Leadership and Ethical Decision Making

UWEAR is undergoing a difficult period that has been characterized by declining sales and relatively low profit margins. This situation has generated considerable concerns and pressure of the firm's employees include Joe who is fearing cutbacks and layoffs because of the company's merger with PALEDENIM. However, Joe has established good relations with the CEO of Peninsula Hotels and signed a contract with them in the past financial year. Given the good relations that already exist between Joe and the CEO of this hotel chains, Peninsula is seeking to renew the contract for the upcoming financial year. However, the contract renewal has generated several concerns given that the initial price was so low while Threads4U has offered to beat that offer by 10%. As a result, Joe is facing a leadership and ethical decision-making dilemma that is exacerbated by the pressure to perform.

In light of the leadership and ethical-dilemma facing Joe, he needs to identify a suitable course of action that would be beneficial to all parties and help enhance the profitability of UWEAR during this relatively difficult financial period. From the scenario, it seems the relationship between Joe and Bill was more than a business relationship since its more of a friendship. Good relations with a business client provides a strong foundation for business transactions that are beneficial for all parties (Dahl, 2011). In this regard, Joe should capitalize on the friendship that exists between him and Bill to renew the contract with Peninsula hotel chain. However, the contract renewal discussions should incorporate deliberations regarding the brand name and quality of UWEAR and PALEDENIM. Additionally, Joe should develop a plan for competing with Threads4U and engage his company's management towards offering some promotions or higher price cut as compared to Threads4U's offer.

The proposed response for Joe in this situation is supported by utilitarianism ethical theory, which focuses on promoting the good of all. Based on this theory, an act is not inherently right or wrong, but its rightness or wrongness is determined based on its overall good (Moreland, n.d.). Through this ethical theory, Joe should focus on maximizing the greater good for the greater number of people involved in this business transaction. This implies that Joe needs to consider the situation at UWEAR, the business goals of Peninsula hotel chains, and the pressure to perform. While reducing the price of the offer may not be ideal for UWEAR, the contract renewal would be beneficial because failure to do so would mean that it would loose the deal to its competitor, Threads4U.

The use of utilitarian ethical theory in this situation is justified by the fact that the complex issues surrounding this business transaction requires identifying an acceptable course of action for all. In this regard, the interests of each of the parties to the deal are taken into consideration in order to prevent making a decision that favors one party at the expense of the other parties. For Joe, this theory enhances awareness of his susceptibility to layoff and the UWEAR's declining sales and profitability.

The situation can be viewed differently by others through the use of a different ethical theory or principle. Some individuals are likely to argue that Joe should refuse the contract renewal because it's initial price is already low and further price cuts would hurt the profitability of UWEAR. A further reduction in the price of this deal would imply that UWEAR would be unable to profit from increased sales. This view is based on virtue ethics, which suggests that ethical decision-making is based on common-sense intuitions (Athanassoulis, n.d.). In this case, common sense dictates that Joe makes his decision on the premise of what is the right thing to do i.e. focus on what will generate profits for UWEAR and help him avoid layoffs. On the contrary, others could argue that Joe should utilize his personal and business friendship with Bill as a tool against the competitive 10% price cut offered by Threads4U. The friendship could be used as a tool through which Joe would negotiate for a better deal and persuade Bill against accepting Samantha's offer. This alternative would also be based on common-sense intuitions as the premise for ethical decision-making.

The opposing perspectives are only based on what is good for Joe and does not consider the interests of the other parties in this deal. These perspectives do not enhance the competitiveness of UWEAR, but suggests the the company should avoid competition with Threads4U. Through backing off the deal, Joe and UWEAR would essentially avoid competing with Threads4U, which could ultimately affect UWEAR's market share and profitability. Secondly, the perspectives do not consider the strength and competitive advantages of UWEAR in this market. They would not be ideal since Joe already has good relations with Peninsula and UWEAR is a strong brand name with approximately 50% territorial sales with Peninsula.

The creative or compromise solution for addressing the leadership and ethical dilemma in this situation is to engage UWEAR's top management in discussions regarding the contract renewal and the current offer by Threads4U. In this regard, Joe should not proceed to agree the contract renewal before discussing it with the management. The management team would play a crucial role in providing necessary insights on the suitability of the contract renewal with regards to the firm's business goals and objectives. This is a suitable solution because it will involve key decision makers in the process of determining the feasibility of the contract renewal. The involvement of the management team in the decision making process is a feasible solution given the current situation at UWEAR. The feasibility of this solution is also demonstrated by the fact that the firm's management team is currently looking for better alternatives to enhance the company's sales and profit margins.

In conclusion, this situation is an example of a leadership and ethical decision-making dilemma that requires identifying and utilizing suitable ethical theories and principles. Based on the analysis of this situation, different ethical principles and theories are suitable for different scenarios. When making leadership and ethical decisions, the consideration of relevant principles and theories help in creating the most effective decisions. For Joe, utilitarian ethical principle/theory would help in making a suitable decision that benefits all individuals involved in this contract renewal scenario.

References

Athanassoulis, N. (n.d.). Virtue Ethics. Retrieved from The University of Tennessee Martin website: http://www.iep.utm.edu/virtue/

Dahl, D. (2011, January). How to Build Better Business Relationships. Retrieved April 17, 2017, from https://www.inc.com/guides/201101/how-to-build-better-business-relationships.html

Moreland, J.P. (n.d.). Ethics Theories: Utilitarianism vs. Deontological Ethics. Retrieved April 17, 2017, from http://www.equip.org/article/ethics-theories-utilitarianism-vs.-deontological-ethics/