Running head: ORGL 3332 ARTIFACT 1

ORGL 3332 Behavior, Ethics, and Leadership Artifact:

Unit 3 Essay

Deem N. Silva

South Texas College

ORGL 3332 ARTIFACT 2

ORGL 3332 Behavior, Ethics, and Leadership Artifact:

Unit 3 Essay

For the past decade, a Chief Executive Officer or CEO has led a successful organization

that has expanded its innovation strategies to the local and global markets. The company has

gain prominence because of its commitment to the employees, and it has been the secret

ingredient that has the company has been using to deliver quality services. Some of the

innovative methods that have taken the company to the global markets it is by building a solid

structure while fostering a positive workplace culture and the implementation of Corporate

Social Responsibility or CSR. Together, the CEO and the senior leadership team, have

developed an exceptionally short-term and long-term strategic initiative plans to ensure they are

driving the organization in the right direction. The organization has 500 employees performing

entry, middle, and advice levels of expertise. It has a governing body that is made up of a senior

leadership team and the CEO. There is also a shareholder group that fully trusts the CEO; who

has the ultimate authority in all aspects in the organizational decision-making. Among many

positive things the company provides to employees the incentives, bonuses, benefits, and yearly

salary increases, are essential advantages that have driven productivity. It is important to

mention that executive compensation and incentives are higher than the rest of the other

employees.

One day the financial experts invoke an urgent meeting to report unforeseen events that

threaten the global economy. In the space of ten months, they forecasted a global market

depression that raised the alert bar to its maximum. Based on the shocking nature of the

predicted events, the CEO, the leadership team, and the shareholders entered panic mode. The

CEO, being the ultimate decision-maker, was approached by the leadership team and
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shareholders to review the contingency plan they had developed in the case of this type of event,

but the plan had problems. The magnitude of the recession event superseded the contingency

plan they had on file. The shareholders urged the CEO to develop a strategic plan and activate it

as soon as possible to mitigate the ravages of the upcoming recession. After two weeks of

intense analysis, it was found that the probabilities of surviving were scarce. Nonetheless, a final

projection was provided with only two possibilities; perform layoffs to allocate capital or to cut

salaries and remove bonuses and incentives for everyone in the organization. None of these two

options warranties the company will survive.

There are a few items that will challenge the decision-making process in this case. The

two options in the case are applicable in their terms, deciding the x number of employees to lay

off vs. putting the entire organization at risk for preserving employees. The first challenge is the

inability to measure the variables with the information that has been gathered. The two potential

possibilities for resolving the issue puts the CEO in a dilemma by having to choose between two

right decisions. The second challenge is the limitations of the possible solutions; to layoff or to

cut salaries, and remove bonuses and incentives. These two solutions do not provide reliable

information to determine the risks and advantages. The given solutions are deficient in

providing substantial facts, and they do not ensure a probable future for the entire organization.

The before leads to a third problem; in this case, the individual making the decision it would be

based on a few probable motives. When a decision-maker is not aware of the ethical pitfalls

(biases, boldness, espoused pressures) that permeate when rushing into decisions without a

complete understanding of the situation, they might be inclined to fall for the irrational motives.

Moreover, the fourth problem is the time left to be able to develop a contingency plan. Time

pressure is an element that alters the desired outcome significantly at any given situation.
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Finally, the two solutions carry their moral issues that could cause adverse effects to the CEO,

leadership team, stakeholders, and perhaps even the complete shutdown of the entire

organization.

As can be seen from the above case that, there are not many choices to develop an

effective strategy to save the company from the upcoming recession. Although there is no

certainty that any option could save the company, the best solution would be the one that will

protect each of the employees. The solution provided by the CEO should be on the principle of

moral duty and obligation. Analyzing essential factors about how the company came to be

successfully in the globalized environment, it was all based on the employees and their

commitment to corporate social responsibility or CSR practices. Based on these facts, layoffs

should not even be considered as an option in the first place. In the case study, the CEO entered

in panic when learned about the situation, and obviously, the shareholders felt that as well. What

might have been the first thing they were concerned about? The employees? The profits? The

shares? These variables are critical during the decision-making process, especially in the verge

of an economic breakdown.

The best solution would be to keep the employees and work on a plan to cut expenses.

As a responsible organization, they have a moral duty to safeguard the livelihood of every

employee and the families each represents. There is a Kantian moral principle that can be used

to explain this approach, where employees should be treated as ends and not as means. It would

not be fair for employees that used to bring profit and success to the organization. The same

principle applies to executives and shareholders. In order to compensate for the shortfalls caused

by the recession, cutting salaries with no exemptions will be the first solution. Executives will

be brought down to a minimal living wage for the next twelve months. The Shareholders will
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need to understand that in times like this, is crucial to keep things in balance since the

organization if been affected by external events and not internal operational struggles. If the

company survives the recession with the current employees, it should get back on its feet in no

time since it already has the talent.

On the other hand, they will have to invest in filling up again the position if they go with

the layoffs. Regular employees will only take a minimal salary reduction, nothing major. The

yearly bounces and incentives are going to be eliminated and will be revisited after the recession.

Employee benefits will remain the same. The last item will be to cut operating expenses.

Financial advisors will be working closely with managerial personnel to identify the areas that

need to be improved and create a culture of awareness to save costs. Due to the uncertainty of

the situation, there is no need to infuse any physiological pressure to anyone, and there is no

need to inflate unemployment numbers plus affecting the local community if the entire

organization abides by the provided solution and joins the common cause.

However, there is another solution to be considered, as well. Regardless of the

uncertainties generated by the recession, the decision should be measured based on the

consequences and not on someone’s good intentions. The Kantian approach questions the

morality behind any action, and roundly opposes to the idea to weight any action based on its

consequences since it does not justify the actions (Kant, 2004). Certainly, layoffs are not

immoral if they are justifiable and coherent based on historical facts. Past events have

demonstrated excellent results when reducing staff during economic recessions, allowing

organizations to maintain ongoing business activities, avoiding devastating events. Eventually,

when the economy stabilizes, they can rehire lay off employees, or recruit new candidates at

lower salary rates.

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Considering the possible consequences, they will lead to an assertive decision. Even with

the fifty and fifty chance of surviving, choosing to layoffs would be the most rational decision

since the historical facts can support it. There is no need to deprive 500 employees of their jobs

and reducing their paychecks, although some will probably quit and try to make a leaving with

another employee if they find a job during resection. Instead of relying on probabilities, making

a rational decision will pay higher dividends.

The most rational solution will be to lay off 200 employees to compensate for any

financial. Trying to keep the employees will be devastating, it could go bankrupt and shut down

the entire organization. The ultimate goal is to preserve the organization by keeping key

positions to reduce operational cost. Applying the utilitarianism principle of producing the

greatest happiness as many employees as possible by sacrificing the least, it is not an unethical

approach since it will be protecting the organization from more considerable damage (Mill,

2008). Following this framework will comply with CSR, it will look after the shareholders, and

it will put the organization in an advantageous position. The consequences justify the means.

Nothing could go wrong if utilitarianism approach is used as a decision-making guide since it

promises to cover every possible solution.

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References

Kant, I. (2004). FUNDAMENTAL PRINCIPLES OF THE METAPHYSIC OF MORALS.

Retrieved from https://www.gutenberg.org/files/5682/5682-h/5682-h.htm

Mill, J. S. (2008). Utilitarianism. Retrieved from

https://www.earlymoderntexts.com/assets/pdfs/mill1863.pdf