Gap Analysis - Michael Baker International Katie Bozzo, Michael Burns, Aishwarya Gaje, Eliza Loftus, Bhakti Patel, Marty Waters

Small businesses are the backbone of the American economy. According to U.S. Census Bureau data, there are 5.73 million employer firms in the U.S. with fewer than 500 workers accounted. Due to the vast percentage of Americans immersed in small business, it is critical to study the nature of their ethical environments. Moreover, it is also essential to note that the method of implementing ethical environments in small business vary greatly from that of larger firms. That being said, the variance in many cases creates a stronger and more powerfully integrated ethical environment, as is the case with Gaetano’s Event Center and Catering.

Gaetano’s is a food provider located in Beachview just a few miles from downtown Pittsburgh. The company is most famously known for catering local functions, fundraisers, and hosting entertainment events. Being a small business, Gaetano has the unique advantage to be thoroughly immersed and transparent about their business operations in the eyes of both their employees, customers, and community. Gaetano's close connection with its community and customers allows the company to easily promote and root a strong ethical foundation in their employees and thus foster positive relationships all around.

As mentioned previously, many small business implement their ethical environment in much differently than larger firms. Due to the differences in implementation, a gap is created between the ideal ethical environment as defined by course materials and how small businesses actually operate. Findings in our investigation of Gaetano’s method of integration of ethics highlighted some of the key differences from what our team has learned in class. The class materials heavily focus on formal and informal system and value based culture system with a separation of ethics and morality.

Upon learning about Gaetano’s set business practices and systems that lead to the success of the company, our team found it rather intriguing that there is no written publication such as a hand book or training manual at Gaetano. However, it was even more fascinating to learn that the company also does not have a written code for rewards and punishment. Gaetano’s method of promoting ethics significantly contradicts from we have learned in class because the materials in the class place a huge emphasis on the importance of having these formal written documents to hold together the structure of an ethical environment.

While this may be the case for larger companies with a less personal employee employer relationship, Gaetano’s is able to keep a consistent hold on their environment through other means such as their strong values-based culture without such formal documents and systems. The company has been able to uphold their values rather well without written documentation. The owners feel no need for it due to the intimate nature of their relationship with their employees which allows for constant open communication between the owners and their employees. Additionally, Mrs. Gaetano’s dedication to the company as shown through her full time commitment to Gaetano’s allows her to constantly watch over and communication with the employees.The owners of the company rely heavily on an informal system in order to reinforce ethics.

Companies choose to use one of the two main systems that foster the creation the culture: compliance based systems and value based systems. The main difference between the two is that a compliance based system is one based on a written law. There are obvious penalties that are made known to everyone, making senior management’s involvement in

handling wrongdoing limited. In turn, a value based approach is rooted in culture and driven by values.The main driver of the value based culture is the overarching commitment to senior management. Based on Mrs. Gaetano’s dedication to the company, it is easy to understand why Gaetano’s has chosen to use a value based system to promote an ethical culture.

Mrs. Gaetano’s contribution to the company is shown through her full time commitment to the company. Furthermore, it also allows her to constantly watch over and communication with the employees. The owner are firm believers in leading by example; Mrs. Gaetano shows her commitment to the company by working long hours and always being readily available to help employees and customers not matter the scale of a situation. Additionally, Gaetano’s place a huge importance on doing what's ethically correct. Hence, its owners continually emphasize honesty and integrity in their core values. They advocate employees to bring forth ethical issues directly to them because as a small business owner, Mrs. Gaetano believes that maintaining integrity and honesty is key in establishing business ethics.

Furthermore, the owners of the company are also very conscience in that they know exactly how they want their employees to act, and hires employees accordingly. The company has a performance measures that are subjective, yet effective in measuring employee performance. Mrs. Gaetano is able create the culture she envisions within her company through her charming personality, constant communication, and dedication to the company. Seeing this, the employees to truly understand and accept the company’s ethical standards.

All things considered, Gaetano’s values based culture is less likely to be unethical because of the strong moral ties to the business and the feeling of responsibility. However, when looking at any company, there are always suggestions which can increase the effectiveness of the company’s ethical environment. If Gaetano’s is able to combine their strong value based culture with a formal written code of conduct along with a written code for rewards and punishment, the company could combine its value based approach with a compliance based approach, allowing to cultivate the most effective ethical environment possible.

In addition to combining formal elements to their ethical code and adding elements of a compliance based culture system, another consideration for Gaetano would be separation of ethics and morality. By definition, ethics uses systematic standards for assessing individual behaviors. Contrastingly, morality is based on the individual and using personal empathetic assessments of behavior. Ethics has rules for what is “right” and what is “wrong”. These rules help  to correctly and consistently apply punishment for different settings and situations. Gaetano’s would benefit for the separation because ethics help make a decision without using personal judgement.

After interviewing Mrs. Gaetano, it seems that in order to convey a stronger separation of ethics and morality to employees, Gaetano’s could benefit from a systematic means of conveying ethical standards. The approach would assist add boundaries and clarity to any situations that presents a moral issue, especially because the close knit relationship between Mrs. Gaetano and her employees. If implemented, Gaetano's would have a stronger ethical framework. A document, in addition to a written code of conduct and code for rewards and punishments, would be a convey appropriately covery company standards as well as lower the risk of liability. Separation of ethics and morals combined with the a written code of conduct would create a clear, concise, and unquestionable platform to guide Gaetano’s employees in the right direction.

As of now, Gaetano's ethical environment is an adequate fit to their small business model and has helped them successfully adapt to the changing environment around them in terms of customer retention and satisfaction. However, we believe that the owners would benefit from an effort to integrate the formal systems highlighted above in to Gaetano’s existing system. Our over all recommendation is to place more of a focus on an formal system with written documentation, and separation of ethics and morality. If Gaetano’s is able to implement the suggestions we have made, they would be taking the steps to further invest in the company’s long term goals relating to ethics and to ensure a successful ethical environment.