Case Study on Ethical Dilemma (Chapter: 3)

Submitted To:

Dr. Muslima Zahan,

Lecturer of North South University,

Dhaka.

Submitted By:

SL no Name ID
1 Syed Sakib Hossain 1610839030
2 Saad Mhammad Taher 1610839030
3 Md Asif Mahmood 1612454030
4 S.M. Shahriar Zaman 1510579630
5 Mohammad Shafayat 1611179030

Date of Submission: 1th July, 2019.

Ethical dilemma
Your friend manages a retailer that has a history of superior profitability. She believes that one of
the principal sources of competitive advantage for her enterprise are low labor costs. The low
labor costs are due to her hiring of minimum-wage workers, the decision not to give them any
benefits (such as health benefits), and her consistent opposition to unionization at the company
(the workforce is not unionized). Although she acknowledges that this approach does lead to
high employee turnover, she argues that the jobs are low skilled, and that it is easy to replace
someone who leaves. Is your friend’s approach to doing business ethical? Are there ways of
achieving low labor costs that do not rely upon the hiring of minimum-wage workers? Would
you counsel your friend to use an alternative approach?

Solution:
Business ethics is the study of appropriate business policies and practices regarding potentially
controversial subjects including corporate governance, insider trading, bribery, discrimination,
corporate social responsibility, and fiduciary responsibilities. The law often guides business
ethics, but at other times business ethics provide a basic guideline that businesses can choose to
follow to gain public approval.

Part: 1. No, the business that my friend is doing is not ethical.

The friend has a retail business which has a highly profitable. She thinks that the main
competitive advantage is low labor cost. But the employee in her office are not getting expected
wage rate and other basic needs. Besides, she also oppose the unionization of employees in the
company. So, it states that she is tries have full control over her employees so that they cannot
raise their voices against this injustice.

Part: 2. An individual who is in charge of a certain group of tasks, or a certain subset of a

company. A manager often has a staff of people who report to him or her. There are three types
of manager. These are:
 Moral manager
 Immoral manager
 Amoral manager
Moral manager:
The Moral Manager is a person who is dedicated to high standards of ethical behavior both in his
own personal actions and in his decisions of how to manage the company’s activities. He
considers himself more as a steward rather than overseer of the business and, therefore, believes
it is important to exercise ethical leadership.
It is important to remember that a moral manager is also very ambitious and has the drive to
succeed. They, therefore, pursue business success, but he pursues these goals within the
parameters of ethical norms.
Immoral manager:
Immoral managers are the classic examples of self-serving greed which they term as “simply
business.” They have very few scruples and view integrity as a religious term not applicable in
the so called “real world.” In effect, they are willing to do almost anything to achieve their
personal goals and the interests of their company as long as they believe they can get away with
it.
Amoral manager:
The Amoral Manager believes that it is not necessary to consider ethical principles when making
business decisions because it is supposed to be perfectly legitimate for businesses to do anything
they wish so long as they stay within legal and regulatory bounds.

So, after discussing the types of manager we can say that she falls in “Immoral manager”
category because she is not giving proper wage rate and other basic needs to her employees.

Part: 4. Theories:
A. Virtue Theories: Many philosophers believe that morality consists of following precisely
defined rules of conduct, such as "don't kill," or "don't steal."
B. Duty Theories: Many of us feel that there are clear obligations we have as human beings,
such as to care for our children, and to not commit murder. Duty theories base morality on
specific, foundational principles of obligation. These theories are sometimes
called deontological, from the Greek word “deon”, or duty, in view of the foundational nature of
our duty or obligation
C. Consequentialist Theories: An action is morally right if the consequences of that action are
more favorable than unfavorable.
D. Ethical Egoism: an action is morally right if the consequences of that action are more
favorable than unfavorable only to the agent performing the action.
E. Ethical Altruism: an action is morally right if the consequences of that action are more
favorable than unfavorable to everyone except the agent.
F. Utilitarianism: an action is morally right if the consequences of that action are more
favorable than unfavorable to everyone.
G. Social Contract Theory: Social contract theory, nearly as old as philosophy itself, is the
view that persons' moral and/or political obligations are dependent upon a contract or agreement
among them to form the society in which they live.
H. Hedonism: The term "hedonism," from the Greek word ἡδονή (hēdonē) for pleasure, refers
to several related theories about what is good for us, how we should behave, and what motivates
us to behave in the way that we do.
I. Veil of Ignorance: The veil of ignorance philosophy considers all people equal as if each
member were wearing a veil so that such attributes as age, gender, ethnicity, and so on could not
be determined.
J, Categorical imperative: Categorical means unconditional, and imperative means that he
concept should be employed without any question, extenuating circumstances, or exceptions.
Right is right and must be done even under the most extreme conditions.

Part: 5. External Analysis:

Legal: Certain laws affect the environment of business in a lot of ways. Policies and mandates
of different countries affect business in different ways like in trade between countries.
Ethical: Ethical issues affect the business environment in respect to profit making, lack of
infrastructure, funders and investors and cultural aspects that are tied to ethics.
Social: Determinants like cultural trends, demographics population analysis that are tied to social
aspects affect business environment. For example, buying trends in US having more demand in
holiday seasons.
Cultural: Different cultures bring different behavior among people which affect the business
environment differently. For example, culture of Indians is different from Chinese culture which
make makes the business people differently.
Religious: Business environment in different areas with different religious people affect the
business in a lot of ways because of their variety of demand and beliefs

Part: 6. Justification: Every people wants basic needs such as food, place for living, education
etc. But in terms of workplace this needs translated into money. If employees basic needs are
fulfilled then employees love working in that organization and thus the organization does not
have high employee turnover.
The Maslow’s hierarchy of needs tells us about the basic need of an employee. An employee
should be treated properly (The Hierarchy of Needs for Employees, 2019, para 1). From the
case we can say that the employer should not pay lower wages to minimize the cost. Rather the
company should find other means to build competitive advantage in the market. The employer
should emphasize on innovation, efficiency, customer responsiveness, and quality services to go
ahead in the market.
The employer should abide by the laws that are imposed regarding employing and paying
minimum wage to workers. If the employer goes through these rules there will not be such
situation like this.
The employer should be more liberal to her employers and beside she should establish
unionization. Beside in this case the employees are not getting their basic need. So the employer
should have a concentration on fulfilling their needs.
Part: 7. Conclusion
Again, we can say that business ethics is the study of appropriate business policies and practices.
But here, my friend is clearly not following the rules of business ethics because she thinks that
low labor cost is the main Competitive advantage. She is not providing her employees the
expected wage rate and other basic needs. So this is clearly unethical. For earning more benefits
and to follow good business ethics, she has to be a good manager also. We know that there are
three types of managers. The way she runs her retailer, it seems she is an immoral manager.
She should abide by the laws that are imposed regarding employing and paying minimum wage
to workers. If she follow these rules there, the situation will be better. By establishing
unionization, providing basic needs, maintaining and focusing on well employee relationship and
ethics, the employer will get a good result and these strategies will also help her to maintain even
a stronger Competitive advantage for her enterprise.
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