Group Case Study_Page 176_Pace Technologies

The following answers briefly illustrate the culture of Pace Technologies and the reason as to why its

culture can be considered to be in a preconventional level of ethical development. Through a detailed

analysis of Ken, Cody and Ali’s personality, our group provides what we think is Ali’s best course of

action. To conclude, a review of the company’s current development / performance and a Porter’s

Five Forces analysis is conducted to better understand Pace Technologies’ competitive environment.

For an easier read, we have divided our answers to the case study questions according to topics.

Shaping Company Culture and the Preconventional Level of Ethical Development.Ken shapes the

culture of Pace Technology based on his own personality which is aggressive, proactive, energetic and

competitive. Ken only recruits people who share the same personality traits as him enabling the

company to win over competition. Additionally, given Ken’s outstanding performance and track-

record, he is seen positively by the Board, who is interested in maximizing profits and gives him the

authority and power to make all day-to-day and strategic decisions.

Our group considers the culture of Pace Technologies to be at the preconventional level of

ethical development in which “individuals are concerned with external rewards and punishments and

obey authority to avoid detrimental personal consequences” (Daft, 2014, p. 161). In this case study, we

observed that Cody embodies Ken’s ‘can-do’ personality and emulates his actions and assumes that by

stealing trade secrets from a major competitor. Cody believes this will give him an advantageous

position vis-à-vis Ali, allowing him to stand out to Ken. As such, Cody only considers the external

rewards that he might gain within the firm. Additionally, Ali is afraid to speak up because her moral

and ethical standards are different from that of Pace organization and Ken himself.

According to the preconventional level stage, everyone is pursuing their own interest first, and

as such, it is difficult for Ali to speak up and express her view on what’s ethical or not. Furthermore,

Ken put Cody and Ali in a situation in which they compete with one another for a better proposal

further demonstrates that the company’s culture is far from reaching the conventional level since the

conventional level encourages teamwork and collaboration (Daft, 2014, p. 160).

The Best Course of Action for Ali.We believe that Ali should speak up directly to Ken and be

the whistleblower. From what the case offers, Ken doesn’t seem like a person that wins over his

competitors by cheating. He wants to win using his own ability and talent and the talents of his team.

If Ken is indifferent with the source of the information and wishes to use the stolen

information, we believe that Ali should report directly to the ethics committee since they are

responsible for oversight all aspects of ethics and legal issues (Daft, 2104, p. 172). In the worst case

scenario, if the Committee is not acting independently, Ali should potentially consider leaving the

company and search for employment in a company that values ethical behavior when conducting

business. Hopefully Pace Technologies encourages the whistle blower and recognizes this kind of

behavior when associated with ethical issues.

Our team believes that if we were in Ali’s position that we would finish our own proposal and

hand it in to Ken. If Ken’s fair, he should be able to see that Cody’s work is not his own and would

acknowledge our hard work. On the other hand, if Ken agrees with Cody’s proposal, we would

encourage Ali to first report to the Ethics committee. If nothing is done to address Ken and Cody’s

behavior (given Ken is in good eyes with the Board), we would leave the firm since there is obviously

a cultural clash between our personality and that of the firm which is not conducive to a healthy long-

term relationship.

Different Decision given Different Approaches.Given the definition of Utilitarian approach

which emphasizes the use of moral behavior to generate the greatest good for the greatest number of

people, Cody would steal the trade secret and put in the proposal because it would likely help the

company perform better than its rival, Raleigh-Tech (Daft, 2014, p. 157). In essence, it would ensure

that employment to current workers, increase morale and ensure the continued success of Pace

Technologies as an industry leader.

In contrast, the Individualism approach, which contends that acts are moral when they promote

someone’s own long-term interests, would suggest that Cody should steal the Raleigh- Tech’s trade

secrets, use it for his own benefit and present the pitch to Ken (Daft, 2014, p. 157). Consequently,

Cody would win over his internal competition Ali, get promoted and receive a bonus; he will also gain

a lot of visibility internally which would help for his future endeavors within the firm.

The Practical approach which bases decision on the good of larger society and general

standard suggests that Cody should not use the stolen trade secret because it’s unethical and

unprofessional (Daft, 2104, p. 158). If this kind of behavior was to be publicized in the evening news,

it would lead to public resent suggesting that it is against prevailing standards of the profession. As a

result, Cody should feel embarrassed and uncomfortable.

In short, we believe that Cody is following the Individual Approach as he is trying to advance

his career within the firm and is acting on his own self-interest. This is supported by a statement in the

case study, where Cody states that: “with this [stolen] information, R-T doesn’t have a chance and

neither do you [Ali]” (Daft, 2014, p. 176).

Technology Industry’s High Competitive Environment as per Porter’s Five Forces

Analysis. Furthermore, our team has conducted a brief analysis of the Technology industry using

Porter’s Five Forces model. We conclude that the Technology industry is highly competitive given a

high bargaining power of buyers and suppliers, and low threat of new entrants and substitute products.

The Technology industry is constantly evolving in the past few decades and we have seen

many companies emerging as the result of disruptive technology. Many good examples include Apple,

Google, Amazon, etc. Many startups saw the opportunities as well and decided to enter the space with

the emphasis of innovation, big data as well as entrepreneurial spirits. However, the result wasn’t very

promising. Below is a porter’s five forces analysis on the technology industry and why it is so hard for

new entrants to survive.

The bargaining power of buyers in the industry is relatively high since there are many IT firms

in the industry and customers have the choice to pick and choose depending on the firm with the best

price-quality trade-off and introduction of innovative products. Customers are also very sensitive to the

prices as many of them purchase bulk in order to support or run their company. However, if the

technology is cutting edge, buyers might consider paying a premium for the product.

Similarly, the bargaining power of suppliers is relatively high. Many of the suppliers have

established strong relationship with the buyers for a long time and they do not want to lose the

relationship easily. At the same time, they need to innovate on a daily basis to ensure their product met

the market need.

Furthermore, the threat of substitutes is relatively low in the technology space. Nowadays

almost everyone uses computer, tablet and smart phone. There isn’t really an alternative substitute in

this digital age.

The threat of new entrants in the technology industry is very low. Even though the industry is

very attractive and we’ve seen a high pick up in start-ups activity. However, due to the high initial

capital required at start, the lack of customer loyalty and their small size / scale vis-à-vis the mature

giants in the industry, it is expected that many of start-ups will not succeed.

Given all the factors mentioned above, one can conclude that the degree of competition in the

Technology industry is extremely high. Every firm strives to provide the most cutting edge technology

to win the heart of new customers to ensure market share. One such example, is the competition

between the IOS system and Android system which continuously come up with new features to win

over a new customer base from its competitors, requiring a lot of capital and R&D expenses to be able

to do so.