You are the head of the Human Resources department of an organisation. One day one of the workers died on duty. His family was demanding compensation. However, the company denied compensation because it was revealed in investigation that he was drunk at the time of the accident. The workers of the company went to strike demanding compensation for the family of the deceased. The Chairman of the management board has asked for your recommendation.

What recommendation would you provide the management?

Discuss the merits and demerits of each of the recommendations.

Ethics
Ethics: Case Study
2017
20 Marks

Introduction This case highlights the ethical dilemma of balancing corporate responsibility with individual accountability. The recent Foxconn suicide case, where workers protested demanding better working conditions and compensation for deceased colleagues, mirrors this tension. Utilitarianism offers a framework for navigating this complex situation.

Stakeholder Identification Deceased worker's family, company management, workers' union, other employees, shareholders, and the general public.

Recommendations and their Merits and Demerits

  1. Partial Compensation and Support: Offer a compassionate partial compensation acknowledging the worker's family's hardship, even if the worker was at fault. Simultaneously, uphold company rules regarding safety violations.
  • Merits: This approach balances the utilitarian principle of maximizing overall well-being (family's financial needs and company stability) with the rights approach, acknowledging the family's right to basic support. It also addresses the social contract between the company and its employees, fostering trust and preventing further unrest. This approach is similar to the Tata Steel's approach to employee welfare, known for its compassionate policies.
  • Demerits: It may not fully satisfy the workers' union or public opinion if they perceive it as insufficient justice. It also sets a precedent that might encourage future negligence. The company must ensure transparency in explaining the rationale behind this decision to avoid accusations of unfairness.
  1. Comprehensive Support Program: Establish a comprehensive support program for the family, including financial aid for education, healthcare, and job training. This program should be separate from compensation and focus on long-term well-being.
  • Merits: This demonstrates the company's commitment to the common good approach and virtue ethics, emphasizing compassion and responsibility. It aligns with the public welfare aspect of the dilemma and addresses the social injustice caused by the worker's death, regardless of fault. It also contributes to a positive public image, enhancing the company's reputation for ethical conduct. Similar initiatives have been adopted by Infosys Foundation in their social responsibility programs.
  • Demerits: This approach might be perceived as an admission of guilt by some stakeholders, potentially leading to legal challenges. It also requires significant financial investment from the company, which might impact shareholder interests.
  1. Strengthening Safety Protocols and Training: Invest in rigorous safety training programs, reinforce existing protocols, and implement stricter monitoring of compliance to prevent future incidents. Conduct a thorough safety audit and address any gaps.
  • Merits: This proactively addresses the dereliction of duty issue and emphasizes the company's commitment to due diligence. It promotes a culture of safety, aligning with the utilitarian principle of preventing future harm. It also demonstrates a long-term gain approach by investing in a safer work environment, benefiting all employees. This aligns with the Oil and Natural Gas Corporation's (ONGC) focus on safety training and protocols.
  • Demerits: Implementing these measures requires time and resources. It might also face resistance from some employees if they perceive it as increased scrutiny or workload.
  1. Mediation and Dialogue: Facilitate open communication between the management and the workers' union through a neutral third party. This can help address the conflict of interest between the company and its employees and find a mutually acceptable solution.
  • Merits: This promotes transparency and fairness, addressing the lack of justice perception. It allows for a collaborative approach, respecting the rights and perspectives of all stakeholders. It can lead to a more sustainable and peaceful resolution compared to prolonged strikes. Similar approaches have been used in resolving labor disputes in the Indian automobile industry.
  • Demerits: Mediation can be a time-consuming process, and there's no guarantee of a successful outcome. It requires willingness from both parties to compromise, which might not always be present.

Conclusion This case study highlights the complex interplay of ethical principles in a real-world scenario. The Wipro's commitment to ethical business practices serves as an example of how a company can prioritize both profitability and social responsibility. A balanced approach, combining partial compensation with enhanced support programs and strengthened safety measures, offers an ethical way forward. This approach acknowledges the worker's family's needs, upholds company rules, and fosters a safer work environment, preventing future ethical dilemmas. Open communication and transparency are crucial throughout the process to maintain trust and ensure a just resolution.

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