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Business Ethics

 

 RECOMMENDATION FOR CUBIC ELECTRONICS SDN BHD CO.

 

 

ABSTRACT

A decade ago, business ethics is unheard of, and now, it is starting to gain attention from nations. Many books were written on corporate ethics, and even made as university subjects. This assignment studies ethical issues and practices involved in Cubic Electronics Sdn. Bhd., a huge electronic manufacturing company, on its ethical practices and how these practices affect their stakeholders; the employees, customers, stockholders, environment and the society as a whole. This assignment will reveal ethical issues involved in this company, industry and line of business, the reaction of employees and their stakeholders over these issues, and appropriate steps to rectify problems related to them.

 

ACKNOWLEDGEMENT

The task of completing this research requires the talents of many hard working members pulling it together to meet impossible deadlines and untold stresses. We would like to thank the outstanding team responsible for making this research possible: the interviewees; Ms. Eva Wong, Ms. Loh, Ms. Uma Devi, and Ms. ___, who were true specialists in their field for their willingness to sacrifice thei much precious time, the project team; interviewers, question-setters, chart plotters, researchers, compilers, and a special thank-you to our research officer, Dr. Uchenna Cyril Eze for the opportunity to undertake this project, administrative support from Cubic Electronics’ management and to all others involved in the completion of this paper, a big thank you.

 

DEDICATION

This research is written in dedication to corporate entities practicing good ethics in their organization and serious academicians intending to have deeper insight into the issue of corporate ethics, with true will of practicing good ethics in their working life.

 

1.0 INTRODUCTION

1.1 COMPANY INTRODUCTION AND PRODUCTS OFFERED, STAFFS

Cubic Electronics Sdn. Bhd. is the largest manufacturing facility and wholly owned subsidiary of Creative Technology Ltd. It manufactures digital entertainment products such as sound cards, portable audio players. Cubic Electronics Sdn. Bhd. is an integrated electronics manufacturing company, the Manufacturing center of Cubic Integrated Manufacturing. It is located at Taman Tasik Utama Industrial Park (6 km from the North-South Expressway) providing manufacturing solutions in mobile wireless computing, communication, audio visual and digital entertainment for original equipment manufacturer (OEM) and original design manufacturer (ODM) customers.

 

Cubic Electronics manufactures on bases of staying competitive through low cost, high quality and high productivity operation. Cubic Electronics’ customers are retail customers and also international OEM customers such as Dell, Sony and Hewlett Packard (HP). At current, the Company has 281 Exempt Staff, 405 Non-exempt staff, 1235 Direct labour staff, 216 Contract staff with totals up 2134, exceeding planned total staff of 1864 (with a difference of 270). Initially the planned staffs were: Exempt: 281, Non-exempt: 423, Direct Labour: 1118,

Contract: 42.

 

 

 

1.2 HISTORY OF COMPANY

It began in 1994, when Cubic Electronics started operations as Creative Technology Ltd’s first offshore manufacturing facility at rented premises in Batu Berendam, Melaka. Then 2 years later, in 1996, Cubic Electronics obtained ISO 9001 certification for manufacturing Operations Quality Management System. The subsequent years, 1997 and 1998, Cubic Electronics achieved set target of Creative Technology and was one of first two recipients of the CEO Gold Coin Award and also won the Melaka Excellence Industrial Award.

 

In year 2000, at the turn of the new century, Cubic has envisioned and formulated long term action plan to create one-stop world class integrated E&E manufacturing hub. It also acquired over 300 acres of land in Ayer Keroh, Melaka. With that, they began drafting the integrated comprehensive master plan. Here, in 2001 Cubic Electronics relocated their operations to a new manufacturing facility (Phase I) in Taman Tasik Utama, Ayer Keroh, Melaka. From then, it expands until it becomes the largest manufacturing facility for Creative Tech. Ltd.

 

In year 2003, Cubic received another state award which is the Chief Minister Community Service Award for generous community projects rendered. Cubic has been giving donations to charity, blood donations twice a year, computer training for rural areas and even involved in adoption of Anita the orang-utan. From there on, Cubic began manufacturing high-end mp3 players and related products. It then earned recognition and certification from leading multinational OEMs. The following year, 2004, Cubic obtained ISO 14001 and OSHAS 18001 for high standards of integrated Environmental and Occupational Health and Safety Management System.

 

In 2005, Cubic Electronics won the Melaka chief Minister People Management Award for transforming Mission and Vision of organization into action plan. They also completed Phase II of manufacturing facility – two facilities and one administration centre. They also completed Phase III which is Human Resources Centre which is a 8-storey building above schedule. Just last year; 2006, Cubic Integrated Group acquires major stake in Cubic Electronics Sdn Bhd. from Creative Technology Ltd., paving the way for the Group to realise its vision of establishing a world class integrated E&E manufacturing company through Cubic Integrated Manufacturing, Cubic Integrated Learning and Cubic Integrated Village.

1.3 ORGANIZATIONAL STRUCTURE, VISION, MISSION, VALUES & CULTURE

Vision: “A world renowned integrated E&E manufacturing hub and community through sustainable and innovative manufacturing services and provider of a conductive environment to live, learn, work and play.”

Mission: “A World Class Manufacturing Company who produces products and services of the highest quality, with speedy and timely delivery, through committed employees and strategic partners, to fulfill business objectives and exceed customers’ expectations.”

 

Company Structure

 

 

 

 

 

 

 

 

 

Organizational Structure

 

 

 

 

 

 

 

 

 

 

 

 

 

Company Values

 

 

 

 

The Company’s Values are put together at an acronym “FIRST CLASS”.

F – FLEXIBLE. Offering dynamic & highly integrated resources to meet customers’ demand in the ever changing environment

I – INTEGRITY. Strive for openness, honesty & consistency

R – RESPONSIBILITY. Be committed and accountable to all stakeholders

S – SERVICE ORIENTED. Commit to deliver high quality of product and services

T – TRUSTED. Establish mutual respect and reliability.

C – COST EFFECTIVE. Deliver Business solutions at optimum costs.

L – LEARNING ORGANIZATION. Emphasise on lifelong learning and growth.

A – AMBITIOUS. Think big! Realise the set goal with determination and enthusiasm

S – SKILLED. Be professional, knowledgeable and competent.

S – SPEEDY. Adhere to timely and accurate delivery product and services

 

Organization Culture

Employees in the office have usual working hours from 9am to 6am, and luncheon breaks from 1 to 2pm. They have good relationships with customers and constantly seeking to create satisfaction for employees.

 

1.4 PURPOSE

The objectives of this assignment are as follows:

1.4.1 To provide a hands-on analysis to a real world business ethical issue

1.4.2 To expand analytical skills of students by critical thinking

1.4.3 To educate students the importance of ethical practices in businesses

1.4.4 To serve as a basis for future understanding of the subject

 

1.5 SCOPE

Outcomes of this research will be for use of participants of this research and members of Multimedia University for educational and non-commercial purposes only.

 

1.6 PROBLEM

Identifying and studying ethics related issues in Cubic Electronics Sdn. Bhd.

 

1.7 OTHER INFORMATION

1.7.1 Company Manufacturing Information

Manufacturing capabilities: Cubic Electronics provides SMT or Thru-hole PCB through to box assembly and retail packing for mass production and prototyping. In addition to lead free capabilities, its production meets restrictions of the use of certain hazardous substances (RoHS) requirements.

 

Manufacturing operations: Cubic Electronics have operations meeting Dell’s quality and process requirements, and has been a certified supplier for Dell since 1997. It was awarded Sony Green Partner status via Sony’s Green Partner Quality Approval Programme since 2001. In addition to that, Cubic Electronics are approved by a third party (TUV SUD PSB Certification) for manufacturing systems and operating procedures: ISO 9001:2000 Quality Management Systems, ISO 14001:2004 Environmental Management System, OHSAS 18001 Occupational Health and Safety Management System.

 

1.7.2 Company Factory and Facilities

The Factory has a total built up area of 1,234,197 sq ft, consisting of 3 phases; Phase 1 – 2001 (671,760 sq ft consisting of Logistics 1 & 2, Factory 1 & 2, and Admin 2 & 3); Phase 2 – Jan 2005 (371,400 sq ft consisting of Factory 3 & 4 and Manufacturing Admin 1); Phase 3 – Aug 2005 (191,037 sq ft consisting Admin 1)

 

Learning and Administration Facilities include: Admin 1 (191,037 sq ft): Technical University administration offices and Technical University learning facilities, Admin 2 (33,360sq ft): Administration offices, Recreational facilities and an open-air cafeteria, Admin 3 (115,200  sq ft): 3 office floors, Technical University administration offices, and Technical University learning facilities, Manufacturing Admin 1 (93,000 sq ft) consisting of administration offices.

 

Manufacturing Facilities include: Factory 1 (124,800 sq ft) for PCB Assembly, Box assembly and Testing& Packing; Factory 2 (124,800 sq ft) for University Laboratory Campus facility; Factory 3 (139,20 sq ft) for 3^rd party manufacturing products; Factory 4 (139,200 sq ft) for Box assembly and Retail packing; Logistics 1 & 2 (273,600 sq ft) housing the Incoming and Outgoing wing. Both wings are complete with 12 loading bays with individual air bag dock levellers to facilitate loading and unloading of goods. The storage capacity for both incoming and outgoing wing is 3904 pallets with 1952 bays (1 bay = 2 pallets), and 1792 pallets with 896 bays respectively.

 

1.8 INTERVIEWEE PROFILE

Name	:	Eva Wong Yoke Fah
Position	:	Senior Training Officer
Working Experience	:	8 Years ( 4 years in Export Marketing field, 4 years in HR field)
Working Experience in Cubic	:	4 Years in HR field (2 years in Compensation & Benefit, 2 years in Training & Development)
Education Background	:	Bachelor Degree in Social Science (Universiti Kebangsaan Malaysia-UKM) Specialized in Communication-Advertising & Marketing

 

2.0 LITERATURE REVIEW

2.1 BUSINESS ETHICS DEVELOPMENT

2.1.1 United States

In the United States, the practices of businesses are getting more uniform. However, the issue of business ethics are not. History shows that misguided companies cause their downfall. Example: Bank of Boston, Charles Keating, and Guinness. Despite the fact that US are even more exposed to the issues of business ethics than any other nation and there are more laws regarding corporate practices, white collar crimes are seen to rise.

According to the United States National Business Ethics Survey, “52% of employees observed at least one type of misconduct in the workplace in the past year, with 36% of these observing at least 2 or more violations. 69% of employees report their organizations implement ethics training, up 14 percentage points from the 2003 NBES.

Five of six elements of a formal ethics and compliance program measured by NBES have increased over time with the presence of written standards of ethical business conduct up 19 percentage points since 2004.

 

For example, Adidas Group, this company had been found out that they were employed underage worker in their industry in Vietnam. This had become one of the most important bad ethical issues because hiring underage worker example like children is the negative social responsibility in the child labour forcing which stated that we can only employ the child who is more than 15 years olds.

 

2.1.2 Europe

Ireland’s unacceptably high destruction rate of unwanted cats and dogs is to be put under the spotlight during Spay Week Ireland 2006, starting on Sunday May 28^th. The awareness campaign aims to reduce the number of abandoned animals by encouraging owners to spay or neuter their pets. Each year, over 15,000 healthy but unwanted dogs are destroyed in Irish dog pounds; a destruction rate ten times that of England and Wales. While no figures are available for cats, it is thought that there are even larger numbers of stray and unwanted felines Spay Week Ireland 2006 sets out to highlight the positive benefits spaying and neutering offers to cats and dogs and urging owners to be responsible by not contributing to the crisis of Ireland’s unwanted puppies and kittens. Put simply it’s time to kill the problem, not the pets. Research shows that early neutering dramatically reduces an animal’s chances of developing common cancers and other diseases. It keeps pets healthy, helps control the over-population of stray cats and prevents the needless destruction of perfectly healthy animals in pounds.

 

2.1.3 Asia

Since its establishment in 1995 under the auspices of the Community Relations Department of the ICAC, the Centre is committed to promoting business and related ethics in Hong Kong on a long-term basis. As the Chairman of the Hong Kong Federation of Industries, I strongly believe that good corporate governance and sound ethical management are the foundation for sustaining the competitive edge of any business. When investors are choosing a place to invest or do business, an important factor that they will consider, apart from the cost involved, is the level of corruption of that place as this will directly affect their hard-earned profits. From my experience as an entrepreneur, Hong Kong is a free and clean place where everyone can compete on a level playing field. To sustain Hong Kong’s competitiveness, we certainly need to continue to promote business ethics because it is the first line of defense against corruption.

2.3 INITIATIVES IN MALAYSIA TO BOLSTER ETHICAL PRACTICES

The Malaysian Corporate Governance was developed by The Working Group on Best Practices in Corporate Governance (JPK1) and approved by the high level Finance Committee on Corporate Governance.

The code of ethics in Malaysia is principally an initiative of the private sector. Members of the JPK1 are compromise of public and private sectors. It was to initiate and lead a review and to establish reforms of standards of the corporate governance at micro level. It is based the belief in some aspect, self regulation is preferable and standards developed by those involved may be more acceptable and thus more enduring.

 

The code aims to set out principles and the best practices on structures and process that all companies use in their operations towards achieving the optimal governance framework. It also allows for more constructive and flexible response to raise standards in corporate governance as opposed to the more black and white response endangered by statute or regulation. There are three broad approaches to this issue.

 

The perspective approach where the standard of corporate governance is set by specifying desirable practices combine with a requirement to disclose compliance with them. For example, Samsung Groups as we mention above adopts a standard of best practices in its companies worldwide. The second approach is a non-prescriptive approach where it requires companies’ practices their corporate governance in secret. It emphasis on the disclosure of the actual corporate governance practices and the ideas behind this approach are that each company corporate governance needs maybe different and company directors should be sensitive to address their company needs.

The third approach is the hybrid approach, where there is a need for broad principals and that all concerned should apply flexibility and with common sense to verifying circumstances of individual companies. JPK1 also consider the Hampel approach is suitable for Malaysian context. One is best practice prescriptions necessary, because the corporate governance in Malaysia is lacking and needed to be raised. Just to go to the other extreme of merely requiring disclosure of existing corporate governance practices of Malaysian companies is not sufficient. One must comfortable with the standards of corporate governance practices in public listed companies.

 

Secondly, the companies must be encouraged to consciously address their governance needs. The biggest problem with prescriptive approach is it would encourage directors concentrate on form than their judgment on what corporate governance practices are the best for their companies. The Hample recommendations require companies in Malaysia to include the code in the annual report on how they apply the broad principles set out in the code, rather than aiming to secure sufficient disclosure so that investors and others can access the company’s performance and governance practices, and can respond in an informed way.

 

2.4 ETHICAL PRACTICES AND DEVELOPMENT IN ELECTRONICS INDUSTRY

In the electronics industry area, many of us know that they will produce a lot of chemical disposal to the environment. Meanwhile, the electronics industry areas have a lot of workers involved. So in order to prevent the things such as chemical waste or disposal, they have to implement ethical practices inside their company rules and policies because nowadays, polluting the environment is a serious offence. It may bring harm to the living life and even may spoil the ecosystem. If more serious, it may cause the extinction of some special species.

 

In addition, the electronic industry requires workers with technical skills to perform jobs such as soldering. If the company fail to provide a good and conducive working environment to the employees, the soldering works will not be neat and this affects the quality of the outputs produced. Contrary to that, if good and enjoyable working environment is provided, employees feeling happy will be more attentive and careful in dealing with the production of such highly complex items.

 

3.0 RESEARCH METHODOLOGY

Cubic Electronics was chosen for our research because it is a large company, and surely will have ethical issues. Also, as an electronics manufacturing company, they will produce a lot of chemical waste that may deteriorate the environment and we are eager to know how they deal with the disposal. The following methods are employed in this research:

 

3.1 FACE-TO-FACE INTERVIEWS

An appointment was sent thru email on July 17, 2007 and was approved by Ms Eva on July 17, 2007 through email. The first interviewee, Ms. Eva Wong Yoke Fah, Senior Officer of CIM, was approached on August 16, 2007 [5.00pm] for detailed information. The second and third interviewee, Ms Loh, Environmental Safety and Heath Dept Head and Ms. Umi, from EHS Dept. of CIM respectively, was then interviewed on August 29, 2007 [4pm] for further clarifications on the first interview results. All three interviews were conducted at the company’s meeting room at Taman Tasik Utama Industrial Park, Melaka. (Refer Appendix A for list of interviewees and Appendix B for copy of Interview questions). All three were chosen for interview because they are stronghold positions. Since we are researching for ethical environmental practices, Ms. Umi  was interviewed because she is a specialist in field of waste disposal.

3.2 QUESTIONNAIRES

A total of 16 employees were given the questionnaire through e-mail on August 18, 2007 regarding their job satisfaction and view of the company. Out of the 16, only 10 respondents replied to us. (Refer Appendix C for copy of questionnaire)

 

3.3 LIBRARY RESEARCH

Beauchamp T, Bowie N, “Ethical Theory and Business” e.17 was referred to derive appropriate interview questions. The questions are set based on group discussions and finalised after being referred to Dr. Uche, the research officer. In addition, the “Company Fact Sheet” obtained from Ms. Uma Devi, Human Resources Manager who was also present with the main interviewees on July 25, 2007 for better understanding on the Company’s core business and processes involved. We have also gathered extra information from MCG (Malaysia Corporate Governance) and SEC. We studied these two sources because we believe that ethics is actually closely knitted to them.

 

3.4 INTERNET RESEARCH

Few websites were referred to complete our report. Below are the website we used to gain some other extra information: Cubic Group’s main site 2007 [17 July 2007] to gain more understanding on the company. The ‘United States National Business Ethics Survey’ [http://www.ethics.org/research/nbes-2005.asp] was accessed on August 29, 2007 to know the current situation of corporate ethics in the United States.

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4.0 DATA: ORGANIZATIONAL ETHICAL PRACTICES

The following are ethical practices of the company in which we discovered from the interview:

 

4.1ETHICAL PRACTICES TO CONSUMERS

In the company, there is a special department (Quality Control) to check the products are completed, and before they are released into the market. When they detect any deformities and problems in the product, the faulty item will be withheld from being released into the market. All products released to the market are disclosed with risk information, warning tags, and warranty. During the warranty period, if a consumer discovers a problem with the product, the product can be returned to the place of purchase. With the receipt and warranty card, they can directly send the item to the service center. The company will investigate whether the returned product whether the problem lies within the product or caused by consumers. If it is caused by the consumer, the product will not be replaced, and vice versa.

 

4.2 ETHICAL PRACTICES TO INVESTORS

CUBIC Integrated Manufacturing (CIM) was the subsidiary company of Creative Technology Ltd, Singapore. Now it had become independent company. It is not yet a listed company. With that, it has to provide annual reports to its investors to make them aware of the current financial position of the company.

 

4.3 ETHICAL PRACTICES TO EMPLOYEES

The company do not practice discrimination based on age, race, religion, color, nationality, ethnic origin, creed, disability, staff category, sexual orientation, gender, mental/parental status, political belief or social/economic class and etc. Employee safety is controlled under EHS (Employee Health and Safety) according to the OSHA. There will be shield covering the machines and equipments while it is running to prevent employees from unwanted accidents. Before purchasing the equipment, the supplier will send an analysis report including safety, usage manual, risks involved, and maintenance etcetera. After the machines arrive at the company, suppliers will send their engineers in to provide training for the company’s engineers and technicians. Engineers and technicians will know to handle the machines properly and prevent accidents. Then the company’s engineers and technicians will give training to the operators.

 

In the workplace, lighting, temperature, and humidity are set according to different condition needs of different sections. The production engineers are in-charge to justify and set up the work station. They will work with the facilities department, too. All the lighting, temperature and humidity are measured with special equipments. For example, the soldering section workers need to work under the light for long hours and they need a good eye sight, so the lighting there cannot be too bright or too dark. If it is too bright, it may hurt the workers’ eyes.

 

To prevent accidents happen, the company has provided special safety training for all workers. All the operators are well-trained to perform their tasks and control the machine and equipment. EHS committees are in-charge to go through the workplace for inspection quarterly. Close monitoring by the supervisors for each section are held to avoid accidents happened.

 

The company provides periodically medical check-up for all the employees. A basic medical check-up in the in-house clinic is compulsory to all the new employees. In-house clinic also provide basic medical aids to the employees. Every worker will undergo a personal monitoring when they enter the company. These personal monitoring includes exposure level towards noise and chemical. To conclude this part, the company put lots of concern towards the employees’ safety and health.

 

 

4.4 ETHICAL PRACTICES TO ENVIRONMENT

The Company organizes campaigns to conserve the environment such as; 1, Encouraging employees to recycle paper by giving free gifts such as key chains for every 2kg of paper collected. Every week, employees of the company will also be sent an email regarding global environmental issues such as global warming.

 

Regarding the disposal of waste, the Company produces 2 kinds of waste; Scheduled wastes and non scheduled wastes. The company does not simply dispose wastes but contracts contractors with licences. The Department of Environment of the company will review the licences and approve appropriate contractors to manage wastes.

 

Scheduled wastes, for example, Battery disposal (Code SW103) differs from Electrical and Electronical wastes (Code: SW110). Both wastes require different ways of disposal to ensure they are disposed properly and pose the least harm to the environment. Thus, specialists are contracted to manage each kind of particular waste. For example, in the company, Lam Chong Trading (Melaka) can only dispose the Company’s Electrical and Electronical wastes while Primochem (Perak) can only dispose their chemical wastes.

 

4.5 ETHICAL PRACTICES TO SOCIETY

The Human Resources Department of the Company organizes annual donations to charity. Two times per year, they also organizes blood donation drives. In addition, they provide computer training programmes for rural areas. For example, the “Celik Computer Programme” organized by Cubic Electronics with support from the Felda Educational Unit on 23^rd of April 2000 at Jelai. In addition to that, they are also one of the main sponsors of the Malacca Zoo. Cubic sponsors the food for the animals and is also the sponsor for the adoption of Anita the orang-utan in the zoo since year 2000. In addition, to help single mothers in standing on their own feet and supporting their own life, Cubic’s “Single Mother Programme” seeks employment for single mothers to help them gain money to support their livelihood and children’s education.

 

5.0 DATA: ETHICAL POLICIES

5.1 OBJECTIVES OF THE COMPANY’S POLICY

5.1.1 To create awareness within CESB employee pertaining the company general employment policy.

5.1.2 To establish a harmonious working relationship between CESB and the employees.

5.1.3 To achieve consistent application of terms & conditions of employment for all employees.

5.1.4 To provide a basis for resolving grievances arising between an employee and the company as equitably and as quickly as possible.

 

5.2 POLICY CONTENTS

5.2.1 Code of conduct: please refer to CESB Disciplinary Action (P4-4020) and Grievances (P4-4021) policy.

5.2.2 Equal Opportunity: To avoid less favourable treatment on any grounds not relevant to good employment practice.

5.2.3 Human Rights: Not complicit in human rights abuses.

5.2.4 Employment: Each employee is entitled to fair, courteous and dignified treatment during the hiring process, while employed and at the end of employment.

 

5.3 FAIR EMPLOYMENT POLICIES

5.3.1Recruitment, Promotion and Development of talent

1. a) No discrimination based on age, race, religion, colour, nationality, ethnic origin, creed, disability, staff category, sexual orientation, gender, mental/parental status, political belief or social/economic class and etc.
2. b) External Training and In-house training are provided for employees to develop skills and add values on personal development and best workforce.
3. c) Annual review and performance appraisal to discuss the development of every employee’s working performance.

5.3.2 Working Hours and Payment of wages

1. a) The Company adheres to local laws and industry standards and CESB provided with reasonable time off and overtime compensation.
2. b) CESB discourages the practice of deduction from wages for disciplinary purposes and deductions reduce pay below legal minimums.

5.3.3 Remuneration and Recognition

1. a) CESB remunerates and recognizes the employees based on local competitive conditions to outstanding employees.
2. b) CESB has established a fair and consistent compensation and benefits system.

5.3.4 Forced and Child Labor Practice.

5.3.5 Employment of women: maternity leave.

5.3.6 Security of Employment

1. a) Greatest stability in terms of job tenure.
2. b) CESB offers prospect for advancement and promotion with opportunities for any necessary training.
3. c) Provides retirement and insurance coverage scheme.

 

 

5.3.7 Sexual Harassments

The Company forbids acceptance of intimidation and sexuals harassment (please refer to sexual harassment policy P4-4044)

5.3.8 Safety, health and environmental protection

Employees must comply with all the instructions and procedures of safety and health.

CESB:

1. a) Protects and promotes better environment for employees and the community.
2. b) Provide and maintain safe and healthy working conditions.
3. c) Drug free work place.
4. d) Continuously improve environmental, health and safety system and operations

5.3.9 Company’s expectations towards employees

1. a) Upholding the corporate values
2. b) Employees to show mutual respect
3. c) Employees are to conduct the company’s business with honesty and integrity.

 

6.0 ETHICAL ISSUES RAISED BY NEW TECHNOLOGY APPLICATIONS

6.1 TECHNOLOGY IMPROVING WORKING CONDITIONS

The implementation of new technology will always be for the betterment of the working conditions. The purchase of new machineries will include more safety features. External expertise (Engineers and technicians) will sent in to train Cubic employees whenever a new machine is introduced to the factory to ensure the machine is handled properly, safely and beneficial to both employees and the Company. The knowledge is the taught to the machine operators . Implementation of new technology thru introduction of new machinery poses no unwanted ethical problems in the company.

 

6.2 CREATION OF NEW JOBS THROUGH FACILITY EXPANSION

When upgraded technology calls for new facility to hold the machineries, Cubic will need to employ more workers. No workers will be retrenched instead more will be hired. Cubic’s employees have been guaranteed job security in their Company’s policy.

 

7.0 EFFORTS IN CREATING AN ETHICAL ENVIRONMENT AMONG EMPLOYEES IN THE WORKPLACE

About creating an ethical workplace environment for employees, the company is no doubt a very ethical entity. It is proven when the company was certified with Occupational Health and Safety Management System, OHSAS 18001. The company has EHSS Awareness every quarter and workplace injury is very minimal.

 

At the factories, the machines are shielded and covered by a transparent protector that prevents employees from touching them while the machine is operating. When the protector is removed, the machine will temporarily stop operating until the protector is put on again. In this, we can see the effort of the company in keeping the work environment safe for employees. In addition to that, the floor where employees have to stand and work are padded with some kind of sponge to make it more comfortable for standing assembly line workers and better ergonomics. These employees are also provided with chairs so that they may sit when the feel tired.

 

The company also ensure that the workplace conditions suit the nature of the production line. The temperature, humidity and lighting all play important roles in ensuring comfort and health of employees. Areas where employees need to stand in long hours of light will be given softer and more comfortable lighting to avoid straining the eyes, and areas where many machines operate will be padded with noise absorbers to prevent stressing the ears. Room temperature is also adjusted to ensure the heat generated by machines will not cause discomfort to the employees. The conditions of the workplace are always monitored and supervisors report to their direct authority whenever something is not right. A walk past the offices has shown us that the administrative offices are comfortable, conducive with pleasing lighting and cooling which keeps employees happy and comfortable.

 

Besides physical environment, the company tries to create good relationships between employees by organizing a lot of activities in bringing cohesiveness. Cohesiveness will also contribute to happy working environment. An example of activity is the involvement of employees in rehearsals for the Malaysian National Day celebration on 31^st August 2007. These efforts taken by the company, mostly by the Human Resources Department, has shown how the company is being ethical to employees, keeping their job satisfaction high.

 

8.0 VIEW AND SATISFACTION OF EMPLOYEES OF THE CURRENT PRACTICES

Based on the data or research we collect; we had finalized it and put it into a data graph (Refer Appendix D for the data graph). We had select 16 persons in this company to be our survey person but only 10 persons entertain us. Through the information we had collected:

 

8.1 In the satisfaction with company treatment, majority are satisfied with current situation.

8.2 Majority of the employees are satisfied with their protection of their privacy by the company.

8.3 Majority are thinking that the rules and policies by the company are fair to them.

8.4 There are half of the employees think that the rules and policy are unfair to them. For example, unstable company structure, incompetitive salary and benefits if compare with market trends. Some are thinking that rules and policy are fair enough for them while some don’t have any comment.

8.5 Majority are well-informed about their company’s vision, mission, structure and culture.

8.6 Majority of the employees think that they are satisfied with the workplace environment.

8.7 Through the data we collect, for the improvement that the employees want to improve from the company we can categorize it into salary, management and employees’ benefits.

 

9.0 SUMMARY

From the research, we discovered that Cubic Electronics are ethical and responsible to their stakeholders; the employees, customers, stockholders, environment and society. They have safety features and good workplace environment, fulfilling the need for safety and health of employees. The company has cared into detail the conditions of the workplace such as temperature, lighting and noise control to suit the health needs of their operators. A café is also provided for employees to take their time off and relax. The company’s initiative to provide such ethical and conductive working environment has won them the certification OHSAS 18001. To the stakeholders, they provide full disclosure of the company’s financial position thru annual reports. To the environment, Cubic has proper waste management systems to properly dispose the wastes to create the least harm to the environment. To the society, the Company has organized many programmes and activities that benefit the society such as blood donations, computer literature for rural areas, and so on. In addition, the company has policies written in black and white to safeguard interests and privacy of employees, giving employees a secure feeling that their position in the company. Of the survey done to the other employees, majority were satisfied with the conditions and treatment by the company. Their main dissatisfaction is only regarding salary and wages which is deemed not enough.

 

10.0 CONCLUSION

In summary, this research has fulfilled the objectives of the assignment of providing hands-on analysis to a real world business ethical issue, expanding analytical skills of students by critical thinking, educating students the importance of ethical practices in businesses and it served as a basis for future understanding of the subject. It also serves as a basis for future researches.

 

11.0 RECOMMENDATION

The recommendations for improvement for the company will be based on the survey done on the employees. Out of the 10 questionnaire feedbacks returned, the respondents wanted improvement from the company regarding salary and employee benefits.

 

Since there are half of the employees think that the rules and policy are unfair to them, we recommend the company to revise their policies, standard operating rules and procedures. While revising, they should include employees in the setting of new rules, so employees feel empowered. Lastly, the employees must be well-informed of the rules and policies. One of the respondents complained that there is no job rotation. We propose the company to design different tasks to employees every week or month to enrich their knowledge and skill.

 

Some employees also are not well informed of the Company’s vision and mission. We propose that the company to clearly deliver the vision and mission to new employees during training and orientation section. As the employees’ main dissatisfaction is regarding salary, employee benefits and management, first, the company should provide fair compensation to employees for their job performance. This will motivate employees to work harder towards achieving the Company’s goals. From the survey, some respondents are unhappy over the lack of communication between upper-level management and lower-level employees. Thus, we suggest that the Company should flatten the organization for better dissemination of information.

 

Arefeh Verdi Nejad

Fereydoun Verdi Nejad