Duck Associates, Essay Example

Duck Associates would not save any amount by outsourcing the payroll function. This is depicted in the following narration:

The company will save $42,000 every year due to the removal of the Payroll position. This means that the Salary and Wages expense will decrease by $42,000. This is equivalent to saving $3,500 per month.

The company will lose $4,000 in terms of assets in the form the current payroll software. Owing to the fact that the software is obsolete, the company will right the asset of as obsolete. There is no scrap value for the software, thus making it a loss.

Duck Associates will incur an extra $450 in terms of salary and wages on a weekly basis. This is equivalent to $23,400 over 52 weeks (1 year).

The company will also incur $2,000 per month ($24,000 per year) for outsourcing the payroll function to the payroll service.

Operating income = 42,000 – (23,400 + 24,000) = (5,000)

The company will operate with a $5,000 deficit in terms of operating income. It is therefore not advisable for Duck Associates to undertake the outsourcing of the payroll function. However, it is important to consider whether outsourcing this function will increase employee productivity. Furthermore, outsourcing this function will lead to the laying off of Toby Stock, a crucial and loyal member of Duck Associates’ staff.

Stock is undoubtedly an invaluable asset to the company and a loyal employee. It is difficult to replace this kind of dedication. This employee is also highly productive and carries the company’s vision forward. The employee is a great influence to other employees and as such firing Stock would lead to a decrease in morale in other employees. Firing Stock may potentially cause an increase in employee turnover owing to the fact that Stock would have been laid off despite loyalty and dedication to the company. This would in turn affect the level of production as employee productivity is directly related to their morale, dedication and state of mind.

Owing to the fact that Stock has been in the company for a long while, they probably know the company’s business processes and managerial procedures. As such, Stock may potentially fill a managerial position given he undertakes a professional managerial course. Employee

Other factors should only be used to determine the impact to the company in terms of operations and/or sales. It is important for any given manager to keep a level head when making ethical decisions. It important that the manager develops a framework that is used in approaching ethical dilemmas based on three cases where there is increasing complexity, reflection and escalation of responsibilities.The book “Defining Moments: When Managers Must Choose Between Right and Right” by Joseph L. Badaracco hihlights looks at how managers find themselves in awkward scenarios where they have to make the choice between rights as opposed to making a choice between right and wrong. The author examines how the inner values of a manager are depicted in the decisions in such situation. This also shows how committed they are to those inner values.  The author manages to build a framework that is used in approaching ethical dilemmas based on three cases where there is increasing complexity, reflection and escalation of responsibilities. The main concerns of the book are the decisional frameworks that managers employ in the decision making process in cases of ethical dilemmas. Tan has to consider what is best for the company while making a decision that is also within the ethics if business and human resource management.