Ethical responsibilities and food contamination crisis management

¶ … business environment, obligation and duty of any business is to protect shareholder's value and make profits to increase a company asset. Apart from protecting the value of shareholder, businesses also have to look beyond shareholders' values and protect the value of other stakeholders that include consumers, environmental groups, employees and communities. To be competitive in a business environment, businesses have four responsibilities, which include acting morally, complying with legal obligations, earn profits, "give back" to the community. (Green, & Donovan, 2009).

Our company is the main source of employment for people in Alberta and source of tax revenue for the local government in the district. Approximately, our company employs 150 permanent employees and 100 contract employees. In the community, our company has established a solid reputation, which we should protect at all cost. The present food contamination rumour could affect our company's reputation if we do not take immediate action.

The objective of this paper is to advise the President on the course of action to take with reference to the ethical issues facing our company.

Issues at Stake

The issue at stake is that our company is currently facing an ethical issue concerning the rumor of the contaminated food in our plant, which one of our employees is trying to cover up. There is also a rumor that some of our employees have been suspected of trying to bribe food inspectors from the Canadian Food Inspection Agency to cover up the ethical problems occurring within our organization. This ethical issue is particularly centered on two floor supervisors who have been with the company for more than 20 years. Although, these employees are very hard working and have been very loyal to the company, however, our company needs to consider the interest of our company first, the shareholders, and other stakeholders before thinking the stake of an individual employee.

Recommendations

Our organization could be accused of deviating from the ethical responsibility if we do not take immediately action on the ethical issue facing our company. Our company needs to take an ethical decision on this issue by investigating the matter and punish any employee responsible for this issue. The Quality Control Department of our company should immediately investigate whether there is a food contamination in our plant. If the outcome of the investigation is positive, our company should immediately recall all the food items that have been produced during the time of contamination. We should also immediately decontaminate our plant to remove all the contaminated food from our plant by ordering for the service of decontamination expert and clean the entire toxic items from our plant.

However, our company could secure some financial loss and risks from the recommendations. We could secure some financial loss from the number of products recalled from the market. Moreover, our company will incur additional costs of paying for the service of decontamination expert. Despite the costs that our company will incur from implementing the recommendation, our company will still enjoy short and long run benefits from the recommendations.

If we do not take immediate action on this issue, our company could face potential risks and losses. The ethical theory argues that executives of modern business are to make ethical decision by indentifying the issues affecting a company and implement an ethical course of action. Our company will face lot of risks if we do not apply our business model in line with ethical theoretical perspectives. Typically, our company could face a legal action of producing contaminated food. Ethical theory suggests that obeying the law as well as obeying the professional conduct is very critical in modern business. Deviating from the suggestion of the ethical theoretical perspective could make our company to secure both market loss, and financial loss from the legal action. The issue could tarnish the business reputations and goodwill that we have been built for a very long time.

The stakeholder theory also reveals that managerial responsibility is to embrace the interests of all stakeholders or individual or any other group that could be affected by firm's objective. From the stakeholder's theory perspective, our company should embrace the interests of not only our shareholders; we should also embrace the interest of other stakeholders such as consumers, environmental groups, employees and communities. Thus, stakeholder theory suggests that firms are to create as much value as possible to stakeholders by keeping the interest of suppliers, customers, shareholders employees and communities along the same direction. By managing stakeholders effectively, executive will be able to create as much value as possible to shareholders, and other stakeholders. Thus, our company should protect the reputations that we have built in the community by applying stakeholder and ethical theoretical perspectives by immediately decontaminating our plants.

Many companies in the United States have secured huge financial losses by not operating within the ethical and stakeholder's theoretical perspectives. The Arthur Anderson secured a huge financial loss because the company did not protect the stakeholder's interests, and did not implement ethical framework in its business model. Some other companies such as WorldCom, and Enron also violated the ethical and stakeholder's theoretical perspectives, which made these companies to secure huge financial losses. In 2010, Siena Foods, a Canadian Food Processor company faced a class-action legal suit on the food contamination, and the company paid CANS$1 million as damages.