Different Moral Standards - Essay Example

Different Moral Standards Step I: Understand the moral standards People adopt different moral standards based on their own culture, norms, goals, values and beliefs. This affects the problem and how the conflict can be resolved. Grand Metropolitan Company (GMC) of Great Britain was in the business of alcoholic beverages and betting parlors. A society may think selling alcoholic beverages is against their norms but here the values were entirely different from the company they took over and their only goal was to maximize profits. GMC took over because their sales had declined and they expected to capture a different segment. They believed that if they entered the consumer market they could sustain the changes. It was an unfriendly take over and they picked on Pillsbury because its product range would fit other social changes taking place. They took advantage of the changing social norms and values. Since women were entering employment, they believed that they could sell packaged food very well. GMC was concerned only with increasing profits and this was communicated to the Pillsbury-Green Giant Group. Green Giant would have to relocate to Mexico in order to ensure profits. Pillsbury accepted the deal against a payment. In this case the moral standards of three groups differ with each other and the fourth to be considered is that of the local people of Mexico. It is difficult for Green Giant not to take any action because in remaining passive they would be harming the interests of the stakeholders. The conflict has to be understood and resolved by all parties involved. The goal of GMC was profits no mater how it was achieved. They were least concerned if the personal values of any group would have to be compromised with. They valued profits and they could apply the management style of ‘light but firm hand on the throat’ to achieve this end. Using this style would not make them feel guilty of committing a wrong. This clearly demonstrates that they give priority to profits over any other values. The goals of Giant Green had to undergo a change to swim along with the demands of the new company. The cultural and religious traditions of both the groups differ which affects the decision making process. GMC is a British company while Green Giant has its roots in Minnesota and California. Since the economic situation of GMC had deteriorated, they were willing to compromise on their values as this gained priority. Thus an ethical solution become imperative which causes the least harm and maximum good to the different groups of people involved in this case. Step II: Recognize the moral impacts The goal of Green Giant-Pillsbury was to maximize profits but their norms differed. The values of the executives of the Pillsbury group differed from the GMC. When Green Giant was threatened with dire consequences if they did not increase profits quickly and substantially, they started looking for cheaper locations. This gave rise to several concerns – economic, social, environmental and ethical – as any action can benefit some, harm others, or deny rights to a certain group. Giant Green considered relocating to Irapuato. The moving of operations to Irapuato, Mexico would harm the people at California. While Mexico would gain as the people would get employment and that too at a wage rate higher than that set by the government, it would create unemployment at Salinas, California. The laid-off workers at Salinas would have no job oppurtunities. At the same time, the question of moral standards arises in Mexico as some would get the minimum wage as per government norms but others employed by Green Giant would get a higher wage. Apart from the economic harm and benefits, there would be the environmental impact of shifting operations. The new proposed location in Mexico is an arid region with water in short supply. Green Giant would require drilled wells over 450 feet deep for its operations. This would inconvenience the local people as the deep wells 20 and 30 feet would dry up if Green Giant moved to that area. Their rights to potable water would be denied if Green Giant moved there. The river water could not be used as it was already polluted. Socially the Irapuato region would benefit through high taxes that would be paid by the Green Giant Company. This would enable the improvement of the local infrastructure and the education system. The local people hence benefit by this action to relocate. At the same time, the cost of living would increase as the land would now grow cauliflower and broccoli instead of corn and beans. This would harm the interests of the local people. This move will benefit both the countries economically. Exports from both countries to each would increase. Social Group Benefits Harms Denial of rights Residents of Irapuoto Higher income, improved standard of living, improved infrastructure, better education system One group would getter higher wages than others, rise in the cost of living. Six thousand acres of land now used for growing beans and corn would be used for cauliflower and broccoli thereby increasing the prices of corn and beans. Potable water Government of Mexico Higher taxes, higher exports to the US, industrialization of the area and the nation as a whole, import of technology. Residents of Salinas Loss of employment, no job oppurtunities for laid-off people. The US Government Improve in exports, improved competitiveness in the world economy. Green Giant Savings to the tune of $13200 per worker per year Step III: Define the moral problem Is it justified for Green Giant to relocate to Mexico merely to enhance profits which are also not assured as the per capita consumption of vegetables is not growing in the US, when it would lead to unemployment of the workers at Salinas, deny the residents of Irapuato of potable water and increase their cost of living? In addition the workers at Salinas and Irapuato are poor and uneducated, unable to fight for their rights. There will be no changes to the product although the company would benefit and to some extent the region of Iraputao would benefit but at the cost of certain rights and facilities. The above analysis clearly suggests that most of the benefits would be acquired by Mexico and its people while the residents of Salinas would be denied the jobs they had been at for the past 30 years. The two nations would however benefit from comparative advantage. In addition, it is believed that in the agricultural sector, improved technology and larger investments do not necessarily mean better skills, lower wages and higher profit margins, as is expected from Irapuato. The employees currently with Green Giant at Salinas would be the most affected. The area has excellent soil and weather conditions and agriculture was the only means of livelihood for the people. The area could ship fresh vegetable to the people in the rest of the country. When Green Giant moves out 1400 workers would be affected. Step IV: Determine economic outcomes To arrive at a moral decision whether to relocate to Mexico or not would have to be arrived at after taking into consideration the net balance of benefits over costs for the full society. This is known as the Pareto Optimality. It is based on the belief that the people must express their preferences for the goods and services they most want. Capital, labour and land are the resources that belong to the society. It is assumed that all stakeholders and customers are fully informed of the situation. According to the Pareto Optimality any action should be able to deliver the greatest possible economic benefits at the least possible economic costs. This concept is known as ‘the more is better than less’. 1. All markets are fully competitive: In the case of Green Giant, the demand is substantial and is expected to grow due to the lifestyle changes brought about women being employed outside the home in Great Britain. It is difficult to obtain profits quickly and substantially in the frozen vegetable industry because competition is fierce and people are no more concerned with brand loyalty. Even when Green Giant was the best known trade in the market it had only 14 percent share of the total market. The produce from Mexico is to be exported to the US and the per capital consumption of fresh vegetables was not growing. Consumer advertising or product differentiation through prices would not increase the market share. 2. All laws must be obeyed: The best ethical decisions are those that comply with the legal requirements. In this case all legal requirements at both ends would be complied with. In fact they would be receiving the support from the local authority. Nevertheless, the goals, values, norms and beliefs of each of the groups have to be combined in such a manner that all are equally benefited. 3. All costs have to be included: The decision to relocate to Mexico is based on the monetary factors with the ultimate goal of enhancing profits. Since they cannot increase sales through different means if they continue at Salinas, they are considering relocation where the costs would be much cheaper. They have taken into account the savings in wages and the transportation costs but they have not considered the societal repercussions and the costs that may have to be made when they lay off people at Salinas. There are 1400 workers currently at Salinas and this may attract huge compensation which has not been considered in choosing to relocate. Since all the three conditions have not been met, Pareto Optimally has not been achieved. Hence this is not an economic solution to enhancing profits at any cost. The economic theory does not provide a sufficient basis to arrive at a decision. Step V: Determine legal outcomes In moral analysis this refers to the laws adopted by the members of the society to regulate the behaviors of the members. the goals, norms, values and beliefs of all the stakeholders have to be taken into account before arriving at a decision. Firstly, there is inadequate information whether all members of the all the societies are aware of the possible shift and the consequences. If Green Giant suddenly shuts down the unit at Salinas without prior information to the workers, it may be infringing on their rights. Secondly, the people at Irapuato may not be aware of the water problem that would arise if Green Giant stars operations there. The idea of economic output is to determine what would be beneficial to the full society. In this both the groups could be adversely affected. The people at both the places are from agricultural background and uneducated. They may not be in a position to exercise their rights even if legal provisions are there. They may not be aware that they can claim compensation from the company when it shuts down operations. Green Giant would have to acquire 6000 acres of land but whether the land belongs to the government or private parties, whether the rate that they would offer is the market price, whether the individual parties have the right to sell, all these factors are not clear. Merely taking the consent of the local leaders would not suffice in this case. Besides, some may be willing to sell the land but the adjacent land owner may not want to give up his current business of corn and beans. Hence this would result in inconsistent representation and would not be right and fair and just to all. The laws enacted by the government may not be fair to all stakeholders. Step VI: Ethical duties The case of Green Giant has neither sufficient economic or legal solution. This makes it important to analyze it through the ethical perspectives. This refers to the obligations owed by the members of the society to other members of the society. Social interest has to be above self-interest. The ethical implications outline the rules and conditions under which some very specific instances of lying, cheating and stealing would be permissible. Based on the six universal rules it can be decided whether the moving of operations to Mexico would be an ethical decision. 1. Personal virtues: The GMC has clearly demonstrated self-interest with least concern of the repercussions on the society at large. It is not an honest, open and truthful decision. They are not being just and fair in demanding immediate and substantial profits from Green Giant. Their management style itself is oppressive. This in turn is pressurizing Green Giant to take steps like relocation which will ultimately be an unfair practice. Personal Virtues should make us proud of our actions but when Green Giant would be exploiting and causing oppression to the poor and uneducated people, they can never at any point in life be proud of their actions. They may enjoy monetary and corporate benefits for a while, but since it is not an honest, open and truthful act, they can never be at peace. 2. Utilitarian benefits: an act is right if it leads to greater net social benefits than social harms. This implies greatest good for the greatest number. Suppose Green Giant does not move out of Salinas their contribution of profits would be less than the expectation of the parent company. In the process however, they would cause harm to the poor, uneducated and powerless workers at Salinas. They have not considered compensation for the workers who would be laid off. This amounts to exploitation and causes no good to that section of people. Secondly, the water system at Irapuato would be disturbed and Green Giant has made no commitments that they would assist financially is setting sewage treatment plants. The cost of living for the local residents would go up. The only benefit from the relocation would be to the company owners while all other groups of people would have to compromise. It thus can be concluded that the decision to relocate to Mexico is not a fair and just decision as it based on self-interest, does not protect the legal rights of all stakeholders, is not an economically viable proposition, and hence not a morally right decision. Read More