Case analysis of Jextra Neighborhood Stores in Malaysia
Ethical issues and how the ethical issues are inter-related
There are several ethical issues that the actors are facing in the case.
As a country manager of Jextra in Malaysia, Chong had been seeking to expand to Klang-a town near Malaysia’s capital city of Kuala Lumpur for some time. While one of the ethical issues him facing was about additional provisions linked with land zoning in Klang. After having a conversation with the mayor of Klang, Chong was surprised by the mayor’s quid pro quo to help finance a new primary school and help pay for the flyover.
The second ethical issue Chong facing was how to make balance or whether should he strictly obey Jextra ’s Business Conduct Code or just do as the Romans do-to accepts the mayor ’s offer. Jextra’s Business Conduct Code has clearly stipulated that employees could not offer benefits to third parties in connection with business matters. While the problem was Chong ’s boss had approved an aggressive five-year investment strategy and expected him to aggressively grow the business. Besides, Chong should consider his own career promotion and discretionary bonus: the number of new stores opened was an important element in his overall evaluation, and a factor in determining his career prospects. Considering a failure to open new stores would be viewed negatively at corporate headquarters, there would be a tradeoff, and Chong need to weigh the advantages and disadvantages of the decisions he would made carefully.
Another ethical issue was that Chong began to doubt Jextra’s top-performing fresh fruit and vegetables buyer Arif Alam ’s job performance. Though Alam consistently negotiated
better contracts than other buyers, considering the current situation that the retail industry in Malaysia was notorious for buyers accepting money and gifts from suppliers, and “Chong had heard rumors about a scheme between Alam and his father-in-law, who ran a trading agency that established contact to Jextra Stores,” besides, Chong overheard two employees’ communication occasionally, so he suspected that Alam could be accepting gifts or taking bribes.
There was also an ethical issue Chong facing was that how to confirm his doubt of Alam ’s dirty buying made him in the dilemma. He worried once he set up an investigation, he will disrupt the relationships between his employees and suppliers, and even the whole business will suffer.
These four ethical issues mentioned above were inter-related: the first issue additional provisions linked with land zoning caused the second issue that Chong had to make balance between obeying Jextra’s Business Conduct Code and accepting the mayor’s offer. Similarly, the third issue that Chong suspected category manager’s behavior caused the fourth issue that he had to worry about the effects resulted in by the actions he could take. Also, these issues were all intractable and pressing for Chong to solve or he would lose the opportunity to expand the business and generate inner corruption which would do harm to company in the long run.
Stakeholders and their interests, values, and preferences
There were four main stakeholders involved in the case: 1. Jextra Company; 2. Tom Chong; 3. Klang Mayor; 4. Arif Alam.
Next, le t’s analyze the interests, values, and preferences of the involved stakeholders respectively.
As an enterprise aimed at making maximum profit, the interests for Jextra Company were seeking to deliver the best results for the Company, the highest return to shareholders, the most beneficial service to customers, to expand their business and have higher Return on Investment. Their values were as their business conduct code mentioned, “To maintain our valuable reputation and to build on our success, we must conduct our business in a manner that is ethical as well as legal,” and “Jextra is committed to conducting business lawfully and ethically. Every associate is obligated to act at all times with honesty and integrity.” For their preferences, that should be maximizing business profits based on lawful and ethical conducts.
Tom Chong ’s interests were adding economic values, increasing the number of new stores opened, getting promotion and earning discretionary bonus. Chong ’s value was creating profits for Jextra and himself legally, and his preference was accepting the mayor’s offer and dealing with Alam later.
Klang Mayor ’s interest was obtaining profits for his family members through the primary school project, his value was attracting investments to Klang, and his preference was using external finance to develop the community.
Alam ’s interest was getting extra benefits through his CM role; his value was exploiting opportunities from the system for personal gain, and his preference was controlling the supplying channel through choosing suppliers and products covered by the trading agency run by his father-in-law.
In order to show the relationships clearly, generally we can conclude the interests, values and preferences of the different stakeholder in table format:
Ethical principles that Tom Chong could use
Utilitarian Rule:
“The utilitarian ethical theory is founded on the ability to predict the consequences of an action. To a utilitarian, the choice that yields the greatest benefit to the most people is the choice that is ethically correct” (“Ridley, Aaron” 1998). The benefit of utilitarian theory is obvious, the utilitarian will choose the way benefits most people through weighing the predicted solutions. Utilitarianism includes two types, act utilitarianism and rule
utilitarianism. “In act utilitarianism, a person performs the acts that benefit the most people, regardless of personal feelings or the societal constraints such as laws. A rule utilitarian seeks to benefit the most people but through the fairest and most just means available.” (“Penslar, Robin L,” 1995).
Utilitarian rule is one of the best rules for Chong to resolve some problems he was facing. When he took act utilitarianism, he would focus on the main expansion target of the company regardless of the methods. Since Jextra aimed to get the zoning approval in Klang and expand business there, what Chong could do under this rule was to satisfy the needs of the mayor to contribute to the new school development fund and meet the flyover request, besides, he might choose turn a blind eye on the bribery issue of the category manager to avoid disrupting supplier relationships, even his choices may chip away at the law edges. While, if he plays as a rule utilitarian, he must consider the laws and Jextra ’s business conduct code restrictions. He may look again at the mayor’s requests and try to get the zoning approval “through regular channels”, which could be the safest and best way for him and his company in the long run. Starting from this angel, an investigation should be taken into category manager Alam in order to prevent bribery behaviors which would do harm to Jextra ’s benefits.
Golden Rule:
“The Golden Rule or ethic of reciprocity is a maxim, ethical code or morality that essentially states either of the following: One should treat others as one would like others to
treat oneself (directive form); One should not treat others in ways that one would not like to be treated (cautionary form, also known as the Silver Rule).” (“Antony Flew, ed.” 1979).
This rule could be especially used to deal with bribery issue of category manager. Even there were several rumors and suspicions, Chong had no clear evidences of Alam ’s dirty business. Actually, nobody wants to be suspected. He could take steps only when he got adequate proofs. If Chong fail to find any persuasive evidence, “he could alienate his people and lose personal credibility” which would do harm to the centripetal force of his team. What Chong should do under golden rule was “do not suspect the man you use”. He should know that his main task now was to get the zoning approval of Jextra’s chosen site.
Moral Rights Rule：
The moral rights rule “asserts that human beings have fundamental rights and liberties that cannot be taken away by an individual’s decision, thus an ethically direct decision is one that best maintain the rights of those people affected by it” (“Sree Rama Rao”, 2010).
If Chong succeeded getting the zoning approval and expanding the business through compromising with the mayor ’s nonconventional requests, Jextra company and Chong himself may benefit a lot, such as brilliant operating performances and personal promotion. While, these methods were wandering the edge of law, assuming that all businesses take advantages through un-regular methods, what the market rules would be, and it cannot be deniable that it would stoke corruption. Chong should obey Jextra’s conduct code and try to get the approval through other moral channels.
Also, according to company ’s conduct code, “Employees and immediate family or household members may not serve as a supplier or customer of the Company.” Chong heard that Alam’s father-in- law was running a trading agency that has direct contracts with Jextra stores, and Alam listed suppliers and products covered by the agency. That means Alam ’s behaviors had already violated the conduct code. Even we can imagine the reason why Alam could be the top category manager. Under moral rights rule, Alam should be investigated, and Chong should search for other qualified suppliers gradually.
How personally see the situation and what actions would be taken
Rule Utilitarianism: First, I will seek for my boss for advices and try to draw support from company ’s resources. Under the local law, “if the school payment speeded up the development process, it could be legal.” With this assumption, I will try to apply for Jextra Social Fund, which was used to provide education supports and now contribute to more local programs with the expansion of Jextra. Besides, I will use the local relationship to know the mayor ’s explicit intention, and during the process, I will hire a legal adviser in order to better bargain with the mayor.
Golden Rule: We need to raise the voice of our reasonable benefits. We have to admit that business is a tradeoff process, in order to get the abundant return, we will sacrifice some benefits. While when the requests are unreasonable, we should express our opinions. If the mayor ’s request for contribution to the school development fund could be considered reluctantly acceptable, then asking for payment for the flyover is totally outrageous, for Jextra ’s determination was to use a “used commercial street and not on either of the roads
close to the planned flyover.” As the golden rule expressed: “one should treat others as one would like others to treat oneself, ” building primary school and constructing flyover is inherently the local government’s responsibility, if the mayor use the administrative power to distribute the burden to enterprises and set up barrier, that’s jobbery. If I were Chong, I would try to negotiate with the mayor again uniting other investors even competitors.
Justice Rule: I decide to use justice rule to deal with Alam’s issue. According to this rule: “an ethical decision should distribute benefits and harm among people in a fair, equitable, and impartial manner” (“Peterq23”, 2014). I do not deny that Alam was the top-performing CM, whose work “contributed to the excellent financial performance of Jextra Malaysia”. While, I also cannot ignore the rumors about the scheme between him and his father-in-law, who ran a trading agency and seems controlled the interactions between suppliers and Jextra. If it’s true, then it’s unfair for those CMs who work hard without this kind of relationships, also, it will do harm to Jextra’s operation management in the long run. To deal with this, I will set an investigation on Alam when time is suitable (after getting the zoning approval).
Conclusion:
For a commercial enterprise, making profits is unalterable principle. While it ’s also obligatory to take relevant social responsibility, such as insisting justice, refusing corruption, etc.
References
Ridley, Aaron (1998). Beginning Bioethics.
Penslar, Robin L,. (1995). Research Ethics: Cases and Materials.
Antony Flew, ed. (1979). Retrieved from http://en.wikipedia.org/wiki/Golden_Rule Sree Rama Rao. (2010). Retrieved from
http://www.citeman.com/12952-moral-rights-approach.html
Peterq23. (2014). Retrieved from
http://www.freezingblue.com/iphone/flashcards/printPreview.cgi?cardsetID=273792
Case analysis of Jextra Neighborhood Stores in Malaysia
Ethical issues and how the ethical issues are inter-related
There are several ethical issues that the actors are facing in the case.
As a country manager of Jextra in Malaysia, Chong had been seeking to expand to Klang-a town near Malaysia’s capital city of Kuala Lumpur for some time. While one of the ethical issues him facing was about additional provisions linked with land zoning in Klang. After having a conversation with the mayor of Klang, Chong was surprised by the mayor’s quid pro quo to help finance a new primary school and help pay for the flyover.
The second ethical issue Chong facing was how to make balance or whether should he strictly obey Jextra ’s Business Conduct Code or just do as the Romans do-to accepts the mayor ’s offer. Jextra’s Business Conduct Code has clearly stipulated that employees could not offer benefits to third parties in connection with business matters. While the problem was Chong ’s boss had approved an aggressive five-year investment strategy and expected him to aggressively grow the business. Besides, Chong should consider his own career promotion and discretionary bonus: the number of new stores opened was an important element in his overall evaluation, and a factor in determining his career prospects. Considering a failure to open new stores would be viewed negatively at corporate headquarters, there would be a tradeoff, and Chong need to weigh the advantages and disadvantages of the decisions he would made carefully.
Another ethical issue was that Chong began to doubt Jextra’s top-performing fresh fruit and vegetables buyer Arif Alam ’s job performance. Though Alam consistently negotiated
better contracts than other buyers, considering the current situation that the retail industry in Malaysia was notorious for buyers accepting money and gifts from suppliers, and “Chong had heard rumors about a scheme between Alam and his father-in-law, who ran a trading agency that established contact to Jextra Stores,” besides, Chong overheard two employees’ communication occasionally, so he suspected that Alam could be accepting gifts or taking bribes.
There was also an ethical issue Chong facing was that how to confirm his doubt of Alam ’s dirty buying made him in the dilemma. He worried once he set up an investigation, he will disrupt the relationships between his employees and suppliers, and even the whole business will suffer.
These four ethical issues mentioned above were inter-related: the first issue additional provisions linked with land zoning caused the second issue that Chong had to make balance between obeying Jextra’s Business Conduct Code and accepting the mayor’s offer. Similarly, the third issue that Chong suspected category manager’s behavior caused the fourth issue that he had to worry about the effects resulted in by the actions he could take. Also, these issues were all intractable and pressing for Chong to solve or he would lose the opportunity to expand the business and generate inner corruption which would do harm to company in the long run.
Stakeholders and their interests, values, and preferences
There were four main stakeholders involved in the case: 1. Jextra Company; 2. Tom Chong; 3. Klang Mayor; 4. Arif Alam.
Next, le t’s analyze the interests, values, and preferences of the involved stakeholders respectively.
As an enterprise aimed at making maximum profit, the interests for Jextra Company were seeking to deliver the best results for the Company, the highest return to shareholders, the most beneficial service to customers, to expand their business and have higher Return on Investment. Their values were as their business conduct code mentioned, “To maintain our valuable reputation and to build on our success, we must conduct our business in a manner that is ethical as well as legal,” and “Jextra is committed to conducting business lawfully and ethically. Every associate is obligated to act at all times with honesty and integrity.” For their preferences, that should be maximizing business profits based on lawful and ethical conducts.
Tom Chong ’s interests were adding economic values, increasing the number of new stores opened, getting promotion and earning discretionary bonus. Chong ’s value was creating profits for Jextra and himself legally, and his preference was accepting the mayor’s offer and dealing with Alam later.
Klang Mayor ’s interest was obtaining profits for his family members through the primary school project, his value was attracting investments to Klang, and his preference was using external finance to develop the community.
Alam ’s interest was getting extra benefits through his CM role; his value was exploiting opportunities from the system for personal gain, and his preference was controlling the supplying channel through choosing suppliers and products covered by the trading agency run by his father-in-law.
In order to show the relationships clearly, generally we can conclude the interests, values and preferences of the different stakeholder in table format:
Ethical principles that Tom Chong could use
Utilitarian Rule:
“The utilitarian ethical theory is founded on the ability to predict the consequences of an action. To a utilitarian, the choice that yields the greatest benefit to the most people is the choice that is ethically correct” (“Ridley, Aaron” 1998). The benefit of utilitarian theory is obvious, the utilitarian will choose the way benefits most people through weighing the predicted solutions. Utilitarianism includes two types, act utilitarianism and rule
utilitarianism. “In act utilitarianism, a person performs the acts that benefit the most people, regardless of personal feelings or the societal constraints such as laws. A rule utilitarian seeks to benefit the most people but through the fairest and most just means available.” (“Penslar, Robin L,” 1995).
Utilitarian rule is one of the best rules for Chong to resolve some problems he was facing. When he took act utilitarianism, he would focus on the main expansion target of the company regardless of the methods. Since Jextra aimed to get the zoning approval in Klang and expand business there, what Chong could do under this rule was to satisfy the needs of the mayor to contribute to the new school development fund and meet the flyover request, besides, he might choose turn a blind eye on the bribery issue of the category manager to avoid disrupting supplier relationships, even his choices may chip away at the law edges. While, if he plays as a rule utilitarian, he must consider the laws and Jextra ’s business conduct code restrictions. He may look again at the mayor’s requests and try to get the zoning approval “through regular channels”, which could be the safest and best way for him and his company in the long run. Starting from this angel, an investigation should be taken into category manager Alam in order to prevent bribery behaviors which would do harm to Jextra ’s benefits.
Golden Rule:
“The Golden Rule or ethic of reciprocity is a maxim, ethical code or morality that essentially states either of the following: One should treat others as one would like others to
treat oneself (directive form); One should not treat others in ways that one would not like to be treated (cautionary form, also known as the Silver Rule).” (“Antony Flew, ed.” 1979).
This rule could be especially used to deal with bribery issue of category manager. Even there were several rumors and suspicions, Chong had no clear evidences of Alam ’s dirty business. Actually, nobody wants to be suspected. He could take steps only when he got adequate proofs. If Chong fail to find any persuasive evidence, “he could alienate his people and lose personal credibility” which would do harm to the centripetal force of his team. What Chong should do under golden rule was “do not suspect the man you use”. He should know that his main task now was to get the zoning approval of Jextra’s chosen site.
Moral Rights Rule：
The moral rights rule “asserts that human beings have fundamental rights and liberties that cannot be taken away by an individual’s decision, thus an ethically direct decision is one that best maintain the rights of those people affected by it” (“Sree Rama Rao”, 2010).
If Chong succeeded getting the zoning approval and expanding the business through compromising with the mayor ’s nonconventional requests, Jextra company and Chong himself may benefit a lot, such as brilliant operating performances and personal promotion. While, these methods were wandering the edge of law, assuming that all businesses take advantages through un-regular methods, what the market rules would be, and it cannot be deniable that it would stoke corruption. Chong should obey Jextra’s conduct code and try to get the approval through other moral channels.
Also, according to company ’s conduct code, “Employees and immediate family or household members may not serve as a supplier or customer of the Company.” Chong heard that Alam’s father-in- law was running a trading agency that has direct contracts with Jextra stores, and Alam listed suppliers and products covered by the agency. That means Alam ’s behaviors had already violated the conduct code. Even we can imagine the reason why Alam could be the top category manager. Under moral rights rule, Alam should be investigated, and Chong should search for other qualified suppliers gradually.
How personally see the situation and what actions would be taken
Rule Utilitarianism: First, I will seek for my boss for advices and try to draw support from company ’s resources. Under the local law, “if the school payment speeded up the development process, it could be legal.” With this assumption, I will try to apply for Jextra Social Fund, which was used to provide education supports and now contribute to more local programs with the expansion of Jextra. Besides, I will use the local relationship to know the mayor ’s explicit intention, and during the process, I will hire a legal adviser in order to better bargain with the mayor.
Golden Rule: We need to raise the voice of our reasonable benefits. We have to admit that business is a tradeoff process, in order to get the abundant return, we will sacrifice some benefits. While when the requests are unreasonable, we should express our opinions. If the mayor ’s request for contribution to the school development fund could be considered reluctantly acceptable, then asking for payment for the flyover is totally outrageous, for Jextra ’s determination was to use a “used commercial street and not on either of the roads
close to the planned flyover.” As the golden rule expressed: “one should treat others as one would like others to treat oneself, ” building primary school and constructing flyover is inherently the local government’s responsibility, if the mayor use the administrative power to distribute the burden to enterprises and set up barrier, that’s jobbery. If I were Chong, I would try to negotiate with the mayor again uniting other investors even competitors.
Justice Rule: I decide to use justice rule to deal with Alam’s issue. According to this rule: “an ethical decision should distribute benefits and harm among people in a fair, equitable, and impartial manner” (“Peterq23”, 2014). I do not deny that Alam was the top-performing CM, whose work “contributed to the excellent financial performance of Jextra Malaysia”. While, I also cannot ignore the rumors about the scheme between him and his father-in-law, who ran a trading agency and seems controlled the interactions between suppliers and Jextra. If it’s true, then it’s unfair for those CMs who work hard without this kind of relationships, also, it will do harm to Jextra’s operation management in the long run. To deal with this, I will set an investigation on Alam when time is suitable (after getting the zoning approval).
Conclusion:
For a commercial enterprise, making profits is unalterable principle. While it ’s also obligatory to take relevant social responsibility, such as insisting justice, refusing corruption, etc.
References
Ridley, Aaron (1998). Beginning Bioethics.
Penslar, Robin L,. (1995). Research Ethics: Cases and Materials.
Antony Flew, ed. (1979). Retrieved from http://en.wikipedia.org/wiki/Golden_Rule Sree Rama Rao. (2010). Retrieved from
http://www.citeman.com/12952-moral-rights-approach.html
Peterq23. (2014). Retrieved from
http://www.freezingblue.com/iphone/flashcards/printPreview.cgi?cardsetID=273792