Ethics

Ethical and moral obligations are laid upon every single entity present. No business is exempted from the obligation of having an ethical and moral conduct. The organizations now a day are labeling themselves to be socially responsible organizations and they are promoting the concept of ethical conduct with their stake holders. Giant corporations such as Unilevers, PG, Motorola, Nokia, Toyota and Microsoft are following a special code of conduct that is implied on each and every member of the company and they have to abide by it. Such moral conducts help the stake holders realize the good will of the companies and their conduct towards the environment, society and their very own partners.

The case given about the ABC Industries depicts a very usual kind of a scenario that is commonly observed at work places. Unjustified firing of employees, sudden increase in their working hours or a sudden decrease in pay cuts is common examples of unethical work practices. Here is the case of sudden cut in the pay.

Stake holders of ABC Industries
ABC Industries is a trucking company. The trucks are owned by ABC, or they might be used on lease or they might have the trucks rented and it can be combination of all three options. The company would have suppliers of the trucks. If they own the trucks they would their own suppliers or incase of lease, they would have a bank to pay to or to pay the rent to the truck owners. They will also have their customers who would be using their services. They might take consignments to pick and deliver to their respected places. The organization would also have their owners who would have invested their capitals in the business and they expect the business to make profits and they can have return on their investments. Employees are also stakeholders of the organization. They constitute a major chunk of the organization. employees are supposed to look after the organizational affairs and their satisfaction is very important. Their rights such as safe work environment, compensation packages that are competitive with markets are important for the organization to look after them. They would also have Government as stakeholder that would put rules and regulations upon them. Laws such as minimum wage law and consumer protection laws are few examples to quote. Government is also liable to receive the corporate tax and the income tax of the employees. Hence, Government is a very strong stakeholder of the company. Society is another and the most critical stake holder of the company. Society envelopes in itself all the pressure groups, the Non Governmental Organizations (NGO) and the common public that are the part of the larger environment. The pressure groups include the environmental agencies that look after the environment. These groups have their vested interest in environmental protection. These groups would be concerned about the trucks and their conditions. They would be concerned that truck fuel does not pollute the environment. NGOs would look after the consumers and their rights. Public would be interested in the way truck drivers dive their trucks and they do not cause any accidents while driving their trucks. These are the major stakeholders that would be interested in the performance of the company.

The US Federal Law on Employment states that disorderly conduct is a crime and should be charged as a crime. However, the offence should be such that it should ravage the peace of the place. In the case studied, the misconduct of Smith was shouting at his employee.

The whole scenario might prove Smith to be wrong and his act would be classified as offensive as disorderly, because he shouted. However, in the depth of the whole case, several reasons can be attached to such rude behavior. Moreover, the conduct did not come out because Smith wished to behave such way, rather situations and circumstances made him shout. In addition, it is also stated that Smith got up and advanced towards Mr. Derrick. Apparently it would display as a conduct of threatening or assaulting the person, but, it was just a reaction to a situation.

Detailed Analysis
ABC Industries has just implemented the change. The change was definitely not the favor of the employees as it negatively affected their net pay and the burden of the increased costs of the company was being laid at the employees. Their compensation was being reduced which, in the initial phases must have been an unacceptable practice for the employees, i.e., the drivers.  In such situations, giving a final verdict with out communicating with the employees is not a correct way of running the work place. Some resistance was to come and drivers must have not felt good about the policy.

This is why Smith reacted that way. He just behaved the way any employee would have had. It was a way to show his grievances. On April 2, the incident was not planned by Smith. After December 13 till April 2 he was in the phase of accepting the change and he was only suggesting an option that could have been heard and implemented too. The reason of Smith getting loud has not been identified hence, it does not set the position for Derrick being clear either. The normal circumstances could have been that Derrick would have been listening to Smith, and he might have objected to what Smith had said. It can also be possible that Derrick would have told him to clean out his truck and that would have aggravated the situation. He might have raised the voice in complains and then decided to bring the issue before Fife. Fife, might have not completely understood what Smith was saying and with the interjection of Derricks, it made the matter worse. That was the last nail in the coffin. Smith must have outrageous and hence raised his voice and got up. At this point, Fifes actions wee purely biased and were meant to do good for Derrick. Fife could have settled the situation and would have talked to Smith about it.

Even if the behavior of Smith was disorderly, in normal circumstances, Fife could have served Smith with a show cause notice and would have asked him to control his behavior. However, he bluntly asked Smith to cleanout his truck and fired him.

This was an unethical behavior from Fife. He being the owner of the company should have tried to retain the employees and should have also tried to listen to them. Instead of it, he gave the final verdict of cleaning out the truck. This suggests an immoral attitude from the owner of the company who does not believe in the rights of the employees.

Ethical Analysis
In the case of ABC Industries, the main problem with Fife was the immoral behavior. Morality can be defined as the conduct that can help people differentiate the right and wrong and decide which conduct is correct at what situations. Ethical theories provide guidelines to understand the situations and provide a code of conduct to resolve human conflict. It provides justification for the right and wrong behavior that could be displayed different circumstances.

Another theory is o prudence, that prudence teaches how ne can follow their self interests and do what ones feel is right for him or her.  Morality guides people to think for others and feel for others. For any business to succeed, morality and prudence should work together and ensure that correct behavior is displayed when taking an important decision. In the case egoism is also being displayed which is depicted by the behavior of Fife. Self Promotion and self worthy decisions lead to egoism that would revolve around the person only and would not take any body else into account. Utilitarian theories suggest an action that would do good for most of he people should be taken and greatest number of people should be benefitted from it. The concept of Utilitarianism is also missing from the case. It believes that morality of an action is determined by the after affects of the actions. The greater are the goods of the action the better would be the decision. Lack of human rights and lack of consideration of ones need is also displayed in the case given.

In ABC Industry the stake holders such as employees are being the victim of the policy and are being victimized due to the egoistic behavior of Fife. He wants his work don and to reduce the burden of the costs on the company he is shifting the surcharge on the employees. An adamant statement such as clean out the truck depicts ill conscience that he does not care about his employees and he is simply thinking for his own good. The discharge of Smith was not supported by any previous evidence of misconduct. It means that Fife was being prudent and he decided what would do him best. He simply decided to teach a hard lesson to the other employees that if they would complain any more, they would lose their jobs just like Smith did. Hence, all employees will now feel afraid to bring their grievances to the owners and their secretaries.

Corporate Culture vs. Corporate Governance
The corporate culture of ABC Industries seems very stringent. The owner Fife has a one liner which risks the job of each and every employee of the organization. This displays a culture where employees concerns are not a matter of importance and they are not given any heed. The environment after the decision of 13 December 2007 also made the air stricter and after the discharge of Smith, it showed that employees who would complain would not only lose their jobs but they might be charged with the act of misconduct. This relates as to how the organization is practicing a culture which is not at all moral. Voicing their concerns is the right of each and every employee and voicing concerns about their compensation is very important.

The corporate governance should be such that employees do not feel imprisoned and they are left with no choice but to obey their bosses. Ethical governance asks employers to be mindful of the needs of their employees and understand their problems and also provide some solutions.

Resolving the issues
In order to resolve the issue, Fife must have not taken the decision with out discussing it with the employees. The employer should have told the employees about it and should have communicated the reason to them. He should have calmly told them that the oil prices have been on the surge and the change is temporary. It will go away as the oil prices come down. For the behavior of Smith, the anger came out as a result of unharmonious environment. The employer did not want to listen to what Smith had in his mind. He had already entered the phase of accepting the policy that is why he asked to display the surcharge cut from his pay. The demand was not a difficult one, but it was a very sane demand.

The organization should have talked to Smith and should have calmly listened and calmly responded to him demands. Pay cut had landed hard on them as oil prices were going high for every one, and pay cut at those times was a difficult practice to implement as well be accepted by the employees.
If a forum would have been set to generate complains as well as recommendations, i.e., involving the employees to help manage the change, matters would not have worsened.  As for firing Smith, a show cause notice should have been served first and Smith would not have altered his behavior, an action could have been taken against him. Intuitive and abrupt decision making should have been avoided at all costs.

Conclusion
The human rights provide every human with the freedom of expression. Expressing one self is important and the same thing was done by Smith, perceived wrong by Fife and it resulted in Smith losing his job, which would not have happened if Fife would have listened to the problems of the drivers and their recommendations.