Introduction
The topic of ethics has gained much attention in business practice. This is because of more cases of business actions that are not ethical and diminishing boundaries in work and business environment as a result of globalization (DeGeorge, 2014). As a result, it is important that businesses consider ethical issues when faced with dilemmas in order to make moral and ethical decisions. There are several approaches to ethical decision making. This paper will discuss two approaches, utilitarian and justice approaches in context of the case of Mergeron, a clothing manufacturer in a small town in the United States.
Utilitarian Approach
In the case study chosen for this assignment, Mergeron a clothing manufacturing company is facing a dilemma. Deana, the operations manager is torn between off shoring and having the company remain in its current location despite the high costs of cotton and labor in the United States. The company has 200 employees and it has a reputation for producing organic cotton clothing. The company has established close knit ties with the local cotton producers who sell their cotton to the company. However, one major issue that the company is facing is the fact that although sales are high, cotton and labor costs in the United States have increased and as a result, profit has reduced. Deana has identified a place in China where the company can acquire cheap skilled labor although she is not sure if the cotton grown in China is organic. She needs to make profit and at the same time she thinks of what will happen to the local cotton farmers and the current employees.
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The major aim of any business is to make profit. All activities and decisions made in every business revolve around generating profit. A utilitarian principle evaluates an action in terms of its consequences (Shaw, 2017). It includes the benefits of stakeholders involved. Its aim is to cause the greatest good that will benefit the majority and cause less harm. In business, a utilitarian perspective relies on statistical data of likely outcomes, and costs and benefits analysis. In addition, it also depends on utility outcomes for stakeholders in the business.
The theory provides a straightforward way of identifying a moral action that will cause the greatest amount of benefits in a certain situation (Chaudhary, 2013). To choose the course of action to be followed in dilemmas, the approach proposes that the first thing to do is to select all the possible actions that can be implemented. The second step is to determine all the likely good and bad outcomes of each possible action. The last thing is to select the action that will yield the highest amount of benefits after expenses are considered (Chaudhary, 2013).
From a utilitarian perspective, Deana is justified to seek for cheap labor in China. The company needs to make profit. The company’s products demand is high and therefore has to meet the increasing demand from its customers. From a cost-benefits perspective, the business could generate more profit from producing its products in China. In addition, the company would spend less on labor because of the skilled cheap labor available in China. The only individuals who would be negatively affected by relocation of the company to China would be the 200 employees and the local cotton farmers. However, the majority who are the company’s customers would benefit from the action. In addition, the company would make great amounts of profit.
Justice Approach
On the other hand, looking at the same situation from a justice approach, off shoring would be morally wrong. Justice as an ethical perspective proposes that every person should be treated in a fair manner regardless of who they are (Morrison, 2015). When examining a moral decision from a justice approach, one should ask if the action(s) to be implemented ensures equality for all the people involved. If the action does not ensure fairness, one must establish whether the variations in treatment are just. Justice shows a mutual recognition and consideration of the basic dignity of one another and acknowledges the fact that people are to live together and in a community that is interdependent (Shaw, 2017). In addition, it dictates that people must treat one another in a fair and just manner.
In the case study of Mergeron Company, it would not be just and fair to relocate the company to China where the company can get cheap and skilled labor and make more profit. Despite the fact that labor and cotton are expensive in the U.S., the company should consider the welfare of the cotton farmers and its 200 employees. The employees depend on the pay they receive from the company to meet their needs. Off shoring would mean that the employees would lose their jobs. In addition, cotton farmers who have produced cotton for the company would lose their market and would be forced to start looking for new customers for their produce. By considering the company’s interest and ignoring the suffering that the employees and cotton farmers would face due to loss of income would be an act of injustice/unfairness. Although the company’s profit has reduced, it is still making some profit and should consider the welfare of its employees and farmers while considering its own and remain in the United States.
Conclusion
In conclusion, ethical decision making is an important aspect in business activities. Ethics help deal with situations in which the law has ‘come to an end’. They help determine what is morally good or wrong and guide in the process of ethical decision making (Shaw, 2017). Ethics are important in handling dilemmas such as the case study analyzed in this paper and in determining the right course of action.
Reference
Chaudhary, P. (2013). A Utilitarian Perspective on Business Ethics. IOSR Journal Of Humanities And Social Science , 14 (5), 75–80. doi: 10.9790/1959-1457580
DeGeorge, R. T. (2014). Business ethics . Harlow, Essex: Pearson.
Morrison, J. (2015). Ethical Theories and Cultural Contexts. Business Ethics , 21–49. doi: 10.1007/978-1-137-30950-1_2
Shaw, W. H. (2017). Business ethics . Boston, MA: Cengage Learning.
