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Ethics in downsizing

When shareholders increase their wealth through downsizing, does this come, to some degree, at the expense of loyal employees---those who have worked diligently to serve the firm in terms of accomplishing its vision and mission?

If so, what actions would you take to be fair to both shareholders and employees if you were charged with downsizing
or "smartsizing" a firm's employment ranks? What ethical base would you employ to make decisions regarding downsizing?

Solution Preview

This is a true statement. When a company decides to lay off employees, it is at the expense of its employees. In USA, the main objective of the firm is to maximize shareholder value. By laying off people, a firm may be increasing the shareholder value in the short term. However, all the negative publicity that ...

Solution Summary

The solution does a great job of explaining the concepts being asked in the question. The solution is very well explained and detailed. A good response for anyone looking to get a deeper understanding of the ethics concepts. Overall, an excellent response.

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