Ethical Dilemma Assignment: Case Analysis Of Star Constructions

Question

Task:
Read the case scenario of Ethical Dilemma, A Matter of Motivation for Joe Santini from the course book and prepare an ethical dilemma assignment answering the following questions:

1. Identify the stakeholders in this case and their likely viewpoints.
2. If you were Joe, what would you do? Explain your answer using any of the motivation theories discussed in this chapter.
3. Which theory of motivation best explains the behavior of Mike Murphy?
4. What ethical issues are raised in this case?

Answer

Answer 1-
Stakeholders involved in the present case scenario of ethical dilemma assignment are the people who are associated with a respective company and gets affected through its decisions and business operations. They can be a group of people or an individual who possess great interest in company and its operations. Generally, stakeholders in a business organization can be considered as the investors, employees, customers, government, trade association and others (Lasyt?, 2019). In the given case study, there is a company named Star Constructions which was facing problems due to prevailing strike by construction workers union regarding employment of independent contractors and non- union members.

For Star Constructions, the stakeholders and their viewpoints can be analyzed as-

• Employees- Employees are paramount to every business organization. They are the one responsible for the performance and productivity of the organization and are considered as primary internal stakeholders. In the given case study, employees of Star Constructions are not satisfied with the company and the industry as a whole. Because of the unsatisfaction among employees, independent contractors and non- union members, they all have gone to the strike till the demands are not met by the company. They are demanding a job security and a financial stability which has been affected due to the economic downturn in the country. Thus, employees play a significant role in the strategy and normal functioning of the business organization, as the company is facing huge loss daily because of the absence of the contractors.
• Construction workers union- In the industry of labor, contractors and workers there are various unions developed to secure the interest of the respective members of their unions. In this case, construction workers union are involved as the independent contractors are the members of the union and their rights and benefits are being hampered due to the prevailing market condition and the economic fluctuations. Joe Santini an organizer for construction workers union feels that matter of principle is involved regarding employment of independent contractor and non- union members. He is a person who is famous for his principles and his approach of work is to benefit the members and the union both. Moreover, there is Des Boyle who is a union secretary, he is ready to initiate the settlement with increasing his demands. However, Des knows because of the market condition, Star Construction will not be able provide assistance as demanded by the union. This is the reason he’s in favor of the settlement so that there will be a better situation for both the company and for the members of the union.
• Investor- They are the one who has invested in the company to run the business smoothly and effectively. Without investors, the company will cease to exist. Mike Murphy is the owner of the Star Constructions who wants that this strike come to an end quickly, so that the company can start working again. He claims that his workers and contractors are well looked after which the whole industry would agree to. But because of the prevailing market condition, the economy is facing a huge recession as a result their business is highly affected. Without employees, Star Constructions are facing a loss of $100,000 a day. Mike wants that mutually the union and the company takes a decision which will benefit to all and offers a cosmetic concession. The company is struggling for the survival and cannot afford the increase in the cost. For the survival in the competitive environment, Star Constructions will need to restrict the use of contractors to maintain the costs.
• Government- Government plays a key role in the compliances and the regulations that company needs to adhere with. In this case, there is a strike going on because of some industrial disputes. The government is pressurizing the union to settle the matter as the election campaigns are also going on parallelly. The government’s motive can be seen to mitigate the disputes instead of resolving them, so that it will not harm their election process. This pressure of government many assists Star Constructions in releasing the prevailing strike (Freeman, 2016).

Answer 2-
Joe is a man of principles and honesty. He has decided to stand on his beliefs and not on his personal motive or benefits. However, if I was Joe, I would have taken decision as per Maslow’s Hierarchy Theory of motivation. As per the theory, there are five needs of an individual and it goes upwards when the lower needs are satisfied. There is a hierarchy based on which an individual gets motivated. It can be explained as-

• Psychological- Psychological needs are those needs of an individual which are required for the survival like food, water and shelter. Joe should have considered the financial crunch he is facing, and his partner is also facing a pay cut because of the economic downturn or recession in the country. There is a housing loan on his head and Joe can lose the job if the members of the union will continue to leave the industry. He is unsecure of the fulfillment of food, shelter and basic necessities. Therefore, he should have considered Mike’s offer as in other ways as well the company will have to restrict the use of contractors which eventually affect union. This was the middle ground based on which he, union, contractors, company and the government would have benefitted.
• Safety- There is threat of survival, job, shelter. Therefore, even at this level Joe is not satisfied. There is a danger that if he loses his job how he will be paying for the housing loan. He should have guided workers that in the present situation they are getting the best concessions form the company. By this way he would not just save his livelihood but also the independent contractors as they will not be losing their job as well.
• Social- It is a need of association, friendship and social support. Joe is such a person everyone listens to; in that case he is satisfied of social needs of hierarchy. However, if he does not take Mike’s offer, he may lose an acquaintance in the industry who is genuinely guiding well for the betterment of everyone. In union as well he is an organizer still everyone looks for him for their issues and guidance.
• Self Esteem- It is a need for respect and recognition. Joe is a person who is reputed for being pretty black and white. This is the reason he is respected by everyone and look forward by everyone to resolve the issues if any. If Joe taken an offer from Mike, then he will go against his own principles and integrity. Therefore, to meet this level of Maslow’s theory, he must stand by his principles and deny the offer presented by Mike.
• Self- actualization- It is a highest level of need where an individual desire of an opportunity for personal development by way of challenging work or through learning. In this case, Joe is not satisfied with the opportunity of growth and development. As there is a fear of losing a job and he has nothing to do to secure his position. To achieve self- actualization, he must take a stand for the union members and provide all the needs they want from the company (Hopper, 2019).

Answer 3-
Mike Murphy is the owner of Star Constructions. He is a person who wants to take control for all the problem arises in the industry disputes. He possesses political behavior rather than industrial approach as he tries to be a diplomatic while influencing Joe and Des. He knows that his men are well looked after but the prevailing economic condition restrict him to agree to all the demands of the union members. The behavior of Mike Murphy can be understood with the help of McGregor’s theory X and theory Y.

Theory X- In this condition, the approach of management is comparatively strong and possess top- down control as the work force are believed to be lazy, self- centered or lack ambition.

Theory Y- While in this case, the work force is motivated and responsible. The management in this situation concentrate upon creating a productive work environment along with rewards and benefits are provided to the work force in order to motivate them for their enhanced performance (Dolph, 2017).

By assessing both the theories of McGregor’s, it has been assessed that Mike possess certain characteristics from theory X and certain from theory Y. According to the theory X, contractors are believed to be self- centered as knowing the existing economic condition they are not ready to accommodate with the company. Hence, Mike seeing the situation is behaving strongly and still possess the control over the situation. Therefore, Mike belongs to theory X and is considered to be motivated though its power of managing the self- centered work force effectively. It can be seen from his conversation with Joe, that he doesn’t want to increase the cost and will also restrict the use of contractors.

While as per theory Y, Mike has maintained it work force nicely which is evident as anyone in the industry can vouch on this fact that his men are well looked after. He has rewarded them fairly based on their performance. But prevailing market condition is different that is the reason he cannot agree to all the conditions. Instead he is ready to settle mutually and ready to provide cosmetic concessions. His approach of settlement reveals that he is concentrating upon developing productive environment and tries to stop strike.

Mike is in the business for same time as Joe. He wants a mutual settlement as he asked Joe to bend a bit as he can also bend. Further, he wants a mutual settlement as they cannot afford the cost which will be attracted if the union will not stop the strike. Hence, as per McGregor’s theory Mike belongs to both theory X and theory Y.

Answer 4-
Ethical issues are the one which creates disruption in the society by creating conflict with a society’s principle and moral. Anyone can get involved in these conflicts whether be a work force/ employee or a company (Nuseir & Ghandour, 2019). Ethical issues raised in the case study are employment of independent contractors and non- union members. Further, the business environment has become bitter with full of threats and accusations. Mike has further offered bribe to Joe to settle the issue.

The issues faced by Joe are- his job is insecure and poor economic condition and personal financial problems has adverse his situation further. Housing Loan has been taken which also impact on the financial crunch he is facing moreover his partner Cindy will be working for 4 days in a week with 20 percent reduction in pay. Unsatisfied job, business environment and economy are the ethical issues faced by Joe in the case study.

Ethical issues faced by Star Constructions are- workers are not cooperative, they went on strike which has hampered organization’s performance and productivity. Because of this reason, the company is suffering huge loss of $100,000 per day.

Issue faced by construction workers union is losing their members because of the economic condition prevailing in the market. As a result, if the situation will not come under control then union may lose all their members and will not be effective for which they have established it.

However, the major ethical issue faced in the case study is the employment of independent contractors and non- union member. This is the reason that threats and accusations were being made which has severely impacted the environment, there is insecurity to Joe regarding his job, company is facing huge losses and Union may cease to exist. Moreover, there is pressure form government as soon they will be facing elections, as a result there is a pressure to settle the dispute.

It can be concluded that, these respective ethical issues can be solved if company listen to the demands of the contractors and provide them financial aid, health, safety and security as much as they can afford in the present situation. Further, assure them that they will meet all their demands when the economy grows, and company does not get affected with it.

References
Dolph, D., 2017. Foundations of Leadership—Theories and Strategies for Success. Apply Today!, p.26.

Freeman, R.E., 2016. Ethical leadership and creating value for stakeholders. In Business ethics: New challenges for business schools and corporate leaders (pp. 94-109). Routledge.

Hopper, E., 2019. Maslow's hierarchy of needs explained. Viitattu, 12, p.2019.

Lasyt?, G., 2019. The role of stakeholders in corporate governance: theoretical approach.

Nuseir, M.T. and Ghandour, A., 2019. Ethical issues in modern business management. International Journal of Procurement Management, 12(5), pp.592-605.