Ethics Topic 1



Anderson University DBA

Advanced Ethics Final Paper

Written by Karl Knapp

7/22/2003

Current Ethical Issue in Management

Description

The recent recession in the United States (and across the globe) has put pressure on firms to reduce costs in order to remain profitable. This pressure causes many firms to reduce across the firm, including through reductions in staff. The staff reductions have caused the US unemployment rate to rise to 6.4% (CBC News, 2003). Staff reductions have a significant impact on both the firms and on the national economy.

Reducing staff in order to cut costs and improve profitability is not a new phenomenon. For most firms, employee costs are the largest company expense. While the US has generally enjoyed a low unemployment rate over the past fifty years, firms have cut staff during economic downturns. In the late twentieth century, “merger-mania” swept across corporate America. This rash of mergers was largely financed by debt and the acquiring firms usually paid a premium for their acquisitions. This combination of factors led to cost cutting as a way for firms to recoup the premium and reduce their debt. Even during prosperous economic times firms have resorted to staff reductions to reduce costs.

In addition to the “merger-mania” of the late twentieth century, many firms adopted reengineering as a way to streamline operations and reduce expenses. Reengineering projects in many firms were closely associated with “rightsizing”. Employees perceived these projects as simply additional cost cutting measures and downsizing exercises.

As the twentieth century ended the US economy was going strong. With unemployment at very low levels, employees had for the most part economically survived the merger-mania and reengineering phases of recent years. While their economic survival had stabilized, the widespread staff reductions sent a cultural message to employees regarding their value to their firms. Employees had been treated as items on an expense report to be reduced and replaced without much of a second thought. This treatment left employees with greatly reduced loyalty toward their employers. The employees were just expenses, the employers were just places to get a paycheck. When a better opportunity arose, employees gave as little thought to jumping to a fatter paycheck as employers gave to jumping to a fatter bottom line.

Recent scandals with Enron, Global Crossing, WorldCom and Arthur Anderson have only acted to reinforce the lack of trust between employers and employees. The stock-option incentives for upper management, while meant to align the goals of management with that of shareholders, backfired as the temptation for huge executive payoffs led to single minded, short-term executive wealth maximization. Many times these payoffs were fueled by staff reductions, with the remaining employees expected to pick up the slack of their former co-workers without additional tools or reduction in workload.

All of these factors have caused a reduction in loyalty and trust between employers and employees. The memories of the merger-mania and reengineering have been triggered by the recent recession and widespread staff reductions of the early twenty-first century.

Impact on Management

Staff reduction, increased turnover, decreased trust, and decreased loyalty are significant issues for management. Changes in these significant factors have major implications for the theory and practice of management.

Staff reductions are difficult and risky organizational events. Human resource practices during these reductions may have significant organizational and legal ramifications. The organizational ramifications are affected by the reasons for, and manner in which, the staff reductions are carried out. Firms that give employees more choices, through early retirement offers, or voluntary buy-outs may experience less organizational trauma than those that reduce employee choice and force termination on employees. The legal ramifications may fall on those firms that are not careful about discriminatory practices during staff reductions.

Increased firm turnover increases recruiting costs, training needs, and can have a negative effect on the quality of a firm’s processes. The lack of continuity also creates managerial control challenges.

Decreased trust and loyalty on both the firm and management level create several management problems. These factors can create short-term problems, such as increased costs because of turnover and training. They can also create longer-term problems, such as reputation in the marketplace and resistance to change initiatives.

These issues present serious ethical dilemmas for managers facing profitability problems. What is the role of the firm to the employee? How should they be expected to treat employees? How should employees be expected to treat their firms? If a firm wants to reduce staff, should they? If so, how?

Ethical Analysis / Biblical Integration

Staff Reductions Are Ethical Managerial Actions

From a cost-benefit approach, reductions in staff have a definite short-term, positive economic effect on the firm and the stock price of the firm. For managers looking for short-term economic gain, this is an approach that can work quickly. Even though reductions in staff harm trust and employee loyalty, the large cost savings available mitigate the negative long-term economic effect of these reductions.

Under a capitalist distributive justice system, reductions in staff are not only ethical, but also necessary. In capitalist societies only the fittest firms survive. If reductions in staff are possible, they should be taken or the firm will fail as other more fit firms reduce costs, increase profits and take the market from the unfit. Reductions in staff are also appropriate for reasons of free choice (libertarian justice). Firms should be free to choose whatever actions they deem fit.

As long as the manager has sought out all alternatives to a staff reduction and has taken all possible actions to diminish the extent of the reductions, their heart will tell them that they have done all that was possible. In this case, natural law would support the reduction.

The Reformed Tradition Sees Staff Reductions as Ethical Actions

The reformed tradition supports the view of benevolence as the relationship of man to man. The role of man is to perform charitable acts and acts of goodwill for their fellow man. These acts of goodwill are enabled by the success that God allows those that work hard and are true to their calling.

Wealth is the affirmation of the truth of a person’s calling. If a manager has examined every alternative and a staff reduction is the best alternative, the action is ethical. The wealth that is accumulated as a result of the necessary reductions is then available for charitable works. The employees let go as a result of the staff reductions have new opportunities that open up to them, possible that redirect their lives in new directions that enable them to more fully pursue their calling.

The authority given to a manager is a just distribution of power because God called the employee to work for the manager. The employee and manager are pursuing the calling if both are able to build wealth. If the employee is holding the manager (and the firm) back from the accumulation of wealth it is a sign that the employee is not pursuing their calling, and it is right and just to redirect their efforts to be more in line with their calling.

Staff reductions benefit society as a whole. As each person is employed in alignment with their calling, all will benefit. Individuals will help those that do not directly benefit, through charitable works until they are able to be directed unto the path of their calling.

Staff Reductions Are Not Ethical Managerial Actions

Utilitarian analysis holds that everyone should act to generate the greatest benefits for the largest number of people (Hosmer, 1996). In a reduction of staff the investors and executives stand to benefit economically. The employees who lose their jobs, in addition to those remaining employed who are asked to take up the slack, all directly lose as a result of reductions in staff. Supply-side economists may argue that the increase in wealth to the investors and executives will stimulate the economy, and trickle down to the employees. This is a weak argument. Overall, reductions in staff fail a utilitarian analysis.

Staff reductions also fail a general distributive justice analysis because is does not result in a fair distribution of the benefits and burdens of society (Hosmer, 1996). The burdens fall upon the employees, while the benefits accrue to the investors and senior managers of the firm. The benefits of the reductions do not accrue equally (Velasquez, 2002), and fail an egalitarian approach to justice. Rawls’ approach to distributive justice also disagrees with reductions in staff in order to benefit the few ‘at the top’.

Reductions in staff may also violate the rights of employees. Staff reductions violate Kantian rights if the reason for the reduction is to advance the interests of management itself. Many times it seems that this is the case.

Management also has a responsibility to balance the needs of the various stakeholders of the firm. Drastic imbalances between stakeholders can lead to long-term problems for the firm. Because of the need for balance, managers have a certain responsibility towards employees. Staff reductions violate this ethic of care towards employees. In fact, managers should exercise special care for those with whom we are concretely related by attending to their particular needs, values, desires, and concrete well-being as seen from their own personal perspective, and by responding positively to these needs, values, desires, and concrete well-being, particularly of those who are vulnerable and dependant on our care (Velasquez, 2002).

Staff reductions may also inhibit the development of the moral virtues in the managers executing them. This is especially the case when the staff reductions are being taken for the purpose of satisfying the short-term desires of management who have fallen the temptation of greed.

Natural law may also be violated by staff reductions if the manager ‘knows’ in their heart that the action is not just. This depends on the reasons for the staff reduction. If all alternatives have not been taken to avoid or diminish the reductions, the manager will likely know in their heart that it is not a just action.

The Wesleyan Tradition Sees Staff Reductions as Unethical Actions

The Wesleyan tradition believes that man must support their fellow man. Man has a responsibility to love those around him. Business is not just simply a place to make money, or even pursue your individual calling, but one where social and interpersonal needs can also be met.

Because the Wesleyan tradition supports the idea that work is a place that includes social and interpersonal concerns, the decision to cut staff may be approached only as a life or death, last resort. The importance of the connectedness to the people in the firm creates an atmosphere in alignment with an ethic of care.

Reductions in staff would only an option in the Wesleyan tradition as an absolute last resort. It would violate much of the environment that the tradition values in its organizations. The long-term ramifications from such a reduction would require the organization to expend a large amount of time and money to build back the prior, interconnected, trusting environment.

Pedagogical Exercise

Objective

Enables the students to understand the complex issues, feelings, and pressures that come along with a staff reduction. This understanding should be gained from the perspectives of the various stakeholders of the organization.

Exercise

Separate the class into the following five groups:

• 20% of the class into the ‘shareholders group’

• 5% of the class into the ‘board of directors’ group

• 20% of the class into the ‘management’ group

• 30% of the class into the ‘employees’ group

• 25% of the class into the ‘local community’ group

Give each group the following (different) instructions:

• Shareholders – tell them that the returns on the stock are not satisfactory and are lagging behind the industry. If something is not done by the end of next quarter the shareholders will seek to sell the company. The group must decide how to inform the board of directors. The group must provide their comments in a meeting with the shareholders outside of the room.

• Board of directors – tell them that, although the stock price has fallen in recent months compared to the industry, the management group has provided documentation of internal performance measures that are satisfactory, but indicate that the organization is overstaffed compared to its competitors. Following the feedback of the shareholders, the group must decide how to inform management of their dissatisfaction with the results. They must ask for a plan that will improve profitability and the stock price by the end of next quarter (3 months) and include staff cuts because the company is overstaffed. The group must provide their comments in a meeting with the management outside of the room.

• Management – tell them that they know their organization is a bit bloated, but they are sure that economic conditions will turn around. Receive the instructions of the board of directors and create an action plan. (The action plan will be to reduce staff. Ask the group to create the specific plan for staff reduction, including how you will select who loses their job.) The group must decide when to tell employees, right up front, when the plan is complete, or when they will lose their jobs. Inform employees of the upcoming staff reductions according to the management plan.

• Employees – tell them that they are not happy with working conditions and have felt that they do not have a say in key decisions of the company. Ask them to draft a plan to lay out specific initiatives that will increase the involvement of the employees in the key decisions. Devise a method to present these initiatives to management when you meet with management.

• Local community – as the group to consider the rights and responsibility of a company to the local community it operates in. Make a list of the most important responsibilities that a company has to the community, and a community has to the company. When the list is complete, inform the management group that you would like to schedule a meeting to discuss the list. Conduct the meeting.

Debriefing Session

Ask each group how they felt about the communication process and exclusion of groups to certain discussions. Discuss the one-way flow of information and the communication problems that can be created in such a situation. Ask the class to critique the management team’s staff reduction plan, both in how it was communicated, when it was communicated, and how people will be selected for reduction. Discuss the legal, economic, and ethical dilemmas in a staff reduction.

Emergent Ethical Issue in Management

Description

The world economy is becoming integrated into a global economy. This “new” global economy is linking together customers, producers, suppliers, distributors, investors, and governments across the globe.

Several factors are driving this new integrated global economy. The fall of the Berlin Wall and the Soviet Union left capitalism as the remaining major economic system. This brought down barriers that existed in Europe for many years, opening the markets. The decline in military tension created a sense of security for firms desiring to expand overseas.

Economic and monetary unions have also had a significant effect on globalization. The north American Free Trade Agreement (NAFTA) lowered North American trade barriers. This enabled firms in North America to move goods, services and production across the area more freely.

The European Union (EU) has also had a significant effect on globalization. The unification of European currencies along with the ease of economic commerce between European countries has enabled European firms to expand more easily as well.

The future potential expansion of NAFTA and of the EU will continue to bring global barriers down. As these barriers fall, capitalist firms will expand into these new markets, seeking competitive advantage and profit.

Impact on Management

Globalization has many effects on the theory and practice of management.

Firms will increasingly encounter and must work closely with diverse cultures and people. Diversity management within firms will become a very important issue for firms wishing to compete in the global economy.

The diversity of employees within a firm present challenges to managers attempting to provide a motivating environment for employees. Employees from different cultural backgrounds will be motivated by different factors. Managers must be trained to appreciate, and adapt their motivation approach based on these factors.

Although English has become the defacto standard language of business, language barriers between stakeholders of global firms can contribute to problems within those firms. The communication process in a distributed organization is difficult. When additional filters, such as language barriers are introduced, communication becomes even more difficult. Firms will have to take specific actions, such as language training for employees, to minimize the effect of these language barriers.

In a global economy, firms will interact and be affected by a variety of new political factors. Each country, even if it is a member of an economic or monetary union, will present specific challenges for firms doing business. The legal, and lobbying functions for firms will become more much expensive and challenging.

Finally, firms face many decisions on the allocation of resources. In a global firm, the firm must balance the demands of many stakeholders. In order to maximize wealth, many firms have allocated various functions globally, sometimes in order to take advantage of lower costs. Many North American firms have moved production to Mexico in order to take advantage of lower production costs south of the US border. Because of NAFTA, these firms have little long-term additional costs, and short-term economics makes the decision. If a firm can reallocation production to another country in order to take advantage of cost advantages, should they?

Ethical Analysis / Biblical Integration

The ethical analyses of the management challenges of the new global economy are not based on the decision if a firm should expand globally or not. The ethical challenge for firms facing this decision are better informed by a discussion of why the firm wishes to expand globally, and how.

While a very strong argument can be made that firms (and people for that matter) do not make rational decisions, for this discussion we will assume that they do. As such, firms will expand for reasons that they perceive to be beneficial to their short- and long-term profitability. The economic analysis, at least on some level, must present a positive net present value for firms to expand globally.

The decision to shift production and resources to other countries presents serious ethical concerns for managers.

Reallocation of Resources to Take Advantage of Lower Costs Is Ethical

The primary duty of managers is to maximize shareholder wealth. While managers must provide some level of balance between the stakeholders of the firm, the primary duty is to maximize profit. The opportunities presented by the various monetary and economic unions certainly help to underscore that moving resources to the most efficient source is a legal action.

The economic cost/benefit of the movement of resources to the location of most efficiency is also very clear. Firms benefit not just from the lower costs provided by the reallocation to more efficient means of production. The available threat of other means of production keeps the current resources competitive, and working at maximum efficiency.

This decision is also certainly consistent with the distributive justice of a capitalist economic system, where benefits should be distributed according to the value of the contribution the individual makes to a society, a task, a group, or an exchange (Velasquez, 2002).

Firms should be free to choose between the available alternatives. The recent actions of governments around the world, creating economic unions, supports the view that the world governments also support the right of firms to choose the best economic alternative.

Rawls would also support the conclusion that the reallocation of production to locations where more efficient resources are available is just (Velasquez, 2002). The areas where labor, for example, is more inexpensive are often areas that are in developing nations, like Mexico. These are some of the least advantaged in the global society and the move most certainly benefits them.

Managers in capitalist firms certainly understand that if they are not the most efficient source of management that they should be replaced. As such, Kant would support the reallocation of resources because management would be willing to have all others do this, even as a basis of how they treat management (Velasquez, 2002).

The Anabaptist Tradition Sees Reallocation of Resources As Ethical

Because business is a vehicle for salvation, the reallocation of resources to other countries provides the Anabaptist tradition with the opening it needs to pursue its main mission in business, to lead others to truth. The reallocation of resources may cause short-term loss for the members of the firm who are no longer competitive with external sources of production. This short-term loss may cause those people to become even more lost, the support of the church will help them to find their way again.

The utilization of resources in new regions and areas opens up evangelical opportunities for the Anabaptist tradition. Business is a means to a greater end. The additional people touched by the business provide opportunities for them to be led to salvation.

The business is a vehicle for salvation and must survive for its primary mission, leading people to God, to be pursued. In the long-term, the most efficient and effective resources must be utilized for the business to continue in its primary mission. The reallocation of resources is ultimately an ethical, and necessary action.

Reallocation of Resources to Take Advantage of Lower Costs Is Unethical

Just because a management action is legal, and even economically feasible in the short-term, does not mean that the action should be taken. The lure of cheaper overseas labor to improve short-term profitability undermines the manager-employer relationship and is unethical.

These reallocations violate the tenets of distributive justice and do not ensure an equitable distribution of benefits (Hosmer, 1996). Even on the basis of capitalist justice, seeking lower priced labor overseas is not ethical because it does not distribute benefits according to the value of the contribution made (Velasquez, 2002). Management reaps the largest portion of the benefits, and their contribution is not commensurate in size.

It is also unfair according to Rawls because the social and economic equalities are not arranged to the greatest benefit of the least advantaged persons (Velasquez, 2002). Managers surely would not want their board of directors to replace them with overseas management, with only cost consideration in mind. Because managers would not want this same action taken against them, these reallocations violate employees’ rights according to Kant (Velasquez, 2002).

These actions also violate the ethic of care that is incumbent on management towards their employees. Employees are vulnerable and dependent on the ethical actions of management for their wellbeing. Management has a responsibility to take actions that nurture their relationships with employees. They must exercise special care for their needs, values, desires, and concrete wellbeing (Velasquez, 2002).

Reallocation of resources in order to maximize short-term profitability, and short-term bonuses of management also enables a pursuit of greed. The pursuit of greed does not build the character or moral virtues desired in a modern manager. Actions that embody greed should be avoided and are unethical.

The Wesleyan Tradition Sees Reallocation of Resources As Unethical

Business is more than about making money. The interpersonal relationships that the employees and managers in the business create are a valuable and important part of the business. The value of those relationships is important not only to the business, but to the loving atmosphere that members of the Wesleyan tradition attempt to create.

Seeking short-term economic gains at the expense of those important interpersonal relationships is not only unethical, but an economic mistake. The interpersonal relationships that enable a business to function effectively serve more than just God, the serve the business. The loving environment created by the Wesleyan tradition enables trust and lowers the transaction costs of intra-firm business transactions.

In addition to the economic importance of a loving environment in a firm, the reallocation of resources for short-term economic gain is not a loving act in the eyes of God. It does not display the loving kindness and love for the people around the manager. The business is not serving the employees justly by seeking short-term economic advantage at the expense of their principles. The reallocation of resources for the pursuit of short-term economic gain is not supported by economics and is an unethical act.

Pedagogical Exercise

Objective

The objective of this exercise is to expose students to the various labor rates, cost of living, and environmental factors in a decision to relocate firm resources overseas.

Exercise

Divide the class into four to six person teams. Each team is the hypothetical production management team of a firm. The firm’s products are being beaten by the competition on price, with products of similar quality. Many of these firms have moved their production to Mexico, or to Asia to tap into the lower priced labor pool available. The CEO has asked the production management team to come up with alternatives that will enable the company to remain competitive with their products.

The team should investigate the factors to consider when moving production (or any other function) to other parts of the world. After defining the factors to be weighed, the production team must write a report that outlines the characteristics of one foreign country against these factors. The report should end with a recommendation to the CEO on the potential move of the production facility. The report will be presented in a formal presentation to the entire management team (the class) upon completion.

Future Ethical Issue in Management

Description

The increasing scope and scale of economic and monetary unions are consolidating economic and political power into a smaller number of larger powers. If this consolidation continues without interruption, the economy could ultimately be organized around two hemisphere super-political economic unions, or even a single, global government and economy. This hypothesized global government / economy / monetary union may evolve with various characteristics. For the purpose of this hypothetical analysis we will assume that the global government has evolved along one particular course.

The global government would have to encompass different levels of authority at its various levels. On the highest level, the global government would decide matters of global policy, pass globally enforced laws, provide global services such as military security, maintain key infrastructure, provide funding for research, fund education, ensure human rights, and provide a judicial system to ensure the laws and global constitution are enforced.

Because the global government will be formed by groups with a variety of experiences with different political systems, the new global government will be a combination of capitalist and socialist philosophies. The overall structure will be capitalist, but will provide more services and collect higher taxes than the current US capitalist structure. A social safety net and higher level of government services will come from the socialist heritage.

On a regional level, regional governors will coordinate regional issues, and will have the same three branches as the global government: executive, judicial, and legislative. The scope of services and areas that the regional government addresses will be limited to those of regional reach. Similarly, state and city governments would operate in a similar fashion.

The evolution of the government into a single, unifying, world government has many implications for business.

Impact on Management

A single, unified world government would eliminate trade barriers, tariffs, and free the movement of goods and services throughout the world. It would not eliminate the different cultures in which firms must operate.

The movement of labor, production, service and sales resources would have to be coordinated across the world. For larger global firms, this will require a coordinated strategy that approaches the world market in the most effective way. It will also require managers to coordinate operations and employees in multiple cultures. Diversity management needs would escalate significantly because of the freedom of movement of staff, goods and services.

Large firms would have a more difficult political lobbying landscape to navigate. Firms operating on a global scale would have to coordinate their political lobbying efforts across the global, regional, and local governments. These efforts could become more costly than similar efforts carried out on the national scale in the current economy. The role of corporations in the creation of political policy and laws could become a very important decision in designing the global governmental structure. A corrupt structure could give large corporations incredible power over policy and lawmaking and skew the distribution of wealth into polar extremes.

Smaller and medium sized firms would have a more difficult time competing with the global firms. Because of the resources and economies of scale needed to compete on a global scale are out of the reach of smaller firms, they would have to direct their strategies toward areas where they can differentiate against their global competitors. Their niche may be reduced to those product and service areas where they can tailor their offerings to meet local cultures and tastes. In markets where economies of scale are available, strategic options for smaller firms would be reduced to focused differentiation strategies.

Due to the increasingly distributed nature of firms, organizational culture would become more difficult to manage. The importance of culture to organizational performance has been well documented (Kotter, 1992). Companies that are able to obtain both broad economies of scale, in addition to a strong global culture would have a distinct advantage over their competitors.

Motivation strategies for managers would also become more difficult, especially for multi-cultural work forces. Different cultural groups are motivated by different factors. Managers will need to utilize a broad motivational toolbox to motivate individual employees in a global economy.

Ethical Analysis / Biblical Integration

A major ethical issue to be considered will be the issue of distributive justice. While the capitalist system is perceived as the ‘winner’ of the cold war other major world powers, such as China, operate under socialist systems. What system is used to distribute the benefits and burdens of society is probably the major hurdle to the creation of a world government.

Many argue that although capitalist systems are more efficient, they do not adequately protect the rights and needs of the disadvantaged. Socialist regions would argue for a larger government role. On the other hand, libertarians would argue for a form of government that minimizes government intervention and provides freedom of choice. Some balance of each of these alternative forms of distributive justice will likely emerge as the amalgamated global government.

A second major ethical issue to be considered with the formation of a global government centers around rights. Current government perspectives vary on the issue of human rights. It is likely that some form of the golden rule, or some of Kant’s views on rights would translate into a global government.

The issue of virtue theory may not provide a wide consensus. While many may argue for the development of “moral virtues” as a positive thing, obtaining consensus on what the moral virtues are, and to what extent must they be developed is a more difficult issue.

Theological traditions would also view the development of a global government differently.

The Catholic Tradition Would Support an Authoritarian World Government

The sinful nature of man requires that the church provide the support that the fallen world requires. The movement toward a global government is a necessary step that enables the church to work with the global government to provide the authority necessary to help sinful men to salvation.

Individuals are not able to overcome their sinful nature without the assistance of the church. The authority of the church provides the structure and support that is needed for the fallen. Working in close conjunction with the global government, the Catholic church has the global reach and administrative resources required to assist the people of the world to confess their sins and be brought to God.

With the broad reach and global resources of the new world government, global social issues can be affected in a much more direct way. The scope and resources of the global government, working closely with the Catholic church, will be able to do many works of social good, directed to the areas of the world that most need it. A global government provides the resources, reach, and authority needed to administer social justice.

The Reformed Tradition Would Support a Capitalist World Government

The creation of a global government would enable opportunities for each and every person on the planet to pursue their calling. A world-wide capitalist system would enable the majority of people to accumulate wealth so that they could pursue charitable endeavors, to help those in need.

It is the responsibility of each and every person to pursue their calling, and to do the best that they can in service to God. The affirmation of that proper pursuit is the accumulation of wealth.

The role of the government is to make sure that each person is free to pursue his or her calling. While the global government would provide a minimum social net for those in need, the efficiency of the capitalist system would provide capital for the charitable works that would be necessary to help those in need. The increased efficiency of a global capitalist system is the machinery needed to create a system that enables people to pursue their calling, and to be helped in times of need.

A capitalist system is the best design for both the most efficient operation of a global society, and to provide for the charitable works for those in need.

Pedagogical Exercise

Objective

The objective of the exercise is to acquaint students with the complex set of possibilities available as choices for a world government. At the end of the exercise the student should understand on a basic level the major political and economic systems of the world.

Exercise

Each group will be assigned a country to research from the Group of 8 (G-8: Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and Russia) along with China, Mexico, and Saudi Arabia. The research should include a description of the country’s political, economic and religious systems. It should also list the major demographic characteristics of the country, such as population, GDP, and inport/export activity.

Following the research phase, each group will create a list of the major pros and cons of each aspect of the country’s political and economic systems. The summary, and the list of major pros and cons will be shared with the class in an informal presentation.

After all groups have presented the key aspects of their country’s political and economic systems, a discussion of the overall global political and economic systems will be held during the course of an entire class period.

A following class period will be dedicated to the discussion of what a global government could be like, based on the factors each group studied. Each group will be asked to argue for the positive aspects of their assigned country’s political and economic system for inclusion in the global government.

Future Ethical Issue in Management

Description

The baby boomer generation is approaching retirement age. As this large group of people retires, it will cause a major reduction in the number of working age citizens in the United States. This major reduction in the number of available employees in the United States will have several major impacts on management.

Impact on Management

The average age of citizens in the US will continue to rise as the baby boomer generation ages. This provides firms with marketing opportunities. Firms can alter their strategy to be in line with the needs and desires of this older generation. Products and service strategies can be differentiated for the needs of the older generation.

The aging population will also alter the market economics for a variety of industries. Obviously the demand for health care services will increase. Additionally, the demand for financial services will also increase as the older generation retires and begins to utilize their retirement investments. Their accumulated wealth will be moved to more stable financial instruments, consistent with a lower yield, lower risk investment portfolio. Entertainment venues that target this age group will also benefit from increased demand.

The aging population may also move south to enjoy warmer climates during retirement. Firms that desire to serve this retired population may need to strategically relocate to warmer locations to move along with the market. In addition to the overall market adjustments, this ageing population presents specific management challenges.

The workforce will increase in average age. The interests of the employees and the benefits that they will demand will change, as they get older. Workplace safety issues may become more important. With an aging population, disabilities may increase among the employee population that requires accommodation under the Americans with Disabilities act.

The size of the workforce will decline. As more and more Americans retire, the number of employment age workers will decline. This decline will cause a shift in power toward the employees, as competition between firms for skilled employees increases. This competition will cause the average salary for employees to rise.

The rise in average employees and competition for skilled workers will cause employers to consider several options. Employers may lobby Congress for an increase in foreign visas to allow immigrants to stabilize the size of the workforce. An increase in foreign work visas would help to counteract the upward pressure on the average wage.

Another option firms may consider it to reallocate firm functions overseas in response to the rising wage levels in the US. This potentiality has been discussed in the previous topic discussion.

As the population ages, managers will have to face some of these demographic shifts.

Ethical Analysis / Biblical Integration

Demographic shifts in the US population are a major force that will affect the practice of management. One of the solutions to the decrease in the supply of workers is an increase in foreign work visas. This approach introduces several ethical dilemmas.

If the purpose of the immigration of foreign workers is to manipulate the supply of employees to bring down the wage rate, this can raise serious ethical issues. The employers will argue that they do not have an adequate supply of domestic labor and that they have no choice but to seek immigrant sources of labor. On the other hand, the employees will argue that immigrant labor is only being brought into the country to lower the wage rate for employees.

Both of these perspectives raise the issue of distributive justice. Because we are discussing the demographics of the US population, the analysis of distributive justice must be viewed through the lens of the capitalist system. In this system the benefits should be distributed according to the value of the contribution the individual makes (Velasquez, 2002). In a capitalist system, if an immigrant can make the same level of contribution as a US citizen, they should reap the same level of reward. The level of reward is at the mercy of the forces of supply and demand. If the wage rates are lowered because of the increased supply of labor, this is fully within the scope of the capitalist system, and should be considered ethical.

The immigration of labor does not impinge on the rights of the US workers. The US workers have the same rights whether or not the immigrant labor force is admitted.

Immigrant laborers can be exploited by the firms that employ them, especially if their work visas are dependant upon continued employment. This puts the employer in a position of power over the immigrant employees. The employers can use this power inappropriately. This is an area of ethical concern. Steps must be taken to protect the rights of the immigrant labor force.

The utilization of immigrant labor force is also found to be ethical utilizing Kant’s views of rights. In Kant’s view, a person’s reasons for acting must be reasons that he or she would be willing to have all others use, even as a basis of how they treat him or her (Velasquez, 2002). If the roles were reversed you can most certainly assume that the US workers would seek immigration to other countries if the economic or living conditions were significantly out of balance and greener pastures were available in other countries.

The Anabaptist Tradition Would Support Immigrant Labor As a Means to Bring Others to God

Immigrant populations are frequently composed of lost and downtrodden souls. They are comprised of people who are in both material and often spiritual need. The Anabaptist tradition would view this group of people as part of the very purpose of business, to bring others to salvation. While members of this tradition would not want US employees to lose wages as a result of an increase in labor, this reduction would be offset by the opportunity to help others in need.

The Reformed Tradition Would Support Immigrant Labor As an Enabling Force

The reformed tradition’s strong ties with the thoughts of Adam Smith and capitalism would certainly lead them to support immigrant labor. The immigration of labor would balance the supply and demand for labor. It would enable the immigrant population to pursue their true calling and to accumulate wealth as a sign of the rightness of their calling.

The balance of the supply and demand for labor will also enable businesses and managers to have additional capital with which to do charitable works and to help those in need.

Pedagogical Exercise

Objective

The objective of this exercise is to foster a greater understanding of differences between generations of Americans in the students. Through this greater understanding, it is hoped that increased tolerance and thoughtfulness of the part of the students toward different generations will be gained.

Exercise

Each student will be assigned a dual task. First, the student must research what the baby boom generation is and what major forces shaped the experiences of their youth. This research must be distilled into a three-page paper on the topic. Following the paper, a classroom discussion will be held about the major findings of the students.

Second, students will be required to target a location frequented by large numbers of the baby boom generation for observation. They will be required to interview at least five members of the baby boom generation THAT THEY DO NOT KNOW. The interview should focus on the baby boomer’s perspective on what it means to be a baby boomer. They should also ask each person what important thing that they have learned that they would like to teach others. The interview results should be typed and submitted to the instructor.

Finally, a class discussion will be held on the subject of the baby boomer generation. Were the findings of the research consistent with the interviews? What subjects were uncovered in the interviews that surprised the students? What confirmed what they already knew?

References

CBC News Online Staff (2003, July 3). U.S. unemployment rate takes unexpected jump. CBC News. Retrieved July 20, 2003 from .

Hosmer, L. T. (1996). The ethics of management. Chicago: The McGraw-Hill Companies, Inc.

Velasquez, M. G. (2002). Business ethics: concepts and cases. New Jersey: Prentice Hall.

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