Introduction
When an individual does some work with his values and principles intact, it is said to be ethical conduct. Ethics lets an individual perform an activity in a proper rule and in a principled manner that resides within a person. A brand like Microsoft requires its managers and employees to pursue those qualities and values by which they can perform their duties ethically. Along with the individual’s respective work, ethics also allows the person in decision-making as and when it is needed in the organization (Emira 2010). Thus, ethics is a way in which individuals can perform their duties with values as well as can take a decision that is for the welfare of the organization.
Ethical Dilemma of Microsoft
In the year 2015, one of the ex-employee sued the software maker, Microsoft, claiming that when it comes to appraisal, remuneration, and promotion, the company discriminated the female employees from male employees in the technical as well as engineering departments. The suit arose suspicion against the ethical practices of the company which had a huge effect on the company’s shares too. It is said by Su and Littlefield (2001) that an ethical dilemma not only has a derogatory effect on a company’s management but it also affects the rapport of the company which it has built with time and age. Adversely, Crane and Matten (2016) say that when a company faces an ethical dilemma, it helps it to continuously be in the news for a longer time, which, in turn, brings the company to the consumers’ notice. Also, Beauchamp, Bowie, and Arnold (2004) state that even though the news of an ethical dilemma gets the company a place in the “Breaking News”, it still does not help the company positively. Rather, the number of consumers either remains the same or decreases and also it is not considered to be profitable for the company (Beauchamp, Bowie, and Arnold 2004). It affects the inner environs as most of the workers are not happy. According to Broad (2014), an ethical dilemma brings a dispute among the workers which makes the company’s inner surroundings unhealthy and unsatisfactory for working. Thus, the total productivity of the company gets affected by this and the employees start concentrating only on their specific interest rather than the company’s interest (Broad 2014).
When the employee of Microsoft put allegations about discrimination against female employees in promotion, salaries, and appraisals, it resulted in the company’s criticism in its target market which led to material ethics within the internal customers. Quite often it is seen that a company faces charges of an ethical dilemma due to the mismanagement of the employees in the higher position. Nussbaum (2000) states that when the management of an organization is incapable of having positive communication with their employees and is biased in their appraisal and promotions, it gives birth to an ethical dilemma in that company. Hence, it becomes of utmost importance that the management of the organization gives equal opportunity to all the employees and respects their talents. They should also make sure to reward all the employees for the amount of hard work that they are putting towards the accomplishment of the company’s goal (Kayode 2014).
Gender bias in the workplace is mainly due to the gap in management. Related to this, Brown & Mitchell (2010) opines that when it comes to appraising employees, managers should ensure that they are doing it purely based on an individual’s performance and not based on their gender or any personal conflict. Thus, ethical practice in the workplace ensures the discouragement of an ethical dilemma and allows the company to progress (Joyner and Payne 2002). The consequence of this suit against Microsoft was that, it started losing its market shares, and the productivity, as well as the revenue for the company, decreased drastically. It was not only Microsoft that faced the allegation of ethical dilemma, but a few other companies like Facebook and Twitter also went through a similar case of ethical dilemma in the past couple of years. Facebook was booked for racial discrimination, and gender bias, as well as sexual harassment, and Twitter, faced allegations of unprofessional and biased practices of behavior and promotions toward female employees (Mazur 2004).
The case of gender bias towards Microsoft decreased its reputation among its customers which brought a matter of concern within the organisation. This was considered to be due to a loophole in the management and an unethical practice among the higher authority. Thus, it was seen that if there was an ethical practice among the management, the case of an ethical dilemma could have been avoided very easily. Hence, it is necessary to avoid any kind of bias among internal customers, especially gender bias (Jones, Felps, and Bigley 2007).
Ethical Theories
Ethical theories are numerous, however, there are few which are well-known and much used by most of the leaders of businesses.
Individualism Theory: This theory views about whether an individual’s decision or act encourages their long-haul self-interest. Normally, it is seen that whenever a person finds anything of their interest, they are very easily drawn towards it, however, this is the time when ethics is managed too. E.g., in case a student is sitting in an examination hall and thinking about cheating, but knowing the fact that if he is caught, his paper will be rejected and it might also lead to him getting expelled, he decides not to cheat. This act can be seen as self-regulation after the assessment of self-interest. Most of the time, the individualism theory results in innovation as there are a lot of rivalries as well as new creative ideas for self-interest (VÄYRYNEN 2006).
However, this theory has restrictions in cases where employees go after the temporary profit instead of the long-haul benefits. In the case of Microsoft, it has people who are more inclined towards temporary benefits, hence, the company very well uses this behavior of its employees to improvise in its growth. Many situations arise when the employees have to take an instant decision, this might leave that person in a dilemma. Thus, the company utilizes the individualism theory to work in such situations, as this theory does not take out conclusions based on an individual’s act, instead, it lets that individual take a corrective measure before the occurrence of such consequences.
Utilitarian Theory: Well-known philosopher, John Stuart Mill, first brought in the theory of Utilitarian view in the nineteenth century. This theory views about whether correct decision-making and good behavior work towards the betterment of an individual. Regarding this, Wong (2017) says that the utilitarian theory, tells about the extent of pleasure that an individual gets from properly performing their duties. It drives contentment in that person when he does his duties properly and from there the utility is drawn. It reduces the negativity and distress of any failure in people and brings satisfaction along with happiness and the ways to double it. It also helps a person understand that it’s not only him but there are even other people who make sacrifices while seeking happiness (Wong 2017).
The utilitarian view is considered to be an outstanding view for realizing the main concepts of ethics. It is that ethical behavior that brings in the most amount of goodness in most people. According to Mill, an individual’s virtuous proposition is assessed by the consequences that are derived. In the case of a business, the management may use the information about the profit that the company is making and the performance of its employees to take the decisions which serve well for a huge portion of individuals. Under this theory, people can take such decisions which are not complicated at all and can follow a path that is ethical and correct. Such actions generate a sense of self-realization about the positives as well as the negatives of a certain action, in an individual. Thus, this theory is considered to be one of the preferred theories for ethical actions (WIRED 2017).
Along with a lot of positives, this theory also has some limitations. The utilitarian theory takes a back foot when it comes to considering justice; however, it is proved that its view of ethical behavior benefits a large section of people.
When considering the software giant Microsoft, being a big organization, there come many situations when the higher management is required to take quick decisions, and while doing so, at times the decision taken might hurt the overall process. In such situations, the implementation of the utilitarian theory plays a significant role where it helps in seeing the consequences and stop from getting repeated. It also helps in taking corrective actions to come out of the adverse situation in the company (Day 2017).
Hence, it is seen that different ethical theories play a vital role in running an organization successfully. It helps in a healthy relationship between the employers, inner customers as well as outer customers. With the help of these theories, the employees can enhance their values and also take the right decisions at the right time. According to Sawyer, Wegner, and Moseman (2006), these theories are an essential part of any organization or even an individual, where their application helps in taking the right decision. For a big company like Microsoft, a healthy relationship among its employees is vital. Hence, the application of ethical theories helps in the establishment of trust within the workplace and thus, helps the company to acquire a higher place in the competitive market (Sawyer, Wegner, and Moseman 2006). The application of these theories increases positivity around the brand name and the number of customers attracted to the company. Because the companies understand the importance of ethical behavior, they check the employees’ ethical standards during the time of recruitment itself, with the help of different questions and by checking their behavior. Thus, ethical theories are very important for an organization to run successfully (Making Ethical Progress without Ethical Theories. 2015).
Discussion of the ethical dilemma of Microsoft
There are a few ethical dilemmas of Microsoft which are discussed below.
Being disparate from the competitors
Microsoft was found treating Netscape unequally after Netscape launched Navigator 2.0. Netscape was offered Windows from Microsoft in return for its browser, Navigator. However, to Netscape, this offer did not have equal weight on both sides, hence, it declined the offer. In return, Microsoft did not share its Windows 95 codes with the company.
Copying the Operating System (OS) of Apple
In 1984, Apple came up with a new invention of a mouse click to access computer data instead of putting in commands. This concept was found great by Microsoft as till then they were using the MS-DOS operating system to access data. Hence, in their new operating system, the company copied Apple’s OS. These practices are seen as unethical in the corporate world (Floros 2011).
Using its friends
In 1981, Microsoft bought MS-DOS from one of its friends for $ 60,000 and then it sold it to IBM too without notifying the person from whom it bought the OS. If it is seen from a business point, it is good as it increases the company’s revenue; however, from a personal point of view, it was considered to be an unethical practice as Microsoft did not inform his friend of the exact reason for his purchase. Hence, the genuineness of that purchase was kept hidden by Microsoft.
Packaging of its products
During its early years, Microsoft packed its other software products which have the IE (internet explorer) as well as Windows Media Player in the same packaging of its Windows OS. This was considered to be unethical sales practice due to which other browsers saw a huge fall in their sale.
Along with the above cases, there are a few other cases related to Microsoft that were seen as unethical practices by the company.
Critical evaluation of the relationship between ethics, leadership, and decision-making
As per Derr (2012), when it comes to running an organization and making the right decisions, ethics plays a vital role as they are interrelated. Along with that, the leadership characteristics of the higher management are essential for achieving the organization’s goal (Derr 2012). It is said to be an ethical act of the management when the employees of an organization are solely rewarded as per their performance, as this is the basis of inhibiting trust between the employees and the management. In this case, Microsoft did not stick to the ethical practice of treating all its employees the same which led the company to go through an ethical dilemma. If the management followed ethical behavior, it would have been able to take a correct and unbiased decision during the appraisal. Hence, it can be said that ethical practices keep the dilemmas away from the company which, in turn, helps the leadership benefit from it. In the present case, if the management had not done gender discrimination and had ensured an ethical practice, the company would have been able to avoid the dilemma very easily. Hence, it can be said the management of Microsoft was inefficient in taking the right decision at the right time.
Ciulla (2003) says that ethical practice, as well as the process of decision-making, coexists. Also, in any business, the purpose of ethical practice is to work for the good of all the employees instead of taking out any personal feud (Ciulla 2003). A manager who has ethical values makes sure to take such decisions which are free of personal revenge and thinks toward achieving the goal of the company. This helps the company to achieve all its aims and be in the topmost position. Hence, the work environment within the company remains healthy and all the employees have only one aim, i.e. achieving the company’s goal. A business and its management are tied to ethics and the employees only target the company’s objective which is, in turn, connected to the aim of the company. Meese and Ortmeier (2004) state that the ethical decision-making process also helps in revenue generation and market rapport. Due to the claim of gender discrimination, Microsoft saw a huge fall in its market reputation, which had a huge effect on its revenue generation (Meese and Ortmeier 2004). Hence, a sensible and ethical decision by the higher management could have easily avoided the ethical dilemma that Microsoft faced.
As per Dion (2012), ethics, leadership, as well as decision-making in management, are all related to each other and add to the development of the company. Through ethics, it is made sure that the management of the organization works towards the common good of all the employees. Through leadership, it is made sure that the leaders in an organization take the right decisions at the right time and follow a proper reward and recognition program for all its employees. Through decision-making, the company makes sure an ethical decision is made by the management which is free of any personal revenge (Dion 2012).
Hence, when an ethical decision is taken in a company, it ensures that there is no gender bias or any unacceptable practice in an organization. On the contrary, it is also seen at times that an ethical decision does not do good to the company or an individual. Sometimes it becomes important for the company to make such decisions that are only beneficial for society and this may not benefit the company in the short run. Otherwise, ethics is beneficial for the company’s growth. Thus, the main motive of ethics, leadership, and decision-making is to help the company succeed and lead the market along with keeping it away from any ethical dilemma which might lead to a downgrade in its market rapport.
Conclusion
The above report clearly states that for a business giant like Microsoft, it becomes necessary for it to follow the ethical theory efficiently. As the global market has become very competitive, a company that fails to follow ethical standards might be at a loss at some time or the other. They might see a downfall in their revenue as well as their reputation. A few suggestions based on the change in culture and behavior can also be suggested.
Recommendations
- First and foremost, Microsoft should make sure to follow ethical standards strictly. The company may also promote an environment of cross-culture for the workers to understand other people well. Cross-cultural environments allow employees to understand what is good and what is bad. They become a pro in decision-making. The HR department of the organization should also inculcate these theories within the organization (Blumberg 2017).
- Ethical training must be introduced to make the employees aware of unethical practices. Nowadays, almost all multinational companies work towards identifying ethical issues in which they give proper training to their HR department too so that they can deal with the ethical dilemma.
- Microsoft should make ethical theories an important part of the processes where it would be important for all the employees to follow and obey the things that are true in its sense. This will reduce any fraudulent activity within the organization and will also help in its growth.
- Microsoft has had the past following an unethical way of marketing its product where it used to provide its other services with its OS in the same packaging, making the customers bound to use its products. Such practices should be stopped to move ahead ethically.
- It is also seen that a lot of times the operations of Microsoft have affected the residents. Thus, it is recommended that the company work as per the rules and regulations of the area in which it has established its operations so that it does not affect the localities.
Thus, by following these steps, Microsoft can easily work ethically and without any further downgrade in its revenue or reputation, it can continue being in the topmost position of the software business.
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