Essay Example on Pegasus: Technology Leadership in New Millennium

Introduction

Pegasus International Inc. is a company that produces integrated circuits (IC - Chips) of associated software for the specific market as communication devices, memory chips, computer-based speakers, video and the multi-media. The company has a robust innovation model with a tagline "technology leadership in the new millennium," intending to develop futuristic products before the existing market needs them. The current market is around the United States, Japan, and Europe. However, it has an elaborate expansion plan to expand to different markets, China being a prime target.

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The reason the managers want to invest in China is because of the business opportunity, such an investment will procure. After a market analysis, it has been noted that China is about to develop into one of the biggest markets for the wireless products because of the cost of cables, and to avoid vandalism. However, the company is faced with an ethical dilemma since, based on the reports, to invest in China, a company will be required to bend some of its rules and ethical principle. At the same time the same is projected to attract substantial profits for the company. This review is a case study of Pegasus international Inc and the ethical dilemma facing the management, and a review of the possibilities and consequences of either of choice.

Ethical Issue

The ethical issue in the case of the is the dilemma between doing what is healthy for the business going concern or disregarding that and adhering to the company principles (McGorry et al., 2019). Also termed as an ethical dilemma, it is a conflict between alternatives where no matter what a person chooses, a principle will be compromised (Lauria & Long, 2019). In this case, if the manager decides to expand to China, the company shareholding will improve, which a great opportunity for the company, his job, and that of the others who are dependent on the going concern of the company. On the other hand, if he does not take it, the company's ethical principles will be upheld, meaning even its name will be salvaged.

As stated in the case study, paying someone to do the transaction on behalf of the company does not equate to the company committing a crime. Thus, it means they are considering proceeding with the offer by using a separate entity. There are two ways to look at this, first, what the company stands to gain, and what it stands to lose. The company will achieve the much-needed expansion, the shareholding value will rise, and everyone stands to gain. At the same time, questions will arise asking how the deal was sealed, answers which will lead to the loss of shareholders' trust because of the management decided to use the backdoor means to commit what they identified as a crime. Though the company's future will be assured, the shareholding may withdraw for the fear of what might happen in the future, including regular payoffs, leading to the loss of the company's capital.

Should they decide to abandon the whole idea, the company will lose as quoted by the wireless division manager; approximately $100 million annually, which is substantial, in addition to loss of the potential overseas investments. It is an opportunity which is being termed as too good to lose.

From one perspective, it is a decision between bad and good. A more in-depth analysis of this problem, however, presents two goods from which a choice of any will lead to compromise (Enderle, 2016). This means that expanding China is an excellent opportunity since the company's health will be boosted, translating to job security, and the shareholding will appreciate the efforts o the expansion steps being taken by the management. But this will compromise the ethical standing of the company. If the company abandons the idea of expansion, its ethical principles are upheld, meaning the company images and trust from the employees, suppliers, and customers will be maintained. They will also lead as an example to the employees meaning the employee morale and even emulating the same while handling the company's business.

While deciding about this issue and determining whether it is about legality or efficiency, it is best to look at both sides. According to the statement, continually paying the contractors will mean that the business will stay in the greenlight. At the same time, every payoff means going deeper and deeper into the crime and eroding the company's image should it be revealed. Then there is the statement like,

".... What these contractors do is their own business, but it works pretty well because the CEOs of all those companies can sign the disclosure statement required by a law saying that they know of no instance where they bribed for their business."

This shows that the payoffs are independent of the company and if anything, the company's image remains intact because of that disclaimer. Thus, the issue should not be about what is legal. Preferably it should be about what is efficient. i.e., what is best for the company's expansion or lack thereof.

Facts of the Case

One of the facts is, the company has a robust innovation program that demands an accompanying expansion for increased market and shareholding. Secondly, the best-suited place for such a development is China because they are about to roll out a wireless program. This means that the company could make approximately $100 million annually and, at the same time, attract the much-needed Japanese investors. Fact three is, to invest in China, agents or contractors are needed, but these require a regular payoff, something that the management is not comfortable with and terms it as a crime. Fact four is, what these contractors do is their own business, and at no instances are they likely to get back to the company. A disclosure is typically requested and signed.

What is not known is the implications of avoiding the agents, and the actual amount of payoff plus their details, such as what goes to pay for the licenses, and what remains as their cut. Additionally, the implications should these payoffs be traced back to the company. More investigation needs to be done regarding the unknown facts. What is known so far can be used to make a decision. It is only that the management may require the finer details, including the disclosure statement content and the legal implications (Enderle, 2016).

The shareholder, management, and the employees have an essential stake at the outcome since it will affect them directly. Some concerns like the legal implications are more important because they might lead to the closure of the business, and their outcomes might be more expensive than the projected gains.

The options for acting are further research into the matter, including investigating for other investment options and countries with friendlier/legal terms (Enderle, 2016). So far, the CEO, Oswald, has only consulted his managers, specifically those in the wireless division. This means that he is yet to involve everyone, including the shareholders and other stakeholders, such as the employees. The only creative option available is that of using another person to commit the crime of the company's behalf and making them sign a disclosure statement.

Alternative Actions

Using the utilitarian approach, the leaders does the cost-benefit-analysis while weighing the outcome versus the benefits (Gustafson, 2013). The best option is to take the China expansion program and be efficient in the payoff methods, while at the same time having a strong disclosure statement with the contractors. This is because of the benefits associated with it and also based on the success of several case companies.

Using the rights approach, the leader will consider maintaining the highest level of human dignity (Fuentes-Julio, & Ibrahim, 2019). To uphold such, the leader might consider not taking the expansion option because it erodes their principles as well as that of the company. They will choose to maintain what is ethical as opposed to what is profitable at the risk of dignity.

The virtue approach emphasizes on the individual character as a critical element in decision making (Carr et al. 2017). If the manager decides to use this approach, then the ethical principle will stand, and the company will not make any investment in China.

Decision

In one of the statements by the division manager, "It's not life and death, but it is a sizable incremental opportunity for us, not to mention potential Japanese partners who will make significant capital investments," meaning that the company is doing well. It does not necessarily demand an expansion. Also, the manager has expressed his concern that despite him wanting to expand and increase profitability, there are virtues that the company must uphold, including corporate culture characterized not only by aggressive R&D and growth but also by integrity, honesty, teamwork, and respect for the individual (McGorry et al., 2019). These the virtues that have made the company get to where it now, meaning they still have the chance of even propelling it further up. Eroding one of these will mean introducing distrust among the customers, employees, and suppliers, all of whom are critical of the business.

Based on these facts taking the virtual approach will be best suited for the company. This approach will safeguard the character and culture that the management has already developed. This means that more customers will have trust in the products the company is offering since they will deem the same approach was applied in making such. Suppliers will trust the company with more facilities and even debt because they know the company does not use shady ways. The employee trust in the company will be boosted.

The response of the audience will be varied based on their virtues. A majority will applaud the idea, but an equal majority will cheer it down because they will be thinking of the opportunities and the profits that will be lost as a result of using such an approach.

References

Carr, D., Arthur, J., & Kristjansson, K. (2017). Varieties of virtue ethics: Introduction. In Varieties of virtue ethics (pp. 1-13). Palgrave Macmillan, London.

Enderle, G. (2016). 'Business and Human Rights' from Donaldson to Ruggie-A Review of a Classic Book: Thomas Donaldson, The Ethics of International Business (Oxford: Oxford University Press, 1989) pp 224. Business and Human Rights Journal, 1(1), 173-178.

Fuentes-Julio, C., & Ibrahim, R. (2019). A Human Rights Approach to Conflict Resolution. Ethics & International Affairs, 33(3), 261-273.

Lauria, M., & Long, M. F. (2019). Ethical Dilemmas in Professional Planning Practice in the United States. Journal of the American Planning Association, 85(4), 393-404.

Gustafson, A. (2013). In defense of a utilitarian business ethic. Business and Society Review, 118(3), 325-360.

McGorry, P., Nelson, B., & Yung, A. (2019). 33.1 ETHICAL ISSUES IN EARLY INTERVENTION. Schizophrenia Bulletin, 45(Suppl 2), S143.