This scenario portrays a typical case in which a private company’s CEO has to choose between high professional standards and transparency on the one hand, and pleasing a client on the other hand. Generally speaking, in the case of a private company, hiring someone for reasons unrelated to her specific skills does not involve an unjust favoritism with regard to other employees (Intelligence). A CEO may legitimately assess that hiring a specific person will attract some clients and generate profit because of her personal relationships. If this turns out to be true, it would have been a good decision (Managerial Prudence).
However, in the case at hand, there is no evidence that the client cares about Lily staying in the company despite her lack of qualifications. In fact, he may be disappointed by the special treatment shown to his daughter (Caution). In order to keep a good relationship with the client, it is certainly appropriate to inform him personally about the layoff and about the fact that the company does not have a position suitable for Lily’s skillset anymore (Tactfulness). As a general rule, the interests of the business should always come first (Justice).
Moving Lily into a new position just because she is a prominent client’s daughter is not a way to keep things legitimate and to set standards and expectations for performance (Professional Excellence). Lily herself may feel her dignity and Self-Esteem diminished by a choice that does not have anything to do with her capacities. She should have been informed about it before actually offering her a new position (Respect for Persons). The other employees will likely see what happened. They may treat Lily as an illegitimate colleague, and not take the company’s policy and standards seriously. This would damage the working relationship with Lily and the work environment and reputation of the company (Memory).
The CEO should consider the effects his decision have on the stakeholders and take care to not create an atmosphere of lies. If he “officially” claims that he hired Lily because of her skills, people may think that he lies. If he states the truth openly, people would think poorly of him and the company (Disclosure and Transparency). The decision to hire Lily is not illegitimate but may set low standards and bad examples for Frank and the other employees (Do Not Give Scandal). If the CEO decides to hire Lily anyway, he should at least (besides informing her first) schedule her training for the new position, because nobody wants an unqualified employee in the workplace (Diligence).
Special Circumstances to Consider:
- If the CEO’s company were public, and as such was supposed to guarantee no favoritism among employees.
- If there was an exchange of favors between the client and the CEO, the scenario would involve a potential case of bribery.
- If for some very peculiar, vague reason, letting Lily go would cause the loss of the important client.
Read Fulvio Di Blasi’s full bio here.