Kudler Fine Foods Ethical Program In order to build an Ethical Organization Profile it is very important to understand the culture and operations of the business. Kudler Fine Foods is an upscale specialty food provider. Kudler places strong emphasis on quality and the ability to provide one stop shopping for the finest foods across a large spectrum of products. The company currently has three locations that boast 8,000 square feet of retail space which host six specialty departments.
Kudler Fine Foods has a fresh bakery, fresh produce, a butcher shop with meat and seafood, packaged foods, cheese and specialty dairy, and most importantly fine wines. The owner, Kathy Kudler, is aware that it is through her customers’ satisfaction that her stores will find success. Kudler connects with its customers with a knowledgeable staff that promises to make the shopping experience delightful and pleasing. While Kudler Fine Foods’ vision is to be the premier gourmet grocery store for savvy customers, Kudler does not ignore their social responsibility, “Kudler Fine Foods uses only the finest organic ingredients.
Whenever possible, we purchase local produce from organic farmers. We use unbleached flour in our bakery goods and we don’t add unnecessary preservatives to our products. Food is rotated from the shelves on an ongoing basis. Those items that are still in “good” condition are donated to local homeless shelters and food kitchens” (Apollo Group, Inc. , 2007). It is through philanthropic acts that Kudler stays connected with its surroundings and establishes the groundwork of the business ethical culture.
Kudler Fine Foods takes positive steps when dealing with the cultural norms it wishes to establish, however, the business leaves ethical gaps that have been overlooked and have allowed for a few ethical dilemmas to surface. The first and most glaring ethical problem or dilemma lies with Kudler’s compensation philosophy and procedures. The current policy allows too much flexibility which would allow for personal bias to influence compensation beyond equal means.
The can be easily remedied by implementing a grading system which ties back to performance then is applies to a formula that will drive the amount of compensation received by performance. The current system has the employee being reviewed by themselves and their supervisor or manager, in the proposed system, the employee would be reviewed and appraised by both manager and anonymously by the employee’s peers. This would provide a more accurate depiction of the employee’s performance and then the amount of merit increase would be formulated, scored, and applied to a scale instead of arbitrarily increased.
Kudler Fine Foods also allows for extra compensation to their employees by rewarding them with perishable food items. While this is an adequate bonus for the employees, it appears that Kudler views this as basic tax free compensation. Kudler’s strategic plan states that, “Our pay is a little bit below average so we allow all employees to take home some of the perishable goods to share with their family” (Apollo Group, Inc. , 2007). This makes compensation impossible to determine if it is fair and equal amongst employees.
There is no tracking of which employee receives what foods. This could be easily remedied by implementing a tracking system which places values to the perishable goods which the employees receive. Kudler Fine Foods final ethical problem lies with a conflict of interest. A conflict of interest occurs when judgment or objectivity is compromised. Kudler’s legal representation consists of the owner’s sister in law who provides nominal legal advice and the strategic plan was built by Tara Emilian, a friend’s daughter (Trevino 2007 pg 73).
These are very important roles that should be performed by a law firm or consultants with some degree of separation. While having Anne Shousha address most legal actions saves money, it also allows for situations where personal conflict could influence business decisions. This can by easier fixed by securing new legal representation. The overall ethical health of Kudler Fine Foods is promising and through ethical training implementation and an enhanced Code of Conduct, Kudler Fine Foods can gain the knowledge necessary for successfully resolve any future ethical problems.
It is a responsibility of the newly hired Ethics Advisor for Kudler Fine Foods to perform research in the industry and with its competitors to identify and prevent any possible current or future ethical dilemmas. By thorough examination of the industry and Kudler’s competitors, ethical issues can be recognized and policies and procedures can be modified or put into effect that would safeguard Kudler Fine Foods from the ethical mistakes or problems that are known to arise within the industry.
The industry standard of constant availability for fine foods has placed an inherent ethical flaw dealing primarily with food transportation. There is a growing trend in food production towards greener practices. By lessening the carbon footprint of food production with farm fresh produce as well as cultivating meat products, finer foods are being marketed as environmentally friendlier than some of their counterparts. However, an oversight in the food distribution and the environmental drawbacks by the emissions produced by the vehicles involved with maintaining constant availability is ethically damaging the industry.
In the UK, “major flaws in the food and drink industry’s ethical distribution strategy have been highlighted in a Food Ethics Council report published this month”(Addy, 2008). The report highlighted that more thought in the distribution of foods is in order to reduce the greenhouse gas emissions caused by the constant demand for the availability of fine foods. The ethical dilemma is firmly rooted in the contradiction of fine foods that advertise and boast of a green environmentally friendly production then are responsible for a huge carbon emission through increased transportation.
Unique Fine Foods, a competitor to Kudler Fine Foods has recognized this ethical dilemma and has taken steps to remedy the situation by reducing wasted transportation movements of the food within its distribution routes. Unique Fine foods signed with Culina Logistics Ltd. , which provides an automated ordering system complete with an automated inventory tracking and then computes for a smarter transportation distribution between the multiple stores that provides Unique’s food products (“Chilled food firm strikes a fine deal,” 2008).
By recognizing the ethical dilemma, Unique Fine foods was able to be proactive in automating a portion of their ordering and distribution which will not only cut back on the carbon emission of wasted transport of smaller items on single routes but will reduce labor costs by automating portions of the ordering process. By recognizing the challenges viewed in the industry and how they have been addressed by competitors, Kudler Fine Foods needs to maintain its fluidity and ability to modify its policies to address this change.
While Kudler Fine Foods code of conduct prevents many ethical issues from arising within the ranks of employees, ethical issues can be found in the nature of the product and niche in which it provides its services. While the Food Ethics Council in UK recommends that (Addy, 2008), “Food retailers should challenge assumptions that products should be continuously available,” this is the inherent nature of the products offered by Kudler Fine Foods and an alternative solution is in order.
Many of Kudler Fine Foods’ customers have grown to expect the finer foods to be available and willingly pay slightly higher prices for the increased costs incurred by making the products available. The changing of this perception would be detrimental to the repeat and return business of Kudler Fine Foods. By following the example of Unique Fine Foods, Kudler should also explore and examine whether this is an ethical problem for with the foods it provides.
Kudler fine Foods should also research and develop a more automated inventory monitoring and ordering system that would aid in reducing Kathy Kudler’s labor some contribution in this area and allow her to be more involved with the customers. It is imperative that Kudler Fine Foods addresses this possible ethical issue and takes steps that are proactive instead of reactive if Kudler hopes to maintain its market share in the area of Fine Food distribution “The main objective of an ethics program is to improve the ethical culture of an organization,” (Kaptein, 2009).
Kathy Kudler understands that the staff connection to her customers is critical to the increasing success of the three stores and understands the ethical behavior of the organization is also directly link to the staff. The Ethical behavior of her organization can be managed through the implementation of rewards and disciplinary plans that drive a carefully developed code of conduct for Kudler Fine Foods that exudes the tones of exemplary social responsibility established through their generous philanthropic example with perishable foods.
Kudler recognizes that it is important to tie ethical goals with task driven goals for optimum employee performance (Trevino 2007 pg 185). The primary initiative is to establish a program that rewards the staff for ethically based store level and personal performance achievements that can be measured, tracked, and appraised. Store level achievements will be centered on sales goals as well as tracked accident free employee work days. Individual and store goals will also center on customer satisfaction, inventory management, and reduced cost of labor and over head.
Sales goals will be based on the store level and driven by profitability and performance of profit margins achieved by each store based on sales growth and or the reduction of costs. With the introduction of cost and performance based bonus structure which rewards for sales increase and profitability increase, mandatory ethics training classes will be offered and available in order to qualify for store level rewards. Another primary concern within Kudler Fine Foods is for the safety and ethical treatment of the employees. Stores will be rewarded through an increased rate of Paid Time Off (PTO) accrual for days accident free.
This program will be tier based and extended to full and part time employees for number of days passed accident free. Accompanying this program will be extensive safety training which will cover all operations and functions within Kudler Fine Foods to ensure the safety of its employees. In an effort to motivate, reward, and protect the individual employee at Kudler Fine Foods, individual goals will be established that will reward the employee through a financial compensation bonus structure that will reward employees for their commitment to the customer and to Kudler Fine Foods.
The structure will be centered in customer satisfaction and peer level /managerial appraised job performance. Part of each employee’s performance reviews and goal setting expectations will be ongoing ethics training which will help the employees fully understand the importance of the code of conduct established to help Kudler Fine Foods achieve their organizational ethical goals. Kudler also recognizes that performance goal alone can also promote unethical behavior and hence couples ethical training with qualifying for performance bonuses (Trevino 2007 pg 185).
Store level goals will be assessed and tracked quarterly through enhanced inventory accounting and sales tracking. Individual employees will have three weeks at the start of every fiscal year to set achievable measurable performance goals which will aid the employee in establishing a career path with Kudler Fine foods and allow for a set baseline in which to measure the employee’s growth. Semi annual reviews will be performed as well as a yearend self appraisal to aid with measuring employee satisfaction.
When establishing ethical and performance rewards, a disciplinary plan should also be established to work as a correctional tool when ethical violations occur. Kudler Fine Foods will exercise a three strike Performance improvement plan (PIP) with the third violation ultimately resulting in the termination of the employee. New employees will take an ethical training class which will dissect an enhanced code of conduct as part of orientation. Employees that receive customer complaints or caught violating any established code of conduct, will be investigated and when necessary, place on a PIP as part of their first strike.
A Second complaint and or violation will result in a second write up and loss of shifts. Negative appraisal and performance marks performed semi annually and at yearend can also result in being placed on a PIP. PIP Plans will explain to the employee performance expectations and ethical training. The tracking and monitoring of both the rewards program and disciplinary plans will be performed though four primary channels. First, monitoring of the store will be done through a surveillance system that will record daily activity when ever movement is detected.
Second, sales data and inventory cost tracking will be used in evaluating the store performance in regards to established reward programs and goals. Third, Individual employees will be evaluated through 360 degree appraisals and management feedback. Finally and most importantly, the primary stakeholder’s opinion will be solicited through customer satisfaction surveys to ensure a store and or employee is providing the ethical service required to strengthen customer satisfaction. Kudler Fine Foods hopes that through rewards and disciplinary plans established through an ethical program will result in the ethical centering of the organization.
Kudler strives for ethical excellence and understand that hardships that can accompany an ethical dilemma which can tear apart the organizational culture and ultimate cause loss of business. This Code of Business Ethics and Conduct applies to all officers and employees of the Kudler Fine Foods. The Code provides a guide to ethical practices in working with customers, suppliers, the general public and each other. The Code sets forth the standards to which all employees, agents and representatives of the Company are expected to follow when carrying out their responsibilities for or on behalf of Kudler Fine Foods. ) Your own personal integrity, common sense and good judgment are the best guides to ethical and responsible conduct. 2) As a business dedicated to its customers, we shall maintain excellence in the quality of our products and services. 3) We shall continue to be responsive to customer requirements, meet or exceed all inspections. 4) As a responsible member of the business community and the community at large, we shall participate in and contribute to the betterment of society. 5) We shall behave as law abiding citizens and be alert to the responsibilities which accompany good citizenship. ) As an employer, the Company shall provide a fair, professional work environment for all. 7) We seek to encourage individual accomplishment and personal satisfaction in the fulfillment of your responsibilities to the Company. 8) As an employer concerned about the well-being of its employees and committed to upholding the standards set forth in this Code, the Company has appointed an Ethics Compliance Officer and Team who is available to answer questions and provide guidance regarding ethical matters. ) The Ethics Compliance Team is also available to employees who wish to express concerns regarding the Company’s business practices. 10) Employees who bring their concerns to an Ethics Compliance Team Member may do so in complete confidentiality and without fear of retaliation. Kudler Fine Foods understands that there is a balance between its standards and the culture it hopes to emanate. Violations of the Code will be assessed; determination if it is a violation of ethics, morality, or social issue will be required and whether legal prosecution is necessary. References Addy, R. (2008).
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