What do you think are the concerns of the silent partners? Explain this situation from their point of view.

You are the managing partner of a small pastry and coffee shop called Coffee Crumbs1. You own the
company along with two (2) silent partners (they invested in the business, but do not have management
responsibilities or decision making power, and they are unknown to most everyone).
During the recent economic downturn your sales had decreased a bit, some local companies had to fire
employees to avoid going out of business. As a result, local unemployment rose noticeably so the local
Chamber of Commerce and local economic development group asked that businesses try to avoid
layoffs if possible. You did your best and were able to keep both of your full-time managers by asking
them to work more hours and reducing the number of the part-time employees. Since the full-timer
managers are both salaried, they do not receive overtime pay. The good news is that the financial
results from the most recent quarter ending June 30, 2021, show that your sales have gone back up. So
as a result you plan to hire back some of those part-time employees heading into the typically busy Fall
and Winter.
However, your silent partners propose another plan. They are both concerned that profits from this
business have been too low recently. They suggest that you fire one of the full-time managers and
replace them with new part-time employees. Since part-time employees do not receive any benefits on
top of their hourly pay, this would reduce expenses and thereby increase profits. The silent partners
believe this can be done without hurting customer service and satisfaction, but it will require extra
work on the part of the remaining full-time manager, who will now have to manage Coffee Crumbs
alone. Keep in mind, you have never lost money, even during the economic downturn you always
made a profit, they would just like more.
This is an ethical dilemma that will require some thought on your part. For this project you will use
only Concepts from Chapter 4 of the textbook. You will answer the following questions considering
your company’s Social Responsibility and identify the Ethical Principles that are at play here and
how they will be used to help you make a decision.
I suggest that you address each of these concerns in the order that they appear and do not reveal your
final decision until the end of the letter. Please use paragraph format, headings are OK, but do not
use numbers or repeat the question in your letter. You will also need to do some research and use
outside sources to support any assertions or claims that you make.
Course concepts and any outside sources will be referenced using APA reference format. If you do not
know what that is then I suggest that you look it up. Here is a helpful website:

1 This activity refers to a fictitious company and fictitious employees. No resemblance to actual companies, implied or
coincidental, is intended.
Principles of Management – Spring 2022
Questions that you will need to answer in this paper. These are writing prompts to guide you, do
not repeat the question. For each question you will need to identify a specific course concept
from Chapter 4.
(1) What do you think are the concerns of the silent partners? Explain this situation from their point of
view. Hint: Read about Milton Friedman’s Shareholder point of view in Chapter 4.
(2) What do you think are the concerns of the employees? Explain this situation from their point of
view. Hint: The employees are not shareholders, but they are primary stakeholders and both
managers will be affected if one of them is fired. What other things might occur in the workplace if
this happens?
(3) What do you think are the concerns of the local officials who have sought to keep companies from
firing employees? Explain this situation from their point of view. Hint: The local community are
also stakeholders, more specifically, they are secondary stakeholders. If you rather you could also
discuss the idea social responsibility as the course concept in the section of the case?
(4) What general ethical principles are relevant in this situation? Explain how these principles are
relevant, including what course of action each principle suggests would be the most appropriate.
Hint: The Ethical Principles are listed and explained in Chapter 4, select three or four that you
feel are relevant here, define the principle, and explain why it is relevant.
(5) So, what is your decision about what to do next? Do you follow the silent partners’ plan or come
up with one of your own? Please make a decision and clearly describe what you will do next.
Hint: The purpose of this letter is to answer your silent partner’s suggestion. That means either
you will accept their suggestion, or you will reject their suggestion. In either case you need to fully
explain your decision. If you reject their decision, explain what you will do instead and how!

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