Ethical Dilemma

ORGANISATIONAL BEHAVIOUR – I

CASE STUDY REPORT ON

ETHICAL DILEMMA

Submitted to:

Prof. Satish Pandey

Submitted by: GROUP ‘O’

Joydeep Mukherjee (20081020) Mohit Raj (20081030) Subham Seal (20081052) Vishnu Mangal (20081059)

ETHICAL DILEMMA

Mr. Ashok and Mr. Roy are very close friends and have known each other for 10 years. Roy and Ashok used to work in the same company but 6 months before, Roy joined another company. 12/3/2005……. Phone call ringing…. Roy: Hello Ashok, can you meet me tomorrow evening there is a serious issue I am facing. Ashok: You sound serious, but I am afraid, I can pay you time tomorrow. Is it possible to meet this weekend? Roy: Yes, no problem. See you then this weekend. The day of meeting…….. Ashok: Hi Roy, please come in Roy: Good morning. Ashok: You seem to be quite serious, any problem. Roy: Yes, I am having some. There is an issue where I am directly in conflict with the interests of my boss. I am at a total loss about whom to listen to, in this proposition. I think I will not challenge the boss. It's difficult and risky to question for an employee asking about the appropriateness of his boss. As an internal employee, I feel that speaking up could've had political or even career-derailing consequences. Ashok: If I would be in your position I'd also feel that it's a greater potential risk to my credibility to be perceived as a traitor for the company. But I think your stance must be consistent with company's standards on Ethics and Integrity, which states that we must not mix our personal things with professional standards. Let me share my brother’s experience, Sameer.

2

3 years before:Mr. Sameer Sharma was working as a Credit Manager in the Processing Cell of a leading public sector bank. He was working in this domain for past 20 years and had vast experience in sanctioning loan proposals. He had been awarded by the bank for his great performance in credit section. He had always been honest and dutiful towards his work. Since he had joined the bank, he had been an asset as far as the credit business of the bank was concerned. A local branch of the bank marketed a proposal of a Housing Loan. The applicant Mr. Kumar was a Senior District Forest Officer. The branch had also the account of the Forest department which was a source of business for the branch. Mr. Kumar wanted to obtain Housing loan without submitting proper title deed of the property. He wanted to utilize his powerful status in the society to avail the loan facility. In addition, he had also promised Mr. Shah, the branch manager that the Forest Department will ensure that the business of branch will increase by providing more and more deposits. Without preliminary scrutiny, the branch manager Mr. Shah forwarded the proposal to the Processing Cell. When the AGM of the Processing Cell, Mr. Joshi received the proposal, he forwarded it to his most efficient and trustworthy officer Sameer for proper scrutiny. While going through the proposal, Sameer found a lot of discrepancies in it as many things were not in accordance with the norms laid by the Bank. He straight-forward returned the proposal to the branch clearly rejecting it. When Mr. Shah complained to the AGM, he also refused to interfere as he shared a great rapport with Sameer which has developed over a period of time due to sustained dedicated and efficient efforts of Sameer. One fine day, the Deputy General Manager (DGM) of the bank, Mr. Sinha who was responsible for the banking activities in the state, invited Sameer to praise him for his sincere efforts in making significant growth in the business of the bank. The DGM of the bank had a certain target to fulfil with respective to credit sanctioned, and in that fiscal year it was yet to be achieved. During the meeting, the DGM asked for a personal favour

3

and instructed Sameer to approve a loan proposal of his acquaintance, which would meet both the ends. The relationship of DGM with the acquaintance will be maintained as well as his “credit-target” would be achieved. Sameer, after perusing the loan proposal found that it was the same one which he had rejected, of Mr. Kumar’s, the DFO, who turned out to be a close friend of the DGM. He initially thought of rejecting the loan proposal outright, but the DGM’s insistence was playing on his mind. Sameer asked the DGM for a written approval on whose grounds he will sanction the loan. DGM refused to give a written statement. Sameer argued that if something wrong happens then he and his AGM will have to face the blushes. The DGM straight away started flexing his “chair-muscle” and threatened him that if he would not sanction the loan then he will be transferred to a remote location and his appraisal will be affected badly. Sameer’s career was at stake, and this was a complete new situation to him. He decided to discuss this matter with his AGM, Mr. Joshi. After listening to the discussion between the DGM and his Credit Manager, the AGM decided to lend full support to Sameer in his stand. Sameer also found full support from his colleagues at the Processing Cell. Every one was of the same opinion that if the loan becomes a bad debt (NPA), then the Processing Cell will face the charges. They all agreed to quit from the Cell if the DGM takes any action against Sameer, the most productive employee of the Cell. Sameer was pretty much tensed about the situation and the family members could sense something was wrong. His wife inquired about the issue worrying him. Sameer didn’t wish to burden his family members with his workplace problems, so avoided as far as he could. Subsequently, with his career on the line, he also thought that the issue was going to affect his family too, so decide to confide to his wife. She, after listening became agitated and vented out her thoughts. She thought about the future of her children and what effect would it have if he was relocated to a remote location or worst still if his job was made insecure. She asked Sameer that it is better to stick with the DGM’s decision as he has considerable power to influence his career. Though she also affirmed, she would be behind him, whatever is his decision. Sameer felt confused; the dilemma was becoming complex day by day. What was a simple choice between what was right and wrong was

4

changing into what would be right to save his career, what would be a prudent choice rather than a foolish one. The “call” had to make now, Sameer was in a fix of his career! As the time for the decision approached, Sameer further brainstormed with his boss and his colleagues and decided to view the matter in the long run gain point of view. He started the procedure to discard the loan application. In the meanwhile, the DGM, Mr. Sinha issued transfer orders of Sameer and Mr. Joshi (AGM), the AGM. He felt that AGM has also acted as a shield to Sameer in this matter. As they had planned earlier, the AGM immediately approached the General Manager (GM) of the Bank. He discussed this issue with him in detail and asked for his intervention. The GM intervened and their transfer order was stayed. But what was not stayed was their performance appraisal, which is essential to have a good one for promotions. This affected both of them as their promotion despite good performance was delayed for more than a year, the culprit being the usual lethargic and high-and-mighty working culture of the PSUs. Although Sameer saved the Bank from an invalid loan proposal, he was unable to save his career interest. He won on ethics but lost on performance appraisal. Ashok: So, I think my brother’s experience will help you in deciding the pros and cons of each option that you will consider prior to take any decision. Personal and professional lives are two sides of the same coin and they must go on parallel paths. There is no free lunch in this world and often we need to pay-off to achieve something. Roy went in deep thought……………………

EXHIBIT

5

General Manager

Deputy General Manager (DGM)

Regional Manager

Assistant General Manager (AGM)

Credit Manager

Branch Manager (Marketing Proposal)

Role of Employees in the Bank: Sr. No.

Designation

Functions

To overlook the functioning of the Bank 1

2

General Manager (GM)

and to set targets for future To lay out plans for achieving the targets

Deputy General Manager

and ensure that they are achieved

(DGM)

To report to the DGM and GM about the

Assistant General Manager 3

business development of the Bank and is

(AGM)

responsible for increasing the business To approve the loan proposals by proper scrutinizing that whether they are in

4

Credit Manager

accordance with the norms of the Bank or not. To look after the individual business of the

5

Branch Manager

branch

TRAINER’S NOTE

6

The fundamental issue in this case, as suggested by the title itself, is Ethical Dilemma. The conflict of personal value ethics and organizational ethics is the point of contention here. The issue of Managing One’s Boss can also be brought to light in this case. When, one’s boss in an organization plays the role of a bully and creates a situation, where your own career is at stake. The methods that you need to adopt so that a feasible solution is reached without harming your career would be a trait of a successful manager. Maintaining ‘Ego’ is reflected in this case. The DGM in his egoistic approach threatens his sub-ordinate to conduct wrong practices in the organization despite knowing that it is against the norms. This can be also related to wrong use of power in an organization. The sub-ordinate is threatened to be transferred which implies practice of dirty politics in the organization for personal interests. We can also visualize the case with the point of Stress Management, where the decision is made by the protagonist under considerable amount of stress. Hierarchical pressure, Family pressure, Social pressure and as well as pressure developed due to one’s own moral and ethical values has been put forward in this case. Dealing with all these stresses, and coming to a correct decision, would exemplify the role of a manager. This case also gives a peek into the loan sanctioning system followed by the banks in our country and also highlights the risk associated with the job of scrutinizing the loans.

LEARNINGS FROM THE CASE (GROUP VIEWPOINT)

7

•

We get an insight in the working of the PSU banks, the ethical prospective, and responsibility at the top level.

•

Almost every business in is a trying run “mean & lean.” But this makes the facility very vulnerable to staff who stand up as there are no reserves built into the current “just in time” method of conducting business.

•

Organizations are operating on the ragged edge in the drive to maximize profits while having maximum sales. This stresses out both staff and customers. Business today operates on the philosophy of mastery and control to exploit everyone they deal with.

•

We can see situations where we have to trade-off between different parameters most often messing our personal life with professional life.

INDIVIDUAL CONTRIBUTION

8

All members have worked towards the development of the case study and in discussion amongst ourselves we have achieved different perspectives which have been brought forward. People have worked on their specific responsibilty and those are mentioned below:Joydeep Mukherjee: Development of the case, bringing the personal touch in the case with the family aspect. Mohit Raj: The source of the case study. Developed the plot and the initial summarization was accomplished. Subham Seal: Framed the conversation part in the case study, searched the internet to enrich the case study with different perspectives. Vishnu Mangal: The Trainer’s note and the learning outcomes from the case. Preparation of final version of the report.

9