We lives in the world which is the rich become richer while the poor become poorer. Many nations in the world had set a price floor of the minimum wages to overcome this problem. Minimum wages is the lowest hourly wage that may be paid to an employee, as fixed by law or by union contract (Webster 1991). However, some of the company used violent to force the employees accept the wages. There are 3 model ethics in management which are utilitarian, moral right and justice. Due to Nike’s problem, all 3 model ethics are related to this problem.
First model ethics is justice because all company should pay the employee the minimum wages that stated by the law because it can increase standard of living for lower earners. The second model ethics is utilitarian which had shown is this case when Nike set to force their workers to sign the agreement to get the lower salary than the minimum wages. This will affect the employee’s moral that can lead the low quality product produce that will give bad impact to both sides. Last model ethics is moral right which had shown when Nike should not perform the forced because it can decrease economy development in Indonesia.
Based on the case of Nike accused of military to intimidate factory workers (ABC News), managers should not accept the offer because it cause to lack of justice to worker. First of all, all managers should know and perform the three ethical models to give all of the company related. The model ethics should to consider by the manager to deal with the company that do not give the fair and justice to their employees. Justice is one of three model ethics that must be used by all managers to make sure the employees get the fair decision.
Justice is moral decisions must be based on standards of equity, fairness and impartiality (Waddel, George and Jones, 2012). All of the company should give the employee’s salary according to the law that stated by law or union contract. This is because the economy nowadays had been worst due to inflation. Inflation is a sustained rise in the general level of prices (Berkeley 2008). The range of salary nowadays from the highest earner to the lowest earner had a huge difference that lead to lower standards of living (Brown, Charles, Gilroy , Cohen 2001 ).
When the employees can resist the resistance of inflation, they can increase their standard of living by receive the fair salary. This is because when they get the fair salary, they can have all utility needed by a human being as they can gain stable wage. All of managers should practice justice to their employees to help the employees gain not only fair salary, but also the right hospitality to help the employees to increase their standards of living (McIntyre 2003). In Nike case, the manager should practice justice to preserve the right of the employees.
Besides that, utilitarian model also should be practice as it can produce greatest good to greatest number of human. Utilitarian model is the moral behavior produces the greatest good for the greatest number (Mascull 2010). Utilitarian model also is a way to help a manager to make decision to choose the most benefit way to make right thing for many side as they can. Companies need to regain the high moral of workers to avoid the low product produced to make both side gain benefits. According on the case of Nike accused of military to intimidate factory workers (ABC News), Nike was made $2. billion in profits last year and it would cost $1 extra per pair of shoes to pay the minimum wages (Keady 2013). Since Nike gain a high profit, they should not use military force to the decrease their worker salary from $4 per day to $3. 7 per day to increase their worker moral that can enhance the quality of product that their produce. If the Nike’s manager use utilitarian model, he will not used force to deal an agreement with his workers as it lead to bad accident to both side. So, a company should to take action that give benefits to many party as many as possible to survive.
Utilitarian model is a model that have objectivity to spread the good things to the greatest number as possible. Then, the third model ethics is moral right approach. The moral right approach asserts that human beings have fundamental rights and liberties that cannot be taken away by an individual’s decision (Ezorsky, Gertrude, Nickel, 1987). Since the moral right is related to management, the manager should not making any decision without any discussion with any board members and not making decision by intuition (Jones 1991).
In Nike case at Indonesia, the moral right approached should be taking because this case can affect the worker lifestyle and it also can delay the economy growth at Indonesia. The reason why the lifestyle of workers will be worst caused by this case because the worker will have hardship in their life as the salary that they earn is low. According to activists, after rent and transport to work, the workers only can afford one meal (Robert 2013). This is evidence that shown how the result that made by the Nike’s manager at Indonesia can give the defect to workers lifestyle.
It also can delay the economy growth at Indonesia when the workers lose their purchasing power and small business is going down. This action also can lead to unemployment rate will increase and all department of business cannot improve. Lastly, after three model ethics that was analyzes, the most appropriate model ethics for the case of Nike accused of military to intimidate factory workers (ABC News) is justice. The other company should not tolerate with the company that act like this. This is because Nike was used military forced to make their employee’s agree with new salary.
Almost of the employees are totally not agreeing with their decreasing salary. The benefits from Nike used military to intimidate factory workers is it can decrease the capital and it can lead to increasing of profit (Bird, Kelly, Manning 2001). However, the partial lost due to this action is it can make their employees suffer due to decreasing wage. Since the employees had difficult money problem, this situation will make it worst. Nike will break law and the worst thing they will affect badly their employees.
The employees will lose their purchasing power and the standards of living. Furthermore, Nike’s action will affect Indonesia economy growth since the employees lose their purchasing power. Moreover, Nike will lose their partnership with other company that does not want to corporate with the company that use force to the employees and break the law. All of the company should practice all three model ethics with the right methods preserve the relationship with employees, public and nature. In conclusion, three model ethics is a helpful tool to help the manager in decision making.
This is because three model ethics cover all aspect of decision making. A manager should not think about profit that will company gain but a manager also should think about surrounding the company. In Nike accused of military to intimidate factory workers case, the manager should not make decision to force the employees to agree with any decision but it must be handling with professional ways. Nike’s manager also needs to think about the impact what the company will face in the future such as the cancelation of partnership due to their unprofessional behavior in this case.
Besides that, justice is the most appropriate model ethics for this case because this case relate to law and Nike does not take the same action to another Nike factory such as their factory at Vietnam. Due to Nike action, the stakeholders will get lower profit after this situation and the number of stakeholder will decrease due to this case that shown the lack of management skills of the manager. Lastly, the professional management should be realized by all company to avoid the problem and lost partnership or corporation that can drag the company to gain loss in the future. References Bird, Kelly, and Chris Manning.
Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia’s Household Survey. [Canberra]: Division of Economics, Research School of Pacific and Asian Studies, Australian National University, 2005. Brown, Charles, Curtis Gilroy, and Andrew Cohen. “Journal OF Economy Lecture. ” The Effect of The Minimum Wages On Employment and Unemployment 20, no. 2 (2001): 487-528. Accessed March 21, 2013. http://www. stanford. edu/class/econ101c/class2. pdf Waddel, Dianne. Jones, Gareth Jr. Jennifer M. George. 2012. Contemporary Management. Australia. McGraw-Hill Australia Pty Ltd. Ezorsky, Gertrude, and James W.
Nickel. Moral Rights in the Workplace. Albany: State University of New York Press, 1987. Jones, T. M. “Ethical decision making by individuals in organizations: an issue-contingent model. ” (1991): Mascull, Bill. Business Vocabulary in Use. Advance. Cambridge: Cambridge University Press, 2010. McIntyre, Richard. “Are Workers Rights Human Rights and Would It Matter If They Were? ” Robert, George. “Nike accused of military to intimidate factory workers. ” ABCNews, February 15, 2013. http://www. abc. net. au/news/2013-01-15/nike-accused-of-using-military-to-intimidate-factory-workers/4465058.