Morality and ethics – do we really need them in today’s organizations?
A case study of Wind Mattress (UK, Germany)
Management of Human Resources
Kehinde Emmanuel Enisan
Table of Contents
Wind Mattress is a German based start up that sells the new innovative concept of a mattress in a box. Wind Mattress was founded in 2014 in Ingoldstadt and has launched operations in other countries in the Euro-zone particularly UK, Belgium, France, Spain, Netherlands and Italy. The Headquarters is situated in Ingoldstadt, Germany. The company although is regarded as a startup already has employees of almost 150 people, as so can be classified as a Small-Medium Enterprise. The company’s workforce is very diverse with employees from every continent apart from Antarctica and Oceania. Wind has been awarded the best mattress in the UK, Belgium and Italy and also one of the fastest growing start up in Germany.
Ethics and Morals are mostly used synonymously and often together but there is a difference between ethics and morals. Both Ethics and morals addresses the concept of ‘Right’ and ‘Wrong’ but while ethics are guided by a set of principles that guides a class of human behavior, morals are more internal and are a guide to a person’s perception of Right or Wrong. Ethics was defined by Paul et al (2006) as “a set of concepts and principles that guide us in determining what behavior work place ethics or professional ethics. Ethics are governed by legal and professional guidelines. Ethics are dependents on others can vary in context and are more external. Morals are more internal and act as a compass in guiding behavior of right and wrong. A person or an Individual can violate ethics in for moral reasons. Morality is above cultural norm.
Business Ethics is a branch of ethics that applies to business practices. Investopedia describes Business Ethics as a study of proper business practices and policies regarding controversial issues e-g Bribery, discrimination etc. Code of ethics is a guide of principles used to enable employees of professionals conduct businesses with honor and integrity. This guide usually a document with a list of organizations mission and goals directs how employees should behave in an ethical manner that will not compromise the business practices of the organization. In recent times, an organization’s image is paramount to their success, that is why businesses must try their best to portray an image of integrity and not indulge in unethical behavior. An article on fortune titled the 5 biggest corporate scandal in 2016 highlights some ways these businesses have acted not only unethically but illegally. Wells Fargo is one of the big giant in the banking industries, providing loans, insurance, credit cards services to their customers. The company’s growth strategy was aggressive which includes employees meeting certain quotas, in an attempt to fulfil these goals, employees of Wells Fargo stated fraudulently creating customer accounts using their data without their knowledge. Some were charged fees and some of the customers credit rating were negatively affected. This unethical behavior led to heavy fines in the hundreds of millions and also negatively affected the company’s image.
Wind mattress is used as a case study for the assignment based on my personal experience working for the company and also interviews of colleagues who have or are still working with the company as well as researched facts about the company. This assignment examines real life situations where Wind mattress’s ethics was called under question and how the employees reacted including myself. The assignment addresses the impact Sarbanes Ox act might have on the company.
Moral and Ethical issues facing in Businesses
Nowadays, businesses have lost the trust of the public in the wake of recent scandals that has embroiled the business world. The public are not convinced some businesses can operate with a high degree of integrity. Wind Mattress is a startup company and it is fair to say that they are not likely to behave unethically and wont face most common ethical issues facing giant corporations. Big corporations like Wells Fargo, Toshiba or Volkswagen have acted unethically in the aim of increasing profits. This led to unethical and eventually illegal behavior such as fabricating accounts, insider trading, fabricating test results in order to deceive regulation agency.
Wind Mattress although still a startup still has to behave ethically and faces its own kind of challenges. Being a startup, the most important or a key part of your organization plan is to raise funding to expand or improve the business processes. There is a saying in Silicon Valley which goes like this ‘Fake it till you make it’. This arguably has led to some of the biggest startup scandal in Silicon Valley. An article on the Business Insider website highlights some of the biggest in Silicon Valley for example, Theranos is a perfect case study of a startup misleading investors and company not following proper regulatory rules. An article on the Wired website detailed how the company failed it in its fiduciary duties. Founded in 2003 by Elizabeth Holmes, Theranos is a privately held health technology company based in Palto Alto, California. The company offers fingerprick diagnostics services that helps test the blood’s chemical level. About 10 years after the launch, the company was valued at estimated 9 billion dollars by investors, bringing in about 50 million dollars in the first 3 years of business. By 2014 the company has $400 million, the company seems to be on a rise signing deals with big corporations eg GlaxoSmithKline. The company even co authored an Arizona Bill that was pass into Law. But all doesn’t look as it seems, an article published by the journal after an Investigative report found out that the company’s patented technology called Edison could not accurately detect enough molecules in samples it processes, not only that but they have been diluting the blood samples and running them through their system. This had a huge negative impact on the company and led to cancelation of contracts and subjected them to investigations. This kind of behavior is not only unethical but also illegal.
In Relation to Wind Mattress, a source disclosed to me in an interview about the company’s deceitful reviews on their websites. The company placed a few reviews on the website and all are false and untrue. The pictures are fake and they mislead buyers into thinking the reviews are accurate. Also on other review website, the company tasks employees to go on anonymous browser and post favorable comments on the website. According to the source, he/she once wrote an email on a legally binding purchase to a customer but instead of signing the email in his or her name, the person used another person’s name which was fictional. This kind of behavior is unethical and it shows the lack of proper training and support for employees on awareness of moral and ethical issues.
Internal training and support programs
Wind Mattress currently doesn’t have adequate internal training and employee support programs available for their employees. I remembered when I first started at the organization. I was given just a piece of paper with computer log in details and told to start straight away. In such situations, every new employee should be given detailed orientation on what the company’s ethics and code of conducts are. For a startup company, they have limited resources in training every single new recruits and employees, that is why I would recommend an online course on code of conduct courses offered online on workplaceanswers.com as a feasible solution to this challenge. They can invest in a partnership or an agreed course which should be made available to every employee or new recruits.
The code of ethics course is details the ethical standards and establishes expectation of employee behavior in the company. The course ensures employees understand their role in the company and highlights the importance of their behavior on the company’s image. The course covers vital topics which includes Anti-Bribery and Corruption, Social Media Compliance, Export and Trade Compliance, Diversity, Harassment, and Mutual Respect, How to Protect Confidential Information, and Intellectual Property, Conflicts of Interest, Environment, Health, and Safety, Antitrust and Fair Competition and Privacy and Data Protection. The program is an employee focused interactive process and also leaves room for monitoring the employee behavior in the company. Every day employees are in situations which might not be fully covered in the course or when they are faced with situation where they could not fully comprehend the impact of their actions, having a consultant at the Human Resource department who the employees should approach when they find themselves in such situations can help monitor the impact of the program and also provide insights for the development of the program. An example of a case where having such person could be helpful was when
Paul, Richard; Elder, Linda (2006). The Miniature Guide to Understanding the Foundations of Ethical Reasoning. United States: Foundation for Critical Thinking Free Press. p. np. ISBN 0-944583-17-2.