Case Essay

PLEASE USE THE THREE ETHICALS ISSUES FROM THE ETHICAL ISSUES IDENTIFICATION STATEMENT (00017856) AND THE CASE IS BELOW AND USE THE OUTLINE BELOW AND USE THE http://www(dot)doleta(dot)gov/layoff/pdf/WorkerWARN2003.pdf in relation to the act. BELOW IS THE HOW THE OUTLINE SHOULD BE SET UP FOR ETHICALS ISSUES 1-2-3 PLEASE GO BY THE OUTLINE BELOW – THE CASE IS BELOW AND USE THE ://www(dot)doleta(dot)gov/layoff/pdf/WorkerWARN2003.pdf THIS IS THE ETHICAL ISSUES IDENTIFICATION STATION WITH THE THREE ISSUES Ethical Issues Identification Statement ETHICAL, LEGAL and MANAGEMENT ISSUES Ethics per se refer to a set of common practices that are generally appreciated to be the “right” thing to execute in given situations. Ethical issues come about when there is a dilemma with regard to the execution of the action. The predicament takes place when there is the effect upon which one would be benefited out of another's expense. As far as management is concerned, taking a business as an instance, management decisions often get tangled up with ethical questions which usually roots from inevitability as such verdicts are of essence to the survival of the business. Taking this given case as an example, a company would have had to devise ways in order to maintain business with their clients through withholding information which may lead to their losing of contracts which in turn become prejudicial to the client's interest. The ethical issue in this case is the injury inflicted to the client due to the deceit. The management approach on the other hand is the decision to deny the information to keep the contracts active for the continued existence of the business. On another note, ethical inquiries bear reservations as it likewise frequently encompass legal issues for it holds the fact that not all legal is moral. As far as the case at hand is concerned, ethical labour queries has been tapped into because the management has been forced to execute adjustments in order to escape the legal liabilities convened by the WARN Act that protect its employees. FIDUCIARY DUTY It is a part of the professional code in most businesses of whatever nature to have what we call the manager's or the employer's fiduciary duty or duty of trust to its subordinates or its stakeholders as the case may be. Fiduciary duty speaks of trust and constitutes several aspects which is simply condensed to the act of placing ones trust and confidence to another to manage and protect property and money that is conveyed to the benefit of the latter (Kaufman, 2002) The fiduciary duties that are bound to be put in issue in this particular case refer to that of Cattywampus Inc. for its clients and for its employees. What is expected of the manufacturer was to provide for products with quality at par with a customer's disbursement. As far as the employees are concerned, the same should be properly informed of the manufacturer's circumstances and be allowed to legally redress quandaries, especially if the same is that of the employer's responsibility. The confidence existent within the client and employees to Cattywampus was violated as the supposed scenarios earlier mentioned were of the opposite. The two fiduciary issues bring forth legal consequences that the manufacturer shall inevitably confront namely the criminal prosecution by their clients. The other would be borne from the solution Cattywampus had undertaken to avoid the penalty which is to flee to non-extraditing countries thus would prejudice the employees they would lay-off. SOLUTION In order to get to a situation where there would be the least number of ethical questions raised, Cattywampus Inc. may do away with transferring its operations to other countries. Doing such would bring about the following: Injuries resulting from its surreptitious service to its clients would not be penalized as it should be, legal labour issues arising from laying-off workers without reason, and the possible consequences it would bring to the countries where they would transfer. Though the corporation has its so-called fiduciary duty to their shareholders, which is the essential reason for its transfer, the same would still be protected if the circumstance would not be dealt with such severity. Greater damage should be avoided through screening and compromising the moral and corporate outcome of an issue as the same would bring about the most ideal scenario in a controversial query. (Johnston, 2005) In this case, Cattywampus has the ability to financially answer to the criminal prosecution brought about by the U.S Government. The consequence of its top executives being replaced is also out of the question. Thus, Cattywampus should simply sort out the criminal case and proceed with its operations as it is. In case of possible decline in profits because of the prosecution, the same may invest in methods of regaining their profit value through publicity and other methods they may deem proper as they may dispense a new executive assemblage which they may utilize as a reflection of a new corporation. The significance of this solution shall similarly eradicate the mass lay-off which would greatly affect more people in the process both ethically and legally. The theory of screening significantly points out the principle that prevention is better than cure, and dealing with one issue as in the case at hand, proscribe the problematic results of simply curing it (Markham, 1998) This was a good proposal for the 3 main issues to discuss in the Final Paper. All three main issues are appropriate. They may need added review of issues and subtopics that you have identified. The sources should be useful for the Final Paper. It must be in a narrative format and include in-text citations and a bibliography or sources cited at the end. Purpose: (short description of the purpose of the memorandum (Example: to identify, discuss, and propose one solution to the three main ethical issues arising from Cattywampus, Inc, unethical and illegal behavior). USE THIS OUTLINE FOR THE THREE MAIN ETHICAL ISSUES ARISING FROM CATTWAMPUS, INC. A. The Problem [short description of the problem B. Ethical Issue #1: (1) present the relevant facts for this ethical issue; (2) explain why this issue is an ethical issue [look to the grading rubric for weekly individual assignments to help you in this regard] as opposed to legal issue and/or discuss how the issue is both ethical and legal issue; discuss any managers' fiduciary duties, and discuss the effects of the ethical issues on all implicated stakeholders [identify the specific stakeholders] C. Ethical Issue #2: (1) present the relevant facts for this ethical issue; (2) explain why this issue is an ethical issue [look to the grading rubric for weekly assignments to help you in this regard] as opposed to legal issue and/or discuss how the issue is both ethical and legal issue; discuss any managers' fiduciary duties, and discuss the effects of the ethical issues on all implicated stakeholders [identify the specific stakeholders] D. Ethical Issue #3: (1) present the relevant facts for this ethical issue; (2) explain why this issue is an ethical issue [look to the grading rubric for weekly assignments to help you in this regard] as opposed to legal issue and/or discuss how the issue is both ethical and legal issue; discuss any managers' fiduciary duties, and discuss the effects of the ethical issues on all implicated stakeholders [identify the specific stakeholders] E. Proposed Resolution Provide a reasoned justification for the best resolution of the ethical issues by the corporation for both the short term and the long term. Be sure to explain what steps the corporation must take and in what order. F. References/Sources Cited (List the research references used and/or sources cited in the memorandum). THIS IS THE CASE Cattywampus, Inc was a long- term military contractor and munitions manufacturer, with annual revenues of $500 billion. The company employed 105 workers. All were highly paid UAW technicians and mechanics. Cattywampus manufactured body armor and armored vehicles for the United States military. Contrary to international law and treaties, it also manufactured landmines exporting them to Afghanistan and Iran, its best foreign customers. More than half of its profits derived from these clandestine operations. All of Cattywampus' products had problems. Although paid handsomely for its body armor and armored vehicles, the materials used in manufacturing were substandard. The body armor did not protect service members from most antipersonnel ammunition. The simple addition of a standard issue flak jacket would have prevented most injuries, but Cattywampus did not tell the military because it feared it would lose its contract. In addition its armored vehicles, though quite strong and sturdy on the sides and top, had only a thin sheet of steel on their undersides, making them especially vulnerable to IED (Improvised Explosive Device) explosions. The landmines it sold to the Taliban in Afghanistan and to the Iranian government were themselves defective. Many of those who attempted to plant the mines were themselves killed in the process because of the use of faulty switches. Most of the mines' victims however, were children and soldiers. As the US military began to understand the problems with the body armor and armored vehicles it had purchased from Cattywampus, Department of Justice lawyers became involved and the families of injured or killed US service members consulted attorneys. Cattywampus' corporate leaders were themselves now looking down the barrels of criminal prosecution, and classes of plaintiffs were forming and growing quickly. The Cattywampus board knew the company's days were numbered. The company could easily afford to pay the class-action plaintiffs. Its top executives, if imprisoned, could be replaced. The board came to the conclusion that its fiduciary duties to shareholders would best be fulfilled by moving its production facilities from the U.S. and establishing a factory in Argentina, a country that did not extradite to the United States, and Colombia, where union organizing is not a problem because unionists are regularly murdered. But first Cattywampus had to try to get out from under the potential legal liabilities, both to the families of service members who had been injured or killed as a result of Cattywampus products, and to the workers in its American plant who are protected by a collective bargaining agreement and by US labor and employment laws. Since it had more than 100 employees, under THE WORKER ADJUSTMENT AND RETRAINING NOTIFICATION (WARN) ACT the company would have had to give employees 60 days notice of its departure from U.S. operations. (See http://www(dot)doleta(dot)gov/layoff/pdf/WorkerWARN2003.pdf in relation to the act. Such notice to employees however would have several undesirable consequences. First, it would also give notice to plaintiffs and to the US military that it was planning on leaving the country. Second, the company was concerned that the exceptionally militant and well-paid UAW workers would undertake acts of sabotage or, alternatively would leave on their own terms rather than when Cattywampus preferred they go. Violation of the law would impose significant back pay liability on the company, which it wanted to avoid. Even if the WARN Act were complied with, under the UAW collective bargaining agreement, workers were entitled to significant amounts of severance pay in the event of a plant shutdown or mass layoff. Cattywampus formulated a plan. First, it would outright fire five workers for no cause and would offer an early retirement package to five others, which they could not refuse. This would bring the number of workers to 95, which would remove the company from the jurisdiction of the WARN Act. Then it would file for bankruptcy under which it was certain to be able to reject the collective bargaining agreement. [When a company files for bankruptcy protection, the Bankruptcy Court has the power to relieve the bankrupt company from its contractual obligations, when this is necessary. Bankruptcy is often used by companies who feel excessively burdened by Union demands.] These two courses of action were successfully undertaken in remarkably short order. Cattywampus now had neither notice requirements under the WARN Act, nor severance liability under a now rejected collective bargaining agreement. The bankruptcy also short-circuited the class-action suit brought by the families of injured or killed service members. With all remaining assets of Cattywampus in the hands of a court-appointed trustee in bankruptcy, no one would be paid for anything. In the interim, Cattywampus had established relationships with contractors in Argentina and Colombia and had factories up and running even before it filed bankruptcy papers. Officers transferred company assets to banks in Argentina and in Switzerland which assured customers that money would be safe from creditors. These actions maintained Cattywampus' profits and share value. Argentina and Colombia were ecstatic to have Cattywampus in the country. Individual lower-level administrators in these countries were handsomely rewarded by Cattywampus for enabling the businesses to function smoothly and not be bothered by the host countries' environmental laws, labor laws, and other (admittedly minimal) business restrictions. Argentinean and Colombian government leaders believed that the radiation and chemical leaking into the local groundwater was a small price to pay for the cut-rate military equipment it received in return, enabling it to battle insurgents, union activists, and drug dealers.