9/10

ID: bc230205613
ASSIGNMENT NO 1
MGT610 (BUSINESS ETHICS)
SPRING 2024

Topic:
Utilitarianism Tech Eon, a multinational corporation in the technology sector, is considering
establishing a manufacturing plant in a South- East Asian Country, called Asiana, known for its
lower labor costs and favorable tax regulations. However, recent reports from human rights
organizations and media channels have raised concerns about labor practices in Asiana. The
reports highlight instances of labor exploitation, including long working hours, unsafe working
conditions, and limited workers' rights protections. Despite these reports, Tech Eon sees the
potential economic benefits of establishing the manufacturing plant in Asiana. The company's
executives believe that the lower production costs and access to a skilled workforce outweigh the
ethical concerns raised by the reports. To address the ethical dilemma, Tech Eon decides to
conduct a cost-benefit analysis using utilitarian principles. They aim to determine whether the
economic benefits of establishing the manufacturing plant in that Asiana outweigh the potential
negative impacts on workers' rights and well-being. During the cost-benefit analysis, Tech Eon
considers various factors, including labor costs, regulatory compliance expenses, potential
reputation damage, and societal impact. They assign monetary values to each factor and assess
the net impact on stakeholders, including workers, shareholders, customers, and the broader
community. After completing the analysis, Tech Eon concludes that the economic benefits of
establishing the manufacturing plant in Asiana offset the potential negative impacts on workers'
rights and well-being. They decide to move forward with their plans to establish the plant,
emphasizing their commitment to complying with labor laws and improving working conditions
in Asiana.
SOLUTION:
Question 1: Incorporating Ethical Considerations:

1. Implement Robust Ethical Standards: Tech Eon should develop and enforce a
comprehensive set of ethical standards that align with internationally recognized norms
and values. These standards should explicitly address issues such as fair labor practices,
workplace safety, and respect for human rights. Regular audits and assessments should be
conducted to ensure compliance.
2. Engage with Local Communities and Stakeholders: Before finalizing plans for the
manufacturing plant, Tech Eon should engage with local communities, labor unions,
 NGOs, and other relevant stakeholders in Asiana. This engagement should involve open
dialogue, listening sessions, and collaboration to understand local concerns and
incorporate community feedback into decision-making processes.
3. Invest in Employee Welfare and Development: Tech Eon should prioritize the well-being
and development of its employees in Asiana. This includes providing fair wages,
reasonable working hours, safe working conditions, and access to training and
advancement opportunities. Employee feedback mechanisms should be established to
address grievances and continuously improve working conditions.
4. Transparent Reporting and Accountability: Tech Eon should commit to transparency
regarding its operations in Asiana. This involves regularly publishing reports on labor
practices, environmental impact, and community engagement efforts. Additionally, the
company should hold itself accountable for any shortcomings by implementing corrective
measures and compensating affected parties where necessary.
Question 2: Consequences of Prioritizing Profit Over Ethics:

1. Reputation Damage: Prioritizing profit over ethics can lead to significant damage to Tech
Eon's reputation, both domestically and internationally. Negative publicity surrounding
labor exploitation or human rights abuses in Asiana could result in boycotts, protests, and
loss of consumer trust, ultimately impacting sales and market share.
2. Legal and Regulatory Risks: Ignoring ethical considerations may expose Tech Eon to
legal and regulatory risks in Asiana and beyond. Non-compliance with labor laws,
environmental regulations, or international standards could result in fines, lawsuits, and
regulatory sanctions, further eroding profitability and investor confidence.
3. Employee Disengagement and Turnover: Employees, both in Asiana and globally, may
become disillusioned and disengaged if they perceive the company as prioritizing profits
over their well-being and ethical principles. This could lead to increased turnover,
decreased productivity, and difficulty attracting top talent in the future.

Question 3: Role of Stakeholders and Impact on Tech Eon:

1. Local Communities and Workers: Local communities and workers in Asiana are directly
impacted by Tech Eon's decision to establish a manufacturing plant. Their support or
opposition can influence the success of the venture. If Tech Eon disregards their concerns
or exploits labor, it could lead to protests, labor strikes, and negative publicity, affecting
the company's operations and reputation.
2. Shareholders and Investors: Shareholders and investors have a personal stake in Tech
Eon's financial performance. However, they also care about the company's long-term
sustainability and adherence to ethical principles. If Tech Eon prioritizes short-term
profits over ethics, it may face shareholder activism, divestment, and a decline in stock
value as socially responsible investment criteria become increasingly important.
3. Customers and Brand Image: Customers are increasingly sensitive to ethical issues and
may boycott or choose competitors' products if they perceive Tech Eon's practices as
unethical. Negative publicity surrounding labor exploitation or human rights abuses can
tarnish the company's brand image and lead to loss of customer loyalty and market share.

In summary, considering the perspectives and interests of various stakeholders is crucial

for Tech Eon to make informed and ethical decisions regarding its expansion to Asiana.
Ignoring ethical considerations can have far-reaching consequences, impacting the
company's reputation, legal standing, and long-term viability.