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FALLFEST2018

14

Sep, 2017

Business Law

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Business Law

QUESTION A

It is imperative upon Green Move to fix the existing issues that the immediate former employee raised with the company management before his sudden dismissal. However, Robert, the CEO is especially adamant. As a matter of ethics, any concerns as regards to the safety of the Zero Pedal are subject to consideration, otherwise it would infringe on the rights of the consumer. There are several questions to consider when solving problems. This is in reference to the DMAIC (define, measure, analyze, improve and control) process. In this particular case, the new employee should ask herself/himself what risks are associated with raising the concern with the management again. It is important to also determine who the decision would affect (the management and staff at Solar Group), how great this effect would be (to both Green Move and Solar Group), and where the effect of this decision would be felt most. After understanding the problem in this manner, the new employee should find the cheapest means of repairing the defect on the Zero Pedal and present it at the Board a second time.

The last company that expressed interest in introducing the Zero Pedal on their shelves may have genuine reasons for asking for the $5,000 a year. However, the apparent manner in which the buyer mentioned it arouses questions of ethics. Green Move should ensure that any monies exchanged between itself and any other companies are recorded. Additionally, the fee should form part of the contract terms between the companies upon collaboration. There are also considerations with regard to the legality of the fee. Additionally, the capacity of the retail store would determine the amount of sales Green Move would make. For instance, if the company is able to stock several bicycles simultaneously and there is a high frequency of visits to the store, the fee would be justified.

The Cost Benefit Analysis is critical in the decision-making process. The steps include measuring the monetary benefits of undertaking the project, examining the preferences of consumers and producers (with regard to their behavior), analyzing a possible increase in demand of the product, and generally the effect of either implementing the project or foregoing it. In this case, the bicycle has great chances of achieving success, owing to the positive remarks the new employee is receiving from retailers. The cost benefit analysis in the case of the Zero Pedal would have a few risks. For instance, Doug notes that the government is yet to set aside legislation to regulate solar-powered vehicles. This is likely to change with time, which could result in a significant reduction in the estimated benefits and an increase in costs. Additionally, Green Move outsources production from an overseas company, where regulations and other changes can occur within the calculated period without consultation with Green Move.

QUESTION B

The decision concerning the contract with Solar Group is one of the toughest the management at Green Move has to make. However, the contract terms state precisely that no children should be employed. However, Solar Group is contravening this part of the contract. Additionally, the contract also defends the rights of the workers, stating precisely that they are entitled to equal and fair treatment. However, the employees are unable to form unionist organizations to defend this right due to the fear of losing their jobs (as is Akash’s case). Demanding these rights from Solar Group is likely to impact Green Moves negatively. Noteworthy, however, the age of the employees has a significant effect on the state of the finished product. Robert should find out if there is a relationship between the age of the employees and the defect models of the Zero Pedal are currently experiencing. This would provide enough grounds for the termination of the contract; otherwise Solar Group is not committing any crime, with regard to the laws in Bangladesh.

Comparing the working conditions in Bangladesh to those in the United States is not practical, considering that both countries have different rules and regulations governing wages and working conditions. However, the International Labour Organization (a body under the United Nations whose sole mandate is to set standards for working conditions in countries under the signatory of the United Nations) outlines various requirements to ensure the protection of rights of workers. Bangladesh is a signatory to the UN, and has been for forty years. According to the ILO, there should be no employment of children and all workers have the right to join unions. Unions are important in collective bargaining agreements. Akash and other Solar Group employees can bargain for higher wages with the company management rather than waiting for five years for a possible promotion.

There are several negative effects of negative publicity to the reputation of a company. The blogger’s actions could have serious consequences to Green Move. One of the most immediate effects is loss of trust. The contract with Solar Group has provisions, which have attracted the attention of the blogger, who has gone ahead and confirmed the truthfulness of the companies. Since Solar Group has not honored all the provisions, Green Move may experience difficulties regaining the trust of her customers if the blogger makes true his threats. Additionally, there are already retail outlets interested in the Zero Pedal. The bad publicity will negatively impact the opinion of prospective buyers and partners, reducing estimated sales. It is also possible for customers to avoid the brand altogether. Coupled with the fact that the bicycles are defective, Green Move would need to invest greatly to counter the possible effects of the bad publicity. The Zero Pedal is a relatively new invention that the company has patented. If the blogger posts the link on his blog, it may open room for competition. Recovering from this would take Green Move a long time.

QUESTION C

Ethics are dependent on social norms. The law has a number of universal provisions but most are subject to social contexts as well. According to the Land Code of the Russian Federation, leasing is in line with the law. Being a citizen of Russia and considering the connections Viktor has with the property managers there, expansion into the Russian market is feasible. The consideration that Viktor has in mind is the ability of the investment to cut costs. Ethically, his personal goal, which is to help reduce underemployment in his country of origin, should not be a factor for consideration in deciding whether to lease the land or not. Importantly, the number of years the lease should last and laws on working conditions and wages are crucial. Additionally, the second envelope offered by the property manager amounts to corruption, and is against work ethics in many parts of the world, presumptuously, Russia included. Viktor should therefore not include the facilitation fee, but find another piece of land to lease.

Besides the business environment in Russia, another essential factor worth considering is the political atmosphere. In recent times, there has been rising instability, with the country collaborating with China in unscrupulous land deals. These have a significant negative effect on the chances of success of a business, especially when it is connected to land. It is therefore rather difficult to ensure the success of a Green Move investment in Russia. Additionally, another challenge is ascertaining whether the property manager will seek other “facilitation” fees in future. Finally, the issue of the patent is critical. With regard to the instability in Russia and the questionable international relations, it is likely that the patenting rights of the Zero Pedal may not be respected.

QUESTION D

Several organizational factors may have contributed to the series of wrong decisions that have been made at Green Move. Firstly, the dismissal of the former employee who had stayed in the company for only six months raised a lot of questions about the work ethics of the company top management. The lack of change in this department greatly hampers organizational decision-making. Expectedly, Robert is still adamant that the Zero Pedal shall succeed, and that the issues the former employee raised concerning its effectiveness are minor. This may have informed the apparent lack of consideration for the workers at Solar Group. Additionally, the firing of the former employee after raising an issue of concern with regard to the operational ability of the Zero Pedal points to weak conflict resolution mechanisms within the company. This understanding can be the reason why the current employee is choosing not to raise the issue yet.

Doug has already confined in the current employee that the dismissal of the employee was questionable. The former employee may decide to sue for illegal dismissal from work. The decision not to act on the issue of Solar Group employees could have serious legal implications on the company. It is likely that the blogger will carry on his threat to post the link on his blog. If the government learns of the Bangladeshi issue, it may decide to withdraw its investment. Additionally, the negative publicity will significantly reduce employee motivation, which has already suffered due to the dismissal of the immediate former employee. It may be difficult to regain trust from the public (customer base) if the employees themselves have lost the trust. Finally, the decisions to pay the $5,000 and $2,000 fees is beyond the contractual agreements between Green Move and the respective companies and bodies with which it makes the agreements. Both of these fees account for corruption, which is against the law as well. An employee can raise this issue with the respective authorizes, or sue.

In order to fix the issue that Green Move currently experiencing, the board of directors should lay down clear guidelines with regard to the company ethics, so that each employee knows what extent they can go. The company should then work over time to cultivate these ethics, and make them part of their organizational culture. Additionally, the company management should ensure that each worker’s rights are protected at the workplace. This would occur upon creating an environment where all employees can express their concerns about any factor in the company without fear of dismissal or victimization. Furthermore, the company should work to ensure that any contractual guidelines that are laid out in any contract are followed. No detail is worth overlooking. Moreover, Green Move should create a culture where a breach of contract leads to termination and exercise this with all future contracts. In the short term, the board of directors should find ways of fixing the problem with the Zero Pedal before expansionary efforts.

The government plays a very crucial role in regulating companies. For instance, the government lays out rules regarding the treatment of employees. Any unconstitutional dismissal from employment amounts to a criminal act. To prevent further cases, the government’s role is to set out clear guidelines regarding what factors to consider before dismissal. The employment of children is a clear contravention of the regulations by the International Labor Organization guidelines, as well as America. The issue of children working at Solar Group should be a priority for the government. if there are still any employees under the stipulated legal age, then the government should uphold the contractual terms and terminate the contract. There are also rules criminalizing corruption. Any monies exchanged with contracting parties should be above board. Through a court injunction, the courts can stop the publishing of any media article or any post. Regarding the supposed blog post, the government can insulate Green Move against such a move, giving Green Move more time to address the issues with Solar Group first.

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