Did Aaron Feuerstein handle this situation appropriately?
Malden Mills, owned and founded by Aaron Feuerstein, is a textile company located in Massachusetts (Charity, 2009). In 1996, a serious fire devastated the company, and the owner made an ethical decision to continue paying the salaries of his employees until he could rebuild the company. He decided not to cast off the employees to rely on their personal resources and unemployment insurance when the fire happened. Feuerstein believes that workers are assets of the company (Charity, 2009). As a leader, Aaron had the responsibility to the community and the workers. Therefore, his decision to keep the workers was a sound and well-reasoned leadership decision. A leader of integrity backs their words with actions and affirmative decisions (Charity, 2009). Aaron demonstrated that he had the courage to take actions that he deemed appropriate for the welfare of his workers. Furthermore, he was determined to stand by his convictions. His decisions and actions showed that he cared for the welfares of his loyal workers (Charity, 2009).
What decisions could he have made instead to ensure that his company will not foresee financial instability?
Under the same circumstances, many CEOs would have moved the business to another location after cashing in on the fire insurance payments (CBS, 2003). The situation would have been different if Feuerstein followed his ethical idealism and faced business realities. Instead of rebuilding the company in its previous location in Lawrence, Washington, Feuerstein would have moved the company to a new location with cheaper labour or overseas (CBS, 2003). The other business decision that he would have made is to take the insurance money, which was bout ($300,000), and retire, but he cared more about the welfare of his employees. However, the company has millions of dollars in debt that drove it into bankruptcy. Most banks do not have moral views about business (CBS, 2003). The company should make a well-reasoned business decision that would improve its performance and profitability if it expects to receive the support of the banks and other financial institutions.
References
Charity, F. (May 21, 2009). Aaron Feuerstein's Malden Mills – YouTube [Video file] Retrieved
CBS, N. (2003). The Mensch Of Malden Mills. Retrieved March 8, 2016, from <http://www.cbsnews.com/news/the-mensch-of-malden-mills/>
