Company's Social Responsibility and Ethical Practices - Case Study Example

Title of Paper Student Name Course Name Date Introduction In society today, ethics in business has become the norm and can dictate whether a business makes profit, loses, losses customers, loses business partners, loses funding or experience high staff turnover rates (Ferrell, Fraedrich, and Ferrell. 2010, 2). Ethics can thus be defined as the moral judgment on what is wrong or right. Ethical decisions that are taken within any organisations are usually made either by individuals or a group of people. However, whatever the case may be about who makes the final decision, the organisation’s culture becomes a yard stick and acts as a guide in informing the type of decision that has to be made (Werhane 2013, 63). As such, a decision to behave in an ethical way is a moral one; an organisation’s employees must make decisions they deem to be right, even if it means that the route taken will mean that the organisation’s short term profits, partnership ties or customer loses are cut (Guy 1990, 21). Making ethical decisions has many benefits to any organisations including, but not limited to; attracting new customers, retaining current customers, attract new employees and attract more investors (Nutt and Wilson 2010, 3). Discussion As a manager of chat application company, several morally related decisions are unavoidable and I have to make tough decisions that sometimes will not go down well with either certain employees, investors or shareholders. The ethical decisions I make are meant to be for the overall good of the company and everyone else involved in it (Weiss 2009, 16). They are not decisions for the short term but those that will continue to affect the company in a positive way for years to come (Zakhem and Palmer. 2012, 56). My position demands that I put the company in a position that it is viewed by stakeholders as fair and ethically moral and this is evident from the company’s culture and policies that are aimed to enable the company to make ethical decisions for the greater good of all those involved (Daft and Marcic 2012, 139). When the company was approached by the possible buyer, there was some sort of excitement due to the valuation the company had received. It showed that our chat application was a good product to attract massive corporations. The risk of being making decisions that would not auger well with customers, employees, investors, partners and the community will thus affect the overall performance of the company (Daft and Marcic 2012, 78). To help me with this decision making process, the three ethical approaches to decision making will help inform the final decision that I will make. These ethical decision making approaches are; utilitarian approach to ethical decision making, moral rights approach to ethical decision making and justice approach to ethical decision making (Elm and Radin, 2002, 68). Utilitarian Approach The utilitarian approach to decision making, also known as the consequence-based approach, refers to an ethical action whose outcome is for the greater good with the least harm for those involved i.e. stakeholders, employees, investors, community. This approach is majorly about the consequences; its application attempts to increase the good and decrease possible harm. As the manager, taking this approach will force me to take a closer look and weigh the results of the possible decisions I will make (Preston 2007, 65). Considering that the utilitarian approach looks at the greater good versus the small harm done and undermines the interest of the minority, it will dictate that my decision leans towards selling the company (Rigamonti 2007, 81). The greater good being that the company will receive a lot of money while at the same time retaining the current workers is far more important for us than the violation of privacy issues that the company’s customers will be put through.. According to this approach, the minority, the company’s customers, is of little consequence when compared to the probable loss that the company will have to forfeit through it I decide not to sell the company at the current over valuation price. Our chat application is a hot product that customers like and this is evident from the number of customers we have in our database. By not selling, improvements to it will probably take a lot of time and by not selling, we will have to wait for some time for our investors to raise enough money for possible improvements (Zhong 2007, 20). With all these in mind, I will therefore have to ignore customers’ privacy issues and sell the company and improve the company’s financial status (Morales-Sanchez and Cabello, 2013, 725). However, it is not in the company’s culture and policy to tolerate unethical practices such as violation of privacy that the buying company will put our customers through and therefore I will not employ the use of utilitarian approach (Rion 1992, 84). Moral Rights Approach The moral rights approach can be defined as an ethical action that views all human beings as ends and not just puppets where the notion of ‘the end justifies the means’ is the norm (Grünig and Kühn. 2009, 52). This approach is of the opinion that all humans being have the ability to choose what they want to do with their own lives (Ramirez 2013, 127). Advocates of this approach deem it one of the best ethical decision making approaches because it respects the moral rights of the aggrieved parties, however small their number may be (Mullins 2012, 87). As an individual, I am a human being first and then a manager and I have an obligation make actions in a certain manner or not to take action at all. Regarding the stipulated in the buyout clause by the buying company, it is my belief that the rights of the customers will be greatly violated if the company uses them in their advertising campaigns or any other way they would want to use them (Nutt and Wilson 2010, 3). I will have to take a positive rights approach and make a decision that will dictate future direction of the company (Teale 2003, 65). This decision will be influenced by the fact that as a manager, I am well aware that our customers are human beings and as such have rights that have to be protected, particularly their privacy. This is the case that our customers find themselves in and a violation of their private information will not be good for the company (Scott 2011). As the custodian of their private information, it is the company’s obligation to protect this right at all costs, even if it means the company will lose a major financial boost. The moral rights approach usually helps a manager determine if he or she has a special obligation to the disadvantaged. This is the situation that I find myself in and given the company’s policies and ethical values, I have an obligation to the company’s customers. My decision will thus be based on the moral rights approach due to the respect it accords human beings. Justice Approach The justice approach, also known as the fairness approach, refers to the ethical actions that all human beings should be treated equally. If circumstances dictate that unequally treatment be applied all across the board, then fairness should be based on a given standard that can be defended. An example would be paying more salaries to employees who contribute a lot to an organisation and putting this as fair (Ruedy and Schweitzer 2010, 80). As the manager of the chat application company, I will be forced to look at the social benefits and costs involved with selling the company with the society in consideration. The company has obligations to many including top managers, employees, its customers, investors and the community at large (Sims 2002, 314). In reality, it would seem fair to sell the company, if the monetary aspect is considered and the beneficiaries will have to be investors and employees/staff. This will be considered to them because the salaries and bonuses of employees will increase and investors’ confidence will increase since possible takeovers after the buyout will not likely happen (Lee 2002, 15). This guarantees stability which is any serious investor will look at before investing. However, this fairness will not be directed to the users/customers of the chat application (Aepli, Olivier and Everett 2011, 54). Their private information will be aired for all and sundry see; even the most intimate of information will risk being laid out in the public eyes for scrutiny. This is not the company’s culture and in all that we do, we try to ensure that we practice fairness all across the board; from employees to the community to our customers (Luecke 2006, 69). Decision As earlier argued, the moral rights approach is the most appropriate approach that I will employ and it will dictate that I not sell the company so that I protect the privacy rights of the company’s customers. This decision goes well with the company’s policy and values to protect human fundamental rights of everyone involved with it, more particularly the customers. This ethical decision will see the company uphold its corporate social responsibility strategy. In contemporary business environment, if a company finds out that another organisation is planning to infringe on customers’ fundamental rights, then it has an obligation to make the culprit company understand that such practices are not ethical, either through their own actions or by directly making such organisations accountable to such actions (Hill, and Jones 2010, 68). Conclusion The multinational company planning to buy our company has made an above market value valuation of the company and this is a very interesting development. Investors may be of the opinion that the decision I have made may have been a strategic mistake that will probably affect the company in the short term by denying it funds through selling (Bazerman and Tenbrunsel 2011, 5). However, the company’s established policies, values and strategies are meant for long term gains and not for short time gains (Prentice 2007, 26). Forfeiting the funds from the sale of the company might be a mistake for the short term but will definitely be overcome in the long term (Brian 2013). The decision not to sell will reinforce the company’s commitment to the community on the stand that the company has when it comes to corporate social responsibility and ethical practices. Such tough ethical decisions are what makes organisations prosper in their respective industry as well as gain respect from all stakeholders involved. It also cuts an organisation from the rest of the cloth that makes the entire market/industry (Giacalone, Jurkiewicz, and Dunn. 2005, 6). 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