The ethical dilemma does not arise when a company is forced to lay off part of its workforce in order to survive. The dilemma occurs when a company makes record profits and rewards its executives with tremendous bonuses and then lays off its workforce anyway, even though their departure damages what remains.
Using TWDC as a simplistic and partially made-up example, after a successful year financially, Iger’s compensation increased from approximately $32 to $40 million. That $8M could have been used to keep another 300 or so CMs at WDW. Instead, the company might decide to pay Iger the $8M while simultaneously laying off those same 300 employees, creating increased workloads for those remaining resulting, ultimately, in declining customer service which, over the long run, leads to reduced revenue due to declining guest satisfaction.
WDW’s success was driven not by Iger but by the pool of employees working together to accomplish common objectives. It was those extra 300 CMs who helped make WDW successful. However, instead of rewarding them, the company terminates them. The company does not do this because the $8M is better spent increasing Iger’s compensation. After all, is Iger going to work 25% “better” because he’s paid 25% more? No. Instead, it does this because Iger and his cronies call the shots and, ultimately, make decisions that are best for them personally, not what’s best for the company as a whole.
I’m not suggesting this is what actually is happening at WDW, only what happens all too often at many companies. This sort of behavior used to be the exception to the norm but, with the post Wall Street “greed is good” mentality, it’s now all too common.
