CASE ANALYSIS FOR "DOES THIS MILKSHAKE TASTE FUNNY
Case Analysis for "Does this Milkshake Taste Funny"
Eastern Dairy is a manufacturing company that specializes in milkshake and ice cream mix for the local restaurants and stores. George Stein was a college student who was looking for a job during his summer break. George decided to apply at Eastern Dairy because the pay was good and he would be able to save more money than he was able to with his past summer jobs. George interviewed for Eastern Dairy and started that same night. Then one evening, he undergoes an ethical decision about a problem that came about during his shift. Should George knowingly bypass the filtration system and possibly allow maggots into the mix? When Paul instructed him to do so, it disturbed him so much that he had to contemplate how to respond to the situation. Would he do the right thing or would he do as he was instructed?
In the assigned case, I will discuss three corporate problems that I see with this situation. The case has multiple factors that play a major role in the decision making process for any organization and the problems that may or may not come occur based off those responses. Are the choices ethically right or ethically wrong? The three most critical factors that I plan to discuss are the lack of employee-training, unethical behavior, and poor inventory management and quality control.
Lack of Training
The first issue that I will be discussing, in regards to this case, is the lack of training employees receive at Eastern Dairy. Poor choices are seen throughout this case, including but not limited to: the lack of proper training, accountability, and the adherence to the manufacturing production standards. Employee training can be expensive and overbearing, but it plays a major role in how employees’ behave in the workplace (Riordan, Weatherly, Vandenberg, & Self, 2001). This has been proven true in this case and throughout my research. Riordan et al. (2001) states that positive job choice experiences should also be positively related to feelings of worth. An employee’s knowledge and understanding about the policies and work standards provides them with a better sense of self-worth about themselves and toward their job, which increases their overall performance. By implementing a training program, employers provide their employees with the knowledge they need to complete their daily responsibilities in a safe and productive manner. The article explains that organizations should actively propose a training program and/or a role model to guide the new employees through the learning process. In addition, the research shows that a positive workplace leads to a lower employee turnover (Riordan et al., 2001). Organizations that offer training programs are investing in their employees and generating employees who perceive their job with a more satisfying behavior, therefore increasing employee morale. Organizations who consider their employees to be an investment can increase their return on investment (ROI), which will decrease the total expenditures spent on a training program. For that reason, the organization recognizes capital gain in the forthcoming (Youndt & Snell, 2004).
A training program should be tailored to around the requirements for each job in the organization. This case indicates that Eastern Dairy’s primary concern is to meet their staffing needs based on the orders they are required to fill during each shift, instead of looking for employees to fulfill the organizations long-term goals. Most organizations with this type of attitude do not implement training programs because it is too costly for them. This article explains that it can be very costly for organizations that suffer high employee turnovers (Ramlall, 2012). Ramlall (2012) stated that organizations benefit in the long-term by creating an environment that results in employee commitment. A happy, knowledgeable employee is more committed to their work than those who are not. For this to be successful, organizations need to consider what factors cause their employees to seek employment elsewhere. Studies have shown that organizations suffer a substantial economic loss when one employee leaves (Ramlall, 2012). In fact, Fitz-enz (1997) stated, “The average company loses approximately $1 million with every 10 managerial and professional employees who leave the organization” (p. 32). This would have a detrimental effect for organizations with a higher employee turnover ratio. The research study asked the question: What are the most influential factors that cause employees to leave their place of employment? Based on the responses the researchers received, they have associated the causes to compensation, opportunities for career advancement, work environment, and ineffective managing techniques(Ramlall, 2012). A well-designed training program will have an impact on employee satisfaction within an organization and overall job commitment. In addition, long-term employees show to have a positive effect on an organizations capital gain.
Organizational success highlights the importance of corporate leadership when it comes successfully implementing standardization within an organization and building an influential teamwork environment in the workplace. In this case, the work environment at Eastern Dairy requires all shift employees to work together, basically, as a team to complete the orders and cleanup by the end of the shift. Manufacturing companies with assembly line production methods need to understand the requirements they must fulfill in order to provide a successful teamwork environment. The article explains that in order for organizations to remain competitive, they need to focus on building a solid foundation involving teamwork amongst their employees (Taborda, 2000). Faxman (1999) quotes, “team-based production systems require intensive employee training and, in most cases, plant redesign” (para 18). A teamwork environment and a well-designed training program allows organizations to offer cross training mechanisms, at the same time, permitting the employees to develop the skill sets necessary to complete all job responsibilities. Learning these skill sets prove effective when another employee calls in sick or goes on vacation, also, in job variations (Fuxman, 1999). Not to mention, these newly developed skill sets along with a teamwork environment provides the employees enough knowledge to work together and to resolve any issues that may arise in an assembly line facility. Educating employees enhances their understanding about the company, their mission, and the company goals, which will assist them in making better choices especially those that could affect the business. While, the lack of training leads to unethical decisions.
Unethical Behavior
In addition to absence of training, another influential concern with Eastern Dairy is the unethical behavior in how they act during work hours and how to handle issues that interfere with getting the job done. The lack of having managerial support during business hours leads to leadership problems that could lead to ethical problems in the workplace (Trevino, Nieuwenboer, & Kish-Gephart, 2013). There is an old saying, “When the cat is away, the mice will play”. In which, proves to be true in this case. Making ethical decisions is not based on what is right or wrong; instead, it is determined between what is right, right or wrong, or wrong (Nijhof & Rietdijk, 1999). When it comes to employees making choices, whether ethical or unethical, they learn role models or leadership. The researchers indicate these role models are the individuals who are in charge. His peers, simply, viewed Paul as the so-called leader of the group since no manager was assigned to their shift. In order for employees to make an honest judgment call, organizations should implement a code of ethics policy. A code of ethics policy lists the ethical standards for which the organization finds acceptable and all employees are expected to abide by (Nijhof & Rietdijk, 1999). Any behavior that does not comply with the code of ethics would result in some type of consequence. According to Nijhof and Rietdijk (1999), “the term behavior, in this context, means any type of unethical reaction that encourages employees to act in a certain manor” (p. 39). A code of ethics policy requires management to agree on what type of behavior is deemed acceptable in the workplace and for anyone who does not adhere to the policy would suffer the consequences. These specific guidelines would help George in making a better decision that meets the company’s standard policy.
According to Sims (1992), “the challenge of ethical behavior will have a profound impact on organizational dynamics and the performance among the organizations in the twenty-first century” (p. 505). The definition of ethical behavior is an individual’s actions that is honestly recognized as “good” and “right” as opposed to “bad” or “wrong” in a particular situation (Sims, 1992, p. 505). The article explains that unethical behavior has become a major problem in several corporations, nationwide, especially on Wall Street. Is that justification for why people continually make unethical choices? Even though it does not make it right, however employees justify their behavior by rationalizing their behavior. Some of those rational assumptions are as follows (Sims, 1992)
- They pretend the behavior is not illegal, which makes it right.
- They excuse their behavior by saying it is really in the best interest for the organization or shall we say it is in their best interest.
- They assume their behavior is okay and state no one will ever find out about it.
- They expect their role models or management to support and protect them in case something goes wrong.
This type of rationalization has proven to be true in this case, as well as, in other scenarios throughout my research. As suggested by the article, unethical decisions pretty much occur everywhere and leaders can only try to prevent it from occurring. One approach is to set guidelines listing what type of behavior is acceptable. Another way is for organizations to reduce unethical behavior is by setting values and goals in respects to employee relationships. In addition, organizations need to provide ethical training to their employees. In today’s complicated times, employees need some structure, thus giving them a better understanding of what is expected of them. Moreover, this provides employees with the confidence they need to be on guard for any possible unethical issues so they can act accordingly (Sims, 1992, p. 505).
The problem with unethical behavior among the workplace is that is hurts everyone, the individual involved, the business, the product brand, the stakeholders, and the innocent victims. Gurley, Wood, and Nijhawan (2007) point out, “The problems that coincide with unethical behavior are issues relating to product safety, environmental influence, and misleading to others when it comes to corporate control for personal gain” (p. 91). Unethical behaviors could possibly result in criminal actions. The Sarbanes-Oxley Act was passed in 1992, making it possible for the courts to go after anyone who acts unethically and they will be held liable for any actions that are deemed illegal (Gurley et al., 2007). The consequence for a person’s behavior could result in lawful termination from their job duties and/or prison time. The Severity of the crimes determines the severity of the punishment. Researchers found that an individual’s moral beliefs play a major role in whether or not they will do the right thing (Gurley et al., 2007). Aside from the punishment aspect of the crime, what effects for the organization endure? The outcome for an organization depends on the severity of the behavior and the total amount lost. Most organization will bounce back from any type of behavior that mimics the issues seen in this case. On the other hand, that depends on what Eastern Dairy will experience (long-term) if the ice cream in question makes it in to the hands of the local businesses and restaurants, especially if people become ill because of it. The decision making process involves making choices based on what is in the best interest for the organization and not for an individual’s own personal gain.
Poor Inventory Management and Quality Control
The third management issue that I will discuss is the lack of inventory management and quality control by management and employees of Eastern Dairy. Organizations are aware that poor inventory management drives up their operating cost (or at least they should be) that could be the difference between a thriving organization or going bankrupt (Wayman, 1995). According to the article, inventory management plays a major role of an organization’s ongoing internal activities. Additionally, inventory is recorded as an asset in the financial book. In this sense, inventory waste because of storing issues or employees waste reflects as a loss and, overtime, this amount adds up. Wayman (1995) discusses the importance of knowing what and how much stock is on hand at all times. If not, then it would be tough to knowingly meet the production requirements. Wayman (1995) argues, “Inventory that is not tightly controlled is a liability for any company” (p. 17). This article discusses the proper methods for storing, handling, and monitoring inventory in a warehouse scenario (Wayman, 1995). Of course, this method involves storing the inventory in a convenient, well laid out location and in a well-organized manner, including the inventories whereabouts. Furthermore, if the product(s) is perishable, then it needs to be stored in a climate-controlled setting. The most important factor for inventory control begins with the proper way for handling inventory. Proper handling of inventory starts with the employees. A well-designed training program will ensure accuracy throughout the workforce. Wayman (1995), also, highlights that a poorly skilled employee with no incentive leads to poor inventory control, which can be costly to the company. This is proven true in this case, where George receives no training and has no goals. The article explains organizations can monitor inventory by implementing a tracking system (Wayman, 1995). A tracking system ensures accuracy when it comes to monitoring inventory and employee waste. Developing a process for the proper storing, handling, and monitoring of inventory enhances an organizations financial position by increasing their capital gain.
According to Ernst, Guerro, and Roshwalb (1992) inventory management and quality control are the same type of concept. They come together as one and you cannot have one without the other. A weakness of quality control is that it can be costly for many organizations; therefore, between inspections, smaller, locally owned organizations tend to lose insight when monitoring inventory control (Ernst, Guerrero, & Roshwalb, 1992). They turn a blind eye causing them to become unaware of the kind of product is available for distribution, how much product they have on hand, the amount of inventory waste during each period, and the expiration dates of their products. Ernst et al., (1992) explains, “In an accounting sense, inventory presents a value assigned to goods either acquired or produced for subsequent sale or for use in production (p. 33). The question that most of us ask ourselves is how could an organization be successful, much less competitive in nature, with respect to this type of inventory management and quality control? The article explains that an inventory management system (IMS) is the new approach in acquiring a better, more accurate quality control system (Ernst et al., 1992). Acquiring an IMS requires organizations either to hire an inventory team or to train current employees to, strictly, monitor all inventory. Inventory teams are the quality control. Obviously, no IMS will be 100 percent accurate because no IMS is perfect. However, the implementation of an IMS improves the likelihoods of having better control of current inventory; thus creating better quality control.
In this case, management attentiveness is the primary concern in regards to quality control. One reason for this can possibly be due to the expenses involved in maintaining quality control. The article describes the cost of poor quality control as the difference between what is their actual operating cost in comparison to what the cost is providing there are no issues within the system and no employee mistakes (Krishnan, Agus, & Husain, 2000). According to a recent study, organizations that refuse to increase quality in production could endure charges between 20-35 percent of their profits, if not equal to the charge of the product (Rodchua, 2009, p. 34). In comparison, a good quality control program reduces the amount of total resources spent on maintaining inventory control; therefore, increasing profits. In addition, improves customer satisfaction. Some of the major factors that play an essential role in determining the total cost involved in designing a better quality control system includes no one paying attention to the smaller cost involved, an organization being unaware of inventory data, lack of consistency and standardization, and lack of commitment (Rodchua, 2009). In which proves to be true with this scenarios in this case. However, having a commendable inventory and quality control system in place can significantly reduce the total projected expenditures involved over the life expectancy of the program. Eastern Dairy could decrease inventory waste providing they design an inventory management system that will improve quality control throughout the entire organization.
References
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