Critical Thinking- Pacific Brands

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Pacific Brands decided to cut costs by moving its operations offshore. Following this decision, 1850 workers lost their jobs. Pacific Brands failed with most of the managerial skills: communication, planning, social responsibilities and ethical behavior. Not only did the management fail to communicate with the workers and the media, but while closing the factories and cutting their Australian workforce, they increased executive salaries by up to 170%. The raise for Sue Morphet was very unethical, damaging Pacific Brands’ reputation. However, “The chairman of Pacific Brands, James McKenzie, denies the company was giving pay rises to executives at the same time as it plotted to cut 1800 staff. He says the company's executives are benchmarked against its competitors.” Hall Asley, Pacific Brands says salaries not obscene, ABC News (Australian Broadcasting Corporation in 2009). Viewed 22 March 2013, < http://www.abc.net.au/news/2009-02-27/pacific-brands-says-salaries-not-obscene/1604396> Well, maybe the pay rises were not given at the same time, but the decision to cut 1850 jobs was not taken overnight, and it was taken due to the need for cost cutting. It is unethical to give pay rises of up to 170% when you need to cut costs. “Morphett got a big pay rise — from about $680,000 to a potential $1.8 million. But it also became clear the pay rise followed a promotion from a divisional head (hosiery) to the top job.” James Kirby 2009, Morphet is not the 'worst boss', but she could learn a few things Viewed 22 March 2013 <http://www.theage.com.au/business/morphet-is-not-worst-boss-but-she-could-learn-a-few-things-20090314-8yfq.html>. So yes, Sue Morphet’s salary raise was in fact part of her promotion from Divisional GM to the CEO position. Yet the question is why the raise will be from $680,000 to $1.8million, in a crisis situation.

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