Introduction
Business ethics is fundamental to management as it affects organizational culture and long-term success. Ethical decision-making is also essential for organizations to maintain the transparency and trust of their clients. Still, in making ethical decisions, managers must consider the consequences of various actions and alternatives. In the case provided, the management is faced with a moral dilemma. The present paper will seek to outline and discuss the key options to determine the best course of action.
Options for the CEO
The first option for the CEO is to lower the company’s bid to win the government contract. This option is rather obvious since the company that places the lowest bid will win the deal. If the firm manages to sign the contract, its profits will increase, and it will not have to cut its workforce to decrease the costs. The second option is for the CEO to ignore the anonymous tip altogether and refuse to lower the bid. Based on the information provided in the case, this might mean that the company will lose the contract and cut its workforce to overcome the losses suffered. This decision would hurt both the employees and the company.
Nevertheless, other considerations have to be taken into account. First, an anonymous tip is not the most reliable source of information. It could be that the actual bid of the rival company will be even lower than the one suggested by the tip. It is also possible that the company’s decision to lower the bid based on this tip will be revealed, in which case the company’s reputation and future performance will suffer.
In addition, it is also necessary to consider the effect of the decision on the company as a whole. If the firm decides to lower the bid based on the tip, it will compromise its integrity and culture. While this is unlikely to have any short-term effects on performance, unethical decisions that employees are aware of could affect their trust in the management, leading to a decrease in morale and organizational commitment. In this case, the long-term effects of lowering the bid would likely outweigh the potential gains from winning the contract.
The best decision that is in line both with the principles of business ethics and with the long-term strategy would be to refuse to lower the bet. This decision would have a positive impact on the company’s culture and ethical leadership, which will likely bring success in the long term. However, the refusal to lower the bid does not mean that the company should take no action at all. Understanding that there is a risk of losing the contract to a rival firm, the CEO could enhance the proposal in other ways.
For example, they could stress the company’s commitment to quality and efficiency, or the principles of lean manufacturing. In this way, the company could capitalize on its strong characteristics without compromising its integrity and ethics to win. While the decision could still harm the company’s profits, action could be planned to minimize the risk of laying off staff and mitigate the losses.
Conclusion
Overall, the case presents two different ethical alternatives, and choosing the best one can be challenging. Numerous factors should be considered in making this decision, including short-term and long-term consequences. In the short term, it would be more beneficial to lower the bid to win the contract, but this could compromise organizational culture and affect the company’s ethical leadership, posing difficulties in the long term. A better alternative would be to refuse to lower the bid. While this would likely mean the loss of the government contract, the CEO could still plan steps to enhance the proposal in other ways or mitigate the losses incurred. This would aid in supporting business ethics while also preventing serious consequences.