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-Thecompany is on the edge of being bankrupt since the Christmas periodwas unfavorable since the company did not get to attain its setobjectives

-Thecompany is in desperate need for the watches being rolled out byRolex for it to get through Chapter Eleven Reorganization.

-Thecompany already has a five million debt with Role that is unpaid andacquiring more stock from them implies an increase in the debt by anadditional three million.

Ethical issues

Iconsider myself a constitutionally honest person and since we havebeen in business with Rudolph Bultmann for years, he has developedtrust in me such that he can supply more products for the companysince we always pay back. However, when making decisions on behalf ofthe company, I am required to be fair and just to all thestakeholders. An ethical issue will arise if I base my decision onthe past performance of the company and the trust that Bultmann hasin my company. Besides, due to the bankrupt situation of thecompany, it may be difficult to repay Rolex debts. Therefore, thereis an ethical issue if I let the company acquire more debt thatcannot be repaid.

Main stakeholders andbriefly explain why

Oneof the main stakeholders of the company is Rolex. Rolex has beensupplying jewelry to the company on credit to the company for years.The bank is also another stakeholder since they provide the companywith financial resources and information. The employees are alsostakeholders since they serve the customers who visit the retailstores. If the company goes bankrupt, they risk losing their jobs.The attorneys are also stakeholders of the company since they providelegal advice to the company concerning the agreements made by thecompany.


Alternative1: I can acquire the new stock of the new line being rolled outby Rolex and utilize the stock in implementing Chapter ElevenReorganization. I will then formulate new strategies that shallenable the company to recover from its bankrupt position.

Alternative2: Since Bultmann is aware of the bankrupt position of thecompany, I will adapt a debt management plan that allows the companyto make reduced payments to Rolex based on the amount of profitgenerated by the company.

Impact on stakeholders

Alternative1: Acquiring new stock from Rolex shall allow the employees tocontinue providing services to customers and have job security.Customers also get to continue obtaining goods and services from thestore that satisfies their needs. Rolex continues to supply productsto the store although it implies that the company shall owe them ahuge debt. The bank shall also be affected if the company followsalternative one because it implies that it has to continue providingfinancial services and advice.

Alternative2: The debt management plan shall affect Rolex because the debtorcan only pay the debt depending on their affordability. Being anunsecured creditor, they may fail to recover the cash they lend outin the form of goods supplied to the company. The alternative shallnot have any impact on the other stakeholders.

Discussion and analysisdrawing on ethical theories

Utilitarianism:The utilitarianism theory argues that one should maximize the goodfor the highest population of people. If the company acquires the newstock from Rolex, the employees get to retain their jobs and thecompany retains their customers and creates an opportunity toincrease its market share. The long relationship between Rolex andthe company also continues to be established as well as that of thebanker, attorneys, and the company. Alternative two shall benefit thesupplier since the company shall be majorly focusing on repaying itsdebts. The other stakeholders may incur costs, for instance,employees cannot be motivated through salary increment or rewardsbecause of the difficult financial position of the company.

EthicalEgoism: The theory states that an individual should maximizetheir self-interest. If I acquire the new stock, I shall be able toimplement the chapter eleven reorganization plans for the companythat shall enable it to improve its bankrupt position. However, byimplementing the debt management plan, I shall not be able to pursuemy self-interest because I will be concerned about repaying the debtI owe Rolex rather than helping the company deal with its financialsituation.

Categoricalimperative: The theory states that one should always actaccording to the set laws. Ethical codes require the owner of acompany to undertake all actions that shall deliver the business frombankruptcy. Therefore, by following the Chapter ElevenReorganization, I will be acting abiding by the laws.

DistributiveJustice: The theory requires one to exercise equity and fairness.By implementing alternative one, I shall be fair to all stakeholdersof the company, unlike the debt management plan that mainly focuseson the interest of the supplier.

VirtueEthics: The theory argues that one should select the best virtueto guide them in their life. I select the virtue of honesty becauseit allows me to be transparent when conducting the operations of thecompany. Honesty helps me to seek advice from my attorneys andbanker. It allows me to inform Rolex of the bankrupt situation of thecompany and develop a clear plan of how I can acquire products fromthem.


Mydecision will be to acquire the new stock from Rolex becauseaccording to the virtue ethics theory, honesty helps me to pursueself-interests, maximize the benefits of others and abide by the setlaws. I realized that implementing the debt management plan mightaffect the good relation that I have established with Bultmann, andthey may refuse to supply any more products on credit. Besides, thedebt management plan would be hindering me from implementing equityand being just to all the company’s stakeholders. The ChapterEleven Reorganization shall help the company to overcome bankruptcyonly if I abide by the virtue of honesty.

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