Concept explainers
Case summary:
Company Z is an online shoe and clothing retailer in Country U. Person H is the Chief Operating Officer of Company Z. He tries to abolish the conventional management hierarchy and finds a different way to run a company such as manager less system of distributed authority known Holacracy.
It replaces the ideas of manager and traditional hierarchy of people in an organizational positions with roles which corresponds to the activity or a function. The manager less approach of holacracy is not for everyone in an organization but this system is for people who don’t want to be responsible for their own work which they are not comfortable with it.
This new system faced lot of confusion and resistance from the employees. This leads to downfall of company from popular Fortune magazine 100 best companies to work. However, Person H remains committed to this system and backs up his enthusiasm with the internal survey reports of employee happiness and other measures.
Characters in the case:
- Company Z: Online shoe and clothing retailer
- Person H: Chief Operating Officer of Company Z
To discuss: Whether Person H has a responsibility to protect his employee’s livelihoods even when they are opposed to management philosophy.

Explanation of Solution
Generally employers are having a moral obligation to look for welfare of their employees. Moral obligations such as a fair pay and good working condition. Tests of an employer’s morality in the cases of layoffs, plant closing and other dramatic events of nature has an impact on psychology, and financial impact on the entire workforce which leads to decrease the reputation of the company.
Thus, these kind of matters handled by employer with sensitivity and extraordinary caring. Whenever a new system was introduced in an organizations, most of the employees are resists new system they think that they will get affected by the system. Employees are having different views about the work and meaning of job in an organization.
Thus, Person H has a responsibility to protect his employees and their livelihoods even though employees are opposed the new system of management philosophy. All the employees should be treated fairly and with respect and company’s obligation is to see that employers don’t abuse their power or mistreat their employees.
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Chapter 8 Solutions
BUSINESS IN ACTION BUNDLE
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