Do corporations have a moral obiligation to avoid laying off employees? More inside, essay for Bus. Ethics?
I am working on a essay for my Business Ethics Class and am a little confused on some of topics. Here are all the questions.
Do corporations have a moral obiligation to avoid laying-off employees? Why or why not? Is there anything unjust about CEO compensation rising, perhaps directly, from mass layoffs? Does a CEO have an obligation to share the pain? What do downsizing and outsourcing reveal about the attitudes of corporations toward their employees?
No, corporations have no moral obligation to avoid laying off employees. Business is all about making profits. If a corp. is performing poorly and profits are minimal or non-existent, then they have to find ways to reduce their cost of doing business and one of the easiest ways is to cut back on fixed expenses, e.g employee wages/salaries. Those usually laid-off are poor performing employees.
Some CEO perks are a little too much. There’s a reason for it. Good business and income follows good management, i.e a good CEO. Sometimes the CEO of a company can make or break the reputation of a company by attracting or discouraging high capital investors/businesses. CEOs’ policies or plans can injure or improve the profits of a company. This is why CEOs get paid a lot, they attract good or bad business; their jobs are very highly leveraged. Alot of CEOs are thus paid higher compensation because their performance is tied to the amount of profits a company makes—high performance bonuses.
So, rising CEO compensation is really not based on mass lay-offs, rather company profits; infact many tend to get a % of company profits as performance bonuses, talk about leverage…
CEO does not have an obligation to share the pain, but it would be nice to find one moral enough to share his/her massive compensation.
Downsizing reduces companies expenses and outsourcing is a lot easier, in terms of papers and financials, when it comes to running a business. This means that if a business system is very efficient, it does not rely on any particular human being to run well because the system is efficient.
Example, one of the reasons why McD. is very successful many years after R Kroc began is because it has a very effiecient business system that could even be managed by a 10 year old or someone with no formal education. McDs does not need a 7 figure CEO running each particular branch/food chain. Therefore, corporations are viewing employees as less of a resource/capital and more of a business expense