Business Law Ethics - Assignment Example

Question 1. The regulatory cycle model is a clear of all the steps involved in the different stagesof the regulatory process. Not only does it explain the relationship between activities within these steps and their importance in the regulatory making process, it also incorporates the various stakeholders involved in the regulation process. 2. The recent regulatory policies in the automotive industry require that automotive companies adhere to the carbon dioxide emission to the environment. While some of the countries such as Australia, Japan, the European Union and Canada have complied, only California has complied top these rules in the United States. The new policies in the automotive industry require that all companies in the industry comply to these policies, by reducing the level of carbon emissions to the environment. This significantly affects the managerial decisions for the automotive companies in these areas. With the policy change threatening to influence these companies’ profitability as well as create new opportunities for these companies, the management has to change their managerial strategies in order to increase on their profitability. However, the influence that this policy has on the shareholding and the investor confidence in the industry is the biggest source of worry for the management of automotive companies. The policy leads to an increase in the invested capital in these companies, therefore increasing their operational costs. With such an increase in the operational costs, there is a corresponding decrease in revenues acquired. Therefore, managers have to look for new ways of achieving investor confidence in the industry, while at the same time seek for opportunities that increase their profitability levels. Question 2 1. Corporate sustainability as a business approach focuses on establishing and maintaining long-term employee and consumer values through proper relationships. It helps the management in understanding how a business should operate in the social environment with its customers and the society, cultural environment that involves the beliefs and practices of the people it operates with, as well as the economic environment affecting its operations. Among the various advantages of corporate sustainability to the organization, include the increase in the transparency between the organization and other stakeholders like the customers. It also engages all the stakeholders in the operations, especially while drawing policies and finally helps the management in thinking ahead. 2. Ethics play a significant role in the profitability of an organization through high revenue generation. The belief that a manager’s actions should always be in accordance to the set norms of behaviour and objectives as well as the universal statements of belief that are "right" and "just" and "fair", plays a main role in improving their profitability. Since the norms and believes that we all hold to are intuitively determines by our religious and cultural beliefs, they direct us in doing what is right and avoiding the wrong. Therefore, doing what is right in most cases leads to motivating people in the organization, therefore increasing the organizational profitability. Question 3 According to freeman, there are two types of organizational stakeholders. These include groups, which are vital to the success, or survival of the organization and those affected or can affect t the survival of the organization. Owners of the organization have a financial stake in it, in that the success or failure of the organization directly affects them. On the other hand, the employees of an organization have the responsibility of ensuring that the organization functions smoothly. It is the responsibility of the owners of an organization to provide the workers with good working conditions. On the other hand, the employees hold the responsibility of maximizing the shareholder wealth through diligent working and proper application of organizational resources. However, this role conflicts with the fiduciary duty of the management and the board of directors in maximizing the shareholder wealth. This is because by providing proper tools and working conditions, offering training to the workers and benefits eats into the profits of the organization thus minimizing the shareholder wealth. Question 4 1. New benzene policies in the company will benefit a number of groups in the company. People working in the lower levels of the company, especially those working in the drying shed are likely to benefit if the implementation of the policies was to take place. According to Shapiro, groups of people working in the drying section dried the cake dumped in a rotating screen and washed with benzene. Although there was a vacuum box that partially recovered the benzene, the technology was outdated, and never worked well. As such, most of the benzene evaporated within the shed, making the atmosphere in the shed heavy with fumes, despite the construction that assumed an “open air” style. According to Shapiro, benzene also known as carcinogen, has direct and statistically shows a valid correlation between benzene and leukemia as well as birth effects. Not only would they reap high benefits from the reduced concentration levels, they would enjoy favorable working conditions. With favorable working conditions, the shareholders indirectly are likely to gain. Good working conditions are a motivating factor for workers in an organization. Working conditions help workers in increasing their level of output, as they feel more comfortable and free top work. This way, they increase their level of output, which subsequently increases the company’s revenues. As such, the shareholders gain more through dividends and shareholding returns. 2. The current working conditions that the people in the drying shed have to contend with is due to the negligence of the shareholders. They show unwillingness to invest in proper working conditions in the company. In fact, Shapiro points out that during the meeting with the plant manager, he agreed that he himself knew of the existence of the problem. However, as he pointed out, the senior managers, despite of his budgetary proposals meant to improve the plant’s drying section, none ever went through. As he explained to her, “because the project could not now show an adequate return on investment, and because the present process was technically "open air" and, therefore, not contrary to OSHA regulations.” Implementing new benzene policies would be confirming these people’s fears that they would actually have to invest in projects that did not have any value to the company. If they were to choose not to adhere to the benzene policies, then they risk prosecution. Either the management or the board of directors is likely to be biggest losers in this plan. 3. The management and the board of directors have the mandate of providing organizational workers with proper working conditions. They have the right to adhere to the set rules and policies in a country. Every policy has an aim, which in most cases seeks to protect the interests of different stakeholders. Failure of adhering to a particular set of policies can potentially lead to legal issues and problems among the concerned parties in the group. As Shapiro realized, the open system of construction in the drying area confined to the OSHA regulations. Therefore, they confidently believed that they had no problems with the legal obligations in a country. 4. Every group in an organization has rights and obligations. Different policies, adapted and implemented in an organization in most cases affect the rights of a number of people working in the organization. Some policies, despite having good intentions, and playing a great role in the achievement of ethical operations in a company, at times disregard the rights of different groups. Shareholders have the mandate of developing policies that govern its operations. While drawing these policies, the shareholders, through their board of directors, draft policies in accordance to the rules of the governing authority. They do not hold any further obligations, as the biggest mandate is ensuring that the stakeholders adhere to the set rules. Shapiro realized that the organization adhered to the OSHA regulations. This means that its operations were within the law of the authority. However, forcing them to adopt a new benzene policy would be dictatorial. It would ignore their rights of choice, their right to do as the law stipulate, thus denying them of their rights. 5. Although of the stakeholders, believe that the policy would be against their rights, which is not true. This is a moral problem among the various organizations. In the case study, implementing as new policy on benzene and one that would look at the working conditions of the group working in the drying section would have double effects on the stakeholders concerned. While the workers stand to gain, some of the groups feel that they are likely to lose in the policy implementation process. The reality is however true; morally, not all stakeholders are likely to gain from the policy implementation. Corporate social responsibility requires that all organizational stakeholders have proper working conditions. Such a policy would not only benefit the workers, but also the entire organization. The shareholders, although they feel that such an investment would not be worthwhile, stand to gain even more. One of the gains they are likely to receive from this investment is the increase in the revenues, directly resulting from employee motivation. There are various ways of motivating a workforce, and one of them is providing the workers with a good working environment. Another way in which they could gain is avoiding trouble with the responsible authorities, particularly with the adherence to the set rules and obligations of the country. The failure by a company to adhere to the set rules and obligations attracts legal action against the owners of a company, the shareholders. The management gains by saving time in dealing with employee issues and health problems related to poor working conditions. 6. Implantation of any policy in an organization has economic implications to the organization. In the short run, it leads to high capital investment, which can potentially lead to low productivity. Changing the drying system, especially in the level of benzene emitted in the atmosphere requires high capital investment. At the initial stages of its implementation, the system would yield similar results, thus reducing the company’s profitability levels. On the long term however, the company’s level of productivity is likely to increase. As the workers, become motivated to work better, their level of production increases. The management has enough time to draft long-term policies and strategies that are likely to lead to organizational profitability through increased revenues. 7. Every policy adapted by a company should have corresponding legal obligations. Always, every company should ensure that its policies adhere to the legal obligations of the country. Companies that operate in violation of the set legal obligations risk prosecution. Worse, they could have their licenses rebuked by the responsible licensing authority. No matter how much expensive the implementation of a policy is, it is not as expensive as the fines imposed on the company, or the revocation of the trading or operating license. Therefore, adapting the policies would save the company from any legal problems that could arise due to failure of adherence. 8. The company has the moral duty of providing its employees with good working conditions. This, though it is not part of the policy framework, should consider that those working in the benzene section are human beings too. It is immoral, and equally wrong to let other people feel the pain that they passed through. A morally responsible person strives to improve the conditions, rather than leaving other people to face similar hardships just like they once did. The fact that the management in the company had faced the same conditions, as revealed by the supervisor, and thus felt obliged to let others pass through the system in order to harden for the top positions is morally wrong. Additionally, exposure to benzene has adverse medical issues, which the organization’s management should have addressed. 9. As things appeared, there was a high level of objection from the company’s management on the improvement of the working conditions of these people. They felt that all people ought to pass through the system before qualifying for top positions. Additionally, shareholders believed that it would not contribute to an increase in the revenue generation for the company. Shapiro, with the understanding of the moral and business ethics should have approached the top management and described to them the advantages of improving the working conditions of the workers. She should have stressed on its contribution tio the increase in the revenue levels. Read More