Project 3: Icelandic Freeze
In the third assignment, you have the opportunity to gain an understanding of the ethical practices in a business related to wages. You will research and identify the ethical issue presented in the case scenario, identify the ethical dilemma associated with the presented case scenario and assess the scenario in terms of ethical relativism and moral universalism
Read the Case Scenario and Answer the following
Assume Josh’s employment practices are unethical.
- Explain the meaning of an ethical issue;
- Identify and explain the ethical issue in the case scenario using the course material to support the reasoning and conclusions made;
- Identify the one non-ethical issue in the case scenario. Explain why?
- Identify and explain the ethical dilemma. Use the course material to support the reasoning and conclusions made;
- Define ethical relativism and moral universalism;
- Does this case scenario illustrate ethical relativism or moral universalism? Explain why or why not?
Solution
Introduction
The case study revolves around the company dealing with Biotech Health and Life Products which is starting to reconsider its distribution and packaging strategy with the aim of reduction in costs. The Head of the Packaging and Distribution is considering shifting its Packaging and distribution to Iceland for gaining from the reduced transportation costs. However, the labor costs at Iceland are higher than that in Germany, and UK. But he has found a way to manage the costs of labors by using only the young people of age 15-18, making them work for 40 hours a week, negotiating at a lower cost, as the unemployment rate for this age group is higher. This step can be contributed to his wish to help the young people of Iceland. But for managing the costs of the labor, Josh has to let the labors go at the age of 19, as at this age the labor contracts are needed to be renegotiated. The strategy of Josh has come under dispute. The workers think that Josh is taking advantage of the system by not letting them get to full employment and get paid a fair wage. The workers have also raised questions about the company policy of paying different wages to similar work in different countries. Josh needs to find some time solution to these problems keeping view both its financial implications for the company and its ethical positions.
Ethical Issue
The ethical issue can be explained as a situation or problem which arises during one’s course of a business causing a person, or business to choose between alternatives which must be considered as either right/ethical or wrong/unethical. This situation causing the conflict of right or wrong makes the organization or individual seek an ethical solution by evaluation of the alternatives. There can be some situations or relationships which can become a reason for generating the ethical issue. Although it is often difficult to recognize a specific ethical issue, the failure to recognize the prevailing ethical issue is often dangerous for the business and the individuals (Marques, 2015).
Any For-profit-organization has the aim of maximizing its profits. However, in this interdependent world, one has to take immense care that one’s advantage does not come at the expense of another party or individual. Sometimes, following this objective blindly, organizations unwillingly and willingly get involved in unethical practices. Maximizing of one’s position, boosting of sales, and increasing earnings per shares, improving returns, and increasing share prices often create pressure on businesses which can push them to cross the limits of ethical practices. Thus, businesses and individuals involved in these practices often have some set values which are needed to be taken into consideration.
Ethical Issue in the Case Scenario
As per the case scenario, Josh is facing the ethical issue in which his aim of reducing the company labor costs is causing him only to hire the labors of age lower than 19 and then lay them off after getting to the age of 19 in expectation of eradicating the need of raising their wages.
Josh was trying to help the community of Iceland by creating jobs. However, he also intends to lower the costs of labor for his company. The solution for solving both problems has come in the shape of hiring only youth employees. It is because of the reason that the unemployment of youth is very high, and thus rates in this sector are lower compared. Moreover, he is also planning to lay off the employees after getting to the age of 19. He is planning to do this because the contract of employment, as per law, has to be renegotiated at the age of 19. It will cause the company to raise the wages of senior employees. Thus, here Josh is getting involved in an ethical issue by not letting its employees get to full employment and enjoy higher wages.
Non-Ethical Issue
The employees of Iceland are faired higher as compared to the employees in the United States, Mexico, and Germany. The paying of different wages in different countries for similar work seems to be a non-ethical issue. As the company policy represents paying fair wages for each of its employees, this can be considered as a non-ethical issue. It is a non-ethical issue because living wages vary from country to country. The workers are not to be exploited, but the workers have to be given the living wage as per their country environment. There is no moral requirement for a company which is operating in more than one country to pay similar wages for similar jobs in different countries.
The value of the wages should be similar, and not exploiting. It implies that a living wage in India cannot be similar to the living wage in Australia, or any other strong economy. Lower wages are one of the reasons that companies switch their operations to these developing countries (Matt, 2015). Thus, this certainly is a non-ethical issue. The manager Josh can certainly hold on providing different wages for similar jobs in different countries. The situation is not an unethical situation. And if the company is paying fair wages as per the economy and work are done by the employees, he need not worry about it.
Ethical Dilemma
Many ethical choices are very clear enough. One can decide whether it is right or wrong easily for most of the situations. Funds are not a tough ethical dilemma like embezzlement of the corporation. It is because embezzlement is stealing, and stealing is unethical. There is not much of a dilemma in deciding this. However, things get pretty ambiguous and difficult to be identified separately when two or more values conflict and one have to choose between these equally difficult alternatives. These situations are considered as one causing ethical dilemmas (Nayak, 2016). Thus, an Ethical dilemma is a situation in which two or more ethical values conflict with each other. Often seen in many corporate ethical dilemmas has been that of the employees who are torn between truthfulness and loyalty to their firms (Merritt, 2016).
In the case scenario presented, the example of ethical dilemma is that of the concern raised by Josh at the end. He is concerned if the different wages paid to the similar jobs in different countries are an ethical practice. On one side, each country has its dimensions based on which the companies state and give wages. These wages can be low as compared to some other economy. However, it is considered fair in the country’s perspective. The ethical dilemma here is that of choosing between paying “same” wage to all the similar jobs in different countries, or else choosing to pay the “fair, living and deserving” wage as per the work is done. In both scenarios, one can be considered of doing wrong by someone. Thus, we can say that both situations are right in their ways, and both alternatives are in conflict.
Ethical Relativism
Ethical relativism is a theory which argues that what is considered right in one culture does not have to be considered right as well in the other culture. It implies that the judgment on an issue or situation of what is right or wrong is done as per the culture in which the situations arise. Thus, what is right in one culture need not be considered as right in another culture. It may be considered wrong in any other culture (Merritt, 2016). This theory argues that the only criterion to judge if anything is right or wrong is to judge that action against the moral action of the society in which it occurs. It can be explained from the example of Abortion, which is considered as immoral in Catholic Spain. However, the same action is considered a neutral form of birth control in the society of Japan. As per the theorists of relativism, they are not merely suggesting that abortion is allowed in Spain and not allowed in Japan. They are suggesting that it is “immoral or unethical practice” in Spain and simultaneously a “moral practice” in Japan. Thus, both cannot be judged against each other, but with their own cultures (Hāyry, 2005).
Moral Universalism
Moral Universalism, which is also known as the moral objectivism or the universal morality is the ethical position which argues that some ethics systems apply universally, regardless of the culture, sex, race or nationality of individuals (Marques, 2015). It implies that there are some universally moral and immoral practices whose morality cannot be discussed and is thus confirmed. It means that murder; stealing, rape, and embezzlement are such practices which are universally immoral (Adewole, 2014).
Conclusion
In the end, it is concluded that the case scenario let us distinguish between the universal morality and ethical relativism. The case of using the wages system unfairly and not allowing the workers to get to full employment and earn a higher income is an example showing that this practice is universally immoral. On the other hand, the case of paying different wages to the same jobs in different countries is an example of ethical relativism showing that each wage should be judged against each country’s own culture and economy.
References
Adewole, D. A. (2014). Global Business Moral Order and the Challenge of Ethical. International Affairs and Global Strategy, 27, 48-60.
Hāyry, M. (2005). A Defense of Ethical Relativism. Cambridge Quarterly of Healthcare Ethics, 7-12.
Marques, J. (2015). Universalism and Utilitarianism: An Evaluation of Two Popular Moral Theories in Business Decision Making. The Journal of Values-Based Leadership, 8(2), 1-11.
Matt, M. (2015, December 11). Ethical Outsourcing: 3 Better Ways To Employ Global Talent. Retrieved from Forbes: https://www.forbes.com/sites/ellevate/2015/12/11/ethical-outsourcing-3-better-ways-to-employ-global-talent/#711487e8355c
Merritt, J. (2016, March 25). The Death of Moral Relativism. Retrieved from The Atlantic: https://www.theatlantic.com/politics/archive/2016/03/the-death-of-moral-relativism/475221/
Nayak, S. V. (2016). Ethical Dilemma at Workplace – A Case Study. Informatics Journal, 10(2), 18-20.
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