CH-6 Ethical Decision-Making: Employer Responsibilities and Employee Rights – Business Ethics: Decision Making for Personal Integrity and Social Responsibility : Book Guide

Chapter 6: Ethical Decision-Making: Employer Responsibilities and Employee Rights End of Chapter Questions, Projects, and Exercises 1. Maya confides in her friend and colleague, Alicia, “My husband Gene is very sick. I haven’t shared this with anyone else at work because I didn’t want them to think I couldn’t manage my responsibilities. He was diagnosed last year with progressive Parkinson’s and I thought it would move slowly, and that I could handle everything. Believe me, I am trying to keep everything under control, but our home life is just overwhelming me already. You couldn’t imagine how hard this is – physically and emotionally – plus there’s the added pressure of keeping it under wraps at work. You know they’ll start diminishing my role on those larger projects if they knew my attention might be diverted, and Gene and I just can’t risk the financial instability that might cause. I really appreciate being able to talk to you. I had to get this off my chest, and I knew I could trust you.” Alicia offered her shoulder and told Maya that she could count on her to cover for her, if need be, or to support her in any way she needed. Three weeks later, Alicia and Maya are separately called into the president’s office and told that they are both being considered for a more senior level position. This new position would require a great commitment of both time and energy and would involve taking on a large number of subordinates for mentoring and development. Both women express a strong interest in the position and are told that they will learn of the president’s decision within two weeks. What should Alicia do with the information Maya gave her, if anything? Notwithstanding your response to the previous question, if Alicia chooses to inform the president of Maya’s current situation, would you consider that action to be wrong, unethical? If you were the president in this current scenario, what could you do to impact the corporate culture in order to ensure that your preferred result in this dilemma occurred in the future? When discussing the situation between Maya and Alicia, most people encourage Alicia to discuss the situation with Maya and, if Maya asks her to remain silent, then they advise Alicia to do so. Under these circumstances, however, challenge the students to consider how the CEO will feel if he later discovers that Alicia knew about the facts and did not alert him. Maya was to be handed a great deal of responsibility with other peoples’ careers at stake and Alicia had concerns about her potential, even knew that she might fail. She was not considering all of the other stakeholders who could potentially be hurt. What if Maya were to be in charge of an area that dealt with issues of public safety? Would that change the circumstances? How can Alicia manage the situation, however, without appearing that she is only considering her own self-interest? Alicia faces a complex ethical dilemma. On one hand, she wants to support Maya, who is dealing with significant personal challenges. On the other hand, she must consider her own ambitions and the potential impact on her career if she chooses to disclose Maya's situation to the president. One option for Alicia is to respect Maya's confidentiality and not disclose her situation to the president. This approach honors Maya's trust and allows her to manage her personal and professional life as she sees fit. However, this decision may also result in Alicia potentially missing out on the senior-level position, as she may be perceived as less committed or available for the increased responsibilities. If Alicia chooses to inform the president of Maya's situation, she should do so with Maya's consent. This would involve having an open and honest conversation with Maya about the potential implications of disclosing her situation. Alicia should also consider discussing the matter with HR or a trusted advisor to ensure that she is approaching the situation ethically and in line with company policies. From an ethical standpoint, whether Alicia's action would be considered wrong or unethical depends on the context and the specific circumstances. If Alicia discloses Maya's situation without her consent or uses the information to gain an unfair advantage in the selection process, it could be seen as unethical. However, if Alicia discloses the information with Maya's consent and in a manner that is respectful and supportive, it may be viewed more favorably. As the president in this scenario, there are several steps that could be taken to impact the corporate culture and ensure that similar dilemmas are addressed appropriately in the future. This could include: 1. Encouraging open communication: Foster a culture where employees feel comfortable discussing personal challenges with their supervisors or HR without fear of judgment or reprisal. 2. Establishing clear policies: Implement policies and procedures that outline how personal information should be handled in the workplace, including confidentiality agreements and guidelines for supporting employees facing personal difficulties. 3. Providing support: Offer resources and support services for employees dealing with personal challenges, such as employee assistance programs or flexible work arrangements. 4. Promoting fairness: Ensure that promotion and advancement decisions are based on merit and qualifications, rather than personal circumstances or relationships. 5. Leading by example: Demonstrate empathy and understanding in your interactions with employees, showing that you value their well-being as much as their performance. By taking these steps, the president can help create a workplace culture that values transparency, empathy, and fairness, ultimately leading to better decision-making in situations like the one faced by Alicia and Maya. 2. Review the discussion above regarding global labor challenges. Choose a specific issue, such as child labor or sweatshop labor. Go online and find a news story about a particular company accused of employing child labor or sweatshop labor. How did the company involved defend itself against the accusations? Did they deny involvement in those practices, or, rather, defend the practices themselves? Do you find their defense convincing? Why or why not? Would a different defense be more plausible? Refer to the PowerPoint slides for this chapter, which include the following arguments: •Exploitation of cheap and vulnerable labor supplies allows developing countries to expand export activities and to improve their economies. This economic growth brings more jobs, which will cause the labor market to tighten, which in turn will force companies to improve conditions in order to attract workers. Encouraging greater global production will create additional opportunities for expansion domestically, providing a positive impact on more stakeholders. •Opponents to this perspective argue that allowing this process to take its course will not necessarily lead to the articulated result, just as voluntarily improving legal compliance, wages, and working conditions will not inevitably lead to the negative consequences the free market advocates threaten. •Many economically developed countries currently employ child and juvenile labor, albeit with restrictions, and so one should carefully review the social and economic structure within which the labor exists. Though children may work in unhealthy conditions, they also live in unhealthy conditions. •If children are not working, their options are not as optimistic as those for children in developed economies. There are not always sophisticated education systems or public schools. Often children who do not work in the manufacturing industry are forced to work in less hospitable “underground” professions such as drug dealing or prostitution simply in order to provide for their own food each day. Child labor and sweatshop labor are significant global labor challenges that often result in accusations against companies. One such case involves Nike, a well-known sportswear company, which has faced allegations of using sweatshop labor in its overseas factories. Nike has defended itself against these accusations by emphasizing its commitment to labor rights and ethical practices. The company has stated that it has strict codes of conduct in place for its suppliers, which include provisions against child labor and sweatshop conditions. Nike has also highlighted its efforts to improve working conditions in its factories and to ensure that workers are treated fairly. However, critics have argued that Nike's defense is not entirely convincing. They point to instances where Nike's suppliers have been found to violate labor laws, suggesting that the company may not be effectively enforcing its codes of conduct. Critics also highlight the complex supply chain that many companies, including Nike, operate, which can make it challenging to monitor and address labor violations effectively. A more plausible defense for Nike might involve acknowledging past mistakes and outlining concrete steps taken to address labor issues. This could include increasing transparency in its supply chain, conducting regular audits of its suppliers, and collaborating with labor rights organizations to improve working conditions. By taking proactive measures and demonstrating a genuine commitment to addressing labor challenges, Nike could present a more convincing defense against accusations of child labor and sweatshop labor. 3. We can distinguish due process from just cause in the following way: Imagine a company wanted to abandon the arbitrary nature of employment at will and ensure that its employees were treated fairly in any termination decision. Can you imagine how the employment environment in that firm might be different than in other firms? One approach would be to specify the acceptable reasons for terminating an employee. Obvious candidates would include absenteeism, incompetent job performance, theft, fraud and economic necessity. This approach might also identify unacceptable reasons for dismissal. Such a policy would be identified as a “just cause” practice, since it defines the factors that would justify dismissing an employee for cause. But creating such a list could be a challenge in that one would have to know beforehand all possible reasons for firing someone. As the common law clearly shows, one cannot anticipate all future ways in which something unjust could occur. As a result, a due process policy might be created to complement, or substitute for, a just cause policy. A policy guaranteeing due process, for example, would outline procedures that must be followed before an employee can be dismissed. The process itself is what determines a just dismissal. If an employer followed the process, the decision would be considered just; if the process was violated, then dismissal would be considered unjust. Such procedures might include regular written performance appraisals, prior warnings, documentation, probationary periods, rights to appeal, or response to accusations. Can you imagine other ways in which this hypothetical firm might change standard processes to ensure fairness? •What are the key facts relevant to issues of due process and fairness? •What are the ethical issues involved in your decision and implementation? •Who are the stakeholders involved in your decision? •What alternatives are available to you? •How would each of your alternatives affect each of the stakeholders you have identified? •Where might you look for additional guidance to assist you in resolving this particular dilemma? Suggest that the students take the roles of each player—the decision-maker and the affected employees—to be certain the decision is perceived as fair from all perspectives. A group project around this question may be appropriate. Creating a work environment that prioritizes fairness and due process in termination decisions requires thoughtful consideration and implementation of policies and procedures. Here's how the hypothetical firm might change standard processes to ensure fairness: 1. Clear Policies and Procedures: Implementing clear and comprehensive policies regarding termination, including specifying acceptable and unacceptable reasons for dismissal, as well as outlining the steps and procedures that must be followed before termination can occur. 2. Training and Education: Providing training to managers and employees about the company's policies and procedures regarding termination, as well as the importance of fairness and due process in employment decisions. 3. Regular Performance Reviews: Conducting regular performance reviews to provide employees with feedback on their performance and to identify any areas where improvement is needed. This can help prevent surprises in termination decisions and provide employees with an opportunity to address any issues before they escalate. 4. Documentation: Maintaining detailed documentation of employee performance, including any warnings or disciplinary actions taken, to ensure that termination decisions are based on objective criteria and are not arbitrary. 5. Appeals Process: Establishing an appeals process that allows employees to challenge termination decisions and have their case reviewed by an impartial third party. 6. Employee Assistance Programs: Providing employees with access to support services, such as counseling or legal assistance, to help them navigate termination processes and understand their rights. 7. Transparency and Communication: Ensuring that communication regarding termination decisions is clear, respectful, and transparent, and that employees are informed of the reasons for their termination and the steps taken in the decision-making process. 8. Legal Compliance: Ensuring that all termination decisions comply with relevant labor laws and regulations to avoid legal challenges and protect the rights of employees. Key Facts Relevant to Issues of Due Process and Fairness: • Clear policies and procedures regarding termination • Training and education for managers and employees • Regular performance reviews • Documentation of employee performance • Appeals process for challenging termination decisions • Employee assistance programs Ethical Issues Involved: • Ensuring fairness and due process in employment decisions • Balancing the rights and interests of employees and the organization • Upholding the company's values and commitment to ethical conduct Stakeholders Involved: • Employees • Managers and supervisors • Human resources department • Legal department • Shareholders and investors • Customers and clients • Regulatory bodies and government agencies Alternatives Available: • Implementing a just cause policy specifying acceptable reasons for termination • Establishing a due process policy outlining procedures that must be followed before termination • Providing training and education on fairness and due process • Creating an appeals process for challenging termination decisions • Offering employee assistance programs for support and guidance Impact on Stakeholders: • Employees: Ensuring fair treatment and protection of their rights • Managers and supervisors: Following clear guidelines and procedures in employment decisions • Human resources department: Implementing and enforcing policies fairly and consistently • Legal department: Ensuring compliance with labor laws and regulations • Shareholders and investors: Maintaining a positive reputation and ethical business practices • Customers and clients: Trusting the company's commitment to ethical conduct • Regulatory bodies and government agencies: Ensuring compliance with legal requirements and standards Additional Guidance: • Consultation with legal advisors and experts in labor law • Review of best practices and guidelines from industry associations and professional organizations • Collaboration with other companies and stakeholders to share experiences and insights • Continuous evaluation and improvement of policies and procedures based on feedback and lessons learned 4. What is the difference in your mind, and in your common usage between a perception, a generalization, and a stereotype? Can you give an example of each? After doing so, go to the Web and find dictionary-equivalent definitions of the terms to determine whether your common understanding is the correct one. Are each or all consistently unethical judgments or are they sometimes or always ethically justified in their use and implementation? Under what conditions? Discuss the definitions of perceptions, generalizations, and stereotypes. Lead group discussion on the differences between these terms and what judgments they imply. (Please refer to the Power Point slides from this chapter, as well.) •A perception is means a mental image or concept. •A generalization is vague or general statement, typically derived from details of a situation. •A stereotype is an idea held about certain individuals of particular groups, based only on membership in that group. In my mind and common usage: • Perception: A perception is the way in which something is understood or interpreted by an individual. It is often based on sensory information, personal experiences, and beliefs. For example, if someone perceives a particular neighborhood to be unsafe based on their observations of graffiti and broken windows, their perception may influence their behavior, such as avoiding that area. • Generalization: A generalization is a broad statement or conclusion that is applied to a group or category based on limited information or examples. It involves making a general statement that is true for most or all cases within a certain category. For example, saying "all teenagers are rebellious" is a generalization based on the behavior of some teenagers, but it may not be true for every individual in that group. • Stereotype: A stereotype is a fixed, oversimplified, and widely held belief about a particular group of people. It often involves applying a negative or positive trait to an entire group without considering individual differences. For example, the stereotype that "all women are bad drivers" is a biased and unfair generalization about women as a group. Dictionary-equivalent definitions: • Perception: According to Merriam-Webster, perception is "the way that you notice or understand something using one of your senses." This aligns with my understanding that perception is based on personal interpretation and understanding. • Generalization: Merriam-Webster defines generalization as "a general statement, law, principle, or proposition that encompasses all instances within a given category of phenomena." This aligns with my understanding that generalizations are broad statements that apply to a group or category. • Stereotype: Merriam-Webster defines stereotype as "a standardized mental picture that is held in common by members of a group and that represents an oversimplified opinion, prejudiced attitude, or uncritical judgment." This aligns with my understanding that stereotypes are oversimplified and often biased beliefs about a group of people. Ethical judgments: • Perception: Perceptions are generally not considered unethical, as they are based on an individual's subjective interpretation of their experiences. However, perceptions can be influenced by biases and prejudices, which may lead to unfair judgments or actions. • Generalization: Generalizations can be ethically justified when they are based on accurate and representative information about a group. For example, it may be ethically justified to say that "most birds can fly" based on the characteristics of birds as a group. However, generalizations can also be unethical when they are based on stereotypes or biased information. • Stereotype: Stereotypes are almost always considered unethical because they involve making assumptions about individuals based on their membership in a particular group. Stereotypes can lead to discrimination, prejudice, and unfair treatment of individuals based on characteristics that are beyond their control. In conclusion, perceptions are individual interpretations that can be influenced by biases, generalizations are broad statements based on limited information that can be ethically justified if they are accurate, and stereotypes are oversimplified and biased beliefs about a group that are almost always considered unethical. 5. A particular research study provides some evidence that those born between 1979 and 1994 are perceived as “impatient, self-serving, disloyal, unable to delay gratification and, in short, feeling that they are entitled to everything without working for it.” The study dubs this group the “entitlement generation.” Do you know people born during those years? Is this true generally or would you consider the perception instead a stereotype? From where do you think it stems? Discuss the nature of perception and our own judgment of ourselves. I do know people born between 1979 and 1994, and I believe that the perception described in the research study is more likely a stereotype rather than a general truth. While it's possible that some individuals within this age group exhibit the traits described, it is unfair and inaccurate to apply these characteristics to an entire generation. The perception of the "entitlement generation" likely stems from a combination of factors, including cultural shifts, changes in parenting styles, and the influence of media and technology. For example, individuals born during this time period have grown up in a digital age with access to technology and information at their fingertips, which may have shaped their expectations and behaviors differently than previous generations. Additionally, societal changes, such as increasing emphasis on individualism and consumer culture, may have contributed to the perception of entitlement. It's important to recognize that individuals are shaped by a variety of factors beyond their birth year, and generalizing an entire generation based on stereotypes is not only unfair but also unproductive. Understanding and addressing individual differences and complexities is key to fostering understanding and empathy across generations. 6. As a result of rising health-care costs and the challenge to contain them, companies are trying to encourage employees to take better care of themselves, and some are even penalizing employees if they do not. Wal-Mart Inc. has announced that, starting in 2012, free smoking cessation programs will be made available to employees but tobacco users will be charged higher health care premiums. A survey conducted by a consulting firm and the National Business Group on Health reports that 40 percent of large- and mid-sized companies will use penalties in their employee health care system, up from 18 percent in 2009. What do you think of businesses’ attempts to decrease health care costs by helping employees to become healthier? What are the ethical issues associated with a firm’s choice to cut health care costs by eliminating people who are unhealthy? What rights, duties, responsibilities, and consequences does this strategy imply? Do you think people who don't take care of themselves should be responsible for their increased healthcare costs? How would you feel personally if your past health conditions and current health practices were a part of an employment application? Challenge the issue of personal accountability versus what corporations should be responsible for. Discuss the shifting of burdens from corporations to individuals, such as putting the responsibility for health care back onto the employee, or increasing health care premiums, if that individual does not take care of her or himself. Apply the ethical decision making process to this situation to determine whether this behavior is ethical or not. What about firms that refuse to hire smokers? Or overweight people? Remember that in the case of the overweight person, refusing to hire that individual could be a violation of the Americans with Disabilities Act. Businesses' attempts to decrease healthcare costs by encouraging employees to become healthier can be seen as a positive step towards promoting overall well-being and reducing healthcare expenses. Providing smoking cessation programs and other wellness initiatives can help employees improve their health and potentially reduce the need for costly medical interventions. However, there are ethical issues associated with penalizing employees who do not participate in these programs or who engage in behaviors deemed unhealthy. Such penalties can raise concerns about fairness, as they may disproportionately affect employees who face barriers to adopting healthier lifestyles, such as socioeconomic factors or underlying health conditions. From an ethical standpoint, a firm's choice to cut healthcare costs by penalizing unhealthy individuals raises questions about the balance between individual rights and corporate interests. While companies have a duty to manage costs and promote a healthy workforce, they also have a responsibility to treat employees fairly and respect their autonomy. People who do not take care of themselves should not necessarily be solely responsible for their increased healthcare costs. Health is influenced by a complex interplay of factors, including genetics, environment, and access to healthcare. Imposing penalties on individuals for health-related behaviors can be seen as blaming the victim and may not address the root causes of poor health. Personally, I would feel uncomfortable if my past health conditions and current health practices were a part of an employment application. Health information is sensitive and should be treated with confidentiality and respect. While employers have a legitimate interest in promoting employee health, they should do so in a way that respects individual privacy and autonomy. 7. You run a small consulting business that serves a relatively diverse community and have 24 employees in professional positions. You are not subject to Executive Order 11246. You are concerned that, of the employees in professional positions, your workplace has only one African American, no other employees of color, and three women. At this time, your upper level management – the top six executives and yourself – are all white males. On the other hand, you have 15 support staff (secretaries and other clerical workers), of whom 14 are women and 11 are either African American or Latino. Are these concerns valid? Ask the students whether a business must reflect its community and whether it is realistic for a small firm to adequately represent a balanced workforce. Discuss the implications of a workforce that is diverse within its various different segments, but overall is not diverse—such as this firm where the top six executives are all white males, while the support staff consists of 14 women and 11 others who are either African American or Latino. As the owner of a small consulting business serving a diverse community, the lack of diversity in your professional positions and upper-level management is a legitimate concern that should be addressed. While you are not subject to Executive Order 11246, which prohibits employment discrimination based on race, color, religion, sex, or national origin by federal contractors and subcontractors, promoting diversity and inclusion in your workplace is not only ethical but also beneficial for your business. To address the lack of diversity in your professional positions and upper-level management, consider the following actions: 1. Review your hiring practices: Ensure that your hiring processes are fair and unbiased. Consider implementing diversity training for hiring managers to reduce unconscious bias and promote inclusive hiring practices. 2. Expand your recruitment efforts: Actively seek out qualified candidates from diverse backgrounds. Consider partnering with organizations that support diversity in the workplace or attending job fairs focused on diverse candidates. 3. Create a culture of inclusion: Foster an inclusive work environment where all employees feel valued and respected. Encourage open dialogue about diversity and provide opportunities for professional development and advancement for employees from underrepresented groups. 4. Promote diversity in leadership: Consider implementing a mentorship or leadership development program that encourages employees from underrepresented groups to pursue leadership roles within the company. Additionally, consider promoting from within and providing opportunities for career advancement for all employees. 5. Regularly assess and adjust: Regularly review your diversity and inclusion efforts to ensure they are effective. Collect feedback from employees and make adjustments as needed to create a more diverse and inclusive workplace. By taking proactive steps to promote diversity and inclusion in your workplace, you can create a more diverse and inclusive environment that benefits both your employees and your business. You would very much like to better represent the community in which you do business and you believe a diverse workforce has significant business benefits. You therefore decide to institute a program that will increase the numbers of minorities and women in professional positions as soon as possible. Is this permissible? Do you have all the relevant facts you will need to answer this question? What steps will you undertake in your plan to increase these proportions and what pitfalls must you avoid? An employer's action may be permissible, but there are factors with which employer must comply in order for a voluntary affirmative action plan to be viable and protect the employer from claims of "reverse" discrimination by employees who feel adversely affected by the plan's operation. The plan must be for the purpose of breaking down old patterns of racial or gender segregation and hierarchy, or a manifest imbalance, and it cannot unnecessarily trammel the interests of other employees or create an absolute bar to their advancement, and must be temporarily for the purpose of achieving, not maintaining a more balanced workforce. See United Steel Workers of America, AFL-CIO v. Weber, 443 U.S. 193 (1979). Direct students to the section of the chapter related to affirmative action. Instituting a program to increase the representation of minorities and women in professional positions can be permissible and aligns with the goal of promoting diversity and inclusion in the workplace. However, it is essential to ensure that the program is implemented in a way that is fair, transparent, and in compliance with relevant laws and regulations. To increase the representation of minorities and women in professional positions, consider the following steps: 1. Assess current diversity: Begin by conducting a thorough assessment of your current workforce to identify areas where representation of minorities and women is lacking. 2. Set goals and targets: Establish specific, measurable goals and targets for increasing the representation of minorities and women in professional positions. Ensure that these goals are realistic and achievable. 3. Implement recruitment strategies: Develop and implement recruitment strategies that target minorities and women, such as partnering with diversity-focused organizations, attending job fairs targeting diverse candidates, and using diverse recruitment channels. 4. Provide training and support: Offer training and support programs to help minorities and women develop the skills and competencies needed for professional positions. This can include mentorship programs, leadership development programs, and networking opportunities. 5. Review and adjust: Regularly review the effectiveness of your program and make adjustments as needed. Collect feedback from employees and monitor progress towards your diversity goals. Pitfalls to avoid when implementing a program to increase diversity include: 1. Reverse discrimination: Ensure that your program does not discriminate against individuals based on race, gender, or other protected characteristics. The program should focus on increasing diversity through inclusive practices rather than excluding or disadvantaging other groups. 2. Tokenism: Avoid tokenism by ensuring that diversity efforts are genuine and meaningful. Simply hiring a few minorities or women to meet quotas without addressing underlying issues of inclusion and equality is not effective. 3. Lack of support: Ensure that your program has the support of senior leadership and that resources are allocated appropriately to support its implementation. Lack of support from leadership can undermine the effectiveness of diversity initiatives. 4. Legal compliance: Ensure that your program complies with all relevant laws and regulations, including those related to equal employment opportunity and affirmative action. Consult with legal experts if needed to ensure compliance. Overall, instituting a program to increase the representation of minorities and women in professional positions can be a positive step towards promoting diversity and inclusion in the workplace, as long as it is implemented thoughtfully and ethically. 8. You are a senior global human resources manager for a large apparel retailer that purchases goods from all over the world. The media has focused a great deal of attention on the conditions of your suppliers’ workplaces and, for myriad reasons including a strong commitment to your values-based mission, as well as a concern for your reputation, you are paying close attention to the wages paid to the workers who construct your clothing. Your suppliers in several locations have agreed to talk with you about developing a policy that would apply throughout your operations – now and in the future, wherever you plan to do business – and would impose a minimum wage requirement for all factory workers. You begin to explore some of the resources publicly available to you, such as www.globalexchange.org, www.workersrights.org, www.fairlabor.org, and www.ethicaltrade.org trade.org, to find out what other firms are doing and what labor advocates recommend in terms of language for policies such as these. You explore Nike’s website at www.nikeinc.com, www.adidas-group.com, and others. Now it is time to begin constructing your own policy. What will you include, how specific will you make this policy, how will you determine what will be the “living wage” in each region, and what elements will it contain? Please draft a policy for your company on implementing a living wage worldwide. Students should utilize the websites provided to draft a policy on implementing a living wage worldwide. Drafting a policy on implementing a living wage worldwide requires careful consideration of various factors, including regional economic conditions, industry standards, and ethical considerations. Here is a draft policy for your company: Living Wage Policy 1. Purpose Our company is committed to ensuring fair and ethical labor practices throughout our global supply chain. As part of this commitment, we strive to provide all workers involved in the production of our clothing with a living wage that meets their basic needs and allows for a decent standard of living. 2. Scope This policy applies to all suppliers and subcontractors engaged in the production of our clothing, regardless of location. It also applies to all employees of our company, including those involved in procurement and supply chain management. 3. Definition of Living Wage A living wage is defined as a wage that is sufficient to meet the basic needs of workers and their families, including food, housing, healthcare, education, and other essential expenses. It should also allow for some discretionary income to improve the quality of life. 4. Determining the Living Wage The living wage will be determined based on local economic conditions, industry standards, and the cost of living in each region where our suppliers operate. We will consult with local labor experts, NGOs, and other stakeholders to determine the appropriate living wage for each location. 5. Implementation • We will work with our suppliers to ensure that all workers are paid a living wage that meets or exceeds the local standard. • Suppliers must provide documentation to verify that workers are paid a living wage, including pay stubs and other relevant records. • Regular audits will be conducted to monitor compliance with this policy. Non-compliance may result in termination of the supplier relationship. 6. Transparency and Reporting We will provide regular updates on our progress towards implementing a living wage policy, including information on the wages paid to workers in our supply chain. This information will be made publicly available to promote transparency and accountability. 7. Continuous Improvement We recognize that achieving a living wage for all workers is an ongoing process that requires collaboration and continuous improvement. We will work with our suppliers, industry partners, and stakeholders to identify and implement best practices in this area. 8. Compliance Failure to comply with this policy may result in corrective action, up to and including termination of the supplier relationship. We expect all employees and suppliers to adhere to the principles outlined in this policy. This policy is intended to demonstrate our commitment to fair labor practices and to ensure that all workers involved in the production of our clothing are treated with dignity and respect. We believe that by implementing this policy, we can make a positive impact on the lives of workers and contribute to a more sustainable and ethical global supply chain. 9. As a project manager, Kelly is leading a team on an international business trip where she is scheduled to do a presentation on its project and to negotiate a deal. Just a few days before the trip, Kelly gets a call asking her whether she is willing to let a male member of her team do all the talking because the managers at the company with whom they were planning to do business felt more comfortable dealing with men. Kelly is told that she would still be in charge and that this would never happen again. If this deal works out, it would prove very profitable for the company as well as for Kelly's career. Kelly thinks about the situation in which she finds herself; she has worked very hard on this project and, if the deal is successful, she is bound to get a promotion. On the other hand, she feels discriminated against based on the fact that she is a woman. She has the choice of acting on her principles and calling off the deal, or going ahead with this modification on a 'one time basis” and getting a promotion. After contemplating on the issue for a while, she decides to go ahead with deal and lets someone do all the talking. When they get back she is promoted and everybody is happy. What do you think of Kelly's decision? Could this situation be prevented all together? If you were in a similar situation what would you choose to do and why? First, lead students in discussing Kelly’s options/alternatives. Second, walk students through the ethical dilemmas Kelly would face under each scenario. Third, discuss whether or not Kelly made the right decision. Finally, ask students to develop a creative solution that allows Kelly to satisfy everyone involved, including herself. Kelly's decision to go ahead with the deal and let a male team member do all the talking, despite feeling discriminated against, is a complex ethical dilemma. On one hand, she is prioritizing the success of the project and the potential benefits for her career, which is understandable given the effort she has put into the project. On the other hand, by acquiescing to the request to have a male team member take over the presentation, she is potentially perpetuating gender discrimination and compromising her principles. In this situation, it could be argued that Kelly's decision was influenced by a combination of factors, including the pressure to succeed, the promise of a promotion, and the belief that this was a one-time occurrence. However, by accepting the request, Kelly may be contributing to a larger pattern of discrimination and setting a precedent for similar requests in the future. To prevent such situations in the future, organizations should have clear policies in place regarding discrimination and should provide training to employees on how to handle discriminatory requests. Additionally, organizations should foster a culture of diversity and inclusion where all team members are valued and respected regardless of their gender. If I were in a similar situation, I would consider the long-term implications of my decision. While the short-term benefits of accepting the request may be appealing, I would weigh them against the potential harm to my principles and the message it sends to others. Ultimately, I would strive to find a solution that upholds my values while also working towards the success of the project. 10. Fortune magazine complies a “Best Companies to Work For” list every year. Go to their website http://money.cnn.com/magazines/fortune/bestcompanies/2011/full_list/ and spot trends or similarities, if any, among the listed companies to find policies or programs that you think may help attract employees. The class can discuss the similarities from top rated companies and then decide if those qualities/circumstances make them want to work for those companies. Would students accept lower pay to work for a top rated company? Would they work for a company with a low rating for a higher paycheck? Analyzing the "Best Companies to Work For" list compiled by Fortune magazine can provide valuable insights into the policies and programs that companies implement to attract employees. By examining trends or similarities among the listed companies, we can identify key factors that contribute to their appeal as employers. Some common trends among top-rated companies may include: 1. Strong company culture: Top-rated companies often have a strong, positive company culture that values employees' well-being and fosters a sense of community and belonging. 2. Employee benefits: These companies typically offer competitive benefits packages, including healthcare, retirement plans, and perks such as flexible work hours and remote work options. 3. Career development opportunities: Top-rated companies prioritize employee development and offer opportunities for growth and advancement within the organization. 4. Work-life balance: These companies understand the importance of work-life balance and offer policies and programs that support employees in achieving this balance. 5. Corporate social responsibility: Many top-rated companies are committed to corporate social responsibility and sustainability, which can be appealing to employees who value ethical business practices. In considering whether they would accept lower pay to work for a top-rated company, students may weigh the overall benefits and opportunities offered by such companies. Factors such as job satisfaction, career advancement, and work-life balance may outweigh the importance of salary for some individuals. On the other hand, students may be less inclined to work for a company with a low rating, even if it offers a higher paycheck. A company's reputation and culture can significantly impact job satisfaction and employee morale, which may ultimately outweigh the financial incentive. Overall, the discussion of these qualities and circumstances can help students reflect on their priorities and values when it comes to choosing an employer. While salary is important, it is often not the sole determinant of job satisfaction and fulfillment. Chapter 6 Readings Main Points and Summaries Reading 6-1 “Confessions of a Sweatshop Inspector” by T.A. Frank Main Points •With an increase of protectionist sentiment in the United States in the mid-1990’s, companies that relied on cheap labor abroad were feeling vulnerable to negative publicity. •Today, labor standards are once again in the news. Barack Obama and Hillary Clinton have criticized trade deals such as NAFTA as unfair to American workers, and the new thinking is that trade agreements should include strict labor standards. •In the meantime, as governments contemplate such matters on a theoretical level, what's happening on the ground is mostly in the hands of the private sector. •Private monitoring, if done properly, can do a lot of good. But it's a tricky thing. •Starting in the 1990s, the media began to run stories on terrible labor conditions in factories in Asia. •In this same period, the U.S. Department of Labor, led by Robert Reich, began cracking down on sweatshops within the United States and publicizing the names of firms who were their customers. •The major challenge of inspections was simply staying ahead of the factories we monitored. False time cards and payroll records, whole days spent coaching employees on how to lie during interviews, and even renaming certain factory buildings in order to create a smaller Potemkin village—all of these were techniques used by contractors to try to fool us. •Because any inspection misses something, there were factories that managed to embarrass everyone. In 2000, BusinessWeek published an expose about a factory in Guangdong, China, the Chun Si Enterprise Handbag Factory, which made bags for Wal-Mart. •Unfortunately, that reporting led to the door of my company, which had been among the auditors monitoring the factory for Wal-Mart. While they had found excessive overtime work and insufficient pay, inspectors had missed the captive workers and physical abuse. •Monitoring by itself is meaningless. It only works when the company that's commissioning it has a sincere interest in improving the situation. •Companies rarely get bamboozled about this sort of thing unless they want to. And many prefer to be bamboozled, because it's cheaper. •While companies like to boast of having an ethical sourcing program, such programs make it harder to hire the lowest bidder. Because many companies still want to hire the lowest bidder, "ethical sourcing" often becomes a game. •When companies make a genuine effort, the results can be impressive: safe factories that pay legal wages. •If you're like me, part of you feels that Peru's labor standards are basically Peru's business. It's our job to worry about standards here at home. But that sort of thinking doesn't work well in an era of globalization. If their standards are low, they exert a downward pressure on our own. That's why monitoring and enforcement have such an important role to play. Reading 6-2 “Sweatshops, Choice and Exploitation” by Matt Zwolinski Main Points •For the most part, the author explains that individuals who work in sweatshops choose to do so. •The fact that they choose to work in sweatshops is morally significant. •Taken seriously, workers’ consent to the conditions of their labor should lead us to abandon certain moral objections to sweatshops, and perhaps even to view them as, on net, a good thing. •An agent’s choice, or consent, is transformative insofar as it “alters the normative relations in which others stand with respect to what they may do” •Thus, one way that a worker’s choice to accept the conditions of sweatshop labor can be morally transformative is if it is an exercise of autonomy. •Choices also signal information about an agent’s preferences. Significantly, this is true even when the choice is made under conditions of less than full autonomy. •A worker’s choice to accept sweatshop labor can be morally transformative by signaling information about her preferences. •Sweatshop workers’ choices can thus be morally transformative in two ways—by being exercises of their autonomy, or by being expressions of their preferences. •Unlike popular defenses, The Argument clearly distinguishes two different ways in which workers’ choices can serve to establish a claim of non-interference against those who act in ways that make sweatshop labor a non-option—one based in respect for workers’ autonomy and another based in an obligation not to harm. •The Argument, again unlike popular defenses, is clear regarding the nature of the moral transformation that sweatshop workers’ choices effect. •The Argument’s success is extremely sensitive to a wide range of empirical facts. •If goods made in sweatshops cannot be sold, then it seems likely that sweatshops will stop producing such goods, and those who were employed in their production will be out of work. •Bans on the importation or sale of sweatshop-produced goods take sweatshop jobs away from their workers by making their continued employment no longer economically viable for their employers. •Today, many of the most prominent academic critics of sweatshops focus their energy on calls for voluntary self-regulation on the part of sweatshops. •According to Denis Arnold’s argument MNEs are more morally blame- worthy for doing business with a sweatshop that pays less than adequate wages than for doing no business abroad at all, even if workers in the unethical sweatshop would prefer and freely choose their work over the option of no work at all. Reading 6-3 “Apple's Factories in China are Breaking Employment Laws” by Juliette Garside Main Points •An audit of Apple’s Chinese factories details “serious and pressing” concerns over working conditions. •The independent Fair Labor Association (FLA) conducted an investigation into conditions at Foxconn factories in China, which assemble millions of iPhones and iPads each year. •Foxconn is China's largest private¬ sector employer, and its activities have turned the coastal town of Shenzhen into the electronics workshop of the world. •The FLA investigation found excessive working hours, unpaid overtime, health and safety failings, and management interference in trade unions. Suicide risks continue to be an issue. •Worker committees are composed not by those who need representation, but instead are dominated by management representatives. This left workers feeling "alienated" and lacking confidence in safety procedures. •While high turnover made Foxconn dependent on overtime, workers were often denied pay for extra hours, and around 14 percent were likely to have worked unpaid time. •A third of employees surveyed wanted to work more hours so that they could earn more, and half felt their hours were reasonable, but around two-thirds of workers said their take-home pay did not meet their basic needs. •Student interns and employees under the age of 18 were especially at risk of violating regulations. •The working conditions of those who make Apple products have been the subject of increasing scrutiny. •In January 2012, Apple eventually recognized the need for independent audits and appointed to the task the Fair Labor Association, •The FLA conducted “a full-body scan” and provided recommendations to improve working conditions. Summary An investigation by the Fair Labor Association found serious issues regarding conditions in factories that produce Apple’s iPhones and iPads. Foxconn, China’s largest employer, assembles these devices for Apple. Issues were found with workers working far over the allowed number of hours per week, and sometimes for days without rest. Workers reported experiencing or witnessing accidents and auditors found health and safety breaches such as blocked exits and lack of personal protective equipment. Despite suicides and serious accidents, Foxconn failed to consult workers on safety, and workers committees that should be advocating on behalf of workers were not effective. High turnover made Foxconn dependent on overtime, but workers were denied pay for extra work. Employees were satisfied with their hours or wanted to work more, but many said pay did not meet their basic needs. The use of student interns, supposedly on work experience related to their studies, but in fact used to supplement the workforce during holidays, was raised as a major concern. The report found interns working both overtime and night shifts, in violation of regulations, and their employment status remains vague. Foxconn also relies on migrant workers who live in dormitories near the factories. A major issue is worker suicides, with 17 occurring between January 2010 and March 2012. The working conditions at Apple have been increasingly under fire, and as a result, Apple and Foxconn asked the FLA to observe and make recommendations. Reading 6-4 “Apple’s Foxconn to Double Wages Again” by Tim Worstall Main Points •Foxconn, the major supplier to Apple, is going to double wages for workers in China. The new wage would exceed the minimum wage in Taiwan, where Foxconn is headquartered. •Many campaigners will claim victory here, but there are two important pressures that Foxconn faces, neither of which have anything to do with various student groups demanding that Apple use its influence to increase wages. •The first is that there is a shortage of labor in some of the parts of China where Foxconn has facilities. When there is a shortage of labor, capitalists will raise the wages they offer so as to give them the labor that they require. •The second is that Foxconn is embarking on automating its lines. The labor needed to run an automated factory is very different indeed from the labor needed to run a hand production line. •Foxconn factories are about to become a great deal more automated, which requires higher skilled labor, and Foxconn needs to do more job specific training of those workers. It needs to reduce the turnover of his workforce. Higher wages than its competitors achieves this lower turnover. •In short, there is a shortage of labor, so Foxconn needs to raise wages to get what it needs. •The only thing we know of that raises permanently the wages of the workers is an industrial revolution. We are seeing an industrial revolution in China: thus the wages of the workers are rising. Summary While many human-rights campaigners will take credit for Foxconn’s decision to increase wages at its Chinese factories, Worstall argues that the decision was made for basic economic reasons. First, there is a labor shortage that requires higher wages to meet the high demand relative to supply. Second, due to the automation of its factories, Foxconn requires more highly skilled employees, who are more difficult to replace. Henry Ford faced a similar situation in the United States. Although Ford claimed he wanted his workers to be able to afford his products, Ford was simply trying to retain highly skilled workers. Terry Gou of Foxconn is following the same strategy. By offering higher wages than his competitors, Gou reduces his turnover and the costs of job-specific training of employees. The two effects driving up Foxconn wages have nothing to do with ethics. While higher incomes for workers is a net positive, human rights campaigns have nothing to do with this. The only thing that raises permanently the wages of the workers is an industrial revolution, which is occurring in China. Reading 6-5 “American Apparel and the Ethics of a Sexually Charged Workplace” by Gael O’Brien Main Points •American Apparel has been sued repeatedly for sexual harassment and for creating a hostile work environment. •Discussing a 2006 sexual harassment suit, American Apparel founder, chairman and CEO Dov Charney expressed the belief that consensual sexual relationships in the workplace were appropriate: “I think it’s a First Amendment right to pursue one’s affection for another human being.” •Charney is a complex figure. His sexual behavior is a source of liability for American Apparel, but this behavior is contrasted with his passion for immigration reform, American-made products and high wages for his employees. •Charney’s philosophy raises the question of whether there really can be consensual sex in a workplace if both parties are not equal in status, salary and intention. •If the tone at the top encourages workplace sexual expression, what constraints are in place to protect employees? •American Apparel’s ethics policy talks about “promoting ethical conduct, including the handling of actual or apparent conflicts of interest between personal and professional relationships.” Who decides if a conflict of interest has occurred between personal and professional relationships and if harm was done? •In a cost/benefit analysis of sexual drama (which is an inevitable byproduct of a sexually charged workplace), would the benefits come out ahead if everyone affected got to weigh in? •Charney has tied the importance of sexual energy to creative energy, upon which he says the fashion industry is dependent. This includes increased release of endorphins. Many leaders have championed endorphin highs to stimulate creativity. Less controversial ways to release endorphins include ping pong, volleyball, or fitness equipment. •The irony of sexual freedom in the workplace is that it is about power, not romance. It often ends up exploiting those most vulnerable. Summary The CEO and founder of American Apparel, Dov Charney, has a strong philosophy of sexual freedom in the workplace. This philosophy and Charney’s behavior continues to create problems for the publicly held company. Because of Charney’s actions, American Apparel has been repeatedly sued for sexual harassment and for creating a hostile work environment. Charney is a complex figure, and owns 51.8% of the company. The board has gone along so far with his philosophy of sexual freedom. But, O’Brien asks, can there really be consensual sex in a workplace if both parties are not equal in status, salary, and intention? Is the term “consensual” a delusion if one of the parties is the CEO? If sexual expression is encourages in the workplace by those at the top, how can employees who disagree with the policy be protected? What about harm to bystanders? Charney has tied the importance of sexual energy to the company’s success. Other leaders have championed endorphin highs, but in less risky ways. Charney has enjoyed success, but the company has entered a new, more challenging phase that may prove difficult for him. Sexual freedom in the workplace often ends up exploiting those most vulnerable, such as the immigrants who Charney claims to support. Solution Manual for Business Ethics: Decision Making for Personal Integrity and Social Responsibility Laura P. Hartman, Joseph R. Desjardins, Chris MacDonald 9780078029455, 9781259060588, 9781259417856