Business decisions must not be made in isolation, but should take into account the impact it would have on all the stakeholders. The interest of every individual stakeholder may differ, and there may be several stakeholders for any one business. The typical stakeholders of a business include; creditors, directors, employees, government, owners, suppliers, unions, and the community (Berman). For this particular case study, the stakeholders include; Tom, Joe, Bill, Clients, Uwear, Threads4U, Peninsula Hotel, employees, families of employees, competitors, government, and community. Certain stakeholders have greater control over business choices; whereas, others have no control. For instance; Joe, Bill, and Tom have greater control over the business decision and to impact the interests of the remaining stakeholders.
As mentioned earlier, some stakeholders have greater control; consequently, Joe, Bill, and Tom are the major stakeholders in this case. All three have an ethical and moral responsibility towards the shareholders of the three companies. Joe, Bill, and Tom must ensure that their decisions reflect positively upon the company and should be within the legal framework. However, Joe is mainly concerned with gaining contracts for Uwear under the guidelines set by the management of the company. Tom and Bill share similar duties as they have to maximize the profits of the company. The employees, specifically the salespeople need to ensure that their work is in accordance with company guidelines. Moreover, all employees have the responsibility to behave and act, in a way, that is in the best interest of the organization and contribute positively towards decision making.
The duty of following a morally correct path is termed as the ethical responsibility of the concerned party. Joe has an ethical responsibility to be honest towards the management team. The honesty of Joe would be judged against his ability to provide unbiased and clear information to the management and Bill in particular. Joe’s position in the company is such that he needs to gain the trust of others by showing integrity in his decisions and work behavior. Moreover, Joe must show equality and fairness in all of the decisions that he would make. On the other hand, Bill and Tom should ensure that they deliver upon their commitments and promises. As leaders of their organization Bill and Tom should be role models which depict the loyalty, honesty, and true leadership (Joephson, 2014). Competitors often turn to unlawful and unethical means to maximize their profits. In order to overcome the dilemma of turning to unethical means may be at the cost of some lost profits, but it takes much courage as well (Robertson & Ross, 1995).
The aforementioned situation requires Joe to consider all the choices before making a final decision. A counter offer could be made to Threads4U by a reduction of one to three percent. However, before making the decision to undercut profits Joe must take into consideration the profit margins of the company. This particular contract covers approximately 50 percent of Joe’s sales; therefore, it is a critical decision because his job is at stake. Adding on, Bill has a friendly relationship with Joe and in order to maximize shareholders earnings his relationship with Joe may be at a stake. As loyalty is essential is a business if Bill aims to maximize profits he may lose future business with Uwear.
Shareholder trust and loyalty can also not be ignored because it is a major source of company gaining finances. In order to satisfy both stakeholders, Bill should accept a reasonably close offer from Joe. Incase Joe is unable to secure this contract Tom must overlook it this time because Joe has been successful in securing contracts in the past.
Joe may propose a counter offer to Bill, but this offer may be below than ten percent. Eight percent offer may be made because Uwear has a positive track record, and this offer may not be completely unrealistic either. The eight percent offer may also suggest that all other factors have been considered before making a final offer. One of the strongest reasons Joe has to support this proposal is by suggesting that if the contract is lost the company may lose out on a significant share of the market. Joe has had a good relationship with Bill, and the previous contracts are proof of that relationship. The other four contracts may cover up for any losses that would have to be incurred from this contract (Jobs.co.za).
Berman, C. (n.d.). Who Are the Typical Stakeholders in HR Projects?. Business & Entrepreneurship. Retrieved July 5, 2014, from http://yourbusiness.azcentral.com/typical-stakeholders-hr-projects-25364.html
Jobs.co.za. (n.d.). Jobs in South Africa jobs South Africa Job Search. Retrieved July 5, 2014, from http://www.jobs.co.za/?s=article&x=39
Joephson, M. (2014). Business Ethics and Leadership. -: Wordpress.
Robertson, D. C., & Ross, W. T. (1995). Decision-Making Processes on Ethical Issues: The Impact of a Social Contract Perspective. JSTOR, 5(2), 213-240. Retrieved July 5, 2014, from http://www.jstor.org/stable/3857354