Lecture 1 Ethics
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| MBA Analysis – Feb 18 Trimming the Fat at IBM. If people accepted working at IB they received job guarantee in exchange for undesirable job environment. Ins had a choice to layoff of employees, or slowly retire and not hire replacement (attrition. 1. Identify those parties who welfare will be affected by the action being considered. employees 55+ management shareholders (not the company it’s not a person) 2. State any agreement that you believe exists between the parties (recall here the nature of agreements) management & employees → employees receive lifetime employment (job stability) in exchange for fewer benefits, less independence & potentially longer hours Agreement with shareholders to increase the current value of the company’s shares (wealth of company) 3. Chose the action that best enables the agreements to be kept. maximize shareholder wealth → layoff 20% of workforce workforce agreement → lifetime employment 2 conflicting agreements shareholders vs employees Which agreement did you make first → unsure….shareholders? – all agreements were made around the same time. Gauthier: can’t make an agreement with one party that is going to conflict with another. If they go the attrition route, they are keeping the agreement with the employees and gradually meeting agreement with shareholders. But if the company goes belly up then they will break all their agreements. [task of management is to grow shareholder wealth → not practical think about when you are starting up the company and you are making many agreements that you have to keep. You can’t possibly make an agreement with one party and screw all the other parties (the other parties would never agree) keep agreement with employees Download 0.65 Mb. Share with your friends:
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