BUMG 2202 Business Ethics

Topic Week 1 (Tutorial 2)

 Chapter 1: The Importance of Business Ethics 25

RESOLVING ETHICAL BUSINESS CHALLENGES*

Lael was just hired by Best East Motels into their man- Nikhil would routinely make suggestive comments to
ager training program and was excited about the poten- female employees. In one incident under Nikhil’s watch,
tial benefits after her graduation from Florida State some male employees flirted with female employees,
University. Working part-time and going to school full- including undocumented workers. Nikhil reportedly
time was the norm for her, but the Best East job replaced sat there with a smile. They also told her Nikhil allowed
her two part-time jobs. With this new job, she would customers at the motel to offer their room keys to female
be the one to assign work times. Her luck continued employees.
when she met her mentor Nikhil, who was the son of After a few weeks, Lael heard the same story from
the owner. Best East Motels was a franchise motel chain younger female employees and even some of the maids.
in the United States. Owners bought into the chain with Their responses to these situations were similar. They
a $500,000 franchise fee and paid for the construction ranged from “Nikhil told me if I was older he would ask
of the motel. In return for the fee, Best East gave each me out” to “I don’t want to make a big deal out of this
owner a comprehensive package of marketing, manage- because it might appear I’m a tattle tale.” Another com-
ment, accounting, and financial materials to boost motel mon excuse for not reporting was that Nikhil assured
success rates to over 90 percent. In addition, Best East them this was part of the motel business and was nor-
assisted each owner with groups of people that trained mal. Most employees were afraid to report on the boss’s
staff for every new job, from housekeeping to account- son and put their jobs on the line.
ing. The new-hire training course for each type of Lael reviewed the section of the franchise employee
employee was developed and based on the best practices handbook. It clearly stated sexual harassment of any kind
within the industry. This particular motel had been in would not be tolerated and should be reported immediately
business for 10 years and was seen as successful. to the proper manager. Lael could tell from the manual the
As Lael went through the manager training program, allegations against Nikhil constituted sexual harassment.
everything she heard was great. It sounded like Best East While the Best East Franchise Corporation had no ethics
was a career path she would want to pursue long-term. Six hotline, Lael thought this could be a legal issue.
months into her job, however, Lael started to hear strange She knew putting pressure on the female employees
rumors. For example, on the night shift she found there to report the behavior of the boss’s son was problematic.
was heavy employee turnover and most were females. Lael also felt that going to Nikhil personally about these
Lael began to investigate by scheduling herself onto sev- allegations may not be a wise move. If the behavior was
eral night shifts. One night, as she chatted with one of the reported to the owner, it would become an official alle-
front desk employees, she discovered the girl planned on gation and impact the motel’s reputation and image in
quitting. She was 17 and worked at this Best East motel for the community, and she would be responsible for it. The
a year. “Why are you leaving?” asked Lael. things these women were saying had not personally hap-
Her reply startled Lael. “I don’t want trouble, just pened to her yet.
my last paycheck, a good letter of recommendation, and
that’s it.”
QUESTIONS | EXERCISES
As Lael pressed her for more information, the
17-year-old opened up. She spoke about Nikhil talking 1. Why should Lael get involved in reporting if she
suggestively about her to other employees and how he has not experienced any of the allegations the other
made suggestive physical gestures when she was around. employees are making?
She told Lael about other female employees treated sim- 2. What are some of the characteristics of Best East’s
ilarly, and this always occurred during night shifts when ethical culture that would create the current dilemma
Nikhil was on duty. for Lael?
Digging a little deeper, Lael spoke to several former 3. What should Lael do to resolve her concerns?
employees. Most were fairly young female employees. *This case is strictly hypothetical; any resemblance to real persons,
They told her essentially the same thing. For example, companies, or situations is coincidental.

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