1.1 This question concerns the links between business ethics, reputation at corporate level and organisational success. Consider the following observation from the case study, then answer the question that follows:
When contacted about the matter, the executive directors of Dithaba said that the company cannot accept any responsibility for the bridge’s collapse and referred all queries to the municipality.
Assuming it is subsequently discovered that Dithaba Construction is indeed responsible for the collapse of the bridge, discuss the impact that the board’s denial of responsibility could have on Dithaba’s ethical reputation and its organisational success. Your answer should include examples of factors that could threaten organisational success. (Refer: Chapter 9)
The board's denial of responsibility for the collapse of the bridge could have a significant impact on Dithaba's ethical reputation and organisational success.
Firstly, from an ethical perspective, denying responsibility for a serious incident such as a bridge collapse demonstrates a lack of accountability and transparency. This can erode trust and credibility with stakeholders such as customers, investors, employees, and the general public. As a result, Dithaba's reputation as a trustworthy and ethical company could be severely damaged, leading to a loss of business and potential legal and regulatory consequences.
Furthermore, from a business perspective, denying responsibility could create a negative perception of the company's leadership and decision-making processes. This could lead to a decrease in employee morale, as they may feel unsupported or unwilling to take risks in the future. Additionally, investors may become wary of investing in a company that lacks accountability and transparency, leading to a decrease in funding and potential financial instability.
Overall, the denial of responsibility by the board could threaten Dithaba's organisational success by damaging its reputation, lowering employee morale, and reducing investor confidence. It is essential for companies to take responsibility for their actions, address issues transparently, and work towards rebuilding trust with stakeholders to ensure long-term success.