Article 1: “Uber announces further 3000 job cuts”
Business ethics refers to study of business practices and policies in relation to controversial subjects such as insider trading, corporate governance, discrimination, bribery, fiduciary responsibilities and corporate social responsibility (researchgate.net., 2020). Businesses often use business ethics as guidelines for obtaining the approval of the public. In other words, business ethics includes- professional or applied ethics that analyses and evaluates the ethical problems and principles that may arise in the business environment (researchgate.net., 2020). Business ethics therefore guides the activities of the individuals within businesses and the business operations as a whole (ResearchGate., 2020). The two articles selected for this study are related to well-known companies Uber and Airbnb. The main aim of the paper is to discuss about the ethical issues that are presently being faced by the two companies. The paper will discuss about- a brief overview of the ethical issues identified in relation to the companies mentioned in the articles, the stakeholders being impacted by the issue, neesasry theory to support the existence of unethical activities, and recommendations will be provided.
A brief about the article including its title, source of media and the date of article
The title of the first article selected for this study includes- “Uber announces further 3000 job cuts”, and the article was published in the financial times newspaper. Therefore the media from which this article has been obtained is newspaper (Ft.com., 2020). The financial times newspaper is an international newspaper that is usually published in English language and this article is a recent one.
Overview of essence of the article
The article discusses about the recent decision by Uber Company to cut 3000 more jobs and the company decided to close or consolidate their 45 offices located globally and the company has also decided to reduce their investments from their non-core projects as the company is presently trying to deal with what their CEO has referred to a “ damn virus.” This decision has been taken by the company in addition to its previous decisions of reducing 3700 jobs globally (researchgate.net., 2020). Therefore this ride-sharing giants have planned cuts of more than a quarter from their global workforce. The share price of the company rose by more than 8% after its decision according to various news sources. The CEO also accepted the fact that the company is doing well as Uber eats is performing well, rides are also found better than they were and therefore the CEP said that they needed to wait for this damn virus to be over for everything to be normal. Therefore the strategy that was adopted by the company for the same is job cuts. Moreover the CEO also reiterated the impact of covid-19 on its business globally and the company also stated that although there has been an improvement the same has got limited visibility (researchgate.net., 2020). Therefore the unethical business issue identified from this article includes- job reduction of about a quarter of employees without sufficient prior notice. The company’s decision had been a controversial one since the time it decided to cut job of 3000 people before the current decision of cutting 3700 jobs.
Overview of essence of the article
Discussion about the ethical issue
The ethical issue that has been identified from the article is that of unethical mass job cuts in Uber Company globally (Ugoani, 2019). The unethical issue that is presented in the article can be identified from the statement of the CEO where he clearly states that the company was doing well because of their under easts and moreover the company has also recovered their performance in the market however the company decided to continue with its decision of job cuts for the purpose of maintaining its share in the market and after taking the decision the company has been able to improve its market share by 8%. Therefore it is clear from the article that the company is presently thinking only about its share in the market and is trying to improve the same and is therefore failing to look after the interest of its employees. The existing employees were already working under threat when the company announced another job cut of 3700 jobs. The main reason behind such mass job losses as has been stated by the CEO is the “damn virus” or the corona virus that has impacted the travel and tourism industry vastly.
Some of the key stakeholders identified from the paper include the company Uber, the employees of the company and also the community at large. The decision of mass job cuts has some major impacts upon the identified stakeholders. For instance, the decision to cut jobs have resulted in the company becoming more profitable in the short run and therefore the company has been able to increase its market shares by 8%. However, the long term impact of the decision taken by the company may include some negative impacts upon the company’s operations. This is so because the company’s image has been damaged in front of the community and the employees and therefore when it will decide to expand its workforce again, it may find it difficult to get the same due to damaged relations with the employees. On the other hand, the decision of job cuts majorly have a negative impact over the employees because the market conditions are unstable presently and therefore they may not get jobs and remain unemployable for a longer period of time. There is also a negative impact of the decision of the company upon the community at large because unemployment can lead to various economical and psychological impact upon the unemployed people and affects the spending power of the employees.
Discussion about the ethical issue
Some of the key ethical theories that can be used for the purpose of understanding the identified business issue includes the theory of deontology and the theory of utilitarianism. According to the theory of utilitarianism, an action is considered to be an ethical one when it results in greater good for all and therefore those actions that does not result in greater good for all but only for a few stakeholders is considered to be an unethical one. Therefore according to the theory of utilitarianism, the actions undertaken by Uber are considered to be an unethical one because the Company took the decision keeping the benefits of the shareholders and the owner in view and therefore they failed to consider the interest of the employees of the organization as the company adopted a mass job cut strategy for the purpose of maintaining a good market share (ResearchGate., 2020). The company also ignored the interest of the society as a whole. On the other hand, the theory of deontology discusses about the obligations of people towards their duty and therefore according to this theory, the employers of Uber had certain obligations and responsibilities towards their employees which were ignored by them for gaining short term success in the business environment.
The pay of the employees could have been reduced as the company had started recovering its operations in the global market instead of carrying out another 3700 job cuts. It would have resulted in a mutually advantageous scenario (Wolcott, 2014).
Conclusion
The major ethical issue identified from the article is that of unethical job cuts and the same is considered as unethical because it could have been avoided by the company through adoption of various other strategies such as pay cut instead of job cut and others. Therefore the ethical issues can be clearly identified from the article.
A brief about the article including its title, source of media and the date of article
The title of the second article that is selected for the purpose of this study is “Airbnb to axe 25% of workforce”, and the article was published by the financial times that is an international daily newspaper and that usually provides more emphasis to the economic and business news. The newspaper is usually published in English language. This article was published recently for showing the impact of corona-virus upon some of the major travel and tourism companies.
The key stakeholders being impacted by the ethical issue
Overview of essence of the article
According to the article of the financial times, Airbnb has recently decided to cut 25% of its workforce and has also decided to scale back its efforts for the purpose of luring their high-end travelers and therefore overcome the losses that have been incurred by them due to coronavirus (Ft.com., 2020). The news of job cut was given to the employees by the CEO Brian Chesky who announced that around 7500 workers who occupied 1900 of the accommodation booking would be asked to leave by the next week. The company also disclosed its expectations of obtaining less than half revenue in the year 2020 than its previous years, through a letter sent to the staff by the company. The company also announced to pause their efforts of integrating the transportation option in its application, Airbnb Company decided to cause its efforts of developing the Arbnb studios that was going to be an in-house unit that would be used for predicting content related to travelling. The company also announced its decisions scaling back its investments from the Lux and hotels whose services were aimed at rentals of high end purpose. The company Airbnb is also expecting other major changes to take place in the travel and tourism industry after the coronavirus and is therefore taking considering it important to take actions and evolve accordingly. According to the company they are expecting a change in the demands of the customers and feel that they need to be prepared for the same (Kurter, 2020). Therefore from the article, the ethical issues that can be identified includes- creation of a toxic culture for those employees who are not dismissed and unethical downsizing and job cuts without providing sufficient time to the employees to get prepared or for looking for a backup option or plan.
Discussion about the ethical issue
The two major identified issues identified from the article includes- a toxic workplace culture for the existing employees that further leads to unethical practices being carried out by the employees for maintaining their positions and an unethical act of downsizing and job cuts within a short period of notice (jstor.org., 2020). The unethical issue of job cut within a short period of notice has been understood from the article through the letter that has been provided by the company to their staff discussing about the revenue loss that the company is expecting for the year 2020. However, the company has also announced of dismissing their employees within a week. Therefore the Airbnb did not give sufficient time to its employees for looking for another job and decided to dismiss them immediately. On the other hand, the other issue that has been identified is toxic workplace culture for the employees who have not been dismissed because employees of the organization are now motivated to maintain their jobs at any cost and therefore they may indulge in different types of unethical activities. The outbreak of corona virus pandemic has negatively impacted the economy globally especially for the travel and tourism, companies. However, the way in which different companies are dealing with the same is different. Some companies are adopting more unethical practices for reducing their overall costs while others are still trying to carry out ethical practices even in such situations. However, Airbnb company is presently thinking only about their short term benefit and not the long term impact of their decisions.
Link between the ethical issue and the ethical theories
The key stakeholders being impacted by the ethical issue
The key stakeholders that have been identified from the article includes the employees, the Company and the CEO and also the community in large (ResearchGate., 2020). The CEO and the shareholders of the company may be able to maintain their profitability in the short term but not in the long run because its relations with the employees are becoming damaged due to its decisions and therefore when all the situations become normal, the Airbnb company may have difficulty in expanding their workforce dye to the poor image that they are creating through their decision of job cuts. The employees being impacted negatively by the decision of the job cuts because the present market condition is not good and therefore their financial stability is being affected negatively by the decision of job cuts. In the long run however, the situation may change. The community at large will also suffer because income is continuously reducing through job cuts or pay cuts but the prices of commodities are not falling and are rather rising.
Link between the ethical issue and the ethical theories
One of the most important ethical theory is that of the utilitarianism which discusses about the fact that an act is considered to be ethical or unethical based upon the consequences that is if a decision results in greater good for all then it is considered to be an unethical one or else unethical (jstor.org.,2020). Therefore the decision taken by the Airbnb Company is presently unethical because it is not leading to greater good of all of the stakeholders.
Some of the major recommendations that can be made to overcome the identified ethical issues includes- pay cuts, providing some time to the employees to look for another job, and innovating some new ideas and options like other major companies and thereby improving the workplace culture (Fortune.com., 2020).
Instead of directly carrying out job cuts, pay cuts can be carried out for reducing the cost of the company and thereby helping the employees in maintaining their jobs in the company. This decision will also be considered as an ethical one because according to the theory of utilitarianism, a decision can be called as an ethical one or an unethical one based on its consequences upon the identified stakeholders (Ijsrp.org.,2020). And the company can clearly discuss about its strategy with its employees that the pay cut is a temporary one and they would be getting normal wages and salaries as soon as coronavirus is over. This decision of the company will also help them in maintaining good relationship with their employees for the long term.
Article 2: “Airbnb hits back at Paris for illegal renting claims”
If any business is unable to continue its operations in the market, then they should inform about the same to the employees and show them the true picture or at least inform the employees about the direction in which the company is heading (hbr.org., 2020). For this, it is necesasry for the company to provide sufficient time to the employees to look for another job in the market. Instead of directly cutting the jobs of the employees, the employers can give them some time such that they can get another job. The company can also help the employees in getting another job. This decision will also be considered as ethical because the company would have at least tried to help their employees instead of dismissing them over a short notice (Google Books., 2020). According to the theory of deontology, people have certain obligations towards their duty and therefore keeping this theory in view, employers have certain responsibilities towards the employees and the same needs to be fulfilled by the employers for the purpose of carrying out ethical activities.
The coronavirus pandemic has negatively impacted the entire global economy and therefore all companies have been affected by the same. However the ways in which companies are dealing with the coronavirus pandemic is different (Reinecke, Arnold & Palazzo, 2016). Therefore another practical approach that can be carried out by the organization for avoiding unethical practices includes- carrying out some new innovations or generating new ideas. This strategy is being applied by other organization for helping their customers. For instance, Swiggy is allowing its customers to order essential groceries from their homes such that thy can avoid going out and can also get their required groceries at home (Alton, 2020). This strategy is mainly helpful for the older people who can easily get the groceries they need at their homes. Therefore similar innovative ideas could be carried out by companies for reducing job cuts. Moreover, this decision is an ethical one as all the stakeholders will be benefited through the same. Moreover, it will also help the company in overcoming their toxic workplace culture.
The ethical issue identified from the article includes that of a toxic workplace culture and also the unethical job cuts. These two unethical issues are one of the most common unethical issues that is faced by organizations across the globe. Many times organization are unable to understand how and when their healthy workplace cultures gets transformed into an unhealthy one. From the above recommendations, it has been understood that there are several alternatives that can be used by the company for avoiding their unethical activities related to job cuts. Therefore the article has clearly identified two of the most important types of unethical practices being carried out by the Airbnb in response to corona virus pandemic.
Overview of essence of the article
Conclusion
Therefore from the above discussion, it can be concluded that it is necessary for businesses to avoid unethical practices or activities as that impacts their image in front of the public and that also causes the public to lose their trust in the companies. From the paper, the unethical activities carried out by Uber and Airbnb companies have been understood. For instance, the decision of sudden job cuts that have been taken by the businesses without prior notice to their employees. Moreover from the paper, all those stakeholders who are being impacted by these issues have been understood along with the positive or the negative impact upon each identified stakeholders from the paper. Further various ethical theories have been understood from the paper for the purpose of showing a link between the identified ethical issue and the ethical theories. Recommendations have been also provided in the paper for the purpose of resolving the issues identified in the paper.
References
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