Description
Topic: The Sorry Side of Sears http://www.searsscrewscustomers.com/newsweek.htm
This paper on Ethics must have a table of content, appropriately sub-headed, paragraphed, and page-numbered double-spaced on 12in font. It must be no more five (5) pages long, including charts, tables and appendix (where applicable); and other appropriate citations (bibliography). students are required to review this article and be able to comment on ethical issues they are able to identify. They should also be able to discuss specific ethical issues from the article and make recommendations for improvements.
* Notice: I have done the assignment but I need somebody to add some the tables and charts.
The paper must include:
An introduction;
Main body; and
Conclusion.
The conclusion MUST include implications for managers and business.
textbook is Business Law, Legal Environment, Online Commerce, Business Ethics, and International Issues. 9th Edition. PEARSON Henry Cheeseman.
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The Sorry Side of Sears
Introduction
The article The Sorry Side of Sears focuses on the scandal that rocked Sears while trying to
manage its bad debts. In a bid to reduce its bad debts, Sears had approached its customers who
had declared bankruptcy and gotten them to commit to reaffirmations to continue repaying their
debts so as to avoid repossessions. However, while this practice is not illegal, Sears failed to file
many of these reaffirmations with the court which is a required procedure. An investigation into
the matter revealed that Sears had committed this violation to 187,000 customers and they had
collected a total of 110 million dollars without filling these required reaffirmations with the court
(McCormick). Notably, the scandal revealed that there were ethical issues of fraud, coercion.
Fraud
Sears acted in a fraudulent manner when the company failed to file the reaffirmations with the
courts. Fraud is an act of deception meant to work in the favor of the fraudulent party. In this
case, Sears sought not to involve the courts in their dealings with their customers. The courts are
supposed to be like the regulators of such reaffirmations to ensure that the client is not being
oppressed and that he or she receives a fair deal. Therefore, in excluding the courts from the
process, Sears managed to implement these contracts without worrying about oversight. Their
actions can be deemed as fraudulent since the intent of not filing these contracts with the courts
was to prevent them from being questioned by a judge (McCormick).
Coercion
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Sears also used coercive force to get its customers to agree to the reaffirmation contracts.
Coercion is threatening to use force so as to induce a person to perform in a manner favorable to
a party which would otherwise not have happened should the coercive force not have been used.
Sears was approaching its clients that had declared bankruptcy and urging them to agree to
reaffirmation contracts or else their property would get repossessed. This was the case with
Francis Latanowich who despite his debt being wiped by the courts, was still forced to pay Sears
which was straining his daily income and preventing him from providing basic necessities to his
family(McCormick). Even the courts viewed the practice of reaffirmations as being unethical
(McCormick). The threats issued by Sears prevented many of its customers who had declared
bankruptcy from having a fresh start.
Improper Management
Another ethical issue is the culture at the company that prevented managers from reporting
problems to higher management. Many of the branch managers tolerated the illegal actions that
were being undertaken by the company’s legal department because they did not want to give bad
reports to their superiors. The culture in the company was that managers who gave bad reports
would usually face negative consequences as they were deemed as non-performing. Therefore,
many of these managers allowed these fraudulent activities to continue without reporting them to
the higher management.
Conclusion
The scandal at Sears showed various ethical flaws that were caused by the company’s desire to
succeed in tough economic times. This case can be used as a lesson for management and
businesses on how to deal with goal setting and analyzing reports. Managers should ensure that
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they set achievable goals to prevent pressuring their employees from engaging in unethical
practices to meet these goals. Further, they should also encourage open communication to ensure
that the employees can report even bad results without fear.
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Works Cited
McCormick, John. “The Sorry Side Of Sears.” Newsweek, 21 Feb. 1999,
www.newsweek.com/sorry-side-sears-168892.
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