Business Ethics Case Study

BUSINESS ETHICS Name: Grade Course: Tutor’s Name: (5 November 2010) Outline Introduction Legal concerns Quality concerns Values concerns Best solutions Business Ethics Introduction Businesses have an aim of maximizing profits and thus they apply all means to this end, however without proper ethics the business stands to compromise its credibility in the market and probably loose out on existing and prospective clients. Business functions in the natural and social environment thus being accountable is a duty so that it can always remain operational (Brown, 1990). This fact therefore means that to remain in operation proper business ethics must characterize the business operations because the society is being affected and will judge accordingly. The business therefore should aim in developing an ethical program that complies with the law, manages the risks involved, enhances its reputation, and adds value to the community (Rion, 1990). Once there is an appropriate ethics plan then the business stands to benefit in increased profits, long term sustained growth, better competitive positions, a reputation to enable expand capital investments and credits, international recognition, and good will (Rion, 1990). The managers must first understand the political, social, economic and technological pressures, the organizational structure (i.e. key beliefs, responsibilities, conflicts and sharing), the stakeholders’ expectations, responsible management ideas, and decisions and activities needed so that the ethics program works efficiently (Badaracco, 1997). The legal framework of the country of operation must also be established so that all cases can be dealt with without legal anomalies. An effective business is one that has transparent systems of regulations, transparent accounting and auditing, regulations of the employees, efficient legal systems, and a traceable tax account at all times (Badaracco, 1997). This paper looks at the authentic assessment of Global Enterprises, Inc. (GEI) and drafts a memorandum to an executive officer that identifies, discusses, and proposes a resolution for each of 3 ethical issues identified. The paper critically evaluates the ethical issues in the operations of GEI in a view to streamline the ethical issues therein. GEI is a long-term military contractor and manufacturer of protective body armor, munitions equipment, and armored vehicles, with annual revenues of $300 billion. GEI employs 140 workers each highly paid union technicians and mechanics, members of the Union of Munitions and Armor Workers (UMAW). GEI also manufactures protective body flak jackets, night vision rifle scopes and armored tank vehicles for the US military. Legal Concerns The first ethical concern is the lack of observance of legal requirements. GEI Contrary to international law and treaties manufactures land mines exporting them to Afghanistan and Iran, its best foreign customers. More than half of its profits derive from these clandestine operations. Despite the profits that the company make it must adhere to international laws so as to maintain its reputation. The company makes illegal products that can cause harm to the society and environment (Brown, 1990). These illegal dealings from the company may be of high profits but the impact they bring to society is not a justification to produce them. The company negates the code of proper ethics of legal adherence at all times through this dealings and risks being punished by law (Huevel, et al., 2009). GEI must not place profits before social welfare since the same society will have negative attitude towards it and thus reduce its good will. This can also be established a when GEI establishes it self in Brazil and Colombia and does not adhere to environmental laws, labor laws, and other admittedly minimal business restrictions. They harm the environment through radiations and chemicals that leak to the local ground water. The management does not audit the situation and compares the harm to the environment to the cut-rate military equipment it receives in return, enabling Brazil and Colombia government to battle insurgents, union activists, and drug dealers. Legal adherence to ethic gives credit to business in that people have confidence in the business and thus increase sales and consequently profits (Huevel, et al., 2009). Quality Concerns Quality is not to be compromised in any business, consumers and customers are so conscious of quality since it directly affects them. GEI being a manufacturer of military products which affect the well being and health of individuals have had problems in their production lines. They have continued to produce low quality products despite being paid value for money for the products and although they are paid well for its body armor, munitions equipment and armored vehicles, the materials used in manufacturing are substandard. The flak jackets do not fully protect military service members from most antipersonnel ammunition. The simple addition of superior quality material in the flak jackets would prevent most injuries, but GEI did not tell the military because changing materials would be costly, and GEI fears it would lose its contract. In addition, its night vision rifle scopes work erratically and often not at all, resulting in injuries and deaths of service personnel in combat situations. The armored vehicles, though strong and sturdy on the sides and top have only a thin sheet of steel on their undersides, making them especially vulnerable to IED (Improvised Explosive Device) explosions. In addition, most of the land mines GEI sells to the Taliban in Afghanistan and to the Iranian government are also defective. Many who attempt to plant...