A Personal Education and the Ethical Dilemma and the Hypothetical Scenario

Here’s a hypothetical scenario: I am a manager at LHEM (Large Heavy Equipment Manufacturing), a company that outsources the manufacturing of a specialized piece of equipment to a firm located in another country. We’ll refer to this company as FF (Foreign Firm). Outsourcing this piece of equipment has saved LHEM a considerable amount of money, increasing profits by 15%. However, a recent newspaper article revealed that FF pays their employees only a few dollars a day and imposes extensive working hours upon them.

Though LHEM is not the sole company utilizing FF, we were specifically named in the newspaper article. The CEO has requested my decision on whether to continue our business dealings with FF.

From an economic perspective, it is beneficial to do business with FF due to the considerable savings. Legally, LHEM operates within international fair trade laws and hasn’t broken any rules. However, from an ethical standpoint, it is generally considered inappropriate to conduct business with a firm that treats its employees so poorly. Compelling employees to work long hours for minimal pay is perilously close to slavery. This is highly unethical behaviour, and although we may not directly engage in unethical activities, doing business with a company guilty of such actions effectively supports those questionable practices.

If the media continue to spotlight this story and LHEM’s clientele learns about our connections with FF and their poor employee treatment, they may choose to withdraw their business. This resulting potential loss could notably affect corporate profits.

Corporate Social Responsibility (CSR) refers to management’s obligation to make decisions and take action that contributes to society’s welfare in addition to the organization’s interests (Daft, 2013, p. 150). The moral-rights approach asserts that humans have fundamental rights that cannot be forfeited due to the decisions of an individual. Consequently, an ethically sound decision is one that best protects the rights of those it affects (Daft, 2013, p. 145-146). In light of adhering to CSR and the moral-rights approach, I would recommend to the CEO that we negate further dealings with FF to prevent any harm to LHEM’s business reputation. I would seek out an alternative company that can offer the same services provided by FF for a similar fee, without a history of unethical behaviour. It would be my preference to cease business with FF and initiate dealings with the new company as LHEM’s manager. Exploring the possibility of in-house manufacturing as opposed to outsourcing would also be under my consideration. Furthermore, I suggest that LHEM devise a written code of ethics that aligns with the Triple Bottom Line philosophy—measuring an organization’s social, environmental, and financial performance, otherwise referred to as People, Planet, and Profit (Daft, 2013, p. 154).

My SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis would be the following: Strengths – FF has helped strengthen LHEM, but this could now become more of a liability. Weaknesses – It will weaken LHEM if we have to pay more to receive the same services FF has been providing. Moreover, LHEM could be weakened even further if it becomes a company perceived as doing business with human rights violators. Opportunities – There may be opportunities to do business with companies other than FF for the same services. Threats – LHEM could lose business and damage its reputation if it does not act.

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