Harvard Case - WebTeb (A): A Very Palestinian Dilemma
"WebTeb (A): A Very Palestinian Dilemma" Harvard business case study is written by N. Craig Smith, Elin Williams. It deals with the challenges in the field of Business Ethics. The case study is 5 page(s) long and it was first published on : May 28, 2018
At Fern Fort University, we recommend WebTeb adopt a comprehensive strategy that prioritizes ethical leadership, transparency, and stakeholder engagement to navigate the complex ethical dilemma it faces. This approach involves establishing a robust code of conduct, implementing strong corporate governance practices, and fostering a culture of ethical decision-making throughout the organization. This strategy will not only address the immediate crisis but also build a foundation for sustainable growth and a positive reputation in the long term.
2. Background
WebTeb, a Palestinian e-commerce platform, is facing a critical dilemma. The company's founder and CEO, Khaled, is torn between his personal belief in the Palestinian cause and the potential economic benefits of collaborating with Israeli companies. This conflict has sparked internal dissent and raised concerns about the company's corporate social responsibility and ethical stance.
The case study highlights the complexities of operating a business in a conflict-ridden region, where political and social issues intersect with business decisions. The main protagonists are Khaled, the CEO, and his employees, who represent diverse perspectives on the company's future.
3. Analysis of the Case Study
This case study can be analyzed using the framework of stakeholder theory, which recognizes the importance of considering the interests of all stakeholders, including employees, customers, suppliers, investors, and the community.
Internal Stakeholders:
- Employees: WebTeb's employees are deeply divided on the issue of collaborating with Israeli companies. Some view it as a betrayal of the Palestinian cause, while others prioritize economic growth and job security. This internal conflict threatens employee morale, productivity, and loyalty.
- Khaled: The CEO is grappling with a personal and professional dilemma. He faces pressure from both sides, struggling to reconcile his personal beliefs with the business realities of the situation.
External Stakeholders:
- Customers: WebTeb's customer base is likely to be sensitive to the company's stance on the Israeli-Palestinian conflict. Collaborating with Israeli companies could alienate some customers, while refusing to do so could limit growth opportunities.
- Investors: Investors may be hesitant to support WebTeb if they perceive a high risk of reputational damage or boycotts due to its ethical stance.
- The Palestinian Community: WebTeb's actions will be scrutinized by the Palestinian community, which may view collaboration with Israeli companies as a form of normalization.
Ethical Considerations:
- Corporate Social Responsibility: WebTeb's decision will have significant implications for its corporate social responsibility. The company needs to consider the ethical implications of its actions and their impact on the Palestinian community.
- Business Ethics: Khaled must make a decision that aligns with ethical principles and avoids conflicts of interest.
- Transparency: WebTeb needs to be transparent with its stakeholders about its decision-making process and the rationale behind its choices.
Strategic Considerations:
- Growth and Expansion: Collaborating with Israeli companies could offer WebTeb access to new markets, resources, and technologies, potentially accelerating its growth.
- Reputation and Brand Image: WebTeb's decision will have a significant impact on its reputation and brand image. A decision that is perceived as unethical could lead to boycotts, reputational damage, and loss of customer trust.
4. Recommendations
To address the complex ethical dilemma, WebTeb should implement the following recommendations:
- Establish a Clear Code of Conduct: WebTeb should develop a comprehensive code of conduct that outlines its ethical principles and values. This code should clearly define its stance on social and political issues, including its relationship with Israeli companies. The code should be communicated to all employees and stakeholders, ensuring transparency and accountability.
- Implement Robust Corporate Governance Practices: WebTeb should establish a strong corporate governance framework that includes an independent board of directors with diverse perspectives. This board should provide oversight and guidance on ethical decision-making, ensuring that the company's actions align with its values.
- Foster a Culture of Ethical Decision-Making: WebTeb should prioritize ethical decision-making in all aspects of its operations. This can be achieved through training programs, workshops, and open communication channels that encourage employees to raise ethical concerns.
- Engage with Stakeholders: WebTeb should actively engage with its stakeholders, including employees, customers, investors, and the Palestinian community. This engagement should involve transparent communication, open dialogue, and a willingness to listen to diverse perspectives.
- Seek External Expertise: WebTeb should consider seeking external expertise from ethical consultants or legal advisors to navigate the complex ethical and legal considerations involved in its decision-making.
- Develop a Long-Term Sustainability Strategy: WebTeb should develop a long-term sustainability strategy that considers its social, environmental, and economic impact. This strategy should be aligned with its ethical principles and values, ensuring that the company operates in a responsible and sustainable manner.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: WebTeb's core competency lies in providing a platform for Palestinian businesses. Its mission should be aligned with its ethical principles, ensuring that its actions are consistent with its values and its commitment to the Palestinian community.
- External Customers and Internal Clients: WebTeb needs to consider the interests of both its external customers and internal clients. A decision that alienates one group could have significant negative consequences for the company.
- Competitors: WebTeb's competitors may have different ethical stances on collaborating with Israeli companies. It is important for WebTeb to consider the competitive landscape and its own positioning in the market.
- Attractiveness ' Quantitative Measures: While quantitative measures are difficult to assess in this case, the potential economic benefits of collaborating with Israeli companies should be weighed against the potential reputational damage and loss of customer trust.
6. Conclusion
WebTeb faces a complex ethical dilemma that requires a nuanced and thoughtful approach. By prioritizing ethical leadership, transparency, and stakeholder engagement, WebTeb can navigate this challenge and build a foundation for sustainable growth and a positive reputation.
7. Discussion
Other alternatives not selected include:
- Complete rejection of collaboration with Israeli companies: This option could alienate some employees and investors but would align with the company's commitment to the Palestinian cause. However, it could also limit growth opportunities and potentially lead to a loss of competitiveness.
- Unconditional collaboration with Israeli companies: This option could maximize economic benefits but could damage the company's reputation and alienate a significant portion of its customer base and employees.
Risks and Key Assumptions:
- Risk of Boycotts: WebTeb's decision could lead to boycotts from customers or investors who oppose collaboration with Israeli companies.
- Risk of Reputational Damage: The company's reputation could be damaged if its decision is perceived as unethical or inconsistent with its values.
- Risk of Internal Conflict: The decision could exacerbate internal conflict and lead to employee dissatisfaction or resignations.
Assumptions:
- WebTeb's commitment to the Palestinian cause is genuine and deeply rooted in its values.
- The company is willing to prioritize ethical considerations over short-term economic gains.
- WebTeb is committed to transparency and open communication with its stakeholders.
8. Next Steps
WebTeb should take the following steps to implement the recommendations:
- Within 3 months: Establish a task force to develop a comprehensive code of conduct and corporate governance framework.
- Within 6 months: Conduct training programs and workshops on ethical decision-making for all employees.
- Within 1 year: Implement a stakeholder engagement strategy that includes regular communication and feedback mechanisms.
- Ongoing: Continuously monitor and evaluate the effectiveness of the implemented strategies and make adjustments as needed.
By taking these steps, WebTeb can navigate the complex ethical dilemma it faces, maintain its commitment to the Palestinian cause, and build a sustainable and successful business.
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Case Description
Recent MBA graduate Majed finds his dream job: high-tech, entrepreneurial, senior, social - contributing to the economy of Palestine, a cause close to his heart. But the new CEO of WebTeb, an online medical information service in Arabic, finds it more challenging than expected. Recruiting IT talent in Palestine is particularly tough. Eventually, his team finds an android developer to help them launch, but then comes a fateful phone call. Majed has infringed an unwritten policy of Palestinian tech companies - never to poach each other's employees. The rationale behind this is to keep wages low and thus boost an industry with potential to transform the local economy. The injured party, an IT outsourcing company, asks Majed to rescind the offer. If he refuses, they threaten to put WebTeb out of business by offering better salaries to his entire web-development team. Case B shows how Majed resolves the dilemma.
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