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Memo to Mr. Lee

With the current state of the economy and your concerns on the welfare of MBS, I am concerned about the image of the company to the public. The welfare of the company starts from the roots which happen to be the employee (Rhodes, 2006). Mr. Lee, as your advisor I understand how you feel about the company and how it has been fairing both financially and its image to the corporate public. However, viewing the criterion at which you decide to rescue the company from this situation with, there is a need to view the whole of the board members and the managerial staff as employees. To start on this, I would like to demonstrate the theory of equity in the workplace.

The equity theory from my point of view describes the workplace as the battle front, the enemies who in our case would be the corporate rivals and us, meet in one open field, all armed with ideas and strategies to beat each other. Every side is made up of different people who have different reasons for the participation of the battle. As a caution, everyone needs to stay as alive and active as the other but all have a common goal at hand to defeat their opponents. Through organization and determination, all participants go to the battle fully equipped and ready to defend one another in a case of uncertain events. Applying this theory to the current state of affairs, you will realize that stripping off employee benefits fully or partially is like taking your colleague's spear and shield to defend yourself while leaving him or her vulnerable to attack. As has been the trend of employment in this company, from employment to retirement several members of the same family generation would be working at the company concurrently. If their shields were taken from their forefathers what would they have defended themselves from and how would the current young generation have seen the light of today?

The ethical implications of proceeding with this plan are both harmful to the employees. This is because some of the employees had previously agreed and signed deals that meant cuts to pay in order to retain the health care and retirement benefits. As to the board in the light of corporate rivals, this company would dent its image. If MBS has and must result in the decision of cutting employee benefits to salvage it from financial fall, then according to my theory everyone should be stripped of his or her shield, just as we say, "one for the team". To strip off health benefits from the junior employees only is unethical and to some point insulting while keeping the benefits of the seniors.

The stakeholders, in this case, are primarily the employees and secondarily their families who benefit from the health care plan and retirement benefits. Their biggest concern is their livelihood that would go out of proportion if these benefits were taken from them. Mainly as the CEO, you should be ethically responsible by exercising fair cuts if they must be resulted to. If otherwise, the company can make the employees a deal. This deal should take away the benefits for a certain period of time for the sake of the company; upon which they'll be compensated afterward when MBS gets back to its feet. The rights of the stakeholders, in this case, are violated, in that they may not know or they may never be informed of the position the managerial staff about the cuts or retaining of their benefits. But fairness needs to uphold for this to work out properly for everyone. Consequently, there should be the need of a win-win situation; where all parties are treated under the same set of rules.


To conclude, the only thing that will work right for the company, observing ethics and treating all parties fairly, would be cut salary periodically for a considerable duration. These salary cuts should apply rationally within a certain ratio criterion. The excuse that the company is afraid to lose some of the brightest staff may mean that at this moment we are not a team and applying the theory of equity all measures that undermine the battle ethics may fail under all considerations

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