Family businesses are an ethical mirror which needs addressing because their model of management is seen as sharing the same project as well as a set of values which contributes to a sense of transcendence to the family legacy (Ward, 2016). Many individuals study family businesses since they want to understand the psychological perspective with regards to how the family runs the company.
In a business setting a stakeholder is a person or a party that has the best interest in business and can be in a position to either affect or be affected by the market either positively or negatively. In most companies, the stakeholders include the investor, employees, customers, and suppliers. In this case, the stakeholders are Jane who is in the payroll department, Eddie the General Manager, Brad the owner, Greg the technician and the other technicians in the company.
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There are different interests within an organization and they could either be on an individual level or as a company at large. In this case, Eddie, general manager, has his interests when he hired Jane as the head of the payroll department. He hired her under strict rules not to breach confidentiality since he knew he was doing Greg, his brother, favors. Brad, the owner, has the best interest of his company because he informs Jane that he can see him if there are any concerns or problems.
In any family business, legal advice is needed since it has unique challenges and different needs from the stakeholders within the structure of family enterprises. Even when seeking legal analysis of an organization, the individuals involved require a thorough understanding of the dynamics within this type of organization.
Many issues come up among owners of family businesses since they lack clarity and a well-drafted shareholders agreement. Most of these companies tend to rely on an oral agreement and in cases where the relationships go sour; a family feud arises since there is no proof of affiliation (Astrachan, Klein and Smyrnios, 2002). The legal advisors, therefore, encourage all family businesses to have a written form of agreement to run the business efficiently.
The labor or employment laws may not apply in this case because they are usually generalized for companies that do not involve any family members. The rules only govern individuals who are employed as qualified workers for that specific field in the organization. This case is different because some of the people involved are from the same family and some have the jobs due to their levels of qualification.
Some laws can apply in this case only if they are agreed upon at the organizational level by the stakeholders. These laws are not included in the labor or employment laws since the rules here are for general organization structures that do not involve family members. For example, the general approaches used in the overall company structure are that family members who work in the business line should not have special treatment or favors. In this case, Eddie breaks this law because he offers Greg more commissions than the other service technicians and he gives his brother the easier jobs with the highest commissions.
Another law that may be used in this case, only if agreed upon in the organization level by the stakeholders is that the family members involved in the organization should make conscious effort to keep distance between business and their private lives and should not use their positions in the company to favor any family members. In this case, since Eddie is the General Manager, he is taking advantage of his position to influence the decisions made to give his brother higher commissions than the rest as well as the easier jobs. In organizations where family members are involved there should be a lot of caution since the connection between work and home affairs can ruin how a business runs.
In this case, the theory that would determine the cause of action is deontological ethics since it allows Jane to generate questions, which include what ethical principles should she follow? What does reason require of her regarding treatment of others? What duties does she have? What decision should she make between different responsibilities? (Gray, 2009).
For Jane to come up with a final decision, there is so much at stake for her because, if she confronts the matter she risks losing he job as the head of the payroll department. If she fails to report the issue, then other technicians would keep doing all the hard jobs with fewer commissions. This case indicates that she has to put everything into perspective before making the final decision.
My recommendations, in this case, are that Jane should report the issue to the owner of the company, Brad. Since the owner gave Jane leeway to address any problems or concerns regarding the company to him, then this would be the right path to take. Even if Jane has a massive risk of losing her job is she reports the issue, she has to do the right thing by allowing the owner to know the shortcomings of the company.
The other reason Jane should report the matter is that the deontological ethics indicate that an individual should check how the decision made will affect others. When she says the case to Brad, then the other employees will receive equal pay for equal jobs they are doing. This decision will enable full equity for everyone in the company, and they will all have a high level of satisfaction.
In conclusion, the law has no specific rules which involve family policies within an organization, and it is imperative for a company to have these regulations on their own to avoid circumstances like in this case. This factor will contribute to a healthy working environment, and it will bring in new clients, more profit and more motivation for the employees because they will feel like they are all in the same circle of work.
References
Ward, J. (2016). Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership . Springer.
Astrachan, J. H., Klein, S. B., & Smyrnios, K. X. (2002). The F-PEC scale of family influence: A proposal for solving the family business definition problem1. Family business review , 15 (1), 45-58.
Gray, M. (2009). Moral sources and emergent ethical theories in social work. British Journal of Social Work , 40 (6), 1794-1811.
