Ethics Leadership Analysis One of the Biggest

Ethics Leadership Analysis

One of the biggest advantages of globalization is that many different companies are able to receive cheap labor to produce a wide variety of products that are sold at numerous retail stores in the United States. However, an ugly facet to what has been happening, is that there are a number of different sweat shops in a host of regions around the world and in some cases within the U.S. itself. Evidence of this can be seen with an investigation that was conducted by the Department of Labor. They found that over half of the companies they were looking at, were breaking numerous labor laws by operating 10,000 of these kinds of facilities illegally inside the nation. At the same time, they discovered that a variety of governments around the world were encouraging these kinds of factories. (Elliot, 2009)

In the case of Kathie Lee Gifford, her clothing line was placed into the spotlight. Once it was revealed that her entire product line was being manufactured at these locations inside and outside of the U.S. At which point, there was a tremendous amount of public outrage. As, there were numerous factories in: Honduras and within a few blocks of her studio that were in operation. This is problematic, because it is illustrating how the lack of ethics inside these kinds of organizations is allowing this to take place. To fully understand what is happening requires: examining the current situation, how the issue compares to following the law vs. maximizing their profit margins, the role of company leadership, what individuals / groups have a stake in the outcome, what options are available, if the decision is more damaging to a particular individual or group, what is the best option for addressing this situation, how a remedy could be implemented that will take into account the views of different stakeholders and what can stakeholders learn from these kinds of situations. Once this occurs, it will provide the greatest insights as to the underlying challenges and how these issues can be effectively rectified over the long-term. (Elliot, 2009)

What are the relevant facts of the case? What facts are not known? Do you know enough to draw a conclusion? What, if any, additional information would you seek?

In 2008, Kathie Lee Gifford was shocked to learn that her entire clothing line that was being produced in various sweatshops around the world. This follows a 1996 scandal, where her company and clothing line wrestled with similar kinds of issues. What happened was Charles Kernhagan and the National Labor Committee revealed that many of her different clothes were being manufactured at sweat shops throughout Honduras. At the time, these factories were closed down and the scandal began to quickly run its course. Then, in 2008 the National Labor Committee revealed that nearly all of the clothes that were being produced by the Kathy Lee Gifford clothing line were: manufactured in sweatshops throughout Honduras and within the United States. This same situation took place, involving a company that was publically humiliated and it had tarnished the reputation of Gifford once again. (Elliot, 2009) ("National Labor Committee," 2000)

The different kinds of facts that are not known about the case are how involved she was prior to the second scandal breaking. Where, it is obvious that some kind of ethical issues existed in the company. However, the overall scope and level of her knowing about this is unclear due to the way she reacted publically. Obviously, several different conclusions can be drawn. Most notably: that there was a lack of ethics inside her company, executives were knowingly engaging these activities after having seen the organization going through a similar situation and that the overall scope of the scandal become even worse with the revelation of these kinds of factories inside the United States (which is a violation of a host of different labor laws). As a result, the kinds of information that needs to be sought out are: the involvement of Gifford in what was happening. As, there needs to be some kind of examination as to: the overall length that company executives went in hiding what was happening. This will reveal depth and steps that were taken within the organization to encourage this kind of behavior. ("National Labor Committee," 2000)

Is this issue about more than what is legal or what is most efficient? If so, how?

This is about both what is legal and efficient. The reason why, is because these kinds of issues are interconnected. Where, the scandal involving Kathie Lee Gifford has revealed that there were sweatshops operating just a few blocks from the studio that she worked at. This is a violation of the Fair Labor Standards Act. ("Youth and Labor," 2011) At the same time, the fact that there were factories operating in Honduras is a sign that her company was engaging in the same kind of unethical behavior. In this aspect, one could argue that company executives were knowingly violating the law by: allowing these factories to operate in the United States and in the same region where they had these problems as before. Therefore, one could effectively argue that this issue is based on illegal activity that executives were knowingly engaged in. Yet, the overall scope and involvement of Gifford is unknown.

At the same time, this is a matter of the organization maximizing their profit margins and increasing productivity as much as possible. In this aspect, the overall scope of these sweatshops in different locations around the world is a sign that there was a concentrated effort by executives to achieve these overall objectives. Where, they have taken the concept and they have expanded what was happening to produce the final product for the lowest costs possible. These different elements are important because, they are illustrating that the scandal involving Kathie Lee Gifford's company is both a matter of legality and efficiency. As, the two different aspects are interconnected to help her company increase their overall bottom line as much as possible regardless of what is taking place inside the organization itself.

What was the role of company leadership in this case? How did they impact the case in both the positive and negative way?

The role of company leadership in this case, is that there was a strategy that was designed to help them produce a wide variety of products for the clothing line as cheaply as possible. Where, the highest levels of the organization were involved in the decision. The reason why, is because this case is not just an isolated incident at one particular factory. Instead, it was a number of different locations around the world to include one that was located within New York City. This is an indication that executives from the very top of the organization knew what was taking place and they were knowingly ignoring what was happening.

The way that these decisions impacted the case positively was based on: the fact that the organization was able to maximize their profit margins and productivity. This allowed executives to be able to sell their clothing line to Wal Mart at the lowest costs possible. At which point, they were able to attract a national chain and ensure that there would be consistency in helping them maintain the highest bottom line numbers. The negatives of this kind of case, is that once the facts were revealed, the company was enduring a second public relations nightmare. The only difference is that the overall scope of what was occurring was more severe with the actions that were being taken clearly violating the law.

What individuals and groups have an important stake in the outcome? Are some concerns more important than others? Why do these groups take precedence? Do you agree with this precedence?

There are a number of different individuals and groups that have an important stake in the outcome. A few of the most notable include: Kathie Lee Gifford, company executives, shareholders, regulators, customers and the workers. These different elements are significant, because they are illustrating how the overall interests of stakeholders will vary from one group to the next. As a result, the clashing of these interests is the heart of the underlying ethical dilemma itself.

This means that are some concerns that are placed over that of others. The biggest ones was that company executives wanted to increase their profit margins at all costs. This meant that they would knowingly become involved in activities that were unethical. As, they engaged in behavior that had given the company a black eye one decade earlier and taken them to a new low. In this aspect, the concerns of the company were placed above that of the image of Gifford and the interests of regulators along with workers. The reason why the interests of the company were taking precedence was that executives wanted to ensure that they were able to achieve their long-term goals at all costs. Obviously, I do not agree with these actions. The reason why is because the overall scope of the operation is based upon greed and a lack of morals inside the organization itself.

What are the options for acting? Evaluate the options by asking the following questions:

• Which option will produce the most good and do the least harm? (The Utilitarian Approach)

• Which option best respects the rights of all who have a stake? (The Rights Approach)

• Which option treats people equally or proportionately? (The Justice Approach)

• Which option best serves the community as a whole, not just some members? (The Common Good Approach)

• Which option leads you to act as the sort of person you want to be? (The Virtue Approach)

There are number of different ethical approaches that can be taken in dealing with these underlying situations to include: utilitarian, rights, justice, the common good and virtue. The utilitarian approach is when you are looking at how the different actions of the company are doing the least amount of harm. The basic idea is to examine the underlying situation and determine what avenue will provide the best results, while limiting the negative effects. In this case, Kathie Lee Gifford's company could have engaged in a strategy of paying the higher labor costs. This would have reduced their profit margins, yet it also would ensure that the negative impact of the organization on various stakeholders would be limited. However, given the fact that this did not occur, the organization could choose to engage in activities that will have the least amount of negative effects on their stakeholders. (Vitez, 2011)

The rights approach is when you are looking at the actions that are being taken and you want to treat everyone with: dignity and respect. Where, you want to ensure that they are told the truth about the situation and you are making certain that the organization is not exploiting these individuals. In this case, the company could have avoided these kinds of actions by choosing not to use sweatshops for the manufacture of their final product. Yet, given the fact that executives were exploiting children and other individuals, they could make a pledge to never engage in these kinds of actions in the future. At the same time, they could establish a compensation fund to help these workers and their families. Where, this would provide them with back pay, disability benefits and health care assistance for damages that were inflicted upon them. (Vitez, 2011)

The justice approach is when you are creating ethical guidelines that are based upon fairness for everyone involved. When you apply this to Kathie Lee Gifford's company, executives could create some kind of compensation structure. This will allow workers to: receive extra pay and benefits for the higher quality of work along with going the extra mile for the organization. In the aftermath of these events, executives could implement this kind of structure at their facilities and create various standards that will support these objectives. (Vitez, 2011)

The common good approach is when you are looking at the situation from a larger big picture perspective. You would then want to create strategies that support the long-term objectives that will benefit everyone involved. In this case, the company could establish policies and procedures that will benefit all of the different stakeholders. To deal with lingering effects of the scandal, the organization could create a strategy that will pay workers that were exploited and help them with various expenses they endured. You could then use this in conjunction with the current strategy to create a methodology that will take into account the views of all the different stakeholders. At which point, the company will begin serving the interests of community by: increasing the standards of living inside these different regions. (Vitez, 2011)

The virtue approach is when you are looking a number of different aspects that will influence how someone is acting within the organization itself to include: compassion, love, fidelity and honesty just to name a few. In the case of Kathie Lee Gifford's company this philosophy could be utilized to set different moral standards within organization. Over the course of time, this would help to prevent a host of different abuses from taking place by developing practices that everyone must embrace. This is the point that there will not be a repeat of these issues and the impact that they are having on the company itself. (Vitez, 2011)

Could this decision or situation be more damaging to someone or to some group? What are the cross cultural dimensions involved? Does this decision involve a choice between a good and bad alternative, or perhaps between two "goods" or between two "bads"? How can all the relevant persons and groups be consulted?

This situation is most damaging for Kathie Lee Gifford. The reason why, is because she is known as a media icon, who has built her relationship based on the trust of the general public. The fact that this was able to occur twice with her company, makes her looks like she is encouraging this kind of behavior. At the same time, this makes her company appear as if they only care about increases their profit margins at any cost.

The cross cultural dimensions that are involved are highlighting how the organization is establishing factories in regions where this kind of behavior is supported. At the same time, the illegal sweatshops in New York City are an indication that they are seeking to exploit minority immigrants, who do not understand the labor laws of the United States. This more than likely means that they are uneducated and do not speak English fluently. While, there is also the possibility that these individuals could be in country illegally. When you put these elements together, they are illustrating how the company is taking advantage of people who are from cultures where this kind of behavior is accepted. As a result, this involves two bad choices to help the organization achieve its different objectives.

The way all relevant persons can be consulted, is through establishing policies and procedures that prohibit this kind of activity. You could then create a committee that will monitor for these kinds of abuses that will report directly to: Gifford and the Board of Directors. This will increase communication, while keeping the different persons and groups informed about what is taking place.