Synopsis of the Ethical Dilemma

“The company has developed a new production process, which reduces the use of electricity and labor. Upon hearing the news, the marketing team is eager to launch a new marketing campaign that outlines this development by capitalizing on consumer demand for products that support “sustainability.” The problem is the facility’s waste output has not been reduced. Discussions with General Counsel, the Board of Directors’ Executive Steering Committee, a company-wide task force, and the Marketing team.”

As CEO, I must decide where my sense of duty is directed.  It could be the business consumers or stakeholders.  In this current situation I would have to think about them both, so I would have to discard the green message altogether and launch a campaign that focuses on changes that have made the company more energy efficient. To reach this conclusion I used the Utilitarianism theory which was used because it is not concerned about the moral action itself, but the morality of the outcome.  As a CEO I want to think about both short and long term, greening the message would have impacted us greatly in the short term but demolish the firm long term. Understanding how this could affect our customer base in the long-term means understanding where we stand with our ethical concepts, what is ethically significant or morally relevant and this is a situation where it is needed and used.

Agency Theory and Stakeholder Theory concepts and principles

As a leader in an organization you look at many things when making decisions, you may use the agent theory and ask for advice by going through a consultant firm.  However, this may hinder you are affect your business tremendously because these outside people are acting on behalf of another party may disagree and choose to act in self-interest rather than the principals interest.  Stakeholder theory was also used but this theory involves so many others who are with the organization but have different interest. All these interests are constantly takin into consideration when decisions are being made which is difficult a lot of times because you must keep them all separated to avoid conflict.  Separating each group helps management make decisions easier because it may not always be possible to bring them all together.

Ethical Theories

To make the proper decisions managers must recognize the presence of an ethical issue, this is called moral sensitivity (Milton, 1995).  Several moral failures come from ethical insensitivity.  We should identify courses of action and determine the consequences of each potential strategy.  Once an ethical issue is identified, managers decide on a course of action that best fits both the organizations culture, and values.  After this decision is made managers make judgements about what is right or wrong thing to do in this situation.  As for us, we must decide what will be best for both our customers, and stakeholders.  However, we cannot forget about our loyal employees who work day and night to make sure our product is still a premium product.

Strategic Planning Process

First getting prepare involves bringing my management team in to discuss the issue and to bring in all accurate information that could be used to come up with a decision.  Secondly, clarify the mission and vision statement is when I will talk about the culture of our organization and where I want to see us in the future which will hopefully give the team an idea of what our decision should be doing this also keeps customers and staff in mind while making a strategic decision.  Then, we will identify your current and future market position using a SWOT analysis for the organization, this will give us important information like strengths, weaknesses, opportunities, and threats (Agarwal, Malloy 2002).  We must agree on priorities while we are deciding because the firm must still go on while important decisions are being made and they need on be thorough as possible.  Next, putting the plan together involves putting tasks and responsibilities in a document to make sure there is constant review. Then we must distribute tasks and assign actions that corresponds with each department so that managers in those places can evaluate functions and make sure the decision is carried out throughout the organization.  Finally, holding everyone accountable will be the hardest task to make sure the decision is being followed from top of management to the lowest staff member. The plan will not be effective without processes and metrics that ensures everyone is doing their part. The plan needs to be constantly monitored and performance needs to be measured through either monthly or quarterly strategy staff meetings.

Build Competitive Advantage

Our company will boost in sales base on our decision but will last only a short time because of competitors and their counter attack.  This will result in us having to get a PR practitioner who can analyze the organization, find the positive messages and translate those messages into positive media.  We have thought about this, so we were already prepared, we started offering discounts to loyal customers, and without losing profit we will use cost advantage to bypass competitors who offer the same product to gain a competitive advantage.

Company’s Positioning Strategy

My company formulated our decision based on competitive comparisons, I know our competition will come for our customers, so we will stand out rather than lose customers and a profit. The objective of competitive comparisons is to reposition a competitor’s products in the minds of consumers. This strategy is helpful when a market has two strong competitors. One company focuses its advertising on showing how its products differ from its competition, this will not be difficult since we have loyal employees who care about what they do and what they produce.  We always check our products more than enough times to make sure our customers are receiving the best possible service available in our sector of business.

In summary, a lot can take place within a business to make one proper ethical decision.  Many things are takin into account within the business and outside the business meaning competitors.  Knowing how your shareholders think can help managers with their decisions but they also must have other options to use to make the right decision.  Putting a plan in place will benefit the firm the most, for example using the strategic planning process helps the whole firm succeed.

References

Agarwal, I, Malloy, D.C. (2002). An integrated model of ethical decision-making: A proposed pedagogical framework for a marketing ethics curriculum. Teaching Business Ethics, 6(2), 245-268.

Arnett, D.B., Hunt, S.D. (2002). Competitive irrationality: The influence of moral philosophy. Business Ethics Quarterly, 12(3), 279-304.

Rodgers, W. and S. Gago: 2004, Stakeholder Influence on Corporate Strategies Over Time, Journal of Business Ethics 52, 349–363.

Milton-Smith, J.: 1995, Ethics as Excellence: A Strategic Management Perspective, Journal of Business Ethics 14, 683–693.