Business Ethics – Assignment 1 1. The Sales Rep. A sales representative for a struggling computer supply firm has a chance to close a multimillion-dollar deal for an office system to be installed over a two-year period. The machines for the first delivery are in the company’s warehouse, but the remainder would have to be ordered from the manufacturer. Because the manufacturer is having difficulty meeting the heavy demand for the popular model, the sales representative is not sure that the subsequent deliveries can be made on time.
Any delay in converting to the new system would be costly to the customer; however, the blame could be placed on the manufacturer. Should the sales representative close the deal without advising the customer about the problem? – As a sales representative working for a firm, the success or failure of a deal is partly due to the sale representative. Though it is his/her job to make sure that they agree to more deals, at the same time the clients have to be well informed of every detail of the deal. It is ethical to inform the client properly and not to leave any piece of information out – the truth is better than a false claim.
However, this might cause the sales representative to lose the deal, in which the company would in turn suffer as well. However, if he/she didn’t inform the client, the deal would have probably taken place. The chances of a delay are relatively high considering it says above that the manufacturer has trouble meeting the heavy demands. After closing the deal, the customer would expect everything to be delivered on time, obviously unaware of the problems with the manufacturer. It would anger the client if there was any delay and the risk of legal actions against the firms would increase.
In my opinion, being ethical and informing the customer is important in more ways than one. It not only creates goodwill towards the company and its representatives, but also helps in creating a long-standing relationship with the customer. He/she must know how to balance short-term profits against long standing gains from ethical behavior. 2. The Research Director. The director of research in a large aerospace firm recently promoted a woman to head an engineering team charged with designing a critic component for the new plane.
She was tapped for the job because of her superior knowledge of the engineering aspects of the project but the men under her direction have been expressing resentment at working for a woman by subtly sabotaging the work of the team. The director believes that it is unfair to deprive the woman of advancement merely because of the prejudice of her male colleagues, but quick completion of the designs and the building of a prototype are vital to the success of the company. Should he remove the woman as head of the engineering team? Above is an example of gender discrimination that commonly happens in the business world. It is widely known that many a times women do not have the same opportunity as men for education and meaningful careers. The Universal Declaration of Human Rights (1948) does state that “all human beings are born free and equal in dignity and right”. This therefore brings us to a conclusion that gender discrimination is obviously, unethical. Treating both genders the same way on the other hand is highly ethical.
In the case above, the woman is an expert in engineering and has much to contribute to the project. The men under her have been showing resentment and sabotaging the work will only cause lack of productivity in the project, causing it to be unbeneficial for the entire company. This is an example of male chauvinism where the males feel superior to the females. Here it shows that they feel like they are too good to work under a female, even though she is well informed of her job. In my opinion, the Director here plays a very important part.
As a Director he should be good at handling his staff and not let them get out of control. I personally do not think that he should remove the woman, because he himself believes that prejudice is unfair. He too understands the importance of his job and would hire the right person for it. If its against his beliefs, he should inform the male workers the consequences of any hindrance on the progress. This way, he can ensure that they understand the cost of their biased attitude and straighten them out and it would be disastrous to the company. 3. The Marketing Director.
The vice president of marketing for a major brewing company is aware that college students account for a large population of beer sales and that people in this age group form lifelong loyalties to particular brands of beer. The executive is personally uncomfortable with the tasteless gimmicks used by her competitors in the industry to encourage drinking on campuses, including beach parties and beer-drinking contests. She worries about the company’s contribution to underage drinking and alcohol abuse among college students. Should she go along with the competition? In this case, I do believe that the marketing director should go along with her competition. In the beginning, the main aim of a business is to make a profit. Profit maximization is the main aim of a business. She herself is aware that the youth of the generation are the ones that form loyalties to particular brands of beer. As an MD for a brewing company, her job entails for her to be able to target this youth group and get them hooked unto their beer. The case states that there is a lot of competition. They need to find a unique selling point, which makes them different in selling the same product.
The director herself is uncomfortable with the tricks used to attract their attention. I think she should go along with her competition, because even though there is a drinking age of 18+ or 21+, kids hardly follow these rules anyway. Even though she herself doesn’t believe in encouraging underage drinking, she should be aware that these tricks aren’t solely responsible for the youth of today and their drinking habits. She can advertise her alcohol, with her brand name without graphical descriptions of parties – this way she can compete with her rivals and at the same time incorporate a little bit of what she believes in.
Ethically, it would be wrong to encourage something that is against the law, but in my opinion from the business view, when competition is there the aim is to be on top of it. 4. The CEO. The CEO of a midsize producer of a popular line of kitchen appliances is approached about merging with a larger company. The terms offered by the suitor are very advantageous to the CEO, who would receive a large severance package. The shareholders of the firm would also benefit, because the offer for their stock is substantially above the current market price.
The CEO learns, however, that plans call for closing a plant that is the major employer in a small town. The firm has always taken its social responsibility seriously, but the CEO is now unsure of how to balance the welfare of the employees who would be thrown out of work and the community where the plant is located against the interest off the shareholders. He is not sure how much to take his own interests into account. Should he support a merger that harms the community but benefits the shareholders and himself? – The case above states that CEO of a company is approached about merging with a larger company.
It is beneficial to the CEO of the company, as well as the shareholders of the firm. The main aim of a business is to work hard in order to achieve a goal that is to maximize profits and let the business expand in many ways. It states in the case that it will be very beneficial to both the shareholders and the CEO. The problem reflects on principal-agent framework in which differential objectives can result in organizational problems. This means that every individual has different objectives and want different things and a conflict between these can cause a problem within the organization.
It is also mentioned above that the firm has always been socially responsible and this merger will also harm the firm’s reputation – as employees lose their jobs and homes. To the public eye, they have always seen this firm as being socially conscious but if this merger were to take place then it would seem like a very selfish act, as their employees would be thrown out of work. The compensation pay would not even matter. And the firms reputation would go downhill. Ethically, this would be incorrect. Another reason to consider is the merger itself.
In the short run it may be beneficial to the shareholders and the CEO as well as the company but in the long run there is guarantee that the stock value will be higher considering the fragility of the market environment. Other problems such as cultural differences may also arise. So with this in regard, I believe that the CEO should not agree to this merger. Even the employees are something to think about. He should not just think about his opinion but his employees are the one that also make a difference to the company, and that is why he should not agree to the merger.