Business Decision

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For any business decision to be made, it must be based on measurable terms. The consequences of any decision must be identified and compared. There also must be some quantitative measure of the consequences so that one can be able to defend any decision taken. The decision taken must also ensure minimum harm to the parties concerned. McKenna states that “Abercrombie and Fitch’s problem is on whether to continue with the discriminative policy or not”. If the company continues with the policy, it will continue to use millions of dollars in settling legal claims against it. Its actions will also not be morally correct and this may have a negative impact on the company’s image in future. On the other hand, if the company abandons the policy altogether, this will have a negative effect on the sales and consequently profits. The company’s shareholder may therefore accuse the management of not doing enough to maximize the company’s profits and hence dividends (McKenna).

In arriving at the best solution for the problem in question, I will use the Utilitarianism theory. This is because the solution needs to consider both the company’s position and that of the minority groups. Biz covering.com reported that “the company used more than 200 million dollars in settling claims related to its employment policy”. Suppose that due to the company’s decision to adopt the policy, profits increased by 250 million dollars. Abandoning the policy would mean a 50 million dollars decline in profitability. However, continuing with the policy does not imply that profits will continue to increase even in the future. This is because the number of legal proceedings leveled against the company may increase to a level that the company will not be able to handle. Furthermore, the company has to consider government’s policy on employment. Governments worldwide have policy that provide for equal opportunity employment. Therefore, continued discrimination based on look may prompt the government to act. This can eventually lead to the closure of the business. The company’s image in the long run might also be affected leading to declining sales and consequently profits. This is because human rights activists may call for the society to shun the company’s products. However, any decision taken must aim at increasing profitability while still addressing the minority complains (Biz covering.com).

According to Jezebel .com, “the decision made should result to the overall good of the parties concerned.” The decision also needs to be based on a cost benefit analysis. This is the measurable part of the decision. It is reported that Abercrombie and Fitch Company uses millions of dollars in legal claims relating to its employment policies. The company should therefore use this money to establish other branches that will employ the minority groups or the less attractive people. This is because the decision will not reduce the company’s profitability. In fact, the company’s profitability will be greatly boosted by the decision to open new branches. The decision will also take care of the minority rights without having to affect the company’s past performance. In the branches where the attractive people are employed as the sales representatives, the management staff and accounting staff should comprise both the pretty and the less attractive. This is because this people do not deal directly deal with customers. The new branches should act as a way of investigating whether actually the notion that pretty people are likely to sell more is misplaced. If no significant difference is noticed in terms of sales, then the company should abandon the discriminative policy entirely (Jezebel .com).

The decision I have taken is superior to any other decision in that the decision addresses the needs of both the parties while still ensuring no harm to any of the parties. For the minority groups, the decision will create employment opportunities for them. For the company, its profitability will not be affected. In fact, if all the factors are held constant, the company profitability is likely to improve. This is because the new branches are expected to generate more sales. Furthermore, the millions of dollars used in settling legal disputes will be reverted back hence improving the company’s profitability. The company’s image is also going to improve because it will be seen as a company that takes care of everyone. Any other decision taken would be single sided. For example, Biz covering.com argues that “the decision to abandon the policy entirely would imply a decline in sales and hence the company’s profitability”. On the other hand, the decision to continue with the policy without taking care of the minority rights will mean continued court battles .it will also put the company’s image at stake in the long run and the eventual threat of closure (Biz covering.com).

The reason why I have used the utilitarian theory to solve this problem is because the theory calls for a critical analysis of consequences of taking any action. The theory calls is also monetary based in that it calls for monetary based cost benefit analysis of a decision. Finally, decisions based on this theory ensure that the interests of all parties are taken care of and no party suffers harm.

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