Issues in Gumdrop Northern - Essay Example

 The staff Gumdrop northern,   Executive officer, Gumdrop northern 15/3 Issues in Gumdrop Northern, Fact of the case: The incident relate to that of the Gumdrop northern which was a long term military contractor and munitions manufacture, with the increased revenue and with the employee strength of 105.The manufacturers was mainly in the armored vehicle manufacturing for the US military. The products of the firm had to face lot of problems relating to the product, the different materials used in the manufacturing were below standard and the products had not conveyed it to the military services as they had the fear of loosing the contract. As the product were defective and due to faulty switches many of the soldiers and children losses their lives.       In the later stages the US military began to understand the different problems from the gumdrop northern and the department of justice and the lawyers came involved in the issue and the leaders were going down the barrels of the prosecution .The authorities of the management became aware of the fact and as the fudiciary duties have to be fulfilled,              The company had to face certain legal issues regarding the employees as they were at the edge of bankruptcy, Inorder to maintain the stand in the market the company had fired out the employees for no reasons and the people had to suffer a lot because of the issue.        As the company was bankrupted and as they have build rapport with the countries like Argentina and Coloumbia where the company assets had been transferred to banks in Argentina and which assured customers with good finance which can make them free from creditors.  2) The 3 main ethical issues that are identified in the gumdrop northern are: The use of substandard quality products in the manufacturing of body armor and armored vehicles for the US military services. Exporting of landmines to Afghanistan and Iran in contradiction to the international law and treaty. The supply of the defective land mines to Afganistan and the defective switches of them caused the death of soldiers and children. Termination of the employees for no reasons and without any notification, only to protect the stand of the company from the WARN act. Ethics engage in the area of interpersonal, group, and community policy at the different levels in the organization and the outcome of the achievement of the result. The ethics is the complex process in the organization. There are different ethical issues in the organization gumdrop, the gumdrop is the organization with the annual revenue of about $500 billion and as the revenue and the outcome are considered they are found to be good performing company, but unlike to the ethical practices the company had a problems in the product even though they had a good payment been done for its body armor and armored vehicles, the company also uses various substandard products for its manufacturing. The company had also provided some unethical practices of not informing the military forces when their product failed to protect the service members from the antipersonnel ammunition. The landmines sold to the Afghanistan and the Iranian governments were defective which caused the death of the children and the soldiers. Ethical issues are a trouble or condition which needs a business to select among the alternatives that should be assesses as good or bad. (Ethical or Unethical) .The example of ethical matters and the public include the participation in the society. The ethical issues of the businesses is different from the other management issues (human resources, finance and marketing) With the development of technology ,and emerging rivals resulted in different type of ethical problems in any company. Ethical principles must followed by the company and also it must be satisfy the consumers, workers and employers. Here the company gumdrop fails to maintain the ethical values. The other ethical issues done was with the employees of the organization as the organization wanted to have a stand in the current situation they started to terminate the employee for no reason of the employees, where they had to protect themselves from the law and for the sustainability. Others issue it is mainly shortage funds, lack of labor etc…Legal issues of the business is different from the ethical issues. But the legal issues cover within the ethical issues. The inter-relations between of both the ethical and legal principles are necessary to the successful functioning of the business. The diminishing the value of the business have adverse effect on the business. A legal principle engages obeying with the legal rule and procedures. But the ethical issue engages enduring by ethical codes and moral acts. Legal tasks might be immoral but the ethical problems can not necessary by legal. The company must be differentiating the both legal and ethical duties. The unlawful and immoral acts of the business compel the customers to go away. The legal adjustments was by the workers adjustment and retraining notification, where the company had to give the notification to the employees 60 days prior to the discharge of them and they have to file for bankruptcy for being able to reject the collective bargaining agreement. Ethical factors have significant influence on shareholders, for shareholders the priorities of quality and cost management are taken into consideration; the ethical considerations have much effect on business. The business affects the stake holders directly or indirectly. They have a frequent contact on the business.  The Managers are generally indebted to fiduciary duty exclusively to shareholders, a duty that necessitate the manager to increase the shareholder value in firm’s solvency. “Fiduciary duties are the imposed by a court of equity. They are imposed on a party, so it is said, in order to prevent unconscionable conduct. The distinguishing characteristic of a fiduciary relationship is that its purpose is to serve exclusively the interests of some other person or group of persons. The fiduciary is not debarred from membership of that group, just as a trustee may also be a member of the class of beneficiaries.” (Topic 3: The fiduciary relationship, 2003). When the firm is insolvent, the mangers have certain duties provided by the incentive in such a way as to reduce debt value at a higher rate and increase the value of equity which is not sufficient. The fudiciary duties of managers are supposed to constantly define or refer to the interests of shareholders. When a company is at the edge of bankruptcy, the responsibility of drifts to the responsibility to act in favors and interests of shareholders. This kind of dealings by the managers leads to the efficient and successful results. Gumdrop should take planned steps to resolve ethical issues. The first step is to identify the issues and then is resolution implementation. The first issue was using substandard products for the production of body armor and armored vehicles which caused injury to the US military. The second was the supply of defective landmines to Afghanistan which resulted in loss of human lives. The third issue was the termination of employees in order to escape from the WARN Act. The company has annual revenue of $500 billion so it could easily afford to use good quality materials for the production purposes but there was a lack of ethics in the people who were doing the job as well as the superiors who were supervising the production process. Gumdrop evaded from its responsibility to the families of the dead and injured by filing for bankruptcy. The direct resolution is to find and punish the people who have behaved in such unethical manner and inculcate the value of ethics in the organization. The management should reprimand the people involved and should conduct its own in-house investigations and should give punishment to the culprits. Such a resolution would benefit the company. From the ethical and legal point of view, both the employees and the supervisors should be responsibly held for not practicing good faith. 3) Justifying reasons- The inculcation of ethics will lead to the development of both the organization and its employees. It should be clearly communicated to the employees the consequences that their immoral ethics has brought to the organization and the society. Employees should think of long term benefits and profits, which they can achieve through proper ethics and policies. It should evaluate its basic ethical values such as honesty and integrity in employees. The company should communicate to its employees and in such a manner it can pass a resolution for the ethical problems in the organization. The reason is because an organization is a separate legal entity and it is represented through its people who are responsible for the actions of the company. The superiors should have more moral responsibility than subordinates. The ethical issues of dishonesty and secrecy are the prime reason of such a bad business behavior so gumdrop should conduct a thorough analysis of its employees along with its own practices of conduct. It is through such efforts that the organization can raise its ethical standard. The goal of profit maximization should be balanced with the ethical issues of the company The problem faced by the gumdrop northern and the different issues faced by the company are analyzed and are reported, Thus we would like to put this into your kind attention and request to take the necessary action. Thanking you. Reference List Topic 3: The fiduciary relationship. (2003). Law Book, p.3. Retrieved March 15, 2010, from http://www.law.monash.edu.au/units/law7269/2009/trimester1/lectures/7269-2008-trim2-equity-topic3-the-fiduciary-relationship.rtf Read More