Petra, who is the CEO of a shoe retailer, needs to make a tough decision on whether to close 3 of the 200 stores that are unprofitable. Closing the stores will mean laying off 45 employees right before the holiday season. Leaving the communities also means that local people will have no place to purchase reasonably priced shoes and sneakers. Use the decision tree to recommend what Petra should do. Be sure to consider each of the steps.
What will be an ideal response?
A decision tree is a graph of decisions and their possible consequences, and is used to help with ethical decision making. Petra will ask several questions: Is the proposed action legal? If yes, does the proposed action maximize shareholder value? If yes, is the proposed action ethical? If no, would it be ethical NOT to take the proposed action?
In Petra's case, the decision to close the stores is certainly legal; stores go out of business all the time. By closing the store, Petra does maximize shareholder value, because shareholders do not want to hold on to unprofitable stores. Is the action ethical? That question is more difficult to answer; putting 45 people out of a job right before the holiday season seems a bit cruel. Petra could decide to put off the closings until after the holidays, but that is just postponing the inevitable.
You might also like to view...
Online benefits systems are often referred to as __________ and can result in significant cost savings in benefits administration.
A. cafeteria plans B. value-based initiatives C. employee self-service systems D. high-deductible health insurance plans
In multiple-server models, two or more servers work as a team to serve a single waiting line
Indicate whether this statement is true or false.
Liquidated damages:
a. must be reasonably related to actual losses that could be suffered b. need not be related to actual losses that could be suffered c. must be less than the actual losses that could be suffered d. are usually much higher than the actual losses that could be suffered e. are only available in some states
Porter argues that a nation's firms gain competitive advantage if their domestic consumers are:
A. sophisticated and demanding. B. price insensitive and trusting. C. accommodating and flexible. D. nationalistic and protective of their domestic industries. E. biased toward foreign products.