Introduction
Sears, Roebuck and Company has been in operation for nearly 111 years for which it has observed strict adherence to law for the better part of that period. This has seen the company grow over the years to the level it is covering almost all states within the United States of America. Though there have been a number of challenges, the company has been able to overcome most of them. This has seen the organization experiences various successes in its operations. The success story of the company can be attributed to the strong culture it has observed for the better part of its lifespan. The firm’s mission statement and objectives have always been clear thus guiding employees in their day to day operations. This has also contributed to the company’s success story.
However, recent events have shown that the company’s employees have lost track of the organizational culture that the organization has nurtured for long. This puts to question whether the employees are aware of the company’s mission and vision. The objects of the company are also put to question as well as the company’s ethics that is supposed to be held in high esteem. Sears, Roebuck and Company’s employees have systematically and secretly violated the federal laws for the last decade. A lot of malpractices have been noted in the employees’ operations leaving the company exposed to risks. Interest in the current situation is a scandal with the legal ethics that the company is faced with. This is going to be the worst scandal that has ever faced this company since its inception.
The United States department of justice is weighing a number of options for the action to take. Civil penalties have been proposed as well as criminal prosecutions on the company in one part and its employees found guilty of the offense. Preliminary investigations revealed that communication breakdown led to the situation the company is in. Reporting lines were not clearly followed and rules not adhered to. Intentional omissions were the order of the day with various responsible officers choosing to conceal vital information that could have helped arrest the situation. Every employee needs to take individual responsibility and ask himself/herself where the rain started beating them.
Discussion
As discussed above, Sears, Roebuck and Company is faced with a legal and ethical scandal that is the worst in the company’s history. For the 111 years that the company has been in existence, there has never been a scandal of such magnitude and the top executive officer was not in a position to understand how such a violation of the law could go on for a long time without anyone bringing it to his attention. The scandal could cost the company a total of $500 million in terms of criminal charges and claims compensation for the ethical lapses. The company was engaged in various activities, the most notable of which is the debt collection scheme.
Things went downhill when in 1996 a disabled security guard named Francis Latanowich presented a hand written yellow legal pad to the Boston Bankruptcy Court requesting to reopen his case afresh. Earlier on, his debts had been wiped but Sears asked Latanowich to repay $1,161 for general merchandise, auto battery and TV that he still owed. His argument was that the amount he was asked to pay way above his ability.
It later turned out that Sears had emailed Latanowich an offer of $28 per month in his account with the promise that they would not take back the properties he owned them. Such a deal is referred to as reaffirmation and has to be filed with the courts. This allows the judges to review whether the debtor is in a position to repay as scheduled. Sear, Roebuck and Company did not comply with such a requirement thus did not file the reaffirmation agreement with any court. The judge handling the new case wanted to understand the reasons why Sears did not comply with the requirement in reaffirmation agreement and file with the court. This clearly shows that there was an intentional omission of business ethics in the operations of the company.
The organizational culture, philosophy of the management and ethics of the entire company are important in its day to day operations. The top management should always set the tone for how the whole company will run its day to day business. In the event that the management in place has a philosophy that is based on ethical practices, the leaders are capable of directing the employees by example thus guiding them in various decisions they make. The employees at Sear systematically violated the federal laws that were in place through their dubious actions. This means that top management was not able to inspire and guide the employees in decision-making which left out crucial information that could have helped in averting such a problem.
The company’s workers themselves were not ethical as they lacked honesty and integrity in their work. This would have enabled the employees to make better decisions that would have increased their productivity and morale at work. Employees are supposed to complete their work in an honest way that has integrity. This will make the whole organization benefit and avoid scandals that could lead to legal actions against the organization. Corporations that require their employees to do business with high standards of ethics usually perform at higher levels with the employees staying loyal to the organization for longer periods.
Recommendations
Under the circumstance that the Sear, Roebuck and Company is in, a number of recommendations will ensure that such omissions and blatant disregard of the law are avoided. It is recommended that the management team within Sear, Roebuck and Company maintains high standards of ethics in its operations. They must have a clearly defined management philosophy that is clear to all employees. They must also show ethical practices in their behavior that will guide other employees in their decision-making. They must strive to create long lasting effects that are positive and demand high standards of business ethics from their employees too. Continuous training and reminders must be ensured within the organization to eliminate laxities in the operations of the company. Proper control measures must also be ensured with high levels of accountabilities so that vital information is not left out that might injure the image and operations of the company.
Other Issues
The company has to include other issues such as bureaucracy in its operations to ensure that the checks and balances are properly adhered to. Those who have been found guilty of the current situation should also be treated appropriately so as not to encourage other employees who may be inclined to participate in such practice in the near future. Either, proper communication channels should be set up where employees will be able to consult whenever they are in doubt. The management should also ensure that the current and future employees are properly trained on the business operations and that they are well equipped with the necessary knowledge on the rules and regulations that govern their business. This ensures that the company will not face with such scandals that will ultimately affect its profits.
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