The Rights of the Employees, Essay Example

There are several important ethical issues that commonly arise in case a company goes through a merger, as in the case at hand.  Two of these issues relate to the rights of the employees that will be adversely affected by the corporate change and the other concerns the shareholders’ responsibilities during the merger.

Applying the above on the case, I would suggest to the CEO and even the shaeholders to do what is ethically right.  If the merger would mean that they will earn a huge amount of profit, the CEO and all shareholders, and that they are agreeable to such merger, then that portion of the problem is solved. However, since there are other indviduals who are involved and may be affected by the merger either through demotion, being offered less salary or loss of job.  In this case, it would be the responsibility of the CEO and the board to ensure that nobody will be put in a jeopardy because of the merger.

Given the mentioned responsibilities, it would be recommendable for the CEO to do three things.  Firstly, to inform the employees about the possibility of the merger.  It may be a good idea to get their view on the matter by asking for their vote on whether to deny the offer of merger or to approve it if they will be given an acceptable severance pay.  If the result is that the employees will disagree to having a merger, then the CEO should outright decline the offer. Afterall, they are a successful company and with more motivation and initiative, they will be able to earn what they may have lost in the denial of the offer.

In case the employees agree to the merger on the condition of a severance pay that they will all agree on, then the CEO may go through with the merger. However, he should ensure the welfare of the employees by making the bigger company agreeable to the severance pay agreed upon with the employees and putting it in a legal contract. Should the bigger company fail to meet this condition, they can be held liable.

Finally, another option that the CEO may take is to agree with the merger but with the condition, again legally agreed upon via a contract, to absorb all employees of the merged company and an increase in the salary of each one of them. Failure to meet such condition would also hold the bigger company liable.