12/28/2021

2 Leadership and Ethical Dilemmas

Akhaya Kumar Nayak
aknayak@iimidr.ac.in
3 Ethical Considerations to decide Launching and continuing with a new product
• Customers, Employees, the Communities, and other stockholders
• Is it serving the purpose of consumers exactly for which it is designed and not resulting in any
dis-service
• Quality
• Cost
• Prompt service
• Is the process efficient and ethical
• Raw materials used
• Employee satisfaction and working condition
• Is it profitable for suppliers and distributers & not harmful for the environment/community
• Is it profitable to other important stockholders and the company
4 Ethical Dilemmas in the case?

5 Law as the Moral Minimum

6 Leadership Lessons
• Make new mistakes but don’t repeat the mistakes:
• meeting with General
• Informed Choices and transformed choices: An approach to ethical dilemma
• Not launching the Smith’s idea of Pharma expansion
• Dropping the launch of Baby Liquide Cream
• Challenge will get the best out of a leader:
• General’s challenge
• Revisiting your vision:
• Credo challenge
• Taking the responsibility and immediate correction while facing challenges:
• Tylenol poisoning
• Winning the trust is possible more in ethical way rather than unethical or denial mode.
• Handling the Tylenol crisis
• Stakeholders have to be treated with sincerity, humility, and respect not with negligence and
arrogance
• Responding to Tylenol Crisis

7 Rationalizations
• The belief that the activity is not really illegal or immoral
• Profit Vs Survival
• Taking the risk Vs to know which risks are worth taking
• How far is too far!
• It is in the individual’s and corporate’s best interest:
• Living and acting in the present
• Accept the human nature and protect themselves with watchdogs to sniff out possible
misdeeds
 12/28/2021

misdeeds
• It will never be found out
• the perceived probability of being caught
• Because it helps the company, the company will condone it
• Setting examples and making it clear what loyalty is and what it is not
• Inspecting the inspectors (internal)

8 Five Barriers
• Ill-conceived Goal
• Setting goals and incentives to promote desired behaviour but end up encouraging
undesirable/negative ones
• Sears auto mechanics unnecessary repairing and replacing parts due to sales goals of $147
an hour
• Motivated blindness
• people see what they want to see and easily miss contradictory information when it’s in their
interest to remain ignorant
• Ford Pinto: Leaking fuel tank
• Baseball and doping in USA
• Indirect blindness
• Outsourcing the unethical behaviour
• Rana Plaza factory building collapse 2013
• Merck sold off two cancer drugs, Mustargen and Cosmegen, to Ovation 2015

9 Five Barriers
• The Slippery Slope
• If we find minor infractions acceptable, research suggests, we are likely to accept
increasingly major infractions as long as each violation is only incrementally more serious
than the preceding one
• Why good accountants do bad audits
• Overvaluing Outcomes
• Rewarding results rather than high-quality decisions
• Rewarding unethical decisions because they have good outcomes is a recipe for disaster
over the long term
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11 A Handsome Man will open your eyes

12 An intelligent man will open your mind

13 A Gentleman will open your heart

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