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Phoenix 4 Case Study Of Business Ethics

970 Words4 Pages

Figure 1: Ethical decision making.
Source: (Vucaj, 2014)

Introduction
Ethics in general is about how we behave, encounter and treat one another. Without ethical principles applied in our world, injustice might take place. Ethics is not about the law or the common practice of society. According to Kirk O.Hanson, ethics is the study of standard of behavior that promotes what called good, and business ethics is the study of business behavior that promotes goods (Kirk O. Hanson, 2010). Ethical dilemma is a situation in where the reasons of a decision are in a conflict, or where the applying ethical values are not clear, and it is not immediately obvious what should be done (W. Martin and Schinzinger, 2010). Ethical dilemmas occur when someone …show more content…

Yet, the short term strategy of employee's reduction to reduce coast which is directed to the favor of shareholders without considering the 3,000 stakeholders that were jobless. The ethical decision should have been taken according to an End-Based benefit in which, the final outcome should be less harmful to both shareholders and stakeholders. The ethical dilemma was on how to run the company profitably without cutting off jobs. (Shaoul, 2009).
According to the BBC preview on the Serious Fraud Office report in 2009, the Phoenix Four focused more on pensions and personal benefits like, Edwards Cars owned by ''John Edwards'' instead of the development of the company. Phoenix Four focused more on securing their self financially rather than improving the company's performance. MG Rover was losing terribly which give rise to an ethical dilemma in which they have to choose between investing the money to secure them, and investing the money to develop the company. Both ways they might get profit but their greediness did not give space for an ethical choice and lead the company to fall apart due to bad investment choices. (Peston, …show more content…

Source: (GSK, 2014)
Answers
1. BMW wanted to save the biggest mass car manufacturer in UK. Hence, they sold the assets of MG Rover for £10 to Phoenix Four as they were committed to improve the firm. However, Increasing MG Rover's shares value and supporting the company's stakeholders was the main reason.
2. SAIC had a profitable opportunity of taking over a company supported by BMW. Unfortunately, the company was not managed well and losses took place. The stability of MG Rover was not certain before SAIC concurred the 70 percent yet a chance of successful investment was present. 3. I don’t think that the executives had the intention to be committed to the deals. Even though the executives declared their intention to make the deals work, SFO report shows the opposite by exposing their assets transfers to other companies registered for them, and their lack of responsibility towards the company or the

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