TONY RIDDER AND KNIGHT RIDDER PRESS – EXAMINING THE ETHICS OF RETRENCHING TO SAVE COST

1.     BETWEEN TONY RIDDER AND WALLSTREET

The points of tension between Tony Ridder and WallStreet:

1. The profit pressure which came from the shareholders.
2. Wallstreet alleged that he is coddling journalists.
3. Wallstreet importuned Tony Ridder to implement much deeper newsroom cuts.
4. Wallstreet also expressed disappointment over the 18.4 percent profit when they anticipated a minimum of 25% profit.
5. Some WallStreet Analysts suggested that Ridder should sell the company.

Tony Ridder did not live up to his expectations to the Employees and Shareholders.

Reasons:

1. Undue thirst for Profit: Despite the fact that Knight Ridder’s profits started growing post-layoff. Tony Ridder still pushed for further profits. Despite the criticisms from employees, he ordered Harris to see to a 25% profit margin in 3 years.
2. He sacrificed the employees for profit: In 1966 he came down hard on less profitable divisions and ordered an 8% cut in the work force. He further imposed job reductions (2,200) for a saving of 100 million in the next year and sought to freeze hiring (recruitment) in a bid to cut cost. He had a duty of care to the employees first to ensure that they are treated fairly by virtue of the fact that they have dignity. This also extends to the arguments against unlawful termination.
3. Failure to sustain the core of the business: Knight Ridder was established since 1926 and has been known for integrity and concern for public good. However (because of the diverse shareholding interest) there was increased demand for profit. Rather than focus on journalism, Tony Ridder allowed himself to be swayed by the pressure.
4. He had substituted the interest of the wider stakeholders.
5. He did not live up to the shareholders’ expectation because; by relying on job cuts only (to increase profits) he failed to be innovative to advance the business.

SHOULD PROFIT MAXIMIZATION BE THE MAIN MOTIVE FOR A NEWS AGENCY.

Profit Maximization should not be the main motive for a news Agency as they should be focused on investigation and journalism. The undue “profit pressure” led to the resignation of Jay Harris and several other Knight Ridder publishers. This also led to a loss of skilled manpower and vitiated the loyalty of employees.

WHAT WOULD I ADVISE TONY RIDDER TO DO?

Tony Ridder is advised to respect the interest of all stakeholders and should not be swayed by shareholder’s pressure for profit. Firms and Companies operate within a society, therefore (beyond earning revenue for shareholders) they ought to behave responsibly and ethically all other stakeholders – which includes the employees and wider public.

Respecting the interest of all stakeholders will be in the interest of the company in the long term because they are inextricably linked.

Tony Ridder should therefore be conscious of the employees’ needs. The drive for profit should not trump the interest of the employees or other stakeholders.