizing good encounters without leaders. Business Ethics Quarterly, 28(1), 51-69. https://www.cambridge.org/core/journals/business-ethics-quarterly/article/ethics-of-affective-leadership-organizing-good-encounters-without-leaders/F404DCD1EDEB2C55C1834DB511E7DE00
Carmeli, A., Brammer, S., Gomes, E., & Tarba, S. Y. (2017). An organizational ethic of care and employee involvement in sustainability‐related behaviors: A social identity perspective. Journal of Organizational Behavior, 38(9), 1380-1395. https://doi.org/10.1002/job.2185
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