Ethics

PART ONE: (100 POINTS) Select ONLY ONE of the two case-study choices below. Analyze the case study you select, then resolve the problem with a solution that balances competing interests. A five-part grading rubric will assess your ability to (1) recognize the nature of the problem, (2) evaluate the various competing interests, (3) accept moral responsibility, (4) ensure transactional fairness and, (5) propose a fair and viable resolution.

PICK ONLY ONE (1 of 2) OF THE FOLLOWING CASE STUDY CHOICES:

THINK CAREFULLY ABOUT THE FACTS IN THE CASE-STUDY YOU CHOOSE TO ANSWER.

BRIEFLY RESPOND TO THE FIVE (5) QUESTIONS THAT FOLLOW EACH SCENARIO. A SHORT PARAGRAPH FOR EACH OF THE FIVE QUESTIONS SHOULD BE ADEQUATE.

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CASE STUDY CHOICE #1: CHILD-LABOR SCENARIO:

A mid-level executive visiting a subsidiary factory located in the Republic of Zamunda notices a 12-year-old girl cleaning the factory floor. Child labor is hardly uncommon in Zamunda and labor laws are rarely, if ever enforced. Nevertheless, the executive tells the local manager to replace (fire) the child worker and replace her with an adult. The girl is an orphan and sole breadwinner for herself and 6-year-old brother.

The 12-year-old girl is unable to find another job. So, in desperation she turns to prostitution. Two years later she dies of AIDS. Meanwhile, her brother takes up begging. The brother encounters the same executive while begging outside the local McDonald’s in the capital city of Zamunda. She walks rapidly past his outstretched hand into McDonald’s, where she orders her lunch with fries and cold milk shake. A year later the boy contracts tuberculosis and dies.

1. In your opinion, did the executive act ethically in this situation?

2. Does the parent company have a corporate social responsibility to address this problem?

3. Is the ethical or social responsibility of the local (Zamunda) factory manager different than that of the foreign executive?

4. Are societal expectations that businesses incorporate principles of social justice, inclusion, or sustainability (i.e., ethical supply chain) in their decision-making different depending upon where (which country) one is working?

5. Were you in the same position as this executive, what (if anything) would you have done differently?

CASE STUDY CHOICE #2: BICYCLE FACTORY IN XANADU :

You are the production manager for ACME-Industry Bicycles. The largest manufacturer of bicycles in America. Your company is expanding production to the impoverished nation of Xanadu. This involves building a 300,000 square foot fabrication and assembly building in a medium sized city called Kurrystan. Building the factory will create 300 good paying jobs (wages will be 3 times the average wages in Xanadu). In Xanadu, anyone who gets a good-paying job “shares the wealth with their families and extended families. In a country where people face starvation, poor health, and limited educational opportunities, every job created in Xanadu results in much improved lives for spouses, parents, children, brothers and sisters, etc. These family-members will now be able to attend school, receive medical care, and improve their diets. In addition, Xanadu has a significant air pollution problem and bicycles will provide low-cost transportation via “green-energy.” In short, building bicycles in Xanadu is a wonderful opportunity for ACME, future employees, family-members, and the environment.

As production manager, to start building the new factory, you need a building “permit” from the Kurrystan Regional Commissioner of Public and Works and Architecture. This permit is just a one-page form with a government stamp. The official fee for the permit and stamp is 1000 “drupies” (about $25.00 US). When you go to pick up your permit, the Government Commissioner complains about how “busy” he has been and how it may take “several months” to get to your permit. After a short conversation, you realize it is very clear that the office is not “busy” at all and the Commissioner mentions that he “could get a lot more work done faster” if he could get to work in a “new car.” Corruption is a major problem in Xanadu (one of the most corrupt countries in the World). On the other hand, new cars made in nearby India are relatively inexpensive (about $8,000 US). The factory alone will cost $35 Million Dollars (US). You can easily “hide” this relatively small “facilitation gift” in some sheet metal cost overruns. So, by paying out $8000.00 dollars to the Commissioner for this car, factory construction can start this week. Without buying the car (i.e., paying the bribe), construction may be delayed from 3 to even 6 months. This will cost your company at least $75,000 US per month wasted on just overhead and materials storage costs).

1. Discuss ACME’s (general) corporate social responsibilities in this scenario.

2. What responsibilities (if any) are owed by the production manager to his employer and the ACME shareholders in this situation?

3. Should the fact that corruption is so pervasive (common) in Xanadu affect whether the production manager pays the bribe? How would paying the bribe impact (long term) sustainability for Acme’s operations in Xanadu?

4. From a Utilitarian (Outcome-Based) perspective, discuss why not paying the bribe might yield a “better” outcome regarding (longer-term) corporate sustainability, transactional fairness, etc.

5. Incorporating social justice, sustainability, inclusion, or transactional fairness, explain what you would do (or not do) if you were in the same position as the production manager in Xanadu. ***************

PART TWO: (100 POINTS) (ALL STUDENTS MUST ANSWER)

Draft a 500-600 word essay on the following topic:

Why I do/do not believe *(pick one!) that ethics in business are important to me and to my personal success.

Incorporate at least THREE (3) basic/broad reasons that form a basis for your opinion. Make sure your essay incorporates relevant examples from current (or past) global, national, or local business environment that serve to underpin/support your opinions.