DECISION MAKING in business is neither a walk in the park nor an easy choice between black and white. Business leaders and decision makers are often confronted with gray areas—where either of the path or choice that they take will have a positive effect and repercussion. This is most commonly known as a dilemma which is not just a test of the strategic stance of the organization, but also a test of character among individuals responsible for making decisions.
One of the classic conundrums that companies face is choosing between profitable and being ethical. While it is pretty much obvious that the very reason of the business’ existence is profit, it is still up for the decision makers to choose being ethical if they are gearing towards a sustainable growth. One perfect depiction of this dilemma is when the company has to decide whether to do a product recall of faulty products or to forego it so as to not to hurt short term profitability. If the company chooses to do what is right (recall the batch of defective products), the profitability is at risk, but will have a long-term positive effect to the image and reputation of the brand. Personally, the decision-making in this particular situation for well-established brands (and multinational companies) is relatively easy as compared to start-ups and small to medium-sized businesses. Aside from the fact that they can easily recover from losses inflicted by the recall, choosing short-term profit over being ethical could pose problems on their longevity and continued market growth.
The organization’s “purpose” is also at risk when it is to deal with the dilemma of profit vs ethics. Imagine a company which has already built a reputation and identity for sustainable sourcing of raw materials. When the demand surges, a pressure could surface resorting to partner with suppliers which may not meet the same ethical standards to lessen the production cost. Most of the decision makers of the organization would choose to maintain or grow the market share over sticking to ethical sourcing practices. Yes, it is the most practical thing to do, but not until when stakeholders and investor discover this unethical business practice– and will resist it, which will then create PR backlashes, and will further inflict adverse effects to the company’s image and reputation.
Another dilemma worth noting is choosing between innovation and tradition. Companies nowadays must be innovative in all of the aspects of business operations. They have to adapt with the technology and production trends to keep up with the ever-changing and evolving customer preferences and increasing market demands. That is why, being capital intensive is most practical thing to do, but the sad part is it will alienate long-term employees. If the organization chooses to stick with the traditional approach, hence retaining employees, productivity level, as well as the quality of the product might be sacrificed. But then again, there are practical ways to make it easier for organizations to decide on this very difficult situation. For instance, offering early retirement plans to employees won’t hurt the business too much instead of sticking with their traditional practices.
Ultimately, navigating business dilemmas with thoughtful analysis and strategic insight is essential for sustainable success in today’s competitive landscape.|
