Comet and Their Treatment of Employees - Case Study Example

The paper "Comet and Their Treatment of Employees" is a brilliant example of a case study on business. Comet was a well known electrical retailer based in the United Kingdom. The company sold electronic items and related services to customers. Comet was hit badly the financial crisis of 2008 because much of its business was dependent on housing electrical products and housing sales declined significantly after the crisis. The company was sold to Op Capita which is a private equity firm in 2011. However, just a year later the company went into administration and in December 2012 all Comet stores were closed.

The company was sold at a very low price to the private equity firm and it was hoped that the firm will return the company to profitability. But this did not happen as Comet went into administration just a year later. The way in which the company announced that it was going into administration was highly unethical because it came to many employees as a shock. They were not given any heads up before the announcement of the news and, therefore, they were not in a position to prepare themselves beforehand.

It is also alleged that the private equity firm made a profit of around 60 million from Comet (Union of Shop, Distributive, and Allied Workers, 2012). The company didn’t pay anything to its employees who were left on their own but profited greatly from going into administration. Around 5000 employees lost their jobs just before the Christmas season without any prior notification (Hawkes, 2012). People expected that that company used some of its money to pay benefits to employees but this didn’t happen. Employees were laid out in an ethical manner without any humane consideration for their futures. Thousands of employees were left on their own on the brink of the Christmas season.

The treatment of employees by the owners of Comet was also criticized because initially, the Op Capita promised to keep the company running for 18 months (Kollewe & Wood, 2012). The private equity firm did not keep this promise and went into administration just after a year which made its motives suspicious. All company employees were expecting that their jobs were safe for another 6 months for sure, and so the decision of filing administration came to them as a surprise. The shock stricken employees of the company did not get any financial relief from the company as they lost their jobs abruptly.

Comet should not have gone into administration just a year after its purchase because the previous owners had provided Op Capita with significant working capital and also took care of the outstanding loans of the company (Kollewe & Wood, 2012). This was the main ethical issue because morally Op Capita should have taken care of its employees and should have continued running the company as promised. Still, the owners took only their profits into consideration and sacrificed the employment of thousands of ordinary workers. The way with which the company handled the situation was extremely unethical because owners should have given prior notices before terminating the employment of its workers, even though the owners were in a position to do so.