Final Exam
Ethical Dilemma: Should Amalgamated Product Giant Shipping’s Chief Executive hire more
permanent workers all year round to manage the work load?
Utilitarian perspective
As discussed in this course, the utilitarian principle rests on the maximum amount of
good for the maximum amount of people, after examining the consequences of every possible
course of action. Straightforward it its methodology, utilitarians conducts a cost-benefit analysis
to determine the most ethical alternative based on the utilitarian principle. Applied in the
business setting, cost-benefit analysis often uses money and revenue to quantify factors in
consideration of the different people impacted by the decision. To help solve the dilemma using
the utilitarian approach, below is a cost-benefit analysis:
Alternative 1: Instead of hiring 4,000 temporary workers, the Amalgamated Product Giant
Shipping will hire 4,000 permanent workers.
Stakeholder
Benefit
Cost
Company
The company will have more
reliable workers year-round
to fulfill the increasing
quantity of orders
- According to the
article, online retail
sales is projected to
grow 10% annually.
Permanent employees have
higher wages than temp
workers.
- Ave. Salary of a
permanent warehouse
worker is $14.99/hr.
(Bureau of Labor
Statistics, 2016).
- Ave. Salary of a temp
worker is $10.10
(Bureau of Labor
Statistics, 2016)
Permanent employees are
entitled to benefits (health
care, raises, vacation leaves)
that must also be incorporated
to the cost of hiring.
The company will not have to
pay the cost (explicit and
hidden) of continuous hiring
for temps
- Average cost for
hiring: $7,000 per
employee (Kane,
2014). This includes
overtime cost to keep
Customers
Employees
up with the demand,
recruitment fees,
screening costs, drug
testing, background
checks, and training
The company can protect
itself from negative publicity,
being accused of abusing
workers through temporary
staffing. As more customers
become aware and conscious
of where their products are
coming from, the shipping
company may lose customer
loyalty.
The customers will have to
get their shipment on time
because of the steady stream
of permanent employees that
will handle their orders.
The customers will have a
peace of mind that no
temporary worker is being
abused on their behalf.
The employees (new hires
especially) will benefit from
higher salary, given that
permanent workers earn more
than temporary workers.
The employees’ workload
will be more manageable.
The employee won’t be as
overworked
Customers have to pay higher
shipping cost.
- Average range of
shipping cost in the
US: $2.99 - $11.00
It doesn’t stop with hiring
additional permanent
employees. The company has
to review their work culture
and working conditions, from
setting realistic targets to
setting shifts.
Alternative 2: Stick with status quo. Hire minimum number of temporary workers during peak
hours.
Stakeholder
Benefit
Company
The company will still fulfill
the required number of orders
because of the additional help
during peak seasons.
Cost
Given that there is a drastic
shift in online shopping,
demands are most likely to
increase all year-round.
Given this scenario, the
The company will save
company will have to hire
money on labor cost
temps throughout the year.
- Temporary workers
While the labor itself is
have lower salary than considerably cheaper, when
permanent workers
you factor in the cost of
- Temporary workers
contracting a staffing agency,
have less benefits
the cost of hiring and
- The company has the training, it may be equal or
option to not avail of
even more expensive than
the temporary
hiring permanent workers
workers’ services
during lean seasons.
Sample calculation:
4,000 temp workers at
The company will maintain
$10.99/hr working a 10 hr.
higher profit margins.
shift = $439,600
Currently, the company sees a Cost of hiring:
30-40% revenue increase
$7,000/employee =
annually
$28,000,000 (at 4,000
employees)
Also, this hiring and
employee management model
is difficult to sustain because
of attrition due to workload.
This can lead to loss of
productivity and other
opportunity cost.
Customers
The customers will have to
get their shipment on time.
Customers have to pay
minimal to no shipping cost.
While the timely shipment
may work in the short-term,
the unsustainability of the
practice may lead to shipping
issues in the long-run causing
delayed shipment, etc.
Employees
Temp workers: At least, they
will have a job which is
difficult in those areas and
this economy.
Permanent worker: They will
have additional help in
meeting their targets.
Customers are considered to
be an accomplice to abuse of
the workers.
Because of continuously
increasing demand,
employees (both temp and
permanent workers) will still
have to render 10-hour shifts
that will cause physical
issues.
Based on this cost-benefit analysis, it will benefit more people (employees, customers,
and the company) to hire more permanent workers. The company is a billion dollar company.
Whatever cost this restructuring will bring about can be absorbed by the company and will be
justified as it will satisfy client demands (better customer experience = more revenues) and will
help more workers be more productive and be motivated by the higher salary and job security.
Moreover, this restructuring will help ensure the company’s sustainability in the future.
B. Liberterian perspective
According to the libertarian principle, an individual’s freedom and rights are absolute and
must be protected so as long as they respect other people rights as well. To this point, it must be
understood that temporary workers apply on their own accord. They were not forced. Second, the
responsibilities, benefits, and salaries are all stated in the contract explicitly. The temporary
workers are aware that they have to do more than 8 hours of shift of that they are not entitled to
raises and paid vacation. Given that they signed the contract, they agree to such terms and
arrangement.
Second, libertarians also believe that free market principles ought to dictate the courses of
the business and the economy. Moreover, the consequences of the free market must be respected,
even if such consequences lead to certain inequalities. The free market has moved the shift to
online shopping for two reasons. Minimal to no shipping cost has allowed online stores and
companies to drive prices down. As the article suggested, for such corporations to offer this
value-add to the customers, they must make adjustments in their hiring and employee
management practices like hiring temporary workers.
As long as it makes sense to conduct hiring practices that will keep the company
competitive in the free market and as long as employees agree to such practices, the chief
executive can continue hiring temporary workers for the business.
Deontology perspective
Steps
What is the ethical dilemma?
Who is the agent?
What is the agent’s role in the situation?
What is the nature of the role?
What is the duty of associated with the role?
What is the categorical imperative?
Application
Should Amalgamated Product Giant
Shipping’s Chief Executive hire more
permanent workers all year round to manage
the work load?
The company’s chief executive is the agent?
The chief executive sets the direction of the
company, approves, implements and
institutionalizes the different practices within
the company toward achieving the
organization’s goals.
The chief executive is the leader of the
organization
The chief executive is ultimately responsible
to lead the company toward growth in scale
and revenue, toward sustainability in the longterm, and toward creating pleasant customer
experiences to build consumer loyalty and
expand consumer base.
The chief executive also has the duty to both
the stockholders and the employees.
All executives must conduct fair hiring and
employee management practices, such as
Is this categorical imperative universalizable?
Would I be willing to switch places with
everyone in the scenario?
Am I using someone merely as a means to an
end?
hiring permanent workers and avoid abusing
the temporary workers.
Yes; this categorical imperative is
universalizable. This can be applied to all
chief executives regardless of age, gender,
social status or religion. At the same time, this
categorical imperative applies to all
organizations, and to all industries
Yes, I would be willing to switch with the
place of the chief executive as well as with
everyone else (i.e. employee or customer))
No; hiring permanent workers are ends unto
themselves and not for any other interest.
Such a hiring approach is just as it respects
the individual as a rational human being.
Resolution: Amalgamated Product Shipping ought to hire more permanent workers and avoid
abusing the loophole of temporary job arrangements.
Catholic Social Teaching
Concept 1: Equal human dignity
The CST believes that all humans, created in the image and likeness of God, have equal
human dignity. As such, each human being deserves to be treated with equal respect and with
justice, regardless of one’s age, ethnicity, gender, or social status. That said, applicants and
employees for Amalgamated Product Shipping must be treated with human dignity. This
treatment includes permanent employment with a decent wage and a set of benefits. Anything
less would be discarding their human dignity.
Concept 2: Pursuit of the common good
According to the CST, a company exists not just to earn profit or raise revenues. A
company exists as a manifestation of social relationships among individuals. Moreover, an
organization exists to pursue the common good. In the current set up of Amalgamated Product
Shipping, the concentration of the company is how to increase their profits to the detriment of
many of their employees. If the company is to pursue its true nature of pursuing the common
good, it must hire permanent workers and avoid temporary job arrangements. Within the CST
framework, the company must balance the well-being of the organization, its clients, the
employees, and the larger society. To give employees a permanent working arrangement (as well
as the salary and the benefits that come with) is a step toward that direction.
Concept 3: Preferential option for the poor
Reading the article, it is clear that the employees are aware that they are being given an
unfair treatment for being temporary workers. But because all of them live in poverty and are in
dire need of a source of income, they have accepted their working condition. This should not be
the case. The CST recognizes that policies, practices, and structures have contributed to poverty
and the injustices done to the poor and the disenfranchised. The CST seeks to change the status
quo through reform such that the needs of poor and the disadvantages will be addressed and
considered. Giving them the opportunity to earn a decent wage and permanent work is an
example of this reform. The current hiring practices of the company takes advantage of the poor
because they know that applicants need job. But this is wrong. Amalgamated Shipping (and any
company for that matter), upon recognizing the plight of the poor must help them be more
economically independent and self-sufficient by giving them just opportunities.
Concept 4: Subsidiarity
The principle of subsidiarity ensures the full participation of the local community.
Globalization has driven the rise of online retail, which in turn, led to the success of companies
like Amalgamated Shipping. It is also globalization (more specifically, global demand) that has
let the company to build warehouses. Moreover, it is intense competition that led the company to
hire temporary workers in efforts to keep costs low and maintain their competitive edge. Most of
these decisions, however, are done within the confines of the company headquarters and by a
handful of business executives. The people within the community were not consulted in terms of
their needs and how the business can address those needs. The principle of subsidiarity implores
that the company conduct consultations with the communities and their stakeholders. Based on
the results of these discussions, Amalgamated Shipping can then reform their hiring practices
accordingly hopefully to a more just approach that are aligned with the community’s needs.
Concept 5: Stewardship
The CST discusses how human beings are co-creators, responsible for caring for God’s
creatures. But more than being stewards for natural resources and of course, our talents, we are
also stewards of each other. We are tasked to care for one another and ensure that they, like us,
must be treated with dignity. Based on this stewardship principle, the chief executive of the
company has the responsibility to ensure that the employees are given just wages and benefits.
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