Framework Ethics Guy's 10

7/31/2019 Framework Ethics Guy's 10

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Case Analysis

Guys Ten Stage Framework

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Table of Content

Introduction to the Case ......................................................................................................................... 1

Guys Ten Stage Decision Making Framework: Analysis......................................................................... 1Stage 1: Define the Problem ............................................................................................................... 1

Stage 2: Identify the Goal to Be Achieved........................................................................................... 1

Stage 3: Specify All Dimensions of the Problem.................................................................................. 1

Stage 4: List All Possible Solutions to Each Dimension........................................................................ 2

Stage 5: Evaluate alternative solutions to each dimension regarding the likelihood of each to

maximize the important values at stake............................................................................................. 2

Stage 6: Eliminate alternatives which are too costly, not feasible or maximize the wrong values

when combined with solutions to other dimensions .......................................................................... 3

Stage 7: Rank the alternatives to each dimension according to which are most likely to maximize

the most important values.................................................................................................................. 3

Stage 8: Select the alternatives to each dimension that is most likely to work in the context of the

problem while maximizing the important values at stake.................................................................. 3

Stage 9: Combine the top ranking alternatives for each dimension of the problem in order to

develop a solution to the problem as a whole .................................................................................... 3

Stage 10: Make a commitment to the choice and implement it......................................................... 3


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Case Study: IBM and the End of an EraAnalys is usi ng Guys Ten St age Fr ame work

Introduction to the Case

The case revolves around IBM, one of the most respected companies in America. With its employee

friendly policies, contribution to social causes and ethical values it was one of the most admired

companies and occupied number one position in the Fortunes list of Americas Most Admired

Corporations for several years. But then its profits started plummeting and it had to lay off many of

its employees. An organization known for its no lay off policy, IBM laid-off 2400 employees in March

1993. As a result, it lost its number one spot and slipped a much lower position in 1994.

The question before us is whether IBM was ethical in laying off its employees who trusted the

organization as it had never taken such an action in the past. This is what we would be focusing on

and analysing using one of the frameworks for ethical decision making Guys Ten Stage

Framework.

Guys Ten Stage Decision Making Framework: Analysis

Stage 1: Define the Problem

The core problem identified in this case is that IBM laid off its employees despite following a no lay

off policy for years. This was done due to its plummeting profits. IBM as a firm needs to make profits

to survive and so it laid off employees to reduce the cost when the profits were low. But on the

other hand it had a no lay off policy and as a part of this promise to the society it has certain

obligations. Providing employment to people and caring for them is one such obligation. Did it

violate the psychological contract with its employees when it retrenched them? Moreover, was

retrenchment the only option for IBM in the face of decreasing profits or it should have resorted to

some other alternative? These are questions we need to further probe.

Stage 2: Identify the Goal to Be Achieved

The goal to be achieved is to mitigate or solve the problem of decreasing profits of IBM and at the

same time protect the interests of its employees and stakeholders.

Stage 3: Specify All Dimensions of the Problem

Firm Dimension

IBM is an organization with a deep commitment towards its shareholders and other stakeholders

who are contributing to the company either monetarily or by enabling it to provide services. Hence,

IBM has a commitment to enhance the return for all its stakeholders particularly the shareholders

who provide resources to the firm in the form their hard earned money. So profit maximization is an

important goal for the firm and for this it has to take the business realities into consideration and

base its decisions on those ground realities. In the current case the profits of the firm were going

down and hence in order to reduce personnel cost it laid off employees.


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Employee Dimension

Employees are the most important resource for any firm because they are the ones who drive the

firm and act as the engine to drive the firms performance. In the current case there was a

psychological contract between the employees and the firm that no one will be let go. Though not

strictly legal, this was an implied term of contract. But the lay-off of employees violated this implied

psychological contract. Moreover, they had to suffer the pain and agony and the trouble that an

employee has to go through to find a new job.

Social Dimension

The social dimension to this issue is that a firm has certain commitments towards the society and

the people who live in it viz. the firms employees and stakeholders. The social commitment of an

organization towards society implies its commitment towards its people and if it harms people in

any way (physical, mental, psychological) that amounts to harming the society. In the current case

IBM, by retrenching people, had inflicted that harm on the society.

Stage 4: List All Possible Solutions to Each Dimension

IBM could have looked at other avenues for reducing cost and tried to make itsproducts/services popular. It could have introduced a new product or tried to identify the root

causes of the problem and tried to address those issues. One of the problems that were

suggested was its over-reliance on mainframe. Yet another reason generally suggested is its

inept top management which should ideally have looked at these causes and tried to rectify

them.

Instead of retrenching employees IBM could have reduced their wages to cut down on personnelcosts.

One of the oft-repeated reasons for IBMs failure is its inability to adapt to changing times andthis again implicates its top leadership it reflects in the companys vision to foresee the future

and mould the organization accordingly.

Stage 5: Evaluate alternative solutions to each dimension regarding the likelihood

of each to maximize the important values at stake

Merits Demerits

Solution 1 Introduction of new product, if successful,

could have pushed its profits up enabling it

to retain its employees.

Failure of the new products could have

pushed IBM deeper into the abyss of

flagging profits.

Root cause analysis would have thrown up

the problems or causes for the poorperformance and enabled IBM to identify

the solutions.

It might have been time consuming and

hence not so feasible in the givensituation.

Solution 2 Employees would have at least retained

their jobs.

The pay-cut might have irked the

employees and so the stage had the

potential to produce stiff resistance

from the employees.

This could have reduced the personnel cost

without retrenchment of employees.

The measure might not have been

enough to pull the organization out of

the rut.

Solution 3 Change in the top management might have The change at the helm might have


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put the right people at the top and they

might have been able to see IBM through

the tough times.

backfired if the successor was not

competent enough.

Infusion of new ideas might have been the

doctors order for IBM.

Change in leadership is entails finding

the right replacement and is costly.

Stage 6: Eliminate alternatives which are too costly, not feasible or maximize the

wrong values when combined with solutions to other dimensions

None of the solutions proposed above are too costly or not feasible or maximize the wrong values.

Stage 7: Rank the alternatives to each dimension according to which are most likely

to maximize the most important values

The most important values in the current case are the welfare of the people and survival of the firm.

Keeping these values in mind the solution 2 is the best followed by 1.

Stage 8: Select the alternatives to each dimension that is most likely to work in the

context of the problem while maximizing the important values at stake

The two alternatives that we mentioned above in stage 7 are most likely to work and maximize the

values that are important in this case.

Stage 9: Combine the top ranking alternatives for each dimension of the problem in

order to develop a solution to the problem as a whole

The solution arrived at by combining the solutions 2 and 3 is that IBM should have reduced the

wages of its employees instead of retrenching them and should have introduced new products

and/or services that have proved profitable for the firm.

Stage 10: Make a commitment to the choice and implement it

Having arrived at the solution IBM should have committed to the solution and implemented it.

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