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Case Analysis on Business Ethics of Paso Limited

Introduction

Many scholars have researched a lot on business ethics. Business ethics is a mode of operation that a given organization adheres to in its daily activities with its customers, employees and shareholders. Ethics of a business can be diverse and may include its dealings with an individual person, organization, community or government. Business ethics covers an organization’s dealings in relation to its environment, people and its shareholders or owners (Fraedrich, Ferrell, & Linda, 2010).

This paper is going to revolve around business ethics to demonstrate a clear understanding of business ethics concepts covered in this concept. I am going to focus on Paso Limited which is located in Eastman, Georgia. There will be a brief description of the company’s products/services, the scope and size of its operations. The paper will also include the various ethical issues that affect the company, a visual representation of its stakeholders, measures put in place in managing ethical issues, company’s CSR strategy and the implications of my approach (Pojman & James, 2009).

Company description

Paso limited is a big firm located in Eastman, Georgia. The company deals with various production lines such as; production of agricultural chemicals, production of detergents, soaps and waste treatment products, construction of agricultural structures such as green houses, preparation and coordination of agricultural field days and exhibitions and lastly a consultancy firm (Henn, 2009).

The company has branches spread all over the United States of America and Europe. The firm was started in 1989 by Dr. Mark Sports as a small agricultural firm manufacturing agricultural chemicals such as pesticides. The company has grown to an international multibillion company. As of January 2011 the company was valued at 450 billion dollars. The company supplies 60 percent of the agricultural industry with its range of products and services hence considered to be the leading company in this business. 70 percent of the company’s ownership is by various US citizens and the remaining 30 percent by Dr. Mark Sports (Kozami, 2002).

The company is managed by a good team of professional and experienced managers from all genders and diversity. The board of directors is chaired by Dr. Mark and meets twice in a month in order to set and review policies for smooth running and operation of the firm. For the past years the company has won several awards from the government and non governmental institutions for its great contribution to the country’s economy. The company has also hit headlines with it being criticized for poor working conditions and environment pollution. The company has some few cases to settle with its suppliers pending in court. This has raised many questions concerning its ethics. The company vowed to pull up on the issues being raised during its last annual general meeting with the shareholders (Pojman & James, 2009).

The company needs to purchase latest equipment and catch up with latest technology in order to improve on efficiency, effectiveness and environment pollution in line with its vision and mission (Shaw, 2011).

Ethical issues facing Paso limited

Paso Limited like any other organization has a few ethical issues in its operation that may have great effect to its reputation, market segmentation, production output and efficiency. Customers trust has to be maintained in order to survive in the business world as well as improving on the firm’s revenues. A company’s relationship with the society surrounding it plays a major role in its operation. There are three ethical issues that Paso limited is currently facing: Its operation has major effect on the surrounding environment, employees are complaining of hazardous working conditions/poor working terms and lastly the annual revenues generated by the company due to its decrease in market share (Shaw, 2011). This has great impact on Paso Limited’s triple bottom line (Bose, 2006).

Environment pollution

Paso Limited deals with manufacture of agricultural chemicals, detergents and soaps which produced from poisonous raw materials such as highly concentrated acids. The company has constructed a good drainage system that connects to the council’s sewer line. However, during rainy seasons this never works due to constant blockage of the line which ends up busting the line, exposing chemicals to the environment. Much of this waste mixes with running water which ends up contaminating rivers (Jones, Parker, & Bos, 2005). This is a great threat to the environment and the society that uses these rivers for irrigation and as a source of drinking water. Communities around the company have been complaining about this for quite some time are intending to sue the company if it does not come up with good measures to reduce the rate of pollution in the next three months. In business ethics the company should ensure that its activities do not affect the either the society or environment surrounding it (Jones, Parker, & Bos, 2005). The company should also avoid several cases with its stakeholders as a sign of an ethnical organization which is not the case with Paso limited. An ethical organization should avoid causing unwarranted harm to its employees and the neighboring communities which may be directly or indirectly affected by its operational processes.

Allowances and working conditions

According to business ethics an organization should be fair to its employees by providing good working conditions, equipment/machinery and good rewards/remunerations. Paso limited employees have formed a registered workers union and soon will be going on strike due to poor working conditions, allowances and salary (Shaw, 2011). This will be a big blow to the company which will have a major effect on its reputation. The management is meeting with trade union officials in order to come up with workable structure that will help in settling the issue fairly. The company deals with chemicals that cause permanent disability to human beings in case of an accident or poor handling which as had been the case recently (Shaw, 2011).

Legal suits filed against the organization

We have several cases pending to court as a result of the company’s negligence and not settling its debts. We have employees whose employment was terminated with no reasons. The company has also failed to honor some debts and the suppliers have opted to taking the case to court (Henn, 2009). The government claims that the business has been importing some of its raw materials illegally and has a case to answer. According to business ethics, an organization should adhere to the law as well as maximizing it profits. The organization should not concentrate on profit maximization and forget to follow the law in its exports and imports as well as settling its debts. This is really affecting its operations and overall output. A lot of money is spent in settling court cases hence affecting the amount of revenues generated by the company (Crane & Matten, 2007).

Paso Limited stakeholders

Business stakeholders are people or organizations that are either directly or indirectly affected by its operations. Stakeholders can also affect an organizations activities and performance. Our main stakeholders are farmers using products from our company (Weber & Savititz, 2007). This group of stakeholders has great impact to the company’s revenue generation because it has to purchase and consume the company’s products and services. These products should be of helpful to the farmer in satisfying his or her needs and yield improvement. If the farmer is not satisfied with the company’s products and services, he will opt for product from other companies which slowly reduces the company’s market share and profits generated from its activities (Fraedrich, Ferrell, & Linda, 2010).

Company suppliers play a big role in supplying the company with raw material for manufacturing of products and service delivery. At times the company gets its raw materials on credit and makes payments later. If the payments are not settled in time the suppliers may refuse to supply raw materials in future. Production can’t go on without the major raw material required for various products. Therefore, suppliers should be treated with due respect and their payments being settled on time to avoid any inconveniences (Henn, 2009).

Employees play a major role in an organizations success. These are the people formulating the new products to compete in the market. Machines cannot operate without technicians and operators. Products have to be transported from one place to another. Ready products have to be marketed and the ready established market maintained. All this work has to be done by the employees. Paso Limited has to make sure that it values its employees by rewarding them well as well as ensuring good working conditions and terms. According to business ethics, all employees should be treated equally and fairly without any discrimination or favor. Every organization must respect human rights by protecting their lives (Jones, Parker, & Bos, 2005).

Shareholders have invested in the organization and expect to receive some dividends at the end of every financial year. The organization has to ensure that at the end of each year there are some developments to show to shareholders if no profits realized. The company belongs to the shareholders; the management team has been employed by the shareholders in order to multiply their investment. According to business ethics, the management should not concentrate much on making profits but should also make strengthen its ties with the society and other major stakeholders in the industry (Fraedrich, Ferrell, & Linda, 2010).

Paso production activities should not affect the communities or society in its surrounding. The company should appreciate the society by providing employment, safe products, minimal environment pollution, and contributing to development activities in the surrounding areas. These are also stakeholders because they can paralyze its activities as well as its reputation (Jones, Parker, & Bos, 2005). The company has to consider all stakeholders’ interests that are being affected by its activities both internally and externally. According to business ethics the organization should conduct itself on a plane that is above the law in relation to it behavior. The laws and regulations set by the government are just minimum conditions that govern an organizations operation in order not to infringe other people’s and organizations’ rights (Crane & Matten, 2007).

Managing challenges facing the company

Most of the challenges the organization is facing can be easily managed hence making it successful. The company needs to train its employees on several issues that affect the organization’s relationship with the outside world, enterprise management and good team work. We have several motivational organizations that prepare short courses and seminars that can help the company’s management team and employees in their daily activities at the workplace (Kozami, 2002).

The company should invest on research and development of new products and services that have not yet been developed by other competitors. It should invest on latest technology and machines in its production lines to save on labour and development of new products and services. Acquiring the latest technology might be a big challenge but with good program proposals, the organization can get unsecured loans from financial institutions such as banks, non-governmental institutions and venture capital institutions. Good and advanced technology reduces on wastage as well as human labor. It improves and maintains the quality of products and services being offered by the company (Sekhar, 2010).

The company should establish good relationship with the society by contributing to development activities such as cleaning of environment, building of schools and health centers, creation of environment and offering discounted products to the surrounding communities. There should be a complete overhaul of the procurement department to ensure make sure that company acquires quality raw material. This will minimize on wastage as well as boosting the company’s production output. Rate of corruption will be reduced by 70 percent which is high in the supplies and procurement department (Bose, 2006).

The organization can review its employees’ salaries and their working conditions. They should be provided with protective clothing while handling the chemicals as well as good equipment to assist in loading and offloading of products from trucks. The company should minimize the rate of environment pollution by recycling some of the byproducts instead of releasing it to the environment (Fraedrich, Ferrell, & Linda, 2010).

Strict adherence to the states laws and regulation can help the organization in reducing the number of cases with stakeholders. This help in building confidence hence increased investments. Much time and resources are wasted in settling disputes arising from negligence, corrupt deals and illegal activities by the company. All taxes and company returns should be settled with respective institutions on time to avoid fines being imposed by theses organizations due to late submissions (Weber & Savititz, 2007).

Corporate responsibility

Every business should conduct its activities in an ethical manner prioritizing interest of the surrounding society. As the CEO the company should respond positively to new developments in the community’s interest and expectations. The main shareholders’ interests are increased profits but the society interests should be considered first. The company must stand out as a good and patriotic citizen in the society. The company can reduce its profit margin to offer affordable products to the community as well as paying its employees good salaries. In CSR the manager should look in general at the welfare of all stakeholders and not concentrating on shareholders’ interests only which are profits (Weber & Savititz, 2007). The company has a role to play in the community development and conservation of the environment where it is located (Henn, 2009).

The strategic plan should start by assessing the most critical issues that have major effects on the company if altered a bit and where opportunities stand. This is followed by an agreement on the primary factors to motivate CSR in my organization (Kozami, 2002). Revision of the company’s vision and milestones is important in achieving the new objectives/goals. This should be well documented and published. A well structured system to monitor development and achievements towards its vision should be established. The company should be reviewing its goals and policies of its competitors against its policies and objectives. The CEO should agree with his management team on a plan to be followed in achieving consistency in my company’s processes (Sekhar, 2010).

The CEO should be able to identify key personnel in different departments to work with. These people should be reporting their progress as well as being responsible with all the activities taking place in their production lines. One should collaborate with other organizations like government to help him in implementing his CSR strategy (Fraedrich, Ferrell, & Linda, 2010). With constant evaluation and audit of the program one can easily realize where the strategic plan needs some adjustments in order to fit the intended productivity. My main responsibility is to oversee that the strategic plan is implemented down to the operators as well as ensuring that the society is not oppressed in any way by the company (Jones, Parker, & Bos, 2005).

The organization’s short statement for management outlining my overall CSR strategy should be Serving the community interest and satisfying the shareholders interests in an encouraging environment that is acceptable by the society (Weber & Savititz, 2007).

Implications of the approach

With the above described approach the company is going to create a good relationship with the community at large. There will be great increase in profits as well as development of quality farm inputs that are going to benefit the community so much. There will be an increase in production output and an increase on company’s sales projections (Kozami, 2002). The company will have fewer cases in court hence boosting investor confidence. There will be a smooth learning of the organization with corporation and support from all the employees. There will better salaries and allowances which will motivate employees in their daily activities aimed at the organization’s success (Jones, Parker, & Bos, 2005).

With good revenue generation the organization will avoid illegal and unlawful activities which will enable it to concentration on its production output, efficiency and effectiveness (Weber & Savititz, 2007).

References

Bose, C. D. (2006). Principles of Management and Administration. New Delhi: Prentice Hall of India.

Crane, A., & Matten, D. (2007). Business ethics. New York: Oxford University Press.

Fraedrich, J., Ferrell, O., & Linda, F. (2010). Business Ethics: Ethical decision making and cases. Mason: South-Western Cengage Learning Inc.

Henn, S. K. (2009). Business Ethics: A case study approach. New Jersey: John Wiley & Sons, Inc.

Jones, C., Parker, M., & Bos, R. t. (2005). For business ethics. New York: Routledge Press.

Kozami, A. (2002). Business Policy and Strategic Management. Tata McGraw-Hill: New Delhi.

Pojman, L. P., & James, F. (2009). Ethics: Discovering Right and Wrong. Belmont: Cengage Learning Inc.

Sekhar, S. G. (2010). BUSINESS POLICY AND STRATEGY MANAGEMENT. New Delhi: I.K. Internetional Publishing House.

Shaw, W. H. (2011). Business Ethics: A Textbook with Cases. Boston: Cengage Learning Inc.

Weber, K., & Savititz, A. W. (2007). The triple bottom line. San Francisco: Jossey-Bass Press.

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