Ethical Issues of Companies - Essay Example

PART A A1) Whistle-blowing would have been an easier option, but looking at the ethical framework it is not the right thing to do. By whistle blowing, I would be putting the jobs of the factory foremen in jeopardy against a little advantage of bringing the issue to the knowledge of people. This again will fall back on the company and my career and hence I feel this is not the right thing to do at the moment given that I have been only hired a few days back and it is hard to change the ongoing attitude of people within days. Similarly, by whistle blowing, I would be doing harm to my career and will suffer the fate of my predecessor. In simple words, there is more harm than gain from whistle-blowing in the current setting. As a result, this action is wrong under the utilitarianism framework. This framework states that only those actions should be taken which gives greater good to the society than the costs. In this case, there are more costs associated with the action than the benefits and hence I should be passive and let how things move on until I decide to whistle blow, which is not an option at the moment. If we look at the risks associated with whistle blowing, they are loss of jobs for employees, company's reputation at stake, my job in jeopardy and the chance that the company may lose market share against the major competitor. The gains from the action will be people would be aware about Delectable's nonexistent quality control and this can lead them into making a better choice. However, weighing the two options, one feels that there are greater risks than gains and hence I should not whistle blow. A2) the attitude of workers is purely materialistic at the moment. They are paid on piece rate and hence they want to produce as much goods as possible while ignoring the quality of what they manufacture. The policy of quality control won't be effective in the current company's culture as workers are just trying to make more goods as they are paid on the basis of how much they produce and because quality control may hinder the speed of their work, the policy won't be as effective as it will be in other settings. There are a lot of issues that the management needs to readdress looking at the attitudes of workers and supervisors on the factory floor. First of all, the management needs to incorporate in people that the workers should respect the people from higher level of hierarchy instead of blocking their work. This can be done by the management by showing them their authority and by firing those people who do not cooperate with the top brass. The main pressure is that the workers are not willing to cooperate and the situation can only improve if either the authority is delegated to the quality control department or the management itself fires or threaten people who are hindering the efforts of the quality control department. PART B B1) The government and state faced a major challenge in the form of underfunding to deal with the health and safety issue. There is hardly any possibility that the current staff of 60 can see 16000 food businesses in Georgia. Similarly, Delectable employs thousands of people and government will be threatened to take any action against the company as it would mean loss of jobs and unemployment. However, government can counter the problem by staffing more people in order to keep check and balance on most of the businesses in the state. The government should try to encourage people and organizations to fund FDA by telling them it would improve the general condition of the food businesses in the country and ensure that their offerings are hygienic and comply with quality and control standards. Government can also encourage the businesses to act in a socially responsible way. This can be done by giving tax holidays to company where there is no quality cases recorded reported against the company. The government can also levy stricter rules on food businesses which could levy harsh penalties on these business and can ask them disclose the quality and control issues like salmonella etc. There is a little chance that self-regulation will work in the food business as it will be contrary to the business objective of maximizing profit. The industry's self-regulation can be enforced by government encouraging the competitors to disclose the quality issues about their competitors in the media and press. This will initiate the self-regulation in the industry and those companies who will not comply with quality control standards will be kicked out of the industry. PART C) C1) The ethical issues in the proposal includes that how can we sell contaminated food that we feel is not appropriate for one country's citizen to another country. The other ethical issue is that fact if there is not enough safety mechanism in San Lopez, aren't we responsible take the right action and not the one which increased the misery of an already under developed country. The ethical theories that can be used to examine the issues are utilitarianism theory, deontology theory, normative stockholder and stakeholder theories, and Milton Friedman's argument. Utilitarianism and deontology will be clearly against dumping as they look for social welfare and good intentions. Similarly, stockholder theories and Milton Friedman's argument state that company should do anything that maximizes the company's wealth. Since selling the red-stickered cartons is going to increase our profits we should do that. Stakeholder theory against discourage the actions because they do not comply with social welfare. Overall the action should not be pursued if ethical frameworks are looked at. C2) The situation will not be much different if the yellow-stickered cartons are dumped. The reason behind this is the fact that these cartons are under the scanner for being contaminated and they might be as harmful as the red ones. So according the ethical frameworks used above the situation won't be much different and the company should not even dump these cartons to an underdeveloped country. However, since these cartons can be released the USA market, the deontology frameworks makes it ethical to release these goods to San Lopez. Similarly, the stakeholder theory and utilitarianism framework make it ethical as there is less danger that these cartons will be contaminated than the people who would die of hunger in an underdeveloped country where San Lopez in located. PART D) D1) The payments made to San Lopez's executives to keep the goods on the desirable eye-level shelves are completely legal as it comes under the heading of payment made for merchandising. These payments are as legal as any other marketing related expenses. However, these payments are not ethical because consumer should buy the goods on the appeal of the good rather than by manipulating them by placing some goods at more attractive points than others. The payment made to San Lopez executive for the safety of these goods is also legal but not ethical because these people have threatened Delectable that their goods may be lose if such payment is not made. Hence, it is perfectly legal to make payment but not ethical. PART E E1) According to Ackerman, "zone of discretion" is the period in which very substantial uncertainties exist in the industry. Discretion is considered as a very important concept in individual decision making on the part of the company acting in a socially responsible way. The discretion faces two challenges that are failure to act and the actions which results in failure. As a result the decision should be based on the factors on the factors such as an organizations way of doing things and the environmental factor and demographics which include interaction and personality traits. In this case, the main environmental factor is recession which has diminished the firm's profitability. As a result, more and more firms are moving away from quality and control standards. Similarly, those organizations which are relatively new are less likely to comply with these standards than the older reputed names. This clearly shows that the packages food industry in the US is moving away from the government set standards towards the behavior which will benefit it more. The current environment can be improved by making it binding on the industry that unless their goods have been passed through certain quality control checks, it cannot enter the market. The government should then check a sample of these goods bought from markets to see if they really do comply with the set standards. Similarly, the government can open a quality control center where people can control about the quality issues of a product or a company and then upon verifying the quality problem, the US government can levy heavy fines on the business who do not comply to these standards. This would be really helpful for the government and will help solve the problem of increasing quality issues in the packaged food industry. References: Manuel Velasquez. (2005). Business Ethics: Concepts and Cases. Prentice Hall Susan Key. (2002). Perceived Managerial Discretion. Entrepreneur Journal. http://www.entrepreneur.com/money/index.htmls Read More