#1. Annual executive health evaluations
It is true that a regular and a purposeful evaluation of the performance of the company executive is a cornerstone of effective governance. However, considering the case given, in as much as it is essential to protect the talent of the company's executive ability, it should be understood that the annual health evaluations as recommended by the company executive office are not a prudent move (Valentine & Rittenburg, 2007). Firstly, it cannot be denied that this move will consume a lot of the company resources regarding finances that are going to be invested in this program.
As observed, the various types of health issues that are to be covered are so many that would be expensive for the company, in the long run, considering the number of executives and the annual revenues. It is therefore not to undertake such yearly evaluations in a bid to protect the executive talent of the company (Valentine & Rittenburg, 2007). This is because the company is already having a health plan for the executive and should stick to that. The success of the company could as well have been as a result of its hardworking employees and therefore to avoid rivalry within the company by increasing premiums paid by the employees, this annual executive health evaluation should be abandoned and a favorable one adopted.
#2. Ethical issues observed
It is important to note that some ethical issues have been noticed from this case (Ferrell & Fraedrich, 2015). One of the ethical considerations observed is the consequentialist framework which puts into consideration the future effects of an undertaking in line with those who will be affected directly or indirectly. Hence, in implementing the recommendation of the annual executive health evaluation, it is essential to admit that employees of the company are massively going to be burdened by the additional premiums that are to be levied to cover their health in the health plan of the company.
This is so because they will have to pay additional money to cover them which will lead to a decrease in their net income hence reducing their purchasing power. In this case, through the union, they would want an increase in the salaries which will further have a significant impact on the company executive because they will have to give in to the demands of these employees to ensure a continued production (Vest, 2011).
#3. Company stakeholders
When a company is publicly owned, it implies that the public bought the shares of the company through initial public offer which allows members of the public to subscribe to a defined number of shares of the company. In this situation, therefore, the stakeholders of Simulon Company are the public members. These stakeholders can even include a large number of employees no legal limitation bars an employee from having a share with the company where they are employed.
In any company, it is understood that stakeholders are the major owners of the company even though they might lack the common knowledge and expertise to run a business (Vest, 2011). In any decision affecting the company, before the executive takes any course of action, the stakeholders must always be informed.
#4. Potential consequences for each stakeholder
For this situation, the profits of the stakeholders will not be affected in the short-run, but it is true that they might feel the burden concerning reduced profits if this program is undertaken. This is because initially, the CEO of the company recommended that the increased cost would be recovered through increased premiums of employees under the company's health plan. But if this fails, then it would mean that revenues raised by the company are what will be used to finance the program, in any case, it is adopted. This will reduce stakeholders' profits.
#5. Should the board approve CEO's proposal
Firstly, it is important to highlight some of the consequences of approving the recommendations of the CEO. From the observations, it cannot be denied that the proposal will have a negative impact on employees (Vest, 2011). This is because by increasing the premiums to recover the amount used in the implementation of this program, it means that the net income of these employees will reduce with the same amount hence reducing their income level.
At the same time, by approving this proposal, stakeholders will be burned especially if a significant number of employees of the company decides to quit working for the company. This will mean that the profits made are what will be diverted to finance the program. Therefore, I firmly believe that to avoid a conflict of interest between the executive and the employees and for financial reasons, the board should abandon the proposal.
#6. Which ethical approach guided your decision?
In making my decision, I was guided by the rights approach as one of the ethical considerations when making a decision. This is so because in looking at the matter at hand, and the fact that this approach investigates whether or not the action taken respected the rights of all individuals who have a stake in that decision-making process (Ferrell & Fraedrich, 2015). In as much as it is generally known that the decision-making process in business solely rests with the executive, some consultation and inquiry before coming up with a proposal are very necessary.
In this case, it openly evident that the employees were never consulted regarding the recommendations by the CEO. The major disadvantage to this is that there is a possibility of a strike which can adversely affect the operations of the company because employees are an essential resource of the company.
Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education.
Vest, C. M. (2011). Pursuing the endless frontier: Essays on MIT and the role of research universities. Mit Press.
Valentine, S. R., & Rittenburg, T. L. (2007). The ethical decision making of men and women executives in international business situations. Journal of Business Ethics, 71(2), 125-134.
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