Effective Powers Of the five powers, the establishment of an ethical climate calls for much debate. However given the current climate of Paradigm Toys, that being one of coercive power; the use of referent power is likely going to be the most effective in changing ethical climates. The current climate of coercive power, is displayed through the employees being fearful of the loss of jobs if quota’s are not met- which often causes defective products to be produced. This defective product issue has been seen in a large number of recalls within the past three years. To combat this current ethical culture of ensuring quotas are met but failing to produce a quality product, developing a culture of referent power should be implemented.
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Stake holders, such as employees, and those who purchase toys from Paradigm expect safe, high quality, non-toxic products. To ensure safety of products for example, that paints and plastics being used in the products are non-toxic; Paradigm Toys should only purchase from suppliers that can ensure the safety of their products. Further, to ensure Paradigm Toys is seen as a paragon of social responsibility- employing their own independent testing lab on a contract basis to ensure manufacturing supplies, such as paints and plastics are non-toxic would be seen by stakeholders, both primary and secondary as displaying the corporations’ commitment to ensuring the safety of the product put forth. While this may cost the company more than they would desire to spend on safety, this simple cost upfront may save millions of dollars in recalled toys at a later date; and most certainly would aid in reputation building regarding ethical behavior toward the most important stakeholders, the children who play with the toys produced by Paradigm Toys.
A second method of ensuring corporate ethical responsibility would be to practice philanthropic social responsibility. This could be accomplished by Paradigm Toy Corporation to donate a particular amount of sales dollars to charities focused on children. For example; donations to non-profit hospitals which focus on children’s needs; such as St. Hospital; or The Ronald McDonald House; or Big Brother’s Big Sisters; or any number of