Case analysis

Case: XYZ Shoes, Inc.
XYZ Shoes, Inc. has specialized in shoes for children and is a leading brand in that market. The company is located in a smaller town in the US, and has been committed to the community for many years and sponsors local educational and health programs for children. As common in this industry, most of the shoes are produced outside the US by a various suppliers. XYZ Shoes recently learned that one of its suppliers is employing a number of children under the age of 14. In a team meeting consequences are discussed. One suggestion is to stop the cooperation with the supplier immediately, because the employment of children violates XYZ Shoes’ code for suppliers and international labor standards. Other team members have concerns about that action, because they know that the supplier is the only employer in a very poor area. They suggest that XYZ Shoes should rather work with the supplier to fix the issue as follows: XYZ Shoes should sponsor an educational program for the children and support them financially while they go to school. In turn, the supplier should agree to re-hire the children after they turn 16 years old and have finished school. However, this action would increase the current philanthropic expenditures of XYZ Shoes by 5%.
The team needs to decide what action to pursue: stop cooperating with the supplier immediately, or work with the supplier as suggested to fix the issue?
1. What would be the ethically better way to act? Apply the three ethical methods (Utilitarian method, CI method A, Virtue method) to analyze the case and provide a recommendation.
Utilitarian method – which action/decision maximizes overall happiness?
CI Method A – Which action/decision is generalizable
Virtue Method – Which action/decision is consistent with who someone is and wants to be?
2. What is the better business decision? Provide a recommendation and explain your answer.

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Case Analysis for Ethics in Business
Defining the theories
Before deciding which course of action is the best for the firm to take, it is of central importance to understand what each of the three ethical theories entails. The utilitarian ethics is based on the outcomes. According to the theory, an action is moral if it presents more happiness and pleasure to more people and reduces pain and suffering as much as possible. Therefore, it is evident that utilitarianism accounts for all persons affected by a specified course of action. The CI method A, according to Becker (n.d), emphasizes on the generalizability of an action. Determining the ethical appeal of an action requires one to determine whether he or she would prefer it to become a universal rule of action. The Virtue Method, on its part, is all about the reasonable and acceptable concepts of...

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