Challenges Narinex Company Facing - Case Study Example

Running Header: Business Ethics Student’s Name: Instructor’s Name: Course Code: Date of Submission: I have read and understand Curtin Policies regarding academic integrity. This assignment has been submitted to Turnitin and has a minimum of 80% original material. Should the C-suite have a green seat? Introduction Decision making is vital when it comes to important matters in running of businesses. Each decision made is usually followed by consequences which maybe positive, negative or both. When making decisions therefore, ethical theories are applied in order to come up with the best solution to a dilemma. This paper will discuss a case study based on Narinex company and the challenges facing it. Question one 1. Briefly explain the main ethical dilemma(S) in the case study. An ethical dilemma is usually defined as a situation whereby moral or ethical obligations are in conflict such that any solution is deemed morally intolerable (Stewart 2011). In the case study, Jennifer Brown the CEO of Narinex, a manufacturer of electronics based in Michigan is faced with a dilemma after losing a major contract to Glistrom which is a competitor based in the UK. Brown calls both, Tyler andDyson in a bid to try and find out the cause of the loss. Apparently, Nariex is losing customers on the grounds of sustainability as more customers look beyond compliance matters to whether suppliers paid a fair wage, whether or not the company had eliminated documentation by moving everything online and how they were handling their waste. Apparently, Glistrom had recently appointed a chief sustainability officer (CSO) and this might have been the reason as to why the company was now taking most of the contracts. Brown however, faced a dilemma as she didn’t want to have a large executive just for show to match the actions of their competitor Glistrom. Should she hire a CSO? A report by her granddaughter Zoe however,makes her consider the option of hiring a CSO. While in the meeting, it is however, revealed that Glistrom is beating their company through marketing of their profile and this puts Nariex executives in a dilemma as to whether they should hire someone to tell their own story. They are faced with a dilemma as they would not want their company to appear or seem like they are green washing, yet on the other hand the need to cut down on costs and project a good image of the company. Nariex is also faced with a dilemma as to whether to hire consultants to help improve the company’s image or promote someone internally to assume the position of a CSO. Question two. Compare and contrast utilitarian, libertarian, deontological, and virtue ethics perspective on the dilemmas you have identified. Utilitarianism is based on ability to ascertain or predict consequences of a particular action (Arnold, Audi & Zwolinski, 2010). In this case a choice is considered ethically correct if it yields the greatest benefit to majority of the people (Rainbow 2002). There are two types of utilitarianism one of which is act utilitarianism and the other rule utilitarianism. In act utilitarianism, decisions are made in order to benefit the majority of people regardless of constrains such as the law or personal feelings (Hoyt 2011). In rule utilitarianism however, fairness is considered in regard to the law. Using this principle in business means analyzing the costs together with the benefits of the decisions made. This means choosing what will cost the least and produce maximum benefits to the company. This will hence lead to efficiency in operations and running of the company. This theory however, has a lot of limitations in that predicting the future is almost impossible. Unexpected results can hence occur which would then make the person basing decision making on utilitarianism look unethical (Kish-Gephart 2010). Another problem found in this theory is the impossibility found when trying to compare various types of consequences of an action using the same scale. In this theory an individuals rights may be interfered with for the maximum good of the majority in the society. In the case study, increasing the companies’ compliance to industrial changes and regulations by going green is beneficial to both the company and the environment. This in turnbenefits the customers who need to live in a clean environment. It also helps the company in terms of savings on the cost of production and increases its image in the eyes of the customers. In the utilitarian perspective, Brown should therefore take this path as it is beneficial to all. In essence, hiring a CSO would lead to increase in costs in terms of executive allowances and payments but in the long run this would serve to be both beneficial to the company and the public at large. Creating a good company image would also be beneficial to the management of the company and the employees in terms of increasing profits and hence job security for the employees. Libertarianism is a philosophy which takes liberty of the individual to be the organizing principle in any society (Mingers and Walsham 2010). It includes various beliefs and advocates for the maximization of individual liberty. In solving of dilemmas therefore, the individual views concerning the issues at hand is highly valued. In business, the same is applied to referto fairness in a market economy whereby there is free exchange of goods and services. In the case study, the dilemma presented by the need to hire a CSO for the company to cope with competition can be solved by taking the libertarian view. This in part means that Stevenson would get the job as the CSO rather than hiring external consultants as it would prove inefficient and expensive in the long run. In this study case the views of Brown’s granddaughter Zoe, should also be taken into consideration. Her views being unbiased to company politics show the need for the company to improve on its image by hiring a CSO to deal with compliance issues and sustainability to meet the market demands and align with customers expectations. Furthermore, the fact that most members of the executive agree that something needs to be done to quell the continuous loss of business to rival companies only goes further to strengthen this path of thought. By hiring a CSO, the company will be at par with its competitors as most customers care more about biodegradables than the cost. Putting up measures to ensure that the company is following the guidelines set up in the market will go a long way into ensuring that it acquires the trust of customers who will in return buy from the company and hence boost sales. In the long term this will affect the company’s standing positively as profits will begin to accumulate from contracts won by the company as a result of the same. Deontological theory states that individuals should follow their obligations or duties when faced with an ethical dilemma (Oliver et el 2010). This means that people should uphold their duties while deciding or coming to a conclusion as to what is ethically correct. In this theory the decision process making is consistent and is not affected by personal views rather than obligation (Oliver et el 2010). In this aspect it s important that individuals are treated well as the theory implies a form of responsibility when carrying out obligations. This theory however, has its limitations one of which is that there is no logical basis to determine an individual’s duties or responsibilities. It may at times create a scenario whereby there is conflict of obligation and does not provide guidance when there is a complex situation (Mayer 2010). In the case study, deontological perspective can be used to solve the dilemmas involved. It is the duty of Brown as the CEO to ensure that the company is able to meet its goals by being at par with the competing companies and the regulations in place. It is therefore her duty to hire a CSO to handle issues concerning regulations and the company’simage. This will thus make it easier for it to face off competition from other companies. Virtue ethics theory states that a person should be judged by his character and not his or her actions that may be against the norm (Mayer 2010). This theory considers a persons reputation when analyzing an unusual behavior before considering it unethical or not. In business this theory advocates for the focus on the common good and hence finds the right way of basing a judgment (Hoyt 2010). This theory has a weakness in that it does not take into account the change of a person’s moral behavior. A person may change his character and go unnoticed and hence the decisions made will be in the real sense unethical. In the case study, Brown is faced with a dilemma as whether to hire Stevenson for the CSO job or to work with consultants on the same. Stevenson is particularly aggressive in proposing the idea of having someone from within the company take up the position of the CSO and his behavior in the meeting can be viewed in the virtue ethics perspective as being okay since it will result in the overall benefit for the company. Brown’s virtues on lowering overhead expenses and her reluctance to expand the executive by hiring a CSO stems from her continued dedication to maximization of profit by the company. Her change of mind over the hiring of a CSO can hence be understood as something that is done on a need be basis. Figure 1 Question three Identify, explain and justify an ethical perspective that you think will work best in the situation. You may use a combination of ethical perspectives. In this case scenario, the best ethical perspectives would be the utilitarian and deontologicalperspectives. In this case the decision made would be one that benefits majority of the stakeholders (Mayer 2010). In this case using the utilitarian perspective would incline Brown to hire a CSO to ensure that the production of the company complies with rules set up to protect the environment by using biodegradable material. This would mean that the cost would have to rise in order to sustain this but the benefits would accrue in the long run. Hiring a CSO from within the company would also go a long way in aiding the effectiveness of the compliance to environmental laws and would hence increase customer loyalty to the company. This would in turn lead to increased sales and hence increased profits which would eventually mask any costsaccrued in the program. Increased spending on the companies greening effort would lead to innovations which would eventually lead to cost reduction in manufacturing and sales. It would also give the sales team a story to share with prospective clients. Using the utilitarian perspective would thus be beneficial to both the customers advocating for changes and to the company in terms of getting positive feedback from clients. Hiring a CSO would also help increase efficiency in the company and create an environment of competitive companies that are socially responsible for the society in terms of creating a better environment. Deontological theory states that individuals should stick to their duties and obligations when they are carrying out an analysis of a dilemma (Stewart, et el 2011). In this case study Brown should stick to her duty which is ensuring that the company continues to make profits both in the short term and in the long term. This means that the company cannot afford to lose more contracts to other rival companies. In the event that being in compliance with the regulations set up by the government would cause a large amount of loss to the company, steps should be taken by those charged with the responsibility to ensure there is a balance between expenditure and income. Brown should take it as her responsibility to ensure that the company does not face constrains in other markets. Lower production may be caused by introduction of biodegradable materials. Stevenson as a member of the executive committee should not waver on his stand as it is imperative that the company be run and managed from inside. This is because an insider has more experience dealing with the company’s problems and can best be held accountable for any losses that would result from poor judgment. It is therefore important for the executive to come up with decisions that are in line with the customer’s expectations in order to increase on the number of sales and productivity of the company. Combining various theories and applying them would be useful in decision making as situations vary with prevailing conditions. For example if the company decides to put all its efforts in going green by hiring a CSO, they might lose customers who are more interested in the product rather than the materials Conclusion In conclusion, ethical theories can be used to deal with dilemmas in the business and corporate world. It is however, up to the person charged with the responsibility of making decisions to chose a suitable theory to apply. In this case, the company should hire a CSO to aid in bringing reducing the competition arising in the sector. References Arnold, D., Audi, R, & Zwolinski, M, 2010. Recent work in ethical theory and its implications for businessethics. Business Ethics Quarterly, 20(4): 559-581 Hoyt, B. 2011. A research study in ethics education and training: Predicting ethical behavior. International Journal of Education Research. 6(1): 97-117. Kish-Gephart, J. et el. 2010. Bad apples, bad cases, and bad barrels: Meta-analytic evidence about sources of unethical decisions at work. Journal of Applied Psychology, 95(1): 1-31. Mayer, D. 2010. Examining the link between ethical leadership and employee misconduct: The mediating role of ethical climate. Journal of Business Ethics, 95: 7-16. Mingers, J. and G. Walsham. 2010. Towards ethical information systems: The contribution of discourse ethics. MIS Quarterly. 34(4): 833-854. Oliver, D., Statler, M. and J. Roos. 2010. A meta-ethical perspective on organizational identity. Journal of Business Ethics, 94(3): 427-440. Rainbow, C. 2002. Descriptions of ethical theories and principles.Department of Biology, London: Davidson College. Stewart, R et el 2011, You support diversity, but are you ethical? Examining the interactive effects of diversity and ethical climate perceptions on turnover intentions. Journal of Business Ethics, 100(4): 581-593 Read More