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Today, ethical issues are rather common, and they often occur in various spheres of life. For example, they are not rare in business, as the necessity to consider a situation from the ethical point of view and make a decision occurs when one and the same case is perceived from different perspectives. As a rule, professionals tend to find out what actions can increase their financial profit.
Still, the interventions they choose contradict with the interests of employees or clients sometimes. This issue becomes even more crucial when companies that work on a voluntary basis or provide basic needs to vulnerable populations face it. These organizations help others but require external support themselves to be able to remain in the market. Their main target is to aid but not to profit. Nevertheless, this aim is vital for the ability to operate. Cool organic aid to Latin America (COALA) has recently faced an issue of this type.
Poverty Fighters’ Case
COALA provides the most vulnerable population of Latin America with the products that are vital for the general public. The organization deals with the poorest regions, realizing that it cannot assist everyone, however, trying to do its best. The company reinvests 10% of gaining in this group of countries. It has several vendors, including Poverty Fighters International that works with farmers in Venezuela.
Still, an adverse economic situation affected it, and Hamburg operations are going to be stopped for a while so that the vendor can relocate to a cheaper city. My previous experience, allows me to claim that Poverty Fighters International is unlikely to resume its operations and return to its previous position in the market. I also realize that this issue will be disclosed soon, which will affect the company adversely. Thus, as the general manager of COALA, I need to reconsider marketing steps and pricing.
To understand this problem better and make an advantageous decision, the issue should be discussed from the ethical side following the ethical decision-making model. In this way, it is critical to define the sense of the problem and aspects it affects. Poverty Fighters International provides a lot of goods that COALA allocates to the poorest regions of Latin America through the cooperation with farmers. In this way, the lives of many people will be affected if the vendor stops operating. However, an adverse economic situation in the country does not allow the company to manage its business and break even.
Ethical guidelines that can be followed when making a decision regarding Poverty Fighters International should be based on the utility theory. According to it, people’s preferences define the utility of goods and services. Grant & Zandt, 2007) encourage to pay attention to the clients’ willingness to pay particular amounts of money for particular products. This perspective deals with the cardinal utility (the one that can be measured and compared). People who live in the poor regions are willing to receive aid, and the goods obtained from the very beginning are of the greatest utility to them.
They do not need a range of similar products provided at the same time, but require constant and regular supply. Ordinal utility deals with the things that cannot be measured and compared. The ordinal utility could be referred to when the organization is the only provider of particular goods that cannot be substituted. COALA and its vendors represent the limited amount of organizations that provide aid to Latin America, but they are not the monopolists; that is why they need to adjust their operations and prices. In the framework of this theory, every choice I make to resolve the situation should bring satisfaction (Aleskerov & Monjardet, 2002).
Unfortunately, as a general manager of this organization I have already seen similar cases and know now that Poverty Fighters International are unlikely to recover. Nevertheless, the fact that this vendor provided a multi-million dollar shipment of goods, makes me want to believe that this part of the organization operates decently, and its poor condition depends only on the situation in the country. Thus, I consider that it can be advantageous to relocate the vendor to a cheaper city for some time and to lower the prices for the public to be able to afford more of them.
Knowing that the company is in poor condition, people will be likely to buy its products as they are less expensive than others. If the goods are sold quickly, the losses of the company will be minimalized. Depending on the outcome of such intervention and customer demand as well as the economic condition in the country, the company will consider if Poverty Fighters International can operate. If the vendor’s economic situation does not improve, it will be better to stop its operations and allocate funds to another part of the organization. In this case, the main operations maintained by Poverty Fighters International can be undertaken by it. Such alteration will allow COALA to support Latin America further.
In conclusion, it should be mentioned that the utility theory can guide the ethic decision-making process. It provides an opportunity to find out whether the products provided by the company can be substituted with their alternatives and to see if the necessity to alter prices exists. In case of companies that provide aid, it is critical to consider not the success of one particular vendor, but of the whole organization. It may be better to make the company pause or reduce some operations to have an opportunity to improve the situation in the future.
Aleskerov, F., & Monjardet, B. (2002). Utility maximization, choice and preference. Heidelberg: Springer Verlag.
Grant, S., & Zandt, T. (2007). Expected utility theory.