The term “Ethics” usually refers to the moral behavior or principles of conduct exhibited by people; it implies some chosen behavior patterns that are guided by principles of right or wrong, and good or evil. This paper discusses a business decision that relates to the subject matter of ethics. It also involves stakeholder analysis, application of ethical tools (utilitarianism, profit maximization, and universalism) and an explanation of what I would do if I were in the position of the person in the situation of an ethical dilemma. The business decision under discussion is a company, XYZ Ltd. that opted to sell food products with disregard of concerns of salmonella poisoning (infected with Salmonella enteric bacterium). The person facing the ethical dilemma, in this case, is a friend of mine, John, who was recently employed as a supervisor in the Quality Control department of the company. XYZ Ltd. owns a processing plant that produces peanut brittles, chocolates, peanut butter and other dairy and nut-based snack products in the state. Since it deals with food products, the company is under the regulation of the government agencies in charge of public health matters.
Soon after employment, John noticed that the organization does not inspect products on the production line by the requirements of the government (Craft, 2013). In actuality, the company made and maintained a business decision of inspecting a single product on the production line once every week. John quickly reached his department’s manager with inquiries about the issue of high concern but was soon dismissed, being told that is the way XYZ conducts its in-house business. He then reached to and made suggestions to other members of senior management in the company about the need for more frequent inspections of the different product lines, and removal of infected products, but he did not get any meaningful feedback. He has unrelentingly proposed that the company samples a single product in a given line after every ½ hour as per the regulations, or on an hourly basis at least as a decision alternative of achieving good quality management. The management on its part maintains that such initiatives would imply increases in the costs of doing business and hence maintains the decision alternative of not making changes to its quality management practices.
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Stakeholder Analysis
A business enterprise is obliged to transact its business operations by the set ethical codes of conduct allowed in a given country or region and consideration of stakeholders involved. Ethical concerns mainly focus on the well-being of customers, regulators, and employees of a company since they are the stakeholders that are not on the receiving end of profits of the firm. It is a matter of mutual understanding that salmonella poisoning has some serious health challenge effects on people that consume food products that are infected. Over the past, the organization has been subject to reports of allegations of salmonella food poisoning by customers of the organization as stakeholders. So far, and however, little evidence emerged that had the capacity to link the company to the food poisoning occurrences reported by the customers. Even so, the customers of the company form the most important group of stakeholders under question. Decision alternative of improving quality control in the company would imply a guarantee of health and safety for them. On the other hand, disregard for the change in the business decision implies that their health faces serious risks of diseases.
The other stakeholders are the employees of the company. As an employee of the company, John is a stakeholder, who has a great opportunity for growing his career (within the company’s ranks) and gaining field experience for the development of his curriculum vitae. This opportunity seems to be favored by the good performance of the organization. Even so, and as an individual, John’s performance on-the-job is already compromised since he does not agree with the business decision of the management. As such, the decision alternative of improving the quality management of the company is likely to make the employees more committed and motivated in their jobs. What is more is that it will be a platform for the establishment of management by objectives, wherein the employees are involved in important decision-making in the company, making them feel as valued and respected members of the organization.
It is also important to note that by the initiatives of John, who is also in charge of packaging, once the products are through the production lines, they are sometimes tested at random. The products that are found to be of unacceptable contamination are placed in boxes marked with red stickers indicating that they are not fit for the market. Some other products that may be mildly contaminated are placed in boxes marked with yellow stickers. John soon discovered that some products placed in the sealed boxes were missing on a continual basis, he could only assume the worst; that they were shipped to customers for consumption and profit making.
The management is also a stakeholder in this case, even as it continues to have the ultimate power of decision-making. The decision of alternative of implementing quality management controls implies that the management will have to incur more expenses or costs of doing business. Nonetheless and looking into the situation of continuing with the poor quality management measures implies that the firm risks being caught by the regulating agencies of the government and facing litigation measures . In the end, disregarding the decision alternative by John makes the company be in a position where it risks even higher costs associated with the complete shutdown of the business .
It is important to note that other significant stakeholders that have not been discussed in the section. They include but are not limited to government regulatory agencies, competitors, suppliers and members of the community. The following is a Stakeholder Analysis Table for the case.
| STAKEHOLDERS | DECISION | |
| Change Quality Management (as proposed by John) | Don’t Change Quality | |
| The Management | - | ++ |
| The employees | -+ | + |
| The customers | ++++ | -- |
PART C. Application of ethical decision tools
Ethical behavior is essential when choosing the right decision-making strategy to make when looking for correct approaches to solve ethical related business problems. Better choices can be made and be readily adopted if they follow through acceptable ethical standards compounded with systematic guided approaches (Ford & Richardson, 2013). Business decisions made in consideration with ethical deliberations ensure that the decisions made are based on moral sensitivity, moral judgement , moral motivation, and poise moral character to enable them to offer ethical solutions to business problems. There are three ethical decision tools that can be applied; the utilitarianism, profit maximization, and the universalism.
Utilitarianism
This tool maintains that the level of happiness or suffering of the people should be used as a determinant of whether a course of action is ethical (Ferrell & Fredrich, 2015). The ethical theory of utilitarianism posits that rightful conducts result in maximum pleasure on basis of observing morals as functions of utility. In other words, it posits “The greatest good for the greatest number” and “The ends justify the means” (Deckop, 2008). In the case discussed in this paper, the business decision of XYZ poses as one with the potential for serious harm to many members of the society owing to needs of profitability of a few, the owners of the company. Additionally, application of this theory also makes the business decision unethical in that it has potential of resulting in suffering on the part of the customers in place of freedom. Again, the theory deems that there is need to prevent pain and to promote pleasure.
The actions that can be considered as right are ones that result in the most gratification or happiness in people in the society, while at the same time, ensuring to minimize their level of need and suffering as much as possible (Ford, & Richardson, 2013). In accordance with application of this ethical decision tool, the management of XYZ ought to change its quality management policies for the sake of the health of its customers and in an effort of addressing the concerns of its employees. It is clear that by decision alternative, the total number of people that stand to benefit surpassed the one of those who will suffer by far. It is clear that the management is somewhat devoted to achieve desired pleasures of enjoying good performance as an element of welfarism. In another perspective, the analysis shows that the business decision so far adopted by the management is based on thought that the members of the organization would achieve happiness, regardless of the effects of their policies or operations on the customers.
Universalism
The other ethical decision tool is Universalism; it asserts that the ethical implication of a selected course of action applies universally to all stakeholders, regardless of the circumstances (Oumil & Balloun, 2017). The theory is based on ideologies of “Never treat another inappropriately as a means to an ends,” and “Would you get what you want if everyone did it, under similar circumstances?” (Deckop, 2008). Put another way, morality is universal, and most generally respectable ethical principles apply to everyone and everywhere. Some given professional ethics have been widely accepted all over the world due to the globalization effect. Ethical decision making in business environments has been eased since universalism is able to hold that every action undertaken should be based on societal principles and rules, this entails consideration of actions that demonstrate respect to others rather than a means towards achieving the intended goal. Organizations are torn in choosing between universalism and intercultural standards, however since universalism focuses on the intentions of the decision maker thus it is widely practiced in most decision-making instances
This approach thus finds meaning as an important decision tool to be considered by management of XYZ. In as much as it is the management’s business decision to continue with uncouth quality management procedures, which put the health of customers at risk, the other stakeholders like the employees, the government, and even customers have a role to play. From another perspective of ethical universalism, all persons (or stakeholders) need to be treated with impartial and equal consideration (Lehnert, et al., 2016). As such, the unfair and selfish actions of XYZ management are wrong and unethical and application of universalism deems that change is implemented to ensure standard quality measures are in place.
Profitmaking tool
According to the economic theory of profitmaking, businesses are established for purposes of making profits and achieve good returns on investment and that organizations tend to accompany such with good ethics (Deckop, 2008; Craft, et al. , 2013). The theory indicates that shareholders of a company are satisfied when they receive good returns on their investments. Such forms the primary factor of organizational objectives and the situation of XYZ is no different. In actuality, the organization aims to or realizes profit maximization at the expense of exploiting some the very important stakeholders of the organization- the consumers. As such, the profit making strategy of maximizing profit by disregard of quality management is indeed unjustified. The profit motive can hence be justified if the management applied the theory by situating ethics within the center of its operational policies; ensuring that its initiatives of maximization of profits are open to be regulated at any time and at will. In this way, the company can also use the profit maximization tool as a foundation for its goals of overall performance.
Even so, this decision-making tool has capacity of making the management to opt for outcomes that may be contradictory to those of the others. It must be remembered that increasing the prices of the company’s products, due to costs associated with quality management will make them lose demand and it will lose its market share. As such, the company may be forced to look for other ways of cutting down costs including but not limited to laying off of employees.
PART D. What I would do
Based on the situation of the case, and if I were in John’s position, I would blow the whistle by reaching out to the regulators on the basis of inspection protocol violations. Before coming to a decision , I would ask myself about the manner in which the company’s actions affect the stakeholders, particularly the consumers. It is also important to consider the fact that the lives of innocent people are at stake. I must confess that as an ethical person, I will be predisposed to conform to requirements of the law of the land. The management of the firm needs to renew its quality control system with immediate effect. In my opinion, XYZ has so far failed to practice social responsibility as is required of companies.
References
Craft, J. L. (2013). A review of the empirical ethical decision-making literature: 2004–2011. Journal of Business Ethics , 117 (2), 221-259.
Deckop, J. (2008). THEORETICAL BASES FOR ANALYZING THE ETHICS OF A DECISION. In Scarpello, V. G (ed). The Handbook of Human Resource Management Education: Promoting an Effective and Efficient Curriculum . SAGE.
Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases . Nelson Education.
Heyler, S. G., Armenakis, A. A., Walker, A. G., & Collier, D. Y. (2016). A qualitative study investigating the ethical decision-making process: A proposed model. The Leadership Quarterly , 27 (5), 788-801.
Lehnert, K., Craft, J., Singh, N., & Park, Y. H. (2016). The human experience of ethics: a review of a decade of qualitative ethical decision ‐ making research. Business Ethics: A European Review , 25 (4), 498-537.
Oumlil, A. B., & Balloun, J. L. (2017). Cultural variations and ethical business decision making: a study of individualistic and collective cultures. Journal of Business & Industrial Marketing , (just-accepted), 00-00.
