Ethical dilemma:
Profit, downsizing & the corporate conscience
February 2004
You are the Chief Executive Officer of a wholly owned subsidiary of a multi-national corporation.
The price of shares of the parent company has been depressed because of market fears concerning the profitability of the group. With an eye to boosting earnings and profitability - and therefore the share price - head office instructs you to reduce the size of your workforce by at least 10%.
You receive this instruction at a time when your company is engaged in wage negotiations. The country is in deep recession and you have been offering stability of employment as a trade-off for wage increases.
You raise this with your head office, which confirms the original advice. You are also instructed to maintain secrecy concerning the planned redundancies so that the company can prepare strategies to counter any potential industrial action.
Ethical questions:
- What are the issues?
- Who are the stakeholders?
- What should you do?
- What would you do?
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nb: this is the first ethical dilemma for 2004