Ethics

All the ethical issues involved in the activities carried out by the companys management have been discussed below. It has been discussed whether the activity is ethical unethical and reasoning for it has been given under the light of ethical concepts and theories presented by experts. The analysis given below also discusses the financial impact of the decision on the bottom line of the company and the impact of the decision on the employee morale in the case of forbidding the activity in the future. The reasoning discusses how the management would react to the decision and how should the problem be tackled. All these aspects makes it easier to understand the decision being made and the consequences if the activity is forbidden or continues to take place in the future.
Ethical Analysis of Activities

Activity 1
The practice of taking high value clients to expensive dinners, golf trips and clubs is an unethical practice. Pat Gnazzo should ask its management to cease this practice for the future since it violates the ethical standards. The act of taking the high value clients out for dinner is unethical in two aspects.

Firstly, the principle of equity and fairness is violated when the managers only take the high value clients out for dinner and socializing since they are the ones who can offer the greatest business. This means that the managers are spending more time with the high value clients who they feel can earn them more business and less time with potentially less valuable clients. All clients of the company deserve equal treatment and should receive the same kind of attention. No client should be given special treatment just because he or she is able to bring more business

Secondly, if the managers take the clients out to expensive places, they are putting undue influence on the clients to conduct business with them, hence manipulating their decision making process. After being subjected to expensive treatment, the client feels obligated to provide business to the company without objective reasoning. Thirdly, if the strip clubs are illegal under the law, it would be unethical for the company managers to invite the clients over there.

The forbidding of this activity may lead to resentment about the decision since they will not only lose on valuable business being generated through these clients, but also opportunity to socialize on the organizations own expense. Therefore, it is important that the managers be explained about the nature of this activity and what consequences it can have on the ethical program of the company and its long term success. The companys bottom lines in terms of profits may also be affected in the short run but it can be expected not to be affected in the long run.

Activity 2
The activity of asking the summer interns to collect information from competitors by deception is an unethical practice on the companys part. Gnazzo should immediately ask the managers to stop using this technique to gain information however valuable it may be. Although the information may be highly valuable in terms of giving an edge to the company, but the practice can lead to a compromise over the ethical culture of the company and the corporate ethics guideline.

If we look at Kants categorical imperative, we can reinforce the unethical aspect in it. According to the categorical imperative, act in a way which would be acceptable if the whole world acted the same way. Therefore, if the whole world started deceiving each other for information, the whole concept of ethis and trust would be lost. Secondly, it is unethical to use someone as a means to achieve something. Using the interns as a means to achieve your goals is an unethical practice and should be avoided by the management in any case.  The management should look towards public sources of information if they want any information about the competitors. This will be more consistent with the ethical guidelines of the company.

The managers have found a easy and cheap way of extracting information about their competitors, therefore they will not be happy with the decision to forbid using interns to get this information. They should be told that using deception and posing as university students may get them information in the short run but it will harm the companys reputation in the long run and may also lead to deficiency of trust in the market with the customers, suppliers and other stakeholders.

Activity 3
The use of an overseas supplier who uses underage children as labor is an unethical practice on the part of Chubb. The management should stop using the supplier since it is a violation of the moral standards. Even though the practice may not be illegal when speaking in legal terms, it still remains unethical. But it is considered unethical by the society to employ children to work. Therefore it is advisable for the company to stop using the supplier

A case to support this decision is the case of Nike which was subject to a lot of criticism for using suppliers manufacturing goods in below par conditions and using women and children as labor. The right to minimalism is violated when we talk about using children as labor. The children have the right to minimal education and learning in their childhood before they enter the workforce. the UN declaration on labor laws ensure that no children are used as labor anywhere in the world even if the local laws permit the use of children as labor for manufacturing or any other services being provided.

Even though the cost of production may increase for Chubb in the case that the supplier is banned, but the step is necessary to protect the integrity of the company, long term objectives and to avoid any litigation on the company in case the issue goes public. The customers may stop using the products of the company over these ethical concerns and may ultimately lead to loss of business. Therefore, to uphold the ethical image of the company and to sustain the business in the long run, the company should ensure that its suppliers hire only adults as labor and do not violate the standards of conditions for the workplaces set by international organizations such as United Nations.

Activity 4
The act of hiring security guards who are relatives or friends of the current security guard is not an ethical practice in itself. The company management does not have to worry about it being unethical as long as the hired guards are capable of performing the job at market competitive remuneration and they are hired through a fair and justified process in which every applicant gets an equal chance. However, it would be unfair to other applicants if the person is selected for the job only on the fact that he or she is a relative to a currently employed security guard. The company may however give additional weight for the reference provided by another security guard. The company may decide to adopt this practice to ensure that the security guards employed are reliable and trustworthy since the job is of a sensitive nature. The company, however, should be open to hiring other people for the job of security guard if they can provide adequate references and guarantee and the company management is satisfied with their credentials and skills.

This is in accordance with the ethical principle that preferential treatment is unjust and should be avoided unless there is rational reason for doing so. In this case, the rational reason is that the company requires the security guards to be trustworthy, but they have to have same or better qualifications or skills in comparison to other candidates.

Activity 5
The informal policy of the company which permits the employees to socialize and date among its employees and managers is justified and ethical. The employees right to privacy means that the employees have the right to make decisions about their personal lives even if it involves relationships with other employees of the same company. As long as the relationships do not interfere the business routine and responsibilities of the business and their employees, there is nothing wrong with the policy of allowing employees to foster relationships among themselves since this is their basic right. As long as there is no such policy written in the contract, the employer does not hold the right to prevent employees from socializing and dating other employees. Since personal relationships are usually irrelevant to the employment contract, the policy is ethical and does not require to be repealed. In fact, it endorses the rights of the employees.

The decision to continue with this policy will not have any financial impact on the company. In fact, it will boost the morale of the company since they will feel that the management of the company is respecting their personal lives and letting them socialize and form relationships as long as they do not conflict with the affairs of the company and the socializing is done after the office hours. This will help towards building a strong ethical corporate culture which the company intends on building. It should be remembered that no culture can be healthy unless it respects the privacy of its employees especially their personal lives.

Activity 6
The decision by Chubb to sign an agreement with a government which has been identified as a repressive regime is an unethical one. Conducting business with a country which is involved in human right violation means that the company is morally supporting the countrys repressing regime and providing them the resources in terms of goods and services to carry out the activity which is being condemned by the human rights organizations.

According to the concept of minimalism under the values and international rights, a business is free to pursue its economic interests as long as no minimal rights of any human being are violated. In this case, the repressive regime seems to be violating the minimal rights of its citizens, therefore it should not conduct any business activity with the government of that particular country. An example for such an issue is of Coca Cola which was forced out of South Africa by the world community due to similar ethical concerns during the times of apartheid.

This decision can have a significant adverse impact on the bottom line of the company since it will lose out on a huge business opportunity. However, the company will also win the trust and appreciation of the stakeholders and current customers over their principle stance and hence will improve their ethical and public image, leading them to more business opportunities in the long run. The employees will also feel that the decision is consistent with the ethical culture being instilled in them and the ethical policy of the company for its employees (Kaynak, 2000).

Activity 7
The case of selling fire equipment to developing nations at a lower cost is a subjective one. The principle of equity and fairness says that all customers should be treated with equity and should get the same value for their money which everyone else gets. But in this case where the developing nations cannot afford to buy the same standard of product which is being sold in the US, it should be seen whether the product does not expose the user of the product to any significant risk or danger. If the product is able to meet the international safety standards while reducing the cost, it is ethical for Chubb to sell a lower standard product at a lower price to the developing nations. But if  the lower standard of reliability exposes the user to significant risk, then the job of selling the equipment to the developing countries becomes unethical even if the price is according to the quality of the product. This is because the payer is not purchasing the equipment, but the safety of the users. If the equipment is unable to provide the level of safety and prevention of damage required, there is no benefit for the buyer to buy the product in the first place.

The decision to forbid the management from selling to developing countries can lead to reduction in profits but will help sustain a positive public image where the company refused to compromise on its principles and standards to earn quick profits. However, as discussed above, the company can continue selling if it can meet the international safety standards by bringing the cost within the budgets of the developing countries.

Activity 8
The act of setting up setting up security cameras to monitor the activity of Chubbs employees without disclosing this to them is unethical. Gnazzo should ask its management to cease using security cameras without the consent of the employees. The employees should be informed about the use of security cameras at the work place since they have the right to know about the working conditions and to protect their privacy.

According to the liberal position implied in the stockholders model, the employees have the right to privacy in virtue of being an autonomous person. Therefore they have the right to bargain the rights in their contracts, and the right to privacy is one which should be discussed in advance before it is implemented. Since the use of cameras has been initiated abruptly, it is also not part of the contract negotiated with the employees. The use of security cameras should not be forbidden altogether but they should not be used without the consent of the employees. Informing the employees will mean that they will be more vigilant in their duties and will understand the fact that they are being monitored.

The decision to install security cameras may not have any significant financial impact apart from the small cost of installation and surveillance, but it will significantly hurt the employee morale since they will feel that their privacy is being invaded (Kaynak, 2000). Therefore, it could lead to lesser job satisfaction which could subsequently lead to lower productivity and even higher job turnover.

Evaluation of Results
Following is the list of activities in order of being most problematic to being least problematic
Activity 3 the most problematic issue among all is the use of child labor by the suppliers for manufacturing the fire protection equipment. Since the children can be called the indirect human resource of the company, it has to make sure that the suppliers are hiring the right people and avoid public embarrassment and litigation

Activity 6 the agreement to sell fire protection and security equipment to a government termed as a repressive regime is also a serious ethical issue of international level. Therefore it also has to be looked into.

Activity 7 The possibility of selling substandard equipment to developing nations is a serious ethical issue too since this could put many lives at risk and also damage the goodwill of the company in case of mishaps.

Activity 2 the act of obtaining competitor information by deception is also a serious issue which can harm the reputation of the company.

Activity 8 The use of security cameras can be a concern for the employees which can cause unrest amongst them as they will feel that their privacy is being invaded once they find out about it.

Activity 4 The discrimination when hiring new security guards can also be a concern for potential and current employees who may not see the process as being fair. Thefore, the process needs to be made as fair as possible and, if needed, should rationally justify the use of references.

Activity 1 The practice of taking out high value business clients out for dinner can be seen as discriminatory and unethical by other clients but cannot have a significant impact on the bottom line and the reputation of the company. However, it still remains an ethical issue.

Activity 5 the policy of allowing socializing and dating amongst the employees should not be seen as a problematic ethical issue and can be allowed to continue in the future.

These problems should be preferably tackled in the order of the priority given above since the above order outlines the seriousness of each ethical issue being faced by the company.

Conclusion Deterioration of Financial Conditions
When financial state of a company starts to deteriorate, there is severe pressure from the shareholders over the management of the company to take measures in order to prevent the downslide of the company in terms of profits and revenues. In such situations, the company management tends to take decisions which bend the ethical principles and standards of the company in order to save their necks. This practice is not uncommon in the corporate world (Visser, 2008). When the times are good, the companies flaunt their high ethical standards and the kind of values they uphold. But when the times get tough, they tend to compromise on those principles. This should not be the case to overcome the temporary hardships.
 
My advice to the management of the company will be to not compromise on any of the ethical issues mentioned above even if the financial state of the company becomes severely depressed. The company cannot afford to compromise on its ethical corporate culture and the corporate ethic program in any case since it takes a long time to build such a culture. Any unethical practice will bring the whole culture down instantly when the employees will feel that it is acceptable to compromise on the ethical principles in harsh times. This will mean that they are allowed to compromise on the ethical values when they can justify it.

It should be remembered that all the ethical and legal principles and regulations are built for hard times. It is these times when the companys management is pressed to bend the rules. Therefore, there is no reason why the company should not abide by these ethical guidelines in times of financial hardships.

Ethical principles should be followed unquestionably in order to set an example for the employees of the company and to show that the company does not tolerate any deviance from its code of ethics and allows no exceptions for it. This is important because the employees of the company look up to the top management of the company for directions and feel that they are obligated to act in the same way as the company requires them to. That way is implied in the companys own corporate practices and the trends and examples that the top management sets.

This high standard of ethical policy earns respect for the company among the stakeholders in the long run and helps in building a high standard of code of the ethics for the whole company to follow whether the profits are high low and whether times are good or bad for the management of the company (Visser, 2008). The company should be resolute enough to stay firm over its policies even in testing times since these are the times when the companies are closely monitored by the shareholders and other people. Therefore, my opinion would stay the same for all the above mentioned ethical issues whatever the financial state of the company happen to be.

General Conclusion
It can be concluded that the issues highlighted in this memo are valid ethical concerns and have to be addressed. The remedies to the ethical issues have been provided under the ethical framework and theories provided by great researchers and scientists such as Emanuel Kant. It can be concluded that Pat Gnazzo needs to take immediate measures to prevent its management from indulging in unethical practices mentioned above since it can have serious consequences for the company in the long term in terms of loss of valuable potential and existing customers and subsequently loss of revenue.