Business ethics case study
Introduction
The ability to make a decision based on what is right and what is wrong without reliance on the law represents an ethical streak. The importance of not relying on the bill in considering moral decisions is based on the fact that sometimes, the law does leave something out which may be or fair. However, it is common knowledge that an ethical decision more so in cases where business transactions are concerned refers to conclusions that are made based on the mutual benefits for both of the parties involved. The action is conducted while taking care not to falter the interests of other well-meaning parties who though may not be a part of the transaction but may get affected in one way or the other by the interaction in progress. In as much as there are other considerations when a company is founded, the ethical roadmap that the company wants to take is a vital part not only because it influences the manner in which external participants may view the company, but also because it is a determinant of the subsequent operations of employees in the organization.
The foundation of a business organization is laid upon its formation and the formative years of an enterprise is the basis on which stakeholders in the industry rely to judge the business. Therefore, it is essential to ensure that the establishment of a business enterprise is as clean as any slate could be to avoid future embarrassments in regards to the ethical conduct of the company in its growth years. Moreover, the benefits of ethical procedures and compliances though inconvenient are quite impressive especially if the reputation of the company spreads in a right way. Based on those reasons, it is quite evident now the vitality of having Game Rush Inc. have an ethical foundation in the establishment of its operations in the industry. In beginning a company, most entrepreneurs almost forget to think about the impact of their moral actions, and as stated above, the same issues always come back to haunt the organizations in the future.
Game Rush Inc. Proposed background
It is not uncommon for friends to pursue a commercial joint venture in their lives after all the country is based on a capitalistic market. However, integration among the friends is a crucial component is the ability of the co-founding members to contribute to the organization in diversified ways, a phenomenon in which the advantage of more centers of expertise lies. In establishing the gaming company, all the interested parties are professional in a given field and therefore bring a wealth of experience apart from the fact that they are good at whatever they do. Despite basing the business idea on Alice’s area, the other four equally have a good position of involvement given that Joan is a business manager and so a terrific planner and leader, David a marketing expert as much as Albert is a human resource manager. Finally, I am the accountant and therefore in a unique position to manage the financial situation of the company.
Additionally, the company’s prospects for success are promising if the composition of the founding team is supposed to play a role in its success. Currently, the prevailing market favors gaming as can be confirmed by Alice who has been a significant part of the gaming community through her former job as she can prove. On top of that, the team assembled herein is top notch, and not only successful academically, but professionally accomplished as well given that they have maintained their jobs and are an integral part of the companies with which they work. Moreover, the absence of a stable workforce for the company necessitates the need for outsourcing the development process to another company. As someone familiar with the system, Alice recommends an Indian company which she says is cheaper and flexible and therefore the new company may not need a wing for operations.
Ethical issues in a business
Introducing business ethics
As has been stated earlier, ethics in business represent one area through which consumers can decide on how good a service provider is since the actions taken that confirm the ethical uprightness of an organization many art times are not legally mandated. In business, ethics is considered via two phenomena, and that is trust and integrity though not necessarily in that order. Integrity forms the basis of ethics as it indicates a willingness to act in a manner that is beneficial to both parties without taking undue advantage of a weaker entity for any gain. In instances where integrity is practiced, the ground rules ensure that the environment is fair and conducive and allows all and sundry to thrive despite having the ability to bend the rules, expectations or perceptions in favor of your company.
In the case of Game RushInc., for instance, the main propagators of the company are accomplished professionals in their fields with all sorts of contacts and information derived from their previous work areas. Regardless of whether a Non-Disclosure Agreement was signed with the former company or not, not one of them is expected to use any intellectual property of the companies from which they came as a stepping stone for the development of their new franchise. Additionally, the establishment of new institutions may be difficult and as such the founders may seek shortcuts in an attempt to either minimize their costs or level the revenue stream. Since it involves tilting the playfield through mischievous means, no matter how simple to consumers the maneuver may be, it is still considered as an unethical action and one from which the company is expected to divert. In the case of the company, it would be more sensible to explore the ethical issues that may result from the proposal made regarding three subdivisions, and the classifications are professional ethics, employee rights issues, and business operational ethics.
Professional ethics
Professional ethics refer to the ethical codes of conduct that are specifically designed for members of a particular profession in consideration of the roles and responsibilities they are expected to undertake in an organizational setup and in an account of the training they underwent in preparation for the said roles. More often than not, misuse of the knowledge they have of the same or even ignoring particular issues they are supposed to address in accordance to the skills acquired in training for the roes that they landed. In regards to the fundamental ethical problems that may bedevil a business society, very few of the same may be of professional undertaking since most of the decisions that might require guidance that is not explicitly indicated in the legal system fall within the operations category. However, sometimes accounting issues and processes may need more than just legal understanding and compliance hence it could be classified as an instance where the application of professional ethics is concerned.
Apart from the Sarbanes-Oxley Act of 2002 which was a government response to the Enron scandal of 2001, the government has put in place dozens of measures to curb financial misreporting and misrepresentation of facts that is rampant among companies, but that does not mean that the loopholes exploited by accountants are adequately handled. Despite the numerous regulations and guidelines installed by the government, financial reports are still a preserve of private auditors. The state is tied to merely monitoring the exercise given that there is nothing of substance that it could do because it could not employ the number of auditors that could oversee the auditing for all companies in the country. Therefore, government action is limited to instances where suspicion arises in a company or investigation is launched based on whistleblower reliance.
In the case of Game Rush Inc., the operational wing of the company more so its game production wing shall be situated in India since that part of company activities has been outsourced to a company of that country’s origin. Such a move, though economically beneficial for the company, exposes it to substandard financial regulations meaning that any transgression of the economic nature that is committed by the Indian partner rubs off to Game the company. The absence of punitive action to the Indian company is because the same laws that apply to Americans do not apply in India, there is no guarantee of financial regulations, or instead, it brings into question the company’s compliance with financial management since one wing may be compliant while the other is exempt.
The exemption gives room for the employees at the Indian subsidiary do whatever it is that they could with the company’s financial records as long as it doesn’t hurt the company though it may be illegal in United States. However, it is the American market that will react since the products are sold in USA and therefore they’ll feel they have a right to do something if at all the shady issues conducted on the other side comes to light.
Though more of an operational issue, authenticity of products touches on the professional life of the founders especially in regards to their previous jobs and the ideas that they may have carried forward in implementing their plan of business. Given that the main idea of the company is the manufacture of video games and one of the main pushers of the idea is Alice, a former employee of another gaming company, it is not unusual to wonder whether she broke away with trade secrets which would be unethical and illegal.
As much as it is not a crime to start a business with the same idea as the establishment in which someone worked for some time, the operational specifics is the worry. As an integral part of the team in the stated organization, knowledge of its functional features that drove it ahead in business as well as the measures that were installed to keep it competitive is exposed to you and therefore using it in the new company is unfair. Using the ideas of others and claiming it as your own makes the operation unethical and that is the exact issue that is ongoing with the proposals that are made in regards to the game and the advertising strategies employed. For starters, the basis upon which the game is developed is derived from psychological processes that are the core methodologies through which Game Day Inc. the company for which Alice worked developed their games. In legal terms, that is like committing corporate espionage only that the links between the final products of the two companies are non-existent and therefore no one would look to prosecute or take action.
The advertising strategy proposed too is flawed since it is an idea that is tested and proven and even applied in more than one university nationwide and therefore not one group of people should lay claim to the benefits that result from the application of such knowledge. On top of that, the strategy also fails to consider the fact that the agency contracted to advertise does not get a share fair of the deal which is the epitome of bad faith. Given that recent research items have shown that the process of convincing someone to buy particular goods require a factual theme, as well as a repetition of the information, applying the game as a means of advertisement, passes contrary information. The contradiction stems from the fact that the game itself is not real and therefore not factual hence only one aspect of a successful and can be fulfilled.
Operational ethics
For products to go through the process of production, testing, and marketing, it goes through a collection of activities that can be considered as processes which make operations. Operations in a manufacturing or processing company refer to a set of tasks performed to ensure that a product is created out of totally unrelated and unlike materials with integration or separation from some elements. In the operational process, human beings are involved since methods need controllers, instigators, and finishers to confirm that the work has been done satisfactorily even if mechanization was involved. Given the involvement of a workforce in the process, a human resource department is consequently engaged and so are the legal and ethical responsibilities that define the department.
In the contemporary business world, labor laws cover almost all the bases such as the conflict in how to treat workers can never be a moral issue especially if the company is based in the United States of America. Clauses on the minimum wage, compensation packages, benefits and retirement packages are abundant in the constitution, and a violation of any puts the company in danger of litigation y an employee. The problem for Game Rush Inc. however, lies in the fact that the location of its operational wing is based in India and therefore the laws applying to Americans regarding labor do not apply to the subsidiary.
The primary motivation behind the location of the company was reducing the costs of production by cutting down the labor costs. Additionally, the company of association is famed for delivery of orders on short timelines and therefore considerably efficient. However, the process of designing the game whether in India, Uganda or the united states is consistent which means that reducing the labor cost entails denying someone a chance to get adequately compensated for the work done. In a nutshell, the labor force on which we are to rely to supply the product is grossly underpaid. Interestingly, the same labor force is responsible for making quick orders, yet the price paid for labor is still lower. The repercussions of such an ironical situations lie in the fact that the workers complete more extended working hours for reduced pay, an attribute that could be linked to the unimaginable poverty levels in India and the commitment of the workers to pursue a good life.
Though most of the proposals for the company may be having ethical impediments to their implementations that does not mean that the company is short of ideas that are worthwhile in exploring and are ethical. Apart from the professional ethics issue, most of the other aspects of the company are noble, and it is only fair that we get a chance to rectify the issues raised to align the operations of the company with the moral expectations of the market and the world at large. For instance, the firm recognizes a requirement for diversification in its workforce hence the inclusion of five different people from different backgrounds as well as an Indian company which is primarily composed of a Hindu populace amongst others. On top of that, all the documentation that is subject to government approval are for both states that are India and the United States, and therefore, it can never be said that compliance was an ethical Achilles heel for the company.
Recommended solutions for the ethical quagmire
The effort put in coming up with a business proposal and planning for the business is very much hence withdrawal from the same would be counterproductive. Instead of looking for alternative measures to implement ethical practices in the organization while maintaining the costs of production at a minimum is the key to reestablishing the company but with pure intentions as its basis. The main ethical issues that the proposal flouted were just three and included low compensation of workers, intellectual theft by basing the idea for the design of the psychological processes preferred by the original employers of Alice. Finally, offering the contracted advertising agencies a deal which reflects the value of the work they put and consequentially compensates them as much.
For the human resource crisis, it is not in the place of the company to meddle in the affairs of the Indian firm and increase the pay of its workers or reduce their working hours. However, we may agree with the managers of the same company to pay reasonable labor costs towards the workers involved in the projects of our company considering the resources at our disposal, the prevailing payment rates and the economic condition of India in present time. Alternatively, Game Rush Inc. may cease to collaborate with companies that do not reasonably reward their workers, but that stance would be problematic especially in regards to the stable financial situation of the startup company. Also, making timed orders for products may reduce the overwork that subsidiaries with which we work subject their employees too, but in case of such laws, a compensation payment must accompany the same to take care of employee overworks expenses.
The other unethical undertaking included by the proposal include the application of the psychological processes in game design as proposed by Alice given that they are the ones applied by Game Day Inc., a company in which she was a former member. In dealing with this, adopting a different inspiration for our products may be the best way out. However, the creation of ideas may be an uphill task, and therefore an alternative would be referencing the company as a source of inspiration for the product, a move that opens ownership of all our products to the said company thereby it is also an unviable move. In that case, the initial recommendation is more logical and developing a new inspiration for ideas however hard stands recommended. As with the issue of idea development, advertising agencies that use our games for their adverts in exchange for services deserve a better deal as had been asserted above. In improving their terms, calculating the difference between the values they get from cooperation with our company marks the first step followed by the compensation of the deficit regarding money or added advertisement hours.
Conclusion
In a business, one area through which consumers can decide on how good a service provider can be is the ethical considerations of the company. The finding stems from the fact that the actions are taken that confirm the moral uprightness of an organization many art times are not legally mandated, and therefore the consequences on the organization are not guaranteed. However, one fact that the top executives of a company must come to terms with is that the American populace like companies with which they can relate hence corporations must avoid scandals since the potential market will never forget as much as the current market scope will distance itself from the company. Many an organization has gone under due to scandalous events that were a creation of an action taken that represented unethical interests including Enron Energy Limited. Once a scandal besmirches a company, the public loses its trust in the same due to a perceived loss of integrity for the former meaning that all interactions with the company are unsafe