PHL 323: Current Ethical Issues In Business
Current Ethical Issue in Business
PHL/323
September 3, 2010
Gabriel Lewall
Current Ethical Issue in Business
In the recent years, there are many factors to consider for the way business is conducted, for any business small or large. Some factors, including the economy, competition between companies worldwide, technology development, the workforce, and each person’s individual ethics have played a role in a business’s decisions. In this paper, Learning Team “A” will explain a current and ongoing ethical issue, the basis of the ethical issue, and any ground rules that manifested. Team A will also review ethical change, an ethical system in which employees use, and the role of leadership within the business. Finally, team …show more content…
A will propose a plan to resolve the issue; this includes how the plan effects management and other employees, prescriptive and psychological approaches, and a plan to implement short and long-term compliance for individuals involved.
Statement of Problem or Ethical Issue and the Basis of this Issue Ethical business behavior is important to make sure employees are more likely to be ethical. Ethical business behavior is defined as behavior consistent with the principles, norms, and standards of business practice that have been agreed upon by society (Trevino & Nelson, 2011). AT&T is a large American company that over the recent years has had to rethink where the company will employ AT&T’s workers. People would have to believe that the norm for an American company would be to employ Americans in the United States. In 2003, the Seattle Post did an article bringing up an important issue of outsourcing jobs to India, which this can be viewed as an ethical issue for current or potential employees here in the United States. The ethical issue begins when current AT&T employees working with or training future employees for the location in India (Cook, 2003, para. 2). An anonymous employee has said "It kind of feels like you are talking to your hangman," (Cook, 2003, para 6), who is working directly with the Indian consultants. Another employee has said he or she expects to receive a layoff notice in January 2004 (Cook, 2003). The basis of this ethical issue results in costs. The Seattle Post reported that AT&T had said the company reported needing to cut costs and increase the profit margin by 40%. This occurs through cuts throughout the company and outsourcing more jobs (Cook, 2003).
Ground Rules Businesses must have ground rules to be ethically sound.
According to the Houston Chronicle, the ground rules for business ethics are trustworthiness, respect, responsibility, fairness, caring, and citizenship (Johnston, 2013). If an agency or business follows these rules, they must remain solid and unshakable. However, in times of economic trouble, these rules may have to be altered for the business to see profits. This is the case for AT&T when they needed to outsource many of their positions to India. According to D David Beckman, a writer for WashTech News, before the jobs in Washington could be outsourced to India, the current employees of AT&T were asked to cooperate and train their replacements or they would lose their severance packages, and face possible legal action (Beckman, 2003). This violated many ethical ground rules for AT&T; trustworthiness, respect, responsibility, fairness, and caring from the managerial staff.
Ethical …show more content…
Change AT&T jobs were outsourced to India because they could not compete with other companies. They had promised $15 billion dollars in operational savings to shareholders. Labor rates in India were far less compared to the United States. For instance, an employee who received $60,000 a year in the United States would receive 60% of that in India (Beckman, 2003). AT&T thought the comany would still get quality work at lower cost in India. To outsource the jobs, AT&T needed to change their ethical standards and follow the cheaper route.
Ethical Systems at Work The ethical systems that came into play for executives and managers were consequence-based because there was a cost-benefit analysis completed. There were concerns about payroll and energy use. The executives believed that it would be cheaper to outsource the work overseas. The ethical systems that came into play for managers and employees were duty-based because they were obligated to follow the orders of the leadership.
Organizational Leadership Organizational leadership came into play by using cost-benefit analysis. Ethical behavior and responsibility differed between employees in management by managers being duty-bound to adhere to requirements; although employees are ethically duty-bound they are also concerned about their own entitlement-based issues. The role of middle management was crucial because they were required not only to accept the decision of the executive, but also to pass this on to the employees while keeping them motivated while their jobs hung in the balance. The role of executive management that caused the outsourcing was simple concern regarding costs.
How the Plan Affects Employees and Management A plan to revise the ethical standards with the ultimate goal of resolving the issue for the company could be as simple as gathering information from middle managers, employees, and customers. Get their thoughts on the matter, as customer service in dealing with AT&T is difficult at best and has left a lasting negative impression on customers. Second, leave no solution (no matter how far-fetched it may seem) off the table. Third, keep an open mind – if the business does not exist, involved parties cannot make a profit.
After the company obtains the information, we will build our plan that will consist of hiring a consultant outside AT&T and have them evaluate the budgets and costs that the company spends. Second, the executive and management staffs should be made aware that there is a plan to cut perks of cars, credit cards, holiday parties, bonuses. Employees should expect either the elimination or reduction of employee discounts.
Last, our plan for those employees we offer two options; either severance pay or job sharing. The severance pay will consist of employees opting out of their job and still receiving benefits and regular pay for a set amount of time. This would consist of the employees who have been a part of the company for more than one year. Every year after the initial year employed with AT&T will consists of two months with continued health benefits and severance pay up to one year. For example, an employee who has been with AT&T for five years would subtract one year, leaving that person with four years and eight months of severance pay and health benefits. These employees max out at one-year giving these employees an opportunity to find another job without the stress and worry of expenses. Another option is to job share, this would hire the employees, which are from other countries to move to part-time employees and employ Americans here part-time as well. This way the current employees do not lose their job totally and AT&T can also offer jobs here.
Prescriptive and Psychological Approaches The approaches mentioned above can be considered both prescriptive and psychological approaches. A prescriptive decision-making approach is helpful when there is a conflict of interest (Trevino & Nelson, 2011). The plans to bring the jobs back to America is to help resolve a conflict between employees and AT&T, AT&T will still be able to cut some costs. The psychological approach says people make decisions based on self-interest (Trevino & Nelson, 2011). Some employees may say that AT&T’s top management did this for his or her self-interest but others view this was done for all stakeholders.
Implementation, Communication, and Measurement
The implementation of the plan must occur within the next 18 months. A solid project plan must be built that specifically includes communicating with the management and employees. The purpose, reason, and expectations of bringing the jobs back and having clear, concise discussions so that all parties involved understand the pros and the cons of returning these jobs back to the United States must be explained. Pros would be the addition of jobs for Americans and cons would be the loss of certain perks as mentioned above.
The measurements to ensure the return of the jobs is successful will be via customer surveys and mid-level managers making direct calls to customers to gauge their satisfaction with service.
The calls will be limited to two minutes and will be as non-intrusive to the customer as possible. Long-term measurements will also include surveys, but the most important measurement involved will be quarterly, semi-annual, and annual reports that determine if the return on investment was worth the costs involved.
Conclusion
Companies in general may not perceive an action like moving jobs outside the United States as unethical. By doing the following learning Team “A” made a clear argument of how unethical outsourcing is to Americans; team A has defined the issue, the basis of the issue, identified the ground rules that caused the situation in the first place, what brought the change about, and what ethical systems were utilized. Team A also discussed the different levels of management and their ethical systems, and we proposed a plan for revising the ethical standards to resolve the issue. References
Beckman, D. D. (2003). WashTech News. Retrieved from http://www.washtech.org
Cook, J. (2003, November 19). AT&T Wireless outsourcing jobs overseas. Seattle
Post-
Intelligence Reporter. Retrieved from http://www.seattlepi.com/business/article/AT-T- Wireless-outsourcing-jobs-overseas-1130183.php
Johnston, K. (2013). Chron. Retrieved from http://www.chron.com
Treviño, L. K., & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right (5th ed.). Hoboken, NJ: Wiley.
PHL/323
September 3, 2010
Gabriel Lewall
Current Ethical Issue in Business
In the recent years, there are many factors to consider for the way business is conducted, for any business small or large. Some factors, including the economy, competition between companies worldwide, technology development, the workforce, and each person’s individual ethics have played a role in a business’s decisions. In this paper, Learning Team “A” will explain a current and ongoing ethical issue, the basis of the ethical issue, and any ground rules that manifested. Team A will also review ethical change, an ethical system in which employees use, and the role of leadership within the business. Finally, team …show more content…
A will propose a plan to resolve the issue; this includes how the plan effects management and other employees, prescriptive and psychological approaches, and a plan to implement short and long-term compliance for individuals involved.
Statement of Problem or Ethical Issue and the Basis of this Issue Ethical business behavior is important to make sure employees are more likely to be ethical. Ethical business behavior is defined as behavior consistent with the principles, norms, and standards of business practice that have been agreed upon by society (Trevino & Nelson, 2011). AT&T is a large American company that over the recent years has had to rethink where the company will employ AT&T’s workers. People would have to believe that the norm for an American company would be to employ Americans in the United States. In 2003, the Seattle Post did an article bringing up an important issue of outsourcing jobs to India, which this can be viewed as an ethical issue for current or potential employees here in the United States. The ethical issue begins when current AT&T employees working with or training future employees for the location in India (Cook, 2003, para. 2). An anonymous employee has said "It kind of feels like you are talking to your hangman," (Cook, 2003, para 6), who is working directly with the Indian consultants. Another employee has said he or she expects to receive a layoff notice in January 2004 (Cook, 2003). The basis of this ethical issue results in costs. The Seattle Post reported that AT&T had said the company reported needing to cut costs and increase the profit margin by 40%. This occurs through cuts throughout the company and outsourcing more jobs (Cook, 2003).
Ground Rules Businesses must have ground rules to be ethically sound.
According to the Houston Chronicle, the ground rules for business ethics are trustworthiness, respect, responsibility, fairness, caring, and citizenship (Johnston, 2013). If an agency or business follows these rules, they must remain solid and unshakable. However, in times of economic trouble, these rules may have to be altered for the business to see profits. This is the case for AT&T when they needed to outsource many of their positions to India. According to D David Beckman, a writer for WashTech News, before the jobs in Washington could be outsourced to India, the current employees of AT&T were asked to cooperate and train their replacements or they would lose their severance packages, and face possible legal action (Beckman, 2003). This violated many ethical ground rules for AT&T; trustworthiness, respect, responsibility, fairness, and caring from the managerial staff.
Ethical …show more content…
Change AT&T jobs were outsourced to India because they could not compete with other companies. They had promised $15 billion dollars in operational savings to shareholders. Labor rates in India were far less compared to the United States. For instance, an employee who received $60,000 a year in the United States would receive 60% of that in India (Beckman, 2003). AT&T thought the comany would still get quality work at lower cost in India. To outsource the jobs, AT&T needed to change their ethical standards and follow the cheaper route.
Ethical Systems at Work The ethical systems that came into play for executives and managers were consequence-based because there was a cost-benefit analysis completed. There were concerns about payroll and energy use. The executives believed that it would be cheaper to outsource the work overseas. The ethical systems that came into play for managers and employees were duty-based because they were obligated to follow the orders of the leadership.
Organizational Leadership Organizational leadership came into play by using cost-benefit analysis. Ethical behavior and responsibility differed between employees in management by managers being duty-bound to adhere to requirements; although employees are ethically duty-bound they are also concerned about their own entitlement-based issues. The role of middle management was crucial because they were required not only to accept the decision of the executive, but also to pass this on to the employees while keeping them motivated while their jobs hung in the balance. The role of executive management that caused the outsourcing was simple concern regarding costs.
How the Plan Affects Employees and Management A plan to revise the ethical standards with the ultimate goal of resolving the issue for the company could be as simple as gathering information from middle managers, employees, and customers. Get their thoughts on the matter, as customer service in dealing with AT&T is difficult at best and has left a lasting negative impression on customers. Second, leave no solution (no matter how far-fetched it may seem) off the table. Third, keep an open mind – if the business does not exist, involved parties cannot make a profit.
After the company obtains the information, we will build our plan that will consist of hiring a consultant outside AT&T and have them evaluate the budgets and costs that the company spends. Second, the executive and management staffs should be made aware that there is a plan to cut perks of cars, credit cards, holiday parties, bonuses. Employees should expect either the elimination or reduction of employee discounts.
Last, our plan for those employees we offer two options; either severance pay or job sharing. The severance pay will consist of employees opting out of their job and still receiving benefits and regular pay for a set amount of time. This would consist of the employees who have been a part of the company for more than one year. Every year after the initial year employed with AT&T will consists of two months with continued health benefits and severance pay up to one year. For example, an employee who has been with AT&T for five years would subtract one year, leaving that person with four years and eight months of severance pay and health benefits. These employees max out at one-year giving these employees an opportunity to find another job without the stress and worry of expenses. Another option is to job share, this would hire the employees, which are from other countries to move to part-time employees and employ Americans here part-time as well. This way the current employees do not lose their job totally and AT&T can also offer jobs here.
Prescriptive and Psychological Approaches The approaches mentioned above can be considered both prescriptive and psychological approaches. A prescriptive decision-making approach is helpful when there is a conflict of interest (Trevino & Nelson, 2011). The plans to bring the jobs back to America is to help resolve a conflict between employees and AT&T, AT&T will still be able to cut some costs. The psychological approach says people make decisions based on self-interest (Trevino & Nelson, 2011). Some employees may say that AT&T’s top management did this for his or her self-interest but others view this was done for all stakeholders.
Implementation, Communication, and Measurement
The implementation of the plan must occur within the next 18 months. A solid project plan must be built that specifically includes communicating with the management and employees. The purpose, reason, and expectations of bringing the jobs back and having clear, concise discussions so that all parties involved understand the pros and the cons of returning these jobs back to the United States must be explained. Pros would be the addition of jobs for Americans and cons would be the loss of certain perks as mentioned above.
The measurements to ensure the return of the jobs is successful will be via customer surveys and mid-level managers making direct calls to customers to gauge their satisfaction with service.
The calls will be limited to two minutes and will be as non-intrusive to the customer as possible. Long-term measurements will also include surveys, but the most important measurement involved will be quarterly, semi-annual, and annual reports that determine if the return on investment was worth the costs involved.
Conclusion
Companies in general may not perceive an action like moving jobs outside the United States as unethical. By doing the following learning Team “A” made a clear argument of how unethical outsourcing is to Americans; team A has defined the issue, the basis of the issue, identified the ground rules that caused the situation in the first place, what brought the change about, and what ethical systems were utilized. Team A also discussed the different levels of management and their ethical systems, and we proposed a plan for revising the ethical standards to resolve the issue. References
Beckman, D. D. (2003). WashTech News. Retrieved from http://www.washtech.org
Cook, J. (2003, November 19). AT&T Wireless outsourcing jobs overseas. Seattle
Post-
Intelligence Reporter. Retrieved from http://www.seattlepi.com/business/article/AT-T- Wireless-outsourcing-jobs-overseas-1130183.php
Johnston, K. (2013). Chron. Retrieved from http://www.chron.com
Treviño, L. K., & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right (5th ed.). Hoboken, NJ: Wiley.