Case Study 29

Please use this strategy when you analyze a case:

1-Identify and write the main issues found discussed in the case (who, what, how, where and when (the critical facts in a case).
2-List all indicators (including stated "problems") that something is not as expected or as desired.
3-Briefly analyze the issue with theories found in your textbook or other academic materials. Decide which ideas, models, and theories seem useful. Apply these conceptual tools to the situation. As new information is revealed, cycle back to sub steps a and b.
4-Identify the areas that need improvement (use theories from your textbook)
Specify and prioritize the criteria used to choose action alternatives.
Discover or invent feasible action alternatives.
Examine the probable consequences of action alternatives.
Select a course of action.
Design and implementation plan/schedule.
Create a plan for assessing the action to be implemented.
5-Conclusion (every paper should end with a strong conclusion or summary)

The Main Issue

The case study presents a gnawing problem that affects companies from all over the globe irrespective of their size, industry, market position or incorporation status. United Technologies Corporation (UTC) has a business ethics problem whereby they face allegations of price inflation in their tendering process. The practice of unscrupulous price inflation is considered unethical in the United States especially when dealing with government agencies that derive their funds from public coffers. In response to the negative business publicity that threatened to affect their operations, the firm decided to undertake corrective action. The first step was to the development of a self-regulating body (Defense Industry Initiative, DII) that would provide guidance on how to do business with the government. The DII initiative did not attain the expected results, forcing UTC to resort to internal regulation through the establishment of an organizational code of ethics. The need for a document stating the firm’s code of conduct is exacerbated by the acquisition of Chubb, a multinational company that does not have a comprehensive business ethics report.

The challenge of ethics in business is a controversial issue that has attracted debate from all sectors. Ethics is defined as the philosophy of applying principles that are right or wrong as an individual, social group, business, or society as a whole. The application of ethics is a highly subjective issue that depends on personal values, family background, culture, education, religion, and philosophy. The subjectivity of values is what creates problems in business. For instance, a leading principle in business requires that employees and their management should be guided by the principle of maximizing shareholder’s value. However, this objective may lead to ethical problems for the business when it results in inflation of product prices, environmental recklessness, labor misconduct, corruption, and other ethical malpractices. As such, the business must operate in an environment that strikes a balance between the objectives of the organization and ethical operation…

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