Human Resource Management (PBL Exercise – Ethical and Professional HRM)

PBL Exercise – Ethical and Professional HRM
On one end of the political spectrum, proponents of the importance of protecting the welfare of
employees at work argue that:
companies which are run with a view to the long-term interests of their key
stakeholders are more likely to prosper than those which take a short term
“shareholder first” approach … Put simply, companies need to listen, to process and to
respond constructively to the values and needs of their stakeholders, most especially
their employees, customers and investors. Failure to do this will reduce long-term
commercial viability and increase the risk of corporate demise (Sillanpaa and Jackson,
2000: 227).
Conservative advocates at the other end of the political spectrum agree:
The business that treats its customers contemptuously, or its staff unjustly, or its
suppliers dishonestly, will often find them hard to retain. In a free market, the most
productive staff, the finest suppliers and the cheapest and most flexible sources of
finance can do better than to stay with a business that cheats or treats them unfairly …
In the long run, unethical business is less likely to succeed (Sternberg, 2000:19).
Lafer finds it notable that both sides “share this central conviction: that the drive to maximize
long-term profits naturally overlaps with the imperative to treat employees justly. It is, in fact,
more than striking. It is a fact that begs for explanation, because the shared conviction is
so palpably at odds with evidence from the business world” (Lafer 2005:288).
Can the interest of employees and the interests of business really coincide? What happens
when they are in conflict? And what role should HR managers take when they do?

Task:
1. Find an example of a situation in which you believe that the interests of senior
management/owners are clearly in conflict with the interests of some or all of their employees.
NB. Chose an example described in the public domain. When you submit your paper,
append key article/s or any lengthy descriptive information.
NB. If your example is not current, you may need to nominate a specific point in time
for your analysis.
2. What are three options available to an HRM professional in this situation? Which option
would you chose and why? Defend your choice in relation to what constitutes ethical and
professional behaviour.