Dithaba Construction faces a difficult decision: should it go for the option to accept the government’s stadium tender, or should it go for the option to decline the tender? One decision-making procedure that can help businesses in making ethically sound decisions involves a set of four criteria against which the decision can be measured. Accordingly, the board can ask itself the following four questions:
1.1 Although it would be legal to accept the stadium contract, describe at least two reasons why acceptance could result in eventual non-compliance with laws and regulations.
1.2 Will accepting the stadium contract meet company standards? Provide at least two reasons for your answer.
1.3 Will it be fair to all stakeholders to accept the stadium contract? State at least two stakeholders and how they might be unfairly treated by Dithaba if the company accepts the stadium contract.
1.4 Can the acceptance of the stadium contract be disclosed to parties internal and external to the company? Discuss why you think the CEO/board does not want to disclose the resource limitations facing the company.
YOU ARE REQUIRED TO evaluate the moral soundness of the option to accept the government’s stadium tender by applying the information in the scenario to each of the four questions above. Answer each question separately (1.1. to 1.4). Note the restriction above as to the overall word count for Issue 3’s questions, which guides you as to the length of your answers.
1.1 Although it would be legal to accept the stadium contract, there are two reasons why acceptance could result in eventual non-compliance with laws and regulations. Firstly, there may be hidden costs or unforeseen circumstances during the construction process that could lead to budget overruns or delays, potentially resulting in contractual breaches or disputes with the government. Secondly, accepting the tender may require Dithaba Construction to cut corners or compromise on quality in order to meet the tight deadlines and cost constraints set by the government, which could potentially lead to safety hazards and regulatory violations in the future.
1.2 Accepting the stadium contract may not meet company standards for several reasons. Firstly, the sheer size and complexity of the project may be beyond the capacity and expertise of Dithaba Construction, leading to subpar performance and dissatisfaction from both the client and end-users. Secondly, the terms and conditions of the contract may not align with the company's values and principles, such as transparency, accountability, and sustainability, thereby undermining its reputation and credibility in the industry.
1.3 It may not be fair to all stakeholders if Dithaba Construction accepts the stadium contract. For example, employees may be unfairly burdened with unrealistic expectations or unsafe working conditions in order to meet the project deadlines, compromising their well-being and morale. Similarly, suppliers and subcontractors may be exploited or marginalized in terms of payment terms or project scopes, leading to strained relationships and potential disputes.
1.4 The CEO/board may not want to disclose the resource limitations facing the company because it could damage the company's reputation, credibility, and competitiveness in the market. Revealing such vulnerabilities may deter potential clients or investors, as well as erode employee morale and confidence in the company's leadership. Furthermore, disclosing such information could weaken the company's bargaining power and negotiating leverage with the government or other stakeholders, potentially jeopardizing future business opportunities and partnerships.
Overall, based on the evaluation of the four questions above, accepting the government's stadium tender may not be morally sound for Dithaba Construction due to potential non-compliance with laws and regulations, failure to meet company standards, unfair treatment of stakeholders, and lack of disclosure regarding resource limitations. The company should carefully consider these ethical concerns before making a decision on whether to accept or decline the tender.