ABC Consultants: Navigating Ethical Dilemmas in Management Decisions

This case study examines the ethical dilemmas faced by ABC Consultants, an Australian consultancy group, as it navigates financial losses and competitive pressures. The firm decides to reduce operating costs by downsizing, relocating to smaller premises, and shifting operations online. This leads to an ethical dilemma for managers, particularly the HR manager, who must implement the staff reduction. The study explores the conflict between the company's need for profitability and the ethical implications of terminating employees without cause. It analyzes the perspectives of team managers and the HR manager, as well as the affected employees, and considers ethical frameworks like utilitarianism and deontology in addressing the situation. The case prompts reflection on balancing organizational needs with employee well-being and the role of ethical leadership in difficult business decisions.

Running Head: MANAGEMENT
Management
Student’s Name
University Name
Author’s Note

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Scenario
ABC consultants can be stated to be a primary consultancy group as present in Australia.
The company provides human resource management and management consultancy services to its
clients in order to assist them to deal with the different scenarios and management issues faced
by the firm. However, the business environment has become highly competitive for the
organization and with respect to this, it can be mentioned that, the firm has been facing
considerable problems with respect to the continuation of the operations. In addition to this, over
the last few years, the company has been making considerable losses due to the increase in the
salaries and the wage rate of the different employees. As the operating costs of the firm have
increased including the communication and technology costs as well, ABC consultants has been
finding it difficult to engage in profits. Moreover, it was suggested by the different employees to
increase the overall price of the service being offered to the different client companies, however,
as the competition present in the external business environment has increased, various online
companies with no operating costs, tend to offer very low pricing facilities to the different clients
and hence, with respect to this, even ABC consultants are now required to offer goods at
comparatively lower prices to the different customers. Hence, during the recent annual meeting,
the different managers set together and were rethinking about the initiatives which are required
to be taken by the firm in order to meet with the crisis. Hence, after the meeting was taken the
following decisions were taken with respect to the different objectives which are required to be
met with in order to lower the operating costs were taken:
 The office will be shifted to a smaller premises in order to reduce the rent.
 Currently there are around 100 employees working for the firm and this would be cut
down to 75

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 As the size of the organization will be reduced, with respect to this, around 20% of the
employees everyday will be given flexible work locations and will be allowed to work
from the flexibility of the their homes and be required to be connected to their teams
through the medium of the internet.
 In addition to this, the business also aims to transfer the shift of the business to an online
platform in the future. In this manner, the firm would be able to engage in long term
success and ensure that it is able to gain considerable return with respect to the same.
Hence, after the meeting took place, it could be stated that many employees who were in
the managerial decision found the decision of the firm quite unfair in nature as these employees
are hardworking members of the organization and with respect to this, it can be mentioned that,
they were unwilling to abide by the decision of the senior management, however, they were
restricted by the duties of the job and hence, had to disseminate this information to the different
members of the organization. Out of this, the Human resource manager was provided with the
toughest job of letting these employees know who would be leaving the organization in a time
span of 2 months. The HR Manager would be required to coordinate and corporate with the
different managers and give these employees a notice period of two months. Hence, this is where
the ethical dilemma of the managers came into question whereby although they understood that
when these employees would be given the notice period, it would be unfair and unethical to them
since there does not exist any specific any specific reason why they are being shown the door.
Moreover, the different managers cannot refrain from carrying out their duties as well.
This is where they were required to sit back and take out a solution with respect to the ethical
dilemma being faced by them in whether to consider the overall benefit of the company or about
these employees who are being forced to leave the company without any fault of their own.

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Therefore, in the particular scenario, the critical members as present in the company who are
being faced by the particular dilemma can be stated to be the Team managers of the different
departments and the HR manager who has been asked to manage and handle the entire situation
in hand. Along with this, the selected 25 employees who are on the other side of the dilemma can
also be stated to be the primary members. Therefore, to summarize, the ethical dilemma which
the organization has been facing can be stated to be the firing of the 25 employees in concern and
it can be mentioned that on the other hand, even the organization is not at fault because, they are
required to take serious measures in order to ensure that they do not lag with respect to the
different organizational procedures and are able to maintain the profitability of the venture.
Script
Ethical dilemmas and values concerning the given scenario (Answer 1: Manager 1)
As the HR Manager of the firm since the last 10 years, I believe that in the given
scenario, it can be observed that, the primary ethical dilemma which is being faced by the
organization can be stated to be the values associated with termination of the employees without
any fault of their own. With respect to this, it can be mentioned that, although the betterment of
the organization is in question, as they are suffering from considerable loss since the past few
years and if they continue with the same practices like the one being continued in the past, they
will be closed down soon. However, I belief that although the procedure will lead to a greater
welfare of the organization, the employees who are innocent and have been associated with the
firm since a long period of time are also at a loss because they are being terminated
unnecessarily. Hence, with respect to this, I am under the belief that the main ethical dilemma
being faced by me and the different managers is that, we have to choose between the betterment
of the firm and the consideration of the employees.

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Question Two
Manager One: The main ethical dilemma shown in this scenario is regarding the unnecessary
termination of the employees from the organization. The main stakeholders for the organization
are the technology services providers. The communication between the employees and the
management is not good enough. This is the reason as to why the organization wants to make
some way by which they can gain some profits.
The ABC Consultants have not been capable enough to produce the best productions and
providing the best services to their employees. The increases in the wage rates and the salaries of
the employees can be noted as a very important reason for it. The other stakeholders or key
parties are their employees and suppliers. The salaries of the employees will have to be increased
since they have to keep up the momentum of the employees. I also believe that as a manager I
should be concerned with the health and wellbeing of the employees. In this way our production
costs and other costs have been increasing a lot. We will try to come out of this situation as soon
as possible.
I also feel that this practice of termination of the employees is not at all good for the
employees. We should think about utilizing the utilitarianism theory in this perspective so we
could judge what is good and what is bad for the success of our organization. The employees on
In order to keep pace with the external business environment, we would have to offer several
products to several customers at lower prices so we can gain maximum number of profits
through our services. I will go and talk to the employees on how they can provide more efficient
services for the firm. We will also have to engage the internet providers as our important
stakeholder party. Some stakeholders might disagree with us on getting into online platform but

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it is my responsibility to convince them that we will be able to gain more customers and provide
effective services to them.
Question Three
Manager One: The main points that I have to encounter are the decisions regarding the
shortening of the employee power and the coming into the online platforms. The main ethical
dilemma comes within the fact that the employee man power will be cut short to reduce the
rising costs for the company. I think all of us should sit down in a meeting and decide which path
we will have to take to survive in this competitive business environment. As per the norms of the
deontological theory, I believe that our actions must be based on the morality and judging the
differences between the right and wrong.
On the other hand, the protests have come from several stakeholders on the ground of
ethics. I consider this act of cutting down the man power is very much unethical but we are
facing many problems in providing the increased wages. Many moral obligations have risen from
the different communities since it is our responsibility to see to the well-being of the common
people. The termination of the 25 employees within the organization is very much unethical
since they have been committed to their work for a long period of time.
I think we have been wrong in deciding to cut off 25 employees from our consultancy.
We might lose the respect of the community so we have to think about our decision once again
by implementing the deontological ethics. I will discuss this issue with all the HR managers so
they can fix the situation without harming the well-being of the employees.

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Question 4 (Manager 1): I cannot abide by the exponents of utilitarianism here. This is because
in the face of growing competition, our company is at stake. As I cited you in our annual reports,
the local revenue rate have been under 12% and in parity, you can see here in this presentation
that the operational costs have been expanding by 2 to 3% every year in harmonic progression.
As such, I argue that it is favorable not to follow the utilitarian ethics here. The company would
be able to provide for a common good for the shareholders as well as the stakeholders if their
own business is future sustainable only. As you reported from your findings of the market
survey, I have also studied that the rate of our premium services are comparatively 5 to 6%
higher compared to the other new market entrants. The market domain of our services have also
not expanded in the recent 5 years. In this context, there had been no other better alternative
before the company than to conduct repetitive cost cutting by terminating employees. On the
contrary, I suggest that it is justified that our company has followed the deontological ethical
perspective. At this moment, the labor council, the group of directors as well as the
administrative board have all regarded the fact that the future sustenance of the company is the
highest priority of the organization. This is why the prime concern of the company is to ensure
that the optimum limit of the company is maintained. As such, the deontological ethics of the
company suggests that normative ethics in favor of the company suggest that that the action
should be justified in the light of the fact that if the company is not able to carry on its
operations, then the whole employee base would be dissolved. Hence, more than focusing on the
ethics related to the consequences of the actions like terminating a section of the
employees every year. As per our apprehension, the market would become stable within 2 to 3
years from now. As such, the company would also be in a stable position to attend to the causes
of the stakeholders.

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Question 5 (Manager 1): at the current moment, it is worth communicating that the employees
who are terminated in the middle of their tenure, would be compensated with their dues with 2 to
3 financial years. They stand a chance of about 50% of being reabsorbed in the company,
provided to the conditions applicable. As such, the termination of the employees would be
accompanied with a provisional email whereby the employees would get a quotation from the
company regarding the conditions under which the company had to terminate them and also
include a letter of pledge to “whom it might concern” stating that the credibility of the employees
are justified. The HR department and the Finance Department are up to the task to compensating
the employees in the best possible manner so as to help providing the primary allowances to the
employees.
I have also taken the initiative to communicate to the HR department that the employees
who are to be terminated should get their letter of termination 3 months prior to the date of
termination. As such there are high chances that the employees would be able to make some
alternative arrangements for them. This is the situation where the employee’s unity also needs to
be maintained so that they are not under a threat or panic. In order to retain the potential
employees, I have taken up an initiative personally to communicate to the certain number of
employees in a informal discussion regarding what needs to be done to meet the current crises
that the company is facing. This is how they would get the perception that the company needs
them and they are not under the threat of termination.

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