Techfite Case Study Business Ethics

TechFite, known for its production of high-tech goods in Britain, began production in its first overseas factory in Dellberg USA. As TechFite begins its globalization of international economic integration, it soon realizes there are financial and social responsibilities that needed to be addressed in Dellberg.
As the human resources Director, below are 3 corporate policies that reflect the organization’s culture and ethical viewpoints.
• Competitive wages philosophy to include focus on pay, benefits and work-life balance.
• Employee volunteer program to support local youth leadership development and rebuilding Dellberg.
• Executive’s incentive bonus and pay will be transparent and aligned to the performance of the company.
TechFite

needs to incorporate a competitive wage philosophy with its Dellberg factory in the US. The implementation of the competitive wages philosophy will focus on the total compensation of pay and benefits received within the high tech industry. TechFite must perform industry research locally or regionally around Dellberg to see the range of pay comparable to what an employee of certain job functions could receive elsewhere. Knowing the standards of compensation in the industry they serve would provide insights needed towards fair pay, benefits and at the same time to prevent over paying for a lack of proficiency. Once competitive wage philosophy has been implemented, TechFite will be able to track their employee’s development and proficiency in their job role. Employees would then want to continue to develop to learn new skills to increase their market value. This policy will continue to strengthen TechFite’s reputation of leadership development.
TechFite is widely known for being actively involved in the communities in which they served. It is part of TechFite's culture to encourage employee empowerment and engagement within the communities where they have a presence. TechFite has not fulfilled those promises made to the Dellberg city council over commitment to sponsor community events and invest in infrastructure in rebuilding the city. HR must address TechFite’s social responsibility it has promised to the city of Dellberg by implementing an Employee volunteer program. The company leads sponsorship events and to incentivize employees to volunteer would gradually put TechFite’s footprint on the map of Dellberg. TechFite would be able to allocate 8 hours of employee paid time off to be used towards only for volunteer purpose. Additionally, programs and rewards would be offered to employees who are actively involved in the volunteer program. Employees will be motivated to volunteer more knowing there will be incentives to go along with serving their community.
In order for TechFite to fulfill their ethical responsibility in meeting their economic goals, Executive members’ incentive bonus and pay will be transparent and aligned to the performances of the company. Currently, in reviewing the budget, excessive bonuses are being paid out to top executives. Incentive pays and bonuses are encouraged, however, it must be aligned to the performances of the company. Executives’ bonuses will only be paid if the company is performing and exceeding expectations. This policy would be securing the longevity of the company in the future and encourage top executives to be mindful of company’s financial wellbeing.
In general, the difference between an ethical issue and a legal issue is that ethical issues focus on questions of morality.

Decision makers in the company are acting on behalf of the entire company and must keep in mind of the issue of decision at hand. The end decision must be unbiased and fair as it will set the standard that governs what employees should or should not do. Contrary to ethical issues, legal issues govern what employees can or cannot do. TechFite’s plant in Dellberg is facing a few ethical issues at stake. First, due to budgeting constraints, many employees were classified as part-time status due to work hour limitation. Cutting back hours to hold employees back from gaining full-time benefits is not the right thing to do. Legally, there are no laws to prevent TechFite from cutting back hours to avoid paying benefits. Ethically, TechFite should do the right thing not to cut funds but to offer more full-time benefits. TechFite should view offering full-time benefits as a long-term investment to keep top talents from leaving and to attract new prospective

employees.
Upon a review of the budget, HR director identified possible misuse of resources. Excessive bonus payout was made to top executive members and this could be a misuse of financial resources. Bonuses are allowed if paid fairly and justified. If excessive bonuses were paid out unjustified, this misuse of resources could create more issues for the company down the road. The misuse of these bonus payouts can be legally troublesome for executive members if found the company is required to revise its financial statements as a result of misconduct. Section 304 of the Sarbanes-Oxley Act of 2002 states even if there are no wrong doings by the executives themselves, corporate executives could lose their bonuses and other incentive compensation if their company is required to revise its financial statements as a result of misconduct.
Corporate ethics policy should be the pillars holding up TechFite in providing employees with concepts of good behavior as well as communicate expectations. The role of the ethics officer must ensure policies are written to values-driven instead of compliance driven. “What’s in it for me?” To implement these policies, Ethics Officer must seek and obtain the buy in’s from upper management. Employees must be able to visibly see the commitment their boss and bosses’ boss in casting the right shadows for their subordinates to follow. Ethics Officer must ensure Upper management team to participate in the same training sessions presented to employees and to deliver presentations and or communications to reinforce their commitment in believing the corporate policies. However, Ethics Officer must also continue to monitor the policy created and to ensure compliance. Corporate policies must be integrated into all aspects of the entire company from new employee training, meetings, and other aspects of day-to-day activities. The consistent reinforcement of seeing and hearing these corporate policies will be the major responsibility of the Ethics Officer.
Corporate Social Responsibility is a company’s efforts or best practice to improve society.

The responsibility of any business should be committed to developing and implement best practices into their daily business operations. It is important for businesses to be socially responsible because it protects and improves the lives of their employees and the communities they serve. TechFite’s main benefit from being socially responsible would be brand/reputation differentiation. TechFite decided to invest in a bankrupt city in promising to invest into the city and develop leadership programs would propel TechFite as the knight in shiny armor. Other companies may or may not want to continue to invest in a broken city and if TechFite can deliver its promises to Dellberg, their reputation and brand recognition would be known industry

wide.
The ethical desirability of improving TechFite’s reputation in the community is critical because of brand differentiation. The positive image of TechFite would be known if It continues with the promises to sponsor community events, support local youth leadership programs, and invest in infrastructure to rebuild Dellberg. Once completed it will restore the public image of TechFite within the city of Dellberg.
Another example of why it is important for TechFite to be socially responsible would be to boost employee engagement. Employees preferred to work for a company that has a good public image. If TechFite were reflected positively in the media, employees would be proud to work for them and will be engaged in their jobs. When employees are engaged, productivity increases, top talents will stay longer and it may also attract future prospective employees who are looking for a responsible employer.
Lastly, TechFite will attract more investors due to knowing that they are responsible for how they are using their funds and under the spotlight, they are financially sound with a healthy business budget. When TechFite invests in the infrastructure of Dellberg, they would be showing investors that it is not all about profits but the impact they leave behind.
TechFite’s core value is to produce innovative recreational equipment through work place collaboration. Additionally, TechFite’s culture encourages leadership development and engagement such as the community involvement. The primary business challenge for TechFite is their financial obstacles due to budgeting process and excessive bonus pay outs. Currently, to control the budget, TechFite reduced hours so that their employees are considered part-time status thus unable to receive the full-time employee benefits. Budget constraints are preventing TechFite in fulfilling their core values and not complying with the culture of the company. The ethical course of action challenge would be to reevaluate executive bonus payout and how to allocate more funds to alleviate constraints for funding more full-time employees with full benefits and set aside funds fulfill their social responsibilities for community involvement plans such as investing in rebuilding the city of Dellberg.
TechFite’s business challenge is with its financial obstacles due to budgeting and to overcome this challenge, they must reevaluate executive bonus payout and re-evaluate funds needed to allow for more full-time employees. Ethically, TechFite should allocate funds to fund more full-time employees. If TechFite continues to cut back hours to avoid employees to reach full-time employee status so it can avoid paying benefits, it would be morally unacceptable and unfair treatment. Fair treatment of pay and benefit should be offered to employees at the Dellberg plant, as this is the right thing to do. Employees at the Dellberg plant should feel the company invests in them and confident to know benefits will be provided to protect their well-being.
Socially, TechFite’s budgeting constraints are affecting its ability to execute the promises they’ve made to the City of Dellberg in setting up community events and investing in rebuilding the city. The consideration of setting up a corporate social performance budget should be recommended since their primary business challenge is affecting the investment in Dellberg. TechFite could possibly donate a certain percentage of their sales goal towards philanthropic efforts and solicit donations from employees so that they can pool this money together with local philanthropically minded organizations to fulfill their promises made to the city of Dellberg.
Environmentally, in terms of TechFite’s financial business challenge, it is possible to minimize carbon footprint by going towards the route of a paperless environment. This would cut the cost down in buying paper supplies for the office and in return to minimize paper wastes. In rebuilding the city of Dellberg, any wastes generated by the manufacturing plant should be recycled to prevent wastes going back to the city unprocessed.