Business Environment Issues in Speedy Motor Case Study

Posted: November 28th, 2013

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Business Environment Issues in Speedy Motor Case Study

Question one

Ethics can be simply referred to as moral principles and values. It involves choosing the right decision among right and wrong choices. Business ethics are therefore those functions that lead to making the right decision regarding the welfare of a business, its owners, stakeholders, employees, consumers and the society. The current economy is characterized by a consumer market where only products with maximum satisfaction make sales. Therefore, it is fundamental for a business to conduct its operations in an ethical manner to satisfy more customers.

One business practice that would be considered ethical by stakeholders lies behind gaining competitive advantage. If a business demonstrates a sustainable and caring approach, it manages to differentiate itself from its competitors. This would then benefit the business as many communities and governments would be willing venture into partnership with the business.

The second ethical approach stakeholders would agree with is when a business endeavors to venture unto activities that would increase its productivity. Stakeholders always demand good results and better runs. Increase in productivity translates to better sales made by the business resulting to higher results for the stakeholders.

Apart from being ethical, a business may choose to engage in unethical acts that stakeholders would not agree with. A business derives its resources from society and converts them into its final products. Corporate social responsibility dictates that a business needs to follow a prescribed code of conduct of giving back to the society. Failure to be socially responsible is therefore unethical. This can lead to loss of market as consumers would not want to associate themselves with a business of poor reputation. Consequently, this would translate to poor sales and eventually reduced production. Stakeholders would therefore have to contemplate poor returns from the reduced productivity.

The second business practice stakeholders may consider unethical lies behind the business engaging in fraudulent behavior. A business may engage in unethical behavior with the main view of defrauding entities or people of their money. Engaging in fraudulent behavior warrants serious legal action by law leading unnecessary payments being paid to compensate for the crime. These expenses eventually affect the business’s profit thus reducing returns made to the stakeholders.

Question two  

In my opinion, closing a plant when it ceases to be profitable does not translate to violation of “moral minimum” if respect is granted to certain conditions. The most important consideration is the notice period awarded to the workers concerning liquidation process. In this particular case, a period of less than one month in my opinion is unacceptable. The plant should fulfill moral obligation and should have provided at least sixty days notice. The Worker Retaining and Adjustment Notification Act provide that employers have an obligation of providing their workers with an advance notice of sixty days prior to the closure. In terms of moral minimum, there would be no violation if the company would cater for its employees in the course of liquidation. This may involve due compensation or guarantee of another job at a similar company.

If the company does not endeavor to find an adequate means of compensation for the employees, then this act would amount to violation of moral minimum. In my opinion, employees of Speedy Motor Company would have a legal right of soliciting for compensation once the company undergoes liquidation. This is because the process was pre meditated and thus does not qualify to be unintentional harm. The principle of moral minimum rests behind a bare minimum of unintentional harm. The management had adequate time to make amends on the situation by informing the employees earlier but failed to do so.

Question three

In this case, the main stakeholders to be affected are the employees. Many employees in this company had most probably settled in nearby civilization with view of working until retirement. However, their plans have been cut short due to the sudden lay off. As far as the benefits of the employees are concerned, the company should endeavor to land new jobs for the laid off employees. In my opinion, this would be an opportunity of goodwill creation in closing process, and processes of hiring trained labor would cut long term costs. Severance in this case may be in order regarding the type of contracts signed by the employees.

In addition, the closure would also affect other stakeholders such as the entire community, since the company has been running for twenty years serving many consumers. The interest of the entire society would be considered through the company holding a meeting with the district director who would request members of the community to city hall for a meeting. In my opinion, this meeting should explain the entire situation and the reasons behind the closure. It should also be made clear to the community that this is an opportunity to clear up any emerging questions rather than suggestion session. After the meeting has been concluded, the company should release a press statement to inform other society members who could not make the meeting. The closure of this plant can hence be compensated through building other social amenities such as a school.

Question four

In my opinion, the company should take primary responsibility for terminated or laid off employees. Bad management can probably be attributed to the company’s downfall. This Company had been running for over twenty years serving its employees and the community. Majority of the employees had probably decided to permanently settle in nearby towns with view of working for the company until retirement. The management therefore has to look for adequate measures of compensating its workers. For the best interests of these and the rest of the employees, the company has primary responsibility of ensuring that they look for new jobs for the employees. The decision to grant the employees a period of less than sixty days notice is the main stumbling block, and has subjected the company to potential law suits if it fails to dully compensate its workers.

The best way to achieve this would be to identify a suitable company that is willing to hire new employees. In this case, as noted earlier, hiring experienced employees would cut on the expenses of negotiation, so this would not be a major challenge. This would also include part of the employee’s contribution because of their opportunity of keeping their CMC tenure. In addition, a good suggestion would involve setting up an employment office on short term operation to cater for employees who cannot be relocated. This would buy the company more time to figure out other strategies to employ in sorting out this issue.

In my opinion, the government has a role to play in this situation, even though it has no genuine cause to the company’s closure. The government has corporate social responsibility of ensuring its citizens do not have to endure such situations. In this case, the government can endeavor to establish new jobs for the employees through special program plans.