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A Manager's Ethical Dilemma. The Sears auto scandal brought about a multitude of ethical issues, but the number one issue is that Sears over looked their integrity, values and just focused on increasing profits. Since the goal of the company was to maxim

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A Manager's Ethical Dilemma BSAD460 Section: E1WW Assignment 4-2 April 16, 2012 Introduction Sears, Roebuck, and Company (Sears) opened its doors in the 1800s and expanded rapidly due to the goods and services it provided. During Sears' rapid growth, it was also gaining an impeccable reputation with the public. Sears had a large U.S. market share until the 1980's when it had to start competing with Wal-Mart. Even though Sears attempted to regain some of that market share by lowering prices, their earnings kept declining. It was in 1991, when Sears introduced its productivity incentive plan, which caused Sears to not only lose more revenue but the public trust. Add to that, lawsuits which began with the State of California to be sold by 41 other states due to complaints of faulty workmanship and overselling products and services in their auto care centers which customers did not need. (Trevino & Nelson, 2007). Factors that contributed to alleged unethical conduct Sears began focusing at every level of the company on how they would increase profits in order to stay competitive with Wal-Mart and other retailers. ...read more.


In reason, the employees of Sears were degrading the principle of deontology. The employees' duties were to serve their customers and to provide them with honest findings about the repairs their cars needed, but the productivity incentive plan, reassured them to act unethically. To reach their quotas and to receive their commission, it was necessary for the advisors and the mechanics to overcharge customers for unneeded repairs and squander to save time. The aftermath for Sears was ample, many states had lawsuits against Sears and the license for the Sears auto center in California was in jeopardy. Because of the scandal, Sears lost a lot of dedicated customers and the company's reputation was negatively impacted. As a short-term punishment, in 42 states, Sears had to pay a multimillion-dollar settlement and in California, they were placed on three-year probation. (Trevino & Nelson, 2007). The responsibility of the Sears auto center was to serve its customers with honest service repairs. ...read more.


The company did not even accept that their employees committed fraud by deceiving customers and making them pay for unnecessary repairs. Also, the letter from the Sears mechanic clearly shows that employees are still under pressure to meet quotas and nothing really changed in the company. The employee was threatened termination if he did not increase his production level, even though he had positive feedback about his production in the past. The company did not even take the real cause of the ethical dilemma; they did not eliminate their commission based compensation plan for mechanics. Mechanics are still motivated by meeting sales quotas and how many parts replaced. In 1992, the big question asked was what was going to be the long term impact from this scandal. If I take today's current events in business scandals, I think I can sum it up as a huge impact. Sears decided in one campaign to increase production and revenue and capitalize on greed. Today, it is not uncommon for companies and organizations to have policies on ethics, behavior and business relations. ...read more.

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