Question

A CEO of company discovers that the company is in serious financial difficulty. It seems inevitable that some employees will have to be retrenched to save the company. However the CEO is uncertain about how this situation should be handled. Should he disclose this information as soon as possible to the employees so that it will give them more time to find alternative employment and accept this retrenchment? The company has a strong Labour Union and one of the requirements is that all matters connected with the employees must be informed to the union so that the union can enter into negotiation with the company. The CEO and the senior managers of the company feel that this is their right to retrench and that no one should interfere with this right. It is the thinking of the authorities that on the other hand, if this information is disclosed, the employees would be angry and would create trouble or labour unrest or may also sabotage the work process. The employment contract also says that the company is obliged to inform the employees with regards to any job changes. The CEO is having difficulty and doubt with this problem. You are the manager involved directly with the CEO to carry out this action and what would you do? 1. Does the CEO have moral responsibilty to disclose this information to the employees?(5matks) 2. What is the ethics factor in this situation?Discuss (10 marks)

Answer 1

Explanation:

When an organization taps one of its current executives to be its new CEO, the transition might seem straightforward. The promotion is often the culmination of years—maybe decades—of hard work. CEOs who come from inside the company have probably served in the C-suite or run a large division before, so they have relationships with everyone in top management and the confidence of the board. They know the organization, its history, and its culture. They understand its strategy and might have been intimately involved in developing it. They’ve established credibility and support. You’d think, then, that they’d have an easier time adjusting to and excelling in the job than external hires would.