MGT 526 Wk 6 – Practice: Ethics and Social Responsibility

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MGT 526 Wk 6 - Practice: Ethics and Social Responsibility
MGT 526 Wk 6 – Practice: Ethics and Social Responsibility
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MGT 526 Wk 6 – Practice: Ethics and Social Responsibility

Making Ethical Decisions

 

Societal views influence each country’s laws in how members of a society deal with fairness, justice, poverty, and the rights of the individual. Ethical standards accepted in the United States are not accepted in all other countries. In some countries, bribery is accepted as the standard practice in getting things done, while in the United States and other Western countries, bribery is illegal. The following case examines the managerial ethics of a lighting fixture company in China.

 

It is generally accepted that managers should behave ethically; however, self-interest and profit can lead some managers to engage in unethical business practices. In China, business laws vary from laws enforced in the United States. When businesses close in China, some business owners decide to forfeit their stakeholders’ interests by not repaying debts owed and fleeing the country. This action can have devastating results for the business owner’s reputation, for the suppliers because of lack of payment, and for the workers because of lack of pay.

 

 

Read the case below and answer the questions that follow.

 

By early 2008, China began to experience the effects of the worldwide recession, which resulted in the closing of many businesses. However, instead of applying for protection under bankruptcy laws, many Chinese business owners decided to flee the country, leaving their businesses, stakeholders, and workers in a state of flux and panic. With factories shutting overnight, thousands of workers were unexpectedly out of work. In just one town, 673 companies closed, leaving 113,000 workers unemployed and owing $44.1 million. Workers protested, and creditors confiscated company goods hoping to recoup some of their losses.

 

Trust had traditionally been the primary component of a business transaction in China. Many business deals were made solely on the basis of trust. As a result of the closings, suppliers and investors now actively investigate the financial stability of companies to ensure repayment of debt. In the United States, factory owners could file for bankruptcy, which would allow protection from creditors, but in China, bankruptcy law is rarely and ineffectively enforced. Because of this, creditors take matters into their own hands and have been known to storm a factory to grab anything of value and hold hostage former company executives.

 

Since some employees live at the factory, when a business suddenly closes, they are left homeless as well as unemployed, thus exacerbating the situation. Some officials are encouraging stronger action against business owners by printing their names in local newspapers, shaming their reputation, and creating a blacklist of fugitive bosses. However, business owners are not without worry themselves. They fear for their lives or that their former employees and suppliers will hunt them down and hurt them.

The behavior of the Chinese factory owners does not maintain and protect the fundamental rights of people. Their behavior can therefore be judged unethical according to