An Ethical Dilemma

I would like to analyze through the lens of the normative ethics framework a personal ethical issue I faced at XYZ Systems, a niche software form I worked in. XYZ was a 100-employee strong firm – I was a member in the firm’s corporate development team, leading four junior associates. From the surface, the firm appeared to be flying high, expanding its client roster, doling out bonuses to its employees on the event of Durga Puja, the principal festival of the Bengalis – XYZ bore the countenance of a happy family. However, no sooner had the joyous festive mood disappeared than I along with other key team leads were shocked to learn from the top management in a hastily summoned meeting that the firm’s finances are in doldrums for various reasons – reckless spending, couple of prospective client contracts cancelled, delay in accounting receivables from the firm’s two major clients – so much so, that the firm would not be able to pay its employees for an indefinite period, and that management was contemplating on a sale and to top that, there would be imminent lay-offs. The respective team leads were strictly informed not to divulge this information and rather ensure that business go on as usual with no interruption on any client commitments. Being a small firm, word inevitably got out – and panic amongst the employees started to swell up. When confronted by the question on the firm’s and their immediate future by my direct reports – fresh out of undergrad and still oblivious to the grim realities of the corporate world – I effectively lied straight-faced that the firm was doing fine amid some minor hiccups, and their jobs were very much secure.

I back my aforementioned demeanor on the basis of act consequentialism normative ethics that I pursued here. Had I been truthful, my reports would have lost the motivation to work. They could easily have communicated the truth to other employees. Consequently, their work motivation would have dwindled as well. This is especially true for a small firm where such behavior is highly contagious, and can potentially lead to a complete mayhem in terms of total shut down of the work. As a senior member in the firm, my allegiances were clearly in the company’s best interests. True, we were in this situation we could have averted through better cash management – but, then again, the company had been good to its employees, granted them hefty compensation hikes which were higher than the industry norm. The firm’s top management were trying frantically to salvage the situation: negotiate with the potential clients to close the contracts, signing of which would offer up some cash, hold discussions with the key decision-makers of our two major clients on frequent payments albeit on a smaller chunk to improve our company’s working capital to meet the basic operational needs (salary obligations, utilities and rent expenses, etc.), speak with our suppliers to delay account payables, etc. So, in this crucial juncture, it was imperative that we as a firm stood in unison and kept delivering quality work to our clients to instill confidence in them that our company was not falling apart. A final closure of a potential sale, if strategically beneficial for the firm in the long haul, would be months away. So, in the interim, it was of utmost importance to keep serving our clients to the best of our abilities – this would be in direct support of our firm’s management – and if things were to turn around quickly, any potential lay-off could be averted. Further, it would serve to send out a strong signal to our competitors - who might have been thinking to lure away our top clients – that we as a firm were very much functional. From the employees’ standpoint, sure it would be difficult for the first few months with no salary and uncertainties shrouding their jobs at the firm; most of them hailed from middle-class background which meant they were large contributors to their family income – and in certain cases, they were their family’s sole earning members. Had I divulged the truth and encouraged my reports to start looking for jobs, it could easily have triggered a chain reaction of such behavior from other employees in the firm. The results would have been catastrophic from the standpoint of the best interests of the company. Any hope of salvaging the difficult situation would have swiftly evaporated – the failure and subsequently sale of the company would have been a foregone conclusion. In fact, a sale might not have been beneficial for the employees as well in that the new management could well have instituted a massive lay-off the erstwhile XYZ employees.