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Case Study: The Family Business Essay

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Updated: May 4th, 2022

Introduction

The stakeholders in the case include the management, employees, and the owner. As the head of the Payroll Department, Jane’s interest entails dealing with employee salary and commission. Eddie is the general manager of R&S Electronics Service, implying that he is directly involved in the day-to-day operations of the company. Brad is the owner, implying that he too is directly involved in the daily company operations. Lastly, Greg is a service technician who also happens to be Eddie’s brother and who coincidentally earns high commissions compared to other employees working as service technicians (Anderson, 1992).

Analysis of the Case

Ethics is always about making decisions, and some issues such as the one facing Jane in her managerial capacity are always challenging to resolve. Jane is clearly in an ethical dilemma as she is in a situation that concerns right or wrong, but the values are in conflict and it is therefore difficult to clearly identify them (Sims, 2003). The four areas of corporate social responsibility (CSR) and theories of ethics can be used in this case to come up with reasoned decision-making.

CSR, like ethics, generally implies that individuals and organizations must distinguish right from wrong and proceed to do the right thing. Jane, as the head of the Payroll Department, is obligated to make choices and take actions that will contribute to the welfare and interests of the community as well as the company (Hasnas et al., 2010). Below, the decisions are evaluated across the three domains of CSR as the philanthropic domain does not apply here.

Economic

It can be argued that the main objective of R&S is to extend its services to clients and maximize profits for its owners and shareholders so long as it stays within the rules of the game (Sims, 2003). Jane can therefore decide to expose the unethical practice of Willie and Greg as their engagement with this practice breaks set laws and regulations. Such exposure may have adverse effects on the general manager and Greg, but is a step in the right direction since it assumes that economic gain is not the only social responsibility for R&S.

Legal

Legal responsibility delineates what society deems as important with respect to appropriate corporate behavior in terms of the laid down ground rules, laws, and regulations that organizations are expected to follow (Sims, 2003). It is indeed true that R&S is expected to fulfill its economic objectives within a legal framework (rules and regulations) imposed by local, state, and federal agencies. R&S is culpable of breaking the law regarding the allocation of jobs for service technicians and therefore Jane, as an interested stakeholder, is right to expose Willie and Greg for ignoring their legal responsibilities without fearing that she will be sacked as she is protected by one of the exceptions of the employment-at-will doctrine. Although the doctrine implies that the employment agreement between the employer and employee may be terminated at will by either party with or without just cause, Jane can take refuge in the realization that employers and managers cannot claim that termination was lawful if it indeed violates a public policy exception (Smith, 1985). Charlie is asking Jane to lie under oath that she is not aware of the unethical business practice involving the general manager and his brother, thus terminating Jane’s contract for exposing the wrongdoing would be unethical and illegal in law.

Ethical

Ethical responsibility includes actions that are not necessarily codified into law and may not serve the organization’s direct economic interests but should be made with equity, fairness, impartiality, and respect of stakeholder rights and freedoms (Sims, 2003). Using Kant’s categorical imperative theory, Jane should expose the wrongdoing of the two stakeholders based on the absolute, unconditional requirement that what they are doing is morally wrong and inherently unacceptable. In using the utilitarian approach, Jane will seek to maximize the greatest good for the greatest number of people by exposing the unethical act to ensure that other service technicians benefit from jobs with highly-priced commissions. Still, Jane can employ the moral rights approach to expose the unethical practice in the conviction that all service technicians have fundamental rights and liberties that can’t be taken away by the individual decision of Charlie. In exposing the wrongdoing, therefore, Jane will have taken an ethically correct decision because exposure will maintain the rights of technicians that have never benefited from highly-priced service jobs. Lastly, Jane can use the distributive and procedural justice approach not only to facilitate similar treatment of technicians, but also to ensure fair, impartial, and a consistent administration of rules among them to curtail others from taking advantage (Sims, 2003).

Conclusion & Recommendation

In conclusion, Jane should go ahead and expose the malpractice involving the general manager and his brother in line with the discussed domains of CSR and ethical theories. It is highly recommended for Jane to entrench the elements of the justice approach in the rules governing the company to seal all loopholes that have enabled employees to benefit unfairly.

One of the reasons that reinforce this recommendation is that the distributive element of the justice approach will ensure that the treatment of service technicians is not based on arbitrary characteristics such as family relations; rather it should be based on standards of equity, fairness, and impartiality (Sims, 2003). The second reason is that this recommendation will enable Jane to clearly state the rules and impartially enforce them as the head of the Payroll Department to minimize such unethical practices in the future. Lastly, Jane is at liberty to take the action of exposing her superior for unethical practice since the employer is not free to terminate her under one of the exceptions of the employment-at-will labor law.

References

Anderson, A. (1992). Family business. Business Ethics Program.

Hasnas, J., Prentice, R., & Strudler, A. (2010). New directions in legal scholarship: Implications for business ethics research, theory and practice. Business Ethics Quarterly, 20(3), 503-531.

Sims, R.R. (2003). Ethics and corporate social responsibility: Why giants fall. Westport, CT: Greenwood Publishing, Inc.

Smith, R.M. (1985). Exceptions to the employment-at-will. Labor Law Journal, 36(12), 875-891.

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IvyPanda. 2022. "Case Study: The Family Business." May 4, 2022. https://ivypanda.com/essays/case-study-the-family-business/.

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