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Merbatty Boat Co. Case Study – Ethical Issues Facing the Business

Merbatty Boat building company was founded about three decades ago in Northern Europe. It was listed in the European stock exchange in the year 2012. Merbatty has two manufacturing plants, one in Europe while the other in the US. It currently has slightly over 2000 employees globally. Merbatty generates most of its sales from its agents who secure sales contracts with potential clients. Most of these agents work exclusively for Merbatty and they are paid 4% of the total amounts chargeable to the client.

Ethical issues stem from different aspects of a company’s operations. Majority of companies across the world face similar ethical issues. Most of the ethical issues rotate around the welfare of employees and their working conditions. Merbatty Boat Company is not a spared either. After a successful floatation exercise, Merbatty restructured its management and spruced itself to expand and also build another plant in Surania in 2013. Due to the hardworking agents who traversed the globe searching for clients to earn commissions, the company faces a bright future (CIMA, 2014).

However, the future of the sales agents is bleak. After analyzing its sales records, Merbatty seems to have realized that it would be cheaper to maintain sales offices in regions where sales are high and by the stroke of a pen declared the sales agents in such regions jobless. Stefan Gill has proposed to open 20 sales offices in regions across the globe at the same time terminate the contracts of the sales agents. It is unethical and unfair not to recognize and compensate the work that the sales agents have achieved.

The high staff turnover can only be attributed to lack of an organized employee compensation scheme. In the company’s strategic plan, nothing is mentioned on how to compensate the hard working ordinary employees of the company. The planned growth has sidelined the input of the salient workers who toil everyday to maintain the company’s operations. The very low employee stake in the company demonstrates the company’s inability to promote and motivate its workforce. The total employee stake in Merbatty is 2% a far cry from the 38% owned by the chairman and his son. It is unethical to deny employment to a group of people who have been working very hard to grow the company just as much as its unfair fail to recognize the efforts of the a section of workers in a company.

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