But I also believe Mr. Edmondson’s apology to the board for the bad performance of the company can be considered as an ethical behavior because he did not try to cover up his fault.
What RadioShack could have done to prevent this kind of incident is to apply stricter rules …show more content…
on hiring new employees, conduct background investigations about the applicants, had they done that they would’ve known David Edmondson did not have his two degrees and was not an appropriate person for the job according to the company’s code of ethics.
They also could have prevented themselves from losing more money by immediately firing him without paying him anything as compensation because he had deceived the company.
2.
This situation impacted a lot of people because RadioShack was a big company with many stakeholders, mainly:
i. The investors.
The investors might not have been satisfied of this situation because they are the people who are generally interested in the good functioning of the company and due to this situation the company started losing money, customers, reputation and most of all share price, which went down to a 3 year low.
ii. Employees.
A big number of employees lost their jobs when RadioShack closed around 500 shops in early to mid 2006. Secondly, the employees did not want to be managed by an uneducated person but their concern was that they were unable to do anything about the situation.
iii. Customers.
The customers might have had concerns over buying products from a company whose CEO had been a fraud which would decline in sales, although this is quite debatable because nowadays people are more interested in the product rather than who’s producing it.
Although so many people were being affected but most of them were not able to do anything about it because they had no right or power in the manager’s actions.
3. In my opinion the decision to fire Mr. Edmondson was not “tough” because of the circumstance that had
occurred.
Firstly, because when he joined RadioShack it was on the basis of a lie which was quite unethical.
Then, as soon as he became the CEO of the company, the company struggled with flat sales, lagging stock prices. Then the company share prices went down to a 3 year low. To improve that he suggested closing down a lot of stores that meant huge number of employees would lose their job which was again against the company’s code of ethics.
Generally, Mr. Edmondson failed to meet the company’s standards because of his lack of moral sense. He also failed to achieve the company goals.
Therefore it was not such a “tough” decision as Mr. Roberts suggested. He possibly said that in order to pretend that they still believe in Mr. Edmondson’s abilities and to prevent the situation from getting worse and losing more customers which would impact more company profits.
4. Firstly, the company lost over a million dollars which left the stockholders unhappy because it was their money.
Secondly, the other employees would be dissatisfied and demotivated because the CEO who has lied about his background receives such a big severance package.
In general, the company’s image has also been damaged.
5. Yes an organization can and must prevent situations like this from happening because it not only effects the direct stakeholders of the company i.e. the stockholders and employees but also the customers, which in the worst case results in decline of sales, losing loyal customers and eventually an everlasting terrible impact on the image of the organization.