Resolving Business Ethical Challenges

Companies ensure the wellbeing of their employees through following and applying established ethical regulations. For instance, the ethical code in a given firm may determine the working hours, sick leave, compensation, and the provision of protective equipment in working conditions that put the workers at risk. From the case study “Resolving Ethical Business Challenges,” Preet notes that the Amex Corporation's outsourced factory in China has developed issues that include late deliveries and increased accidents. After taking a trip to the factory, she discovers many ethical issues such as poor working conditions, low pay, and overworked employees.

Once she presents her report and offers recommendations for changes to the supervisors at Amex Corporation, nothing is done. The study presents solutions to the case study by discussing the choices that Amex has and the advantages and disadvantages of each, how Jim takes cultural relativism approach to the issue, and whether Amex is responsible for the working conditions of its suppliers.

Discuss some of the choices of the firm and the advantages and disadvantages of each

Amex Corporation has applied a business strategy of outsourcing its manufacturing processes to reduce costs and increase profits. From the case, the reduction in overall expenses allows the firm to provide quality products at an affordable price, which is appealing to the targeted consumers. Therefore, some of the significant advantages of the choice to outsource are saving money, offering quality products at an affordable price, increased consumers, and high profits. Despite the benefits, the process of outsourcing also has disadvantages. For example, Amex does not have the authority to control the culture or impose working regulations to their outsourcing factories. The company focuses on the increased productivity that a factory facilitates, which reduces their concerns about the working conditions of the employees at this factories. A second disadvantage associated with the decision to outsource is the fact that Amex cannot monitor the outsourcing factories, which prevents the establishment of employees’ welfare that leave the issues unsolved.

Amex also has a choice to influence the working conditions in the factories they outsource to, which can be done by entering into contracts that establish ethical rules on how workers should be treated. A benefit for this will include increased output, timely deliveries, satisfied workers, reduced accidents, and increased revenue. Amex has decided to do nothing despite the presentation of Preet’s report and recommendations. The disadvantage for this choice is the possibility for detrimental consequences for the company once the public discovers the poor working conditions of the workers in its outsourced factories.

Describe how Jim takes a cultural relativism approach to the problem

?Cultural relativism is the notion that actions, customs, beliefs, and ethics in a culture or an individual are relative to or based on the culture itself or within the person’s social context. In the case study, Jim believes that Amex will not do anything to rectify the issues in the China factory because that is the business culture in that part of the world. For example, he claims that people in such factories are willing to work for more extended hours and in less than ideal conditions to get better pay. Therefore, it is within their social context or culture to work long hours and in poor conditions to get higher salaries compared to other workers in different factories. Further, he claims that Amex must outsource to cheap factories to keep their costs low and provide low-priced products that consumers want. Here, Jim uses cultural relativism approach to show that there is a culture where consumers need low-cost products without caring how they are manufactured.

Since Amex does not own the Chinese factory, are they still accountable for the working conditions of its suppliers? Why or why not?

?Amex Cooperation is not legally accountable for the working conditions of its suppliers because they do not own these factories. Nevertheless, it is the company’s responsibility to ensure that it outsources its work to suppliers that show responsibility in providing the best working conditions for their employees. They should select the suppliers that are aligned with their ethics and represent their business in the best way possible. Apart from this, Amex can provide contracts to the Chinese factories making demands for the implementation of better working conditions and other ethical regulations associated with the wellbeing of the employees. In case the factories decline, the company should offer their business to other willing factories. In this case, once the poor working conditions and welfare of the employees are known to the public, Amex will experience adverse business outcomes forcing it to implement new strategies at the factories, working with a different source, or losing its consumers. Therefore, although it is not responsible for its suppliers, it has an ethical responsibility to facilitate the welfare of workers to ensure the success of the business in the short and long-term.

?In conclusion, despite the existence of different business cultures in the countries that it outsources to, Amex Corporation has a moral responsibility to ensure the implementation of ethical standards that maintain the wellbeing of workers. It should solve the issues with the Chinese factory to avoid losing its customers in the future. It is essential for the supervisors at the firm to recognize the effectiveness of ethics in business. Amex should strive to build a strong brand in its market to overcome competition, observe legal and moral obligations, and present a confident appeal to its consumers through maintaining an ethical code in all its business endeavors.

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