Case Study Analysis 102660655 Dimitra Katsaitis

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Dimitra Katsaitis Case Study Analysis 102660655 ASSIGNMENT 3 Case Study Analysis MGT10002 Dimitra Katsaitis 102660655 Image Reference: https://satovconsultants.com/pulling-u-ey-changing-market-dynamics-driving-car- dealerships-evolve/ 1

Dimitra Katsaitis Case Study Analysis 102660655 EXECUTIVE SUMMARY This report was assigned to analyse and summaries a current social media breach Downcity faces with one of its lead salespeople. It will provide a detailed overview regarding the matter with consideration towards the predominate stakeholders that may be affected, exploring the roles Value Judgments, Ethical Implications and Cognitive Bias’s may play in the decision-making process. The report will consist of four key sections; background, case study scenario, alternative solutions and final recommendations. The first section explores the overall issue Downcity faces with technology and the increase of social media use within the company, detailing key aspects of the situation. It will also provide a synopsis of the three key stakeholders, Dell, Kenton and Susannah’s position regarding the issue and discuss certain risks and implications each may face, in addition to possible virtues. Section two will present an overview of how social media has evolved into everyday business life and how social media policies are utilised to protect possible negative outcomes of the misuse of social media, such as, privacy breaches, loss of finances and defamation, just to name a few. Additionally, this section will explain the ethical implication of integrity risk and corporate social responsibilities which businesses may encounter when determining a social media policy. The alternative solution section will offer three different resolutions to the dilemma and explain potential advantages and disadvantages of each resolution. Suggestion one examines the ramifications of doing nothing to address the matter, deliberating the theory of utilitarianism and considering negative outcomes such as affects in company reputation. Suggestion two discusses an example of disciplinary action whilst looking into the benefits of virtue ethics and reviewing its possible limitations; for example, inconsistent moral norms. 2

Dimitra Katsaitis Case Study Analysis 102660655 Finally, suggestion three reviews termination and reports supporting reasons why this option may be the best choice. It will also discuss particular long-term issues ranging from employee resignation to moral relativism. 3

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Dimitra Katsaitis Case Study Analysis 102660655 TABLE OF CONTENT EXECUTIVE SUMMARY2 INTRODUCTION 5 CASE STUDY SCENARIO 6 Overview 6 Stakeholders 6 BACKGROUND 8 ALTERNATIVE SOLUTIONS 8 Ignore & Improve Policies 9 Take Disciplinary Action 9 Termination 10 RECOMMENDATIONS 11 CONCLUSION 12 REFERENCE LIST 13 4

Dimitra Katsaitis Case Study Analysis 102660655 INTRODUCTION The technological evolution has allowed society to grow more reciprocal through rising access and use of the internet and social media tools (Dowerah Baruah 2012). Platforms, such as Facebook, Google, Twitter and LinkedIn, allow individuals to connect and share information privately and publicly in an online forum (Kaur et al. 2018). Businesses are also utilising social media to improve their marketing and sales techniques; However, they must implore appropriate contingency plans as companies are now faced with growing concerns of defamation and online harassment. A review, status, coerced photograph or a message has the potential to go viral and boost a company’s image to new levels or destroy it in a blink of an eye (Stephen 2016). With this in mind, this report will provide a synopsis on a recent issue Downcity has faced regarding an employee sharing disparaging remarks about the company via social media. An overview of the incident will be presented and analysis on the broader issues surrounding businesses and social media policies will be presented. Ethical theories such as utilitarianism, virtue ethics and deontology will be explored whilst investigating current limitations within company policies and provide alternative solutions to resolving the matter at hand, such as termination and other disciplinary actions. Finally, the report will conclude with a final recommendation and explore appropriate reasons to resolve the matter. 5

Dimitra Katsaitis Case Study Analysis 102660655 CASE STUDY SCENARIO OVERVIEW Management of Downcity motors are in deliberations regarding the future of one of their best salespeople, James Kenton, within the company. This discussion is regarding an opinion post made, expressing a poorly organised Mercedes Benz launch event in addition to an attached a photo dawning the company logo in the background and the post itself had minimal privacy restrictions. Some form of disciplinary action is required, accompanies by a much-needed update within the businesses current social media policies (Watson & Lopiano 2016). Ultimately, the responsibility of Kenton’s fate within the business falls on Susannah, who will need to consider any Value Judgments, Ethical Implications and Cognitive Bias’s which may occur throughout deliberations. STAKEHOLDERS DELL – PRESIDENT DOWNCITY MOTORS Dells reputation as president has been placed in jeopardy by the incident. External stakeholders, such as Greg Coucher, have implied that the company needs to keep a tighter rein on staff (Watson & Lopiano 2016), causing Dell to assess Kenton’s merit, desirability and praiseworthiness. This is known as Value Judgment, as Dell has passed judgment on one action rather than considering the entire value of the individual (Werner, Dahlhaus & Levarie 1983). JAMES KENTON – SALESPERSON Kenton has taken to social media to express his opinion after his concerns were not heard in his workplace. In doing so James has represented Downcity in a negative light and affected its notoriety, which may result in loss of business. Kenton exhibits ethical egoism, as his act 6

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Dimitra Katsaitis Case Study Analysis 102660655 produces more happiness for himself that other alternatives, then it is the right this to do (Shafer-Landau 2013). SUSANNAH – GENERAL MANAGER Susannah is faced with the decision to discipline James Kenton and is subject to a range of attitudes, from her father, to other staff and Toby Diller, head of HR. Whilst she should take their opinions into consideration, she must avoid any cognitive bias’s such as the bandwagon effect, referring to an unconscious tendency to align someone’s thoughts with that of other individuals. This outcome is potentially a powerful source of cognitive distortion (Psychology Today 2019). BACKGROUND It is quite clear that social media platforms such as Facebook and Twitter are practised for the purpose of communication. One of the most important benefits regarding use of social media is the online distribution of data and knowledge amid various groups of individuals (Dowerah Baruah 2012). For such reasons businesses must also adapt with change and ensure their policies are regulations are renewed accordingly as to avoid numerous risks, from misuse of company resources to conflict of interest and disparagement of others (Stallings 1990). Additionally, the subject of implementing social media policies within a company is especially testing, due to overlaps in ethical and compliance issues (Jensen 2015). Without initiatives to effectively identify, appraise and manage its approach to social media and its range of tools, businesses face exposure to acts which may damage the company and even lose out on many opportunities. Some damages businesses may face to exposure of negativity through social media are: o Loss of Finances o Effects on Reputation o Deviation of Management Energy o Organisational morale and disruption 7

Dimitra Katsaitis Case Study Analysis 102660655 o Defamation o Loss of employee o Decreased performance and o Reduced Safety (Aula 2010) When a company is in the process of determining a social media policy they must consider and scrutinise all possible implications they may face, particularly ethical ones. A major ethical exposure to acknowledge is integrity risk, which focuses on the environment which places employees at risk of behaving or making choices that may lack integrity (OPI 2019). When a staff member uses social media in an irresponsible manner, whether it be on the business’s behalf or via their personal profile, it could undermine the businesses responsibility to ethical practice and open it to integrity risk (Wood 2000). Businesses also hold a corporate social responsibility and are accountable in evaluating their decision-making processes and the outcome of their choices on the external social system in a way that will not only achieve social benefits but traditional economic gains they pursue (Carroll 1999). They have a moral duty to ensure employees, customers, the local community and environment are protected against any possible risk which may arise. Additionally, an updated policy will protect a company’s reputation, thus improving their image with its external stakeholders and possible investors. ALTERNATIVE SOLUTIONS Before making any high stakes business decision, it’s imperative that all possible consequences concerning ethical and moral implication are considered. As the General Manager, it’s your duty to ensure equilibrium is maintained throughout Downcity, its employees, customers and all internal/external stakeholders. Therefore, the most probable calls to action must be evaluated to protect all involved. These options are as follows: 8

Dimitra Katsaitis Case Study Analysis 102660655 IGNORE & IMPROVE POLICIES The first option to consider, is ignoring the situation and establish a firm set of company social media policies. As per HR’s advice, the current policy has not been updated to cover any breaches through social media and the current code is vague (Watson & Lopiano 2016). Therefore, the best approach is to avoid confronting Kenton and revise the social media policy as to avoid any possible legal implications or other disputes, which may cause further hardship for Downcity. This approach, best exhibits utilitarianism, which claims that a decision is morally correct if there is a greater majority of individuals happy ( Stanford 2017). On the other hand, ignoring the issue may cause the company to look weak and slack on discipline, which could affect its reputation with other stakeholders, such as Greg Coucher, who has already expressed concerns. Additionally, this approach overlooks Kenton’s motivations and intention, which must be considered as this is a second offense (Adams 1976). TAKE DISCIPLINARY ACTION A second option is taking disciplinary action, such as issuing a written warning. With the current policies requiring improvement, issuing the warning will allow time for necessary updates whilst creating a deterrent for other employees who may consider similar actions in future. By issuing a warning, Sue is practicing virtue ethics, which focuses on the development of positive character traits, such as honesty and dedication (Adams 1976). This can be achieved by Sue influencing Kenton in being more loyal to Downcity by giving him another chance, thus maximising the best out of her decision. Kenton will have the opportunity to explain his reasoning and motives as his concerns were not taken into account, thus feeling “guilt by association”, the concept that individuals are judged by the company they keep (Moore & Parker 2017). Therefore, the pair can reach a mutual understanding and move forward whilst maintaining their relationship. This option also protects stakeholders as Kenton is an exceptional salesperson, leveraging in many sales for the business thus revenue for investors. 9

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Dimitra Katsaitis Case Study Analysis 102660655 It must be noted that this approach also has its limitations. As deontology is based on the morality of an action being dependant on its consistency with moral norms (Gawronski & Beer 2016), it must be considered that individuals may differ in such norms, which may cause inconsistencies when disciplining staff members. TERMINATION The final option which can be taken is terminating Kenton’s employment. As Kenton had already been spoken to regarding a similar instance to do with comments on social media, Downcity would have supporting reasons for termination. Imploring this option will set precedent for any future staff who may consider making similar defamatory posts. Terminating Kenton will show strength and control in Downcity, thus maintaining its reputation with its stakeholders and investors. On the other hand, Kenton’s actions seem to be justified by other staff, such as Rachel Evans, who stated “he didn’t say anything that wasn’t true. He just added some sarcasm. We all thought the refreshments were a little but off-brand” ( Watson & Lopiano 2016). The decision to terminate may cause resentment and delinquency within staff, introduce negativity in the business and decreasing morale, which could cause long term issues such as resignations or further bad-mouthing of management and the company (Aula 2010). Therefore, the theory of moral relativism must be examined. It is defined by the idea that what is right and wrong depends on and is determined by one’s group or culture (Moore & Parker 2017). Like Rachel, many staff members agree with Kenton’s comments and so termination could cause more harm than good for the company. 10

Dimitra Katsaitis Case Study Analysis 102660655 RECOMMENDATIONS Susannah should take disciplinary action towards Kenton. As the current social media policy is vague and subject to interpretation, the company cannot terminate Kenton’s employment as it may be subject to possible legal action. In this scenario, the best course of action would be to meet with Kenton, allow him to express his point of view and discuss why the matter is being conceived as severe misconduct. As this was Kenton’s second offence, it is integral that Susannah explain that the company moving forward will not tolerate such insubordination and advice Kenton of the new social media policy which will be in effect. This allows the company to remain consistent and committed, which avoids cognitive dissonance, the case of possessing inconsistent thoughts, approaches or beliefs, particularly in relation to behavioural decisions and changes in attitude (F. Welles 2018). In this scenario, the company will appear to have strength and control to its external stakeholders whilst setting a precedent for possible future incidents, thus avoiding future implications which may arise. In addition, this course of action will allow for Kenton to save face and maintain his prestige within the company, as the warning will be issued in private. This will influence his opinion of Susannah and to respect her choice to not terminate his employment. 11

Dimitra Katsaitis Case Study Analysis 102660655 CONCLUSION To conclude, it is imperative the correct disciplinary actions are taken against and employee who has breached any company policy. For this to be implemented successfully, companies must ensure that they have well written and reviewed policies and codes of conduct, thus being sure that employees understand what is expected of them in the workplace. These behavioural requirements should be brought to the attention of employees and be evaluated consistently. Finally, the employer must implement reasonable and dependable procedures in regard to handling complaints and incidents within the workplace as to ensure employees have the help of impartial hearing if required. 12

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Dimitra Katsaitis Case Study Analysis 102660655 REFERENCE LIST Adams, R 1976, "Motive Utilitarianism", Journal of Philosophy , vol. 73, no. 14, pp. 467-481. Aula, P 2010, "Social media, reputation risk and ambient publicity management", Strategy & Leadership , vol. 38, no. 6, pp. 43-49, viewed 16 September, 2019, <https://www.emerald.com/insight/content/doi/10.1108/10878571011088069/full/html>. Carroll, A 1999, "Corporate Social Responsibility", Business & Society , vol. 38, no. 3, pp. 268- 295, viewed 17 September, 2019, <https://journals.sagepub.com/doi/abs/10.1177/000765039903800303>. Dowerah Baruah, T 2012, "Effectiveness of Social Media as a tool of communication and its potential for technology enabled connections: A micro-level study", International Journal of Scientific and Research Publications , vol. 2, no. 5, pp. 1-10, viewed 11 September, 2019, <http://citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.1.376.5533&rep=rep1&type=pdf>. F. Welles, J 2018, "Cognitive Dissonance Revisited", Neuroscience and Neurological Surgery , vol. 2, no. 1, pp. 01-01. Gawronski, B & Beer, J 2016, "What makes moral dilemma judgments “utilitarian” or “deontological”?", Social Neuroscience , pp. 1-7, viewed 11 September, 2019, <https://www.ncbi.nlm.nih.gov/pubmed/27745112>. Jensen, K 2015, "What’s Social About Social Media?", Social Media + Society , vol. 1, no. 1, p. 205630511557887. Kaur, P, Dhir, A, Rajala, R & Dwivedi, Y 2018, "Why people use online social media brand communities", Online Information Review , vol. 42, no. 2, pp. 205-221. Moore, B & Parker, R 2017, Critical thinking , 12th ed, McGraw-Hill Education, New York, p. 176. Moore, B & Parker, R 2017, Critical thinking , 12th ed, McGraw-Hill Education, New York, p. 401. OPI 2019, Integrity Risk Management , viewed 17 September, 2019, <https://www.ibac.vic.gov.au/docs/default-source/toolkit/integrity-risk-management- toolkit.pdf?sfvrsn=6>. 13

Dimitra Katsaitis Case Study Analysis 102660655 Psychology Today 2019, Cognitive Dissonance | Psychology Today Australia , viewed 17 September, 2019, <https://www.psychologytoday.com/au/basics/cognitive-dissonance>. Stallings, R 1990, "Media Discourse and the Social Construction of Risk", Social Problems , vol. 37, no. 1, pp. 80-95. Stanford 2017, "Deontological Ethics", Standford Encyclopedia of Philosophy , Stanford, Stanford. Stephen, A 2016, "The role of digital and social media marketing in consumer behavior", Current Opinion in Psychology , vol. 10, pp. 17-21, viewed 11 September, 2019, <https://www.sciencedirect.com/science/article/pii/S2352250X15300014>. Watson, M & Lopiano, G 2016, Case Study: Should He Be Fired for That Facebook Post? , viewed 11 September, 2019, <https://hbr.org/2016/03/case-study-should-he-be-fired-for-that-facebook-post>. Werner, E, Dahlhaus, C & Levarie, S 1983, "Analysis and Value Judgment", Notes , vol. 40, no. 2, p. 281. Wood, D 2000, "Theory and Integrity in Business and Society", Business & Society , vol. 39, no. 4, pp. 359-378. 14

Case Study Analysis 102660655 Dimitra Katsaitis

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