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The ethical issues that can be identified in the case can be divided into two categories, the issues involving the main question of the case, i.e. ending the health coverage and pension plans, and issues related to the case in general.
One of the ethical issues, which are not connected to the question of the case, is related to executive compensation. In that regard, the issue can be framed as questions, the example of which can be seen as follows:
- Is the compensation of executives encourage them to benefit the company or themselves?
- Should the executives be paid the same compensations when the company faces financial problems?
- Should the rate of compensations increase be reflected in the salaries of other employees?
- Should the company compromise a portion of the compensation of executives for the benefit of the company?
The aforementioned identified questions can be related to such ethical aspects as responsibility and moral leadership. The application of such ethical aspects to the identified questions can be seen in the fact that the board fails to admit its mistakes in managing the company. The latter is specifically evident when these mistakes are the result of personal choices made by the CEO, including encouraging several long-term members to leave, replacing executives, and increasing compensation.
With the company, while led by Lee returning profits only four years out of ten, the ethical dimension of such aspects can be solved by taking responsibility for personal choices, embracing responsibility for serving others, and admit mistakes and failures (Lennick and Kiel). In terms of moral leadership, the ethical questions can be linked with the issues of integrity and acting consistently.
Taking the core question of the case, i.e. the dilemma of ending medical benefits and the pension plan, the ethical issues can be framed through the following questions:
- Should the CEO maintain the promise made to keep healthcare and retirement benefits, regardless of the financial situation of the company?
- Does the company have the right to use the pension plan funds for other purposes?
- Should the company differentiate in the coverage of the benefits, based on long-term employees, and recently hired employees?
The identified questions can be also related to different aspects of ethics, among which the issue of integrity can be repeated. One of the elements of integrity can be seen in the issue of keeping the promises, where omitting the historical significance of medical befits for the company and their employees. The deal was made with the employees to keep the union out. Such aspect can be related to deception, as unionization would have secured better healthcare coverage for the employees, compared to the outcome the CEO is about to implement. The sensitivity of the issue can be seen through the dilemma of benefitting the employees or benefitting the shareholders, and would the deception can be justified for either case.
Another aspect of integrity can be seen through the role of the CEO in standing up for what is right. In that regard, the dilemma can be seen in determining the ethical dimension of considering a certain party in the company as more important, i.e. the top people vs. the employees, the retention of which was mostly attributed to the benefits provided.
Works Cited
Lennick, Doug, and Fred Kiel. Moral Intelligence: Enhancing Business Performance and Leadership Success. Upper Saddle River, N.J.: Wharton School Pub., 2005. Print.
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