In: Operations Management
Business (Ethics) and the use of Normative Theories.
You've been engaged by an IT company (Coastal IT) as an independent Ethics Consultant. Coastal IT's ethic problem is: They have moved all their technical and support rescources to an off shore company based in India to reduce costs. This means four local staff have been made redundant and morale is very low and client work is behind as the new staff get trained. Coastal IT's customers have NOT been told of this move either.
a) Choose an appropriate normative theory? (Approx 400 words).
b) Discuss the application of that theory? (Approx 200 words).
Due 29 April 2020
Various types of normative theories are:
1. Authoritarian theory: this theory describes that all kind of communication are controlled by the central governing authority of the company. Authoritarians control the media from publishing any kind of information that may pose a national threat to its people.
2. Libertarian theory: this theory describes libertarians as the one who emphasize on the political freedom, freedom of choice and individual judgements. Libertarians are the one who are less supportive to the authoritative behaviour however; they do not oppose the political and economical system.
3. Social responsibility theory: it is an ethical theory which describes that the action of an individual should follow the ethics observed by the society and they should follow their civic duty. According to this theory, there must be equilibrium between the economic growth, welfare of the society and environment.
4. Soviet media theory: it is also known as the communist media theory where the soviet media including newspaper, magazines and journals were under the control of the communist party.
The normative theory applicable to the case of Coastal IT is Social responsibility theory. It is the social responsibility of Coastal IT to maintain equilibrium between their economic growth, welfare of the society and environment. Since, Coastal IT have moved all their technical and support resources to an off shore company based in India to reduce costs because of which their four local staff have been removed from the job and morale of other employees is very low because of which the client work is behind as the new staff get trained. Hence Coastal IT failed to establish the equilibrium between their economic strategy and the issues associated with the welfare of their staff.
Application of Social responsibility theory:
Social responsibility theory involves the philanthropic behaviour of the employer wherein the employer or the organisation should undertake various efforts for the improvement of human welfare. It also involves environmental conservation wherein the organisation is not expected to exploit the natural resources for its sole purpose of economic gain. Social responsibility theory also includes ethical issues related to the company diversity and labour practices wherein the company should not harass and intimidate the employees and should not adopt the unlawful and unfair employment practices. Social responsibility theory supports the volunteer efforts and hence company should carry out the welfare of the society voluntarily i.e. without any legal obligation.
Keeping this ethical theory in mind, it is the responsibility of Coastal IT to maintain equilibrium between their economic move and the welfare of the employees. Along with providing training to its new employees, The Company should also focus on the welfare of the existing employees. It is completely unethical on the part of Coastal IT that they have not informed their client about their move. It is the responsibility of the company to inform all of its stakeholders about the economic development and the strategy that has been planned by the company as it is their legal and ethical right to get informed about the important strategies of the company which would affect their business.
The company should not fire the four employees and should occupy them in the proper role for which they are competent and should treat all the employees as per the applicable ethics.