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Business Ethics
Case Studies
CASE STUDY (20 Marks)
Thirty two sadhus from Punchamahal district, who were on a 72hour relay hunger strike at Godhra since Friday to canvass against the BJP candidate from the Lok Sabha constituency there, Mr. Shankarisinh Vaghela, from his role in the toppling of the Keshubhai Patel ministry after spearheading a revolt, called off their agitation today, reports PTI. Reports received from Godhra, about 80kms from here, said the mahanta and sadhus, along with the vicepresident of all India Shadhu Sant’s Samiti, Avichanddas Maharaj from Sarsa in Anand Constituency, withdrew the fast, which was to end at 2.00 p.m. tomorrow. It was not immediately clear as to why they called off the protest prematurely. The sadhus had said they wanted to ensure the defeat of Mr. Vaghela in the election and alleged that he had betrayed them by dethroning Mr. Patel last October. They also demanded an end to ‘Khajuraho Culture’ in the BJP and noted that Mr. Vaghela had flown dissident BJP MLAs to Khajuraho in Madhya Pradesh during the revolt by some rebels in the party. Meanwhile, the Chief Minister, Mr. Suresh Mehta, at a press conference at the Chhotaudepur town in Baroda district, appealed to the sadhus to end their program of dharna ‘in the interest of the BJP and the nation’.
Answer the following question.
Q1. Explain the unethical aspects in the above case
Q2. Suggest remedial measures in the above case.
Q3. What are your viewpoints on the above case
Q4. What do you mean by ‘ Khjuraho culture’ in the case? Explain.
CASE STUDY (20 Marks)
Shareholder activism has its roots in hostile takeover bids of the 1980s, when corporate raiders were viewed negatively by the media and shareholders. By the 1990s, thinking about the best structure for companies was shifting to reflect the idea that shareholders should have more of a say over companies' destinies. Today, the activists are massive corporations in their own right. Today, it is often the case that activist funds are worth more than the companies they are targeting. The amount of capital available to shareholder activists has gone up dramatically, including from asset classes with a lot of money, such as pension funds. Institutional investors are working with activists at an increasing rate. The campaigns are comprehensive. Activist shareholders now hire investment banks and the best law firms, outpacing the resources individual companies apply to the same analysis. The current wave of change is focused on boards. Shareholders want someone who is an investor on the board. It's becoming best practice to welcome someone with investing experience onto the board, in part to benefit from their perspective but also to preempt activist demands for an investor to join the board. "A lot of people defer to ISS." (ISS is the largest of the activist proxy advisory firms) "A big concern is that companies and activists are fundamentally operating from the perspective of a different timeframe." "We like to build value over a long period of time – to invest in a technology that may not have a payoff for 10 years, or to invest in research and development." "Typically the entry point for activists is sloppy corporate governance." "I see a lot of really good people that don't want to be on boards anymore." How that socalled big data is providing access to information that would not previously have been discovered, what are the ethical boundaries around companies’ use of this data? A panel of experts discussed “Ethical Use of Collected Data” as part of the Business and Organizational Ethics Partnership at Santa Clara University’s Markkula Center for Applied Ethics. The panelists included Shannon Vallor, associate professor of philosophy at Santa Clara University; Scott Shipman, general counsel and chief privacy officer at Sensity Systems; and MeMe Jacobs Rasmussen, chief privacy officer at Adobe Systems. The panel was moderated by Irina Raicu, director of Internet ethics at the Ethics Center. Vallor opened the discussion with an explanation of how big data is used and some of the ethical issues it raises. “The applications are virtually boundless, given that consumers are generating and we are collecting and storing unprecedented volumes of data in all sectors: private, public, heath care, education, commerce and entertainment,” Vallor said. “We are being overwhelmed by the promise of big data to solve persistent challenges in public health, criminal justice” and other areas. But there are risks as well as benefits to using big data. Privacy is one of the biggest issues, given the volume of data that is being collected. Consumers are justifiably concerned not only about what the company that collects the data will do with it, but also how it will be protected from third parties. The ethical issues go well beyond privacy, Vallor said. “It’s easy to lose sight of that because privacy is so significant and challenging.” For example, does big data offer a fair distribution of both risks and benefits? Will it exacerbate the digital divide, with consumer needs and desires being determined based on what those who own digital devices want? Accuracy and reliability are also issues, especially when institutions decide to make important decisions based on the data. “The principle of garbage in, garbage out applies to big databases as well as small databases,” Vallor said. Finally, Vallor said, big data could be used to discriminate, with “analytics as a quick and dirty form of redlining.” Certain types of people could be classified as poor risks for employment, health care interventions, or educational services, for example. Rasmussen, who works closely with Adobe’s digital marketing business, pointed to both risks and benefits of big data when describing her job. “We do collect a lot of data, but we retain very limited rights to use that data,” she said. “My team works with the business units to understand what they are doing with the data and to advise them on how to develop the products in a way that is privacyfocused.” However, Adobe requests permission to aggregate data from its customers, providing information that would not be otherwise available, such as how many PCs, tablets and mobile devices are accessing websites. Adobe tries to follow the dictum, “Say what you do, do what you say, and don’t surprise the user,” Rasmussen said. “’Don’t surprise the user’ sounded really good to me when I first started in this job. But I’ve learned over the years that transparency is hard when you’ve got complicated products. Figuring out whether what you’re doing will surprise the user is often difficult.” “We might draft a privacy policy that says we collect XX and do YY,” Rasmussen said. “Right after you publish it, the product team may come to you and say, ‘Can we do ZZ as well?’ You don’t want to stop innovation, but you can’t just keep revising your privacy policy.” Shipman, too, has a job that illustrates both the promise and the risks of using big data. Sensivity is an Internet of Things company, capitalizing on the transition to LED lighting to create Light Sensory Networks that will allow cities and other entities to deliver both energy efficient lighting and a real time, global database of information that allows customers to manage and understand their physical environment for greater productivity, efficiency and security. He was hired as chief privacy officer to build and govern a global privacy program, in which he will establish data protection standards and lead industry wide privacy initiatives. One of the issues, Shipman said, is defining the audience. For companies like his, the customers — those who purchase the product — are not the only ones affected by it. “To improve operations and efficiency of a city, for example, it’s important to understand how city assets are used – roads, parking spots, utilities, etc. This means collecting data on behalf of our customer – the city – from the end user who is not our customer. Often it’s the noncustomer that is misinformed,” he said. “You have to keep those perceptions in mind as well.” One challenge is that it’s difficult for everyone involved to envision either the benefits or the harms inherent in a use of big data, Shipman said. “Consumers expect companies to innovate. Seeking permission for every benefit would restrict innovation and limit the benefits.” One question from the audience centered around whether consumers are actually as concerned about privacy as they say they are, given that they often don’t bother to use encryption. Raicu said studies have shown people give up less data once they know what’s being collected, which suggests they do value privacy. And Vallor said her students are increasingly using apps like Snapchat, which they view as protecting their privacy. “It’s not true that people either protect themselves from all harm or don’t care about harm,” Vallor said. “The fact that there are people out there who are knowingly allowing their data to be collected doesn’t mean that those people expect to be harmed and aren’t going to be outraged when they are.” On the other hand, Rasmussen said, some people are less concerned the more they learn about how data is collected and used. They may prefer to see ads that are relevant to them, for example, even though it means their online behavior is being tracked. Vallor noted that predicting people’s responses will never be fully accurate. As a strategy, not surprising the user “has got its limitations, and then there has to be another strategy: How do we manage the situation when the user is surprised – or when we’re surprised?” And Raicu noted that there could be a “chilling effect if people are discouraged from using technology because of privacy concerns.”
Answer the following question.
Q1. Debate the dictum, “Say what you do, do what you say, and don’t surprise the user”, in relation to the ethical use of the big data being collected by the companies.
CASE STUDY (20 Marks)
The new CEO of a corporation learns that he has inherited problems with growth and profitability. A fourday workweek and, eventually, layoffs prove necessary. Who is the CEO obligated to inform and when? George Anderson was just a few months beyond his 40th birthday on the day he became CEO of Astratech Communications International (ACI). What an upper! He was still basking in the glow of his good fortune, eager to try out his skills as the CEO. He hoped to get the chairmanship one day when the company's founder, Mike Marcus, decided to step down. Life was good. ACI was a leading supplier of fiber optic transceiver components for the telecommunications industry. It sold to companies like Alcatel, Northern Telecom, and Ericsson, who put ACI's components into the lightwave equipment they manufactured. The company was based in Irvine, Calif., a great place to live, work, and raise a family. ACI's annual sales were around $500 million with 2,500 employees in locations in Mexico and Scotland, in addition to its Southern California headquarters. All of ACI's hourly employees in the United States and abroad were represented by the IBEW, a union with a history of good working relationships with management. The Mexican operation was launched to take advantage of lower labor costs and close proximity to headquarters. The Scotland plant gave the company relief from onerous European tariffs. Both offshore facilities enjoyed excellent employee relations. After settling into his new position, George busied himself identifying the major issues facing the company. Coming in, he had realized that ACI's growth and profitability were problems, but he wasn't sure if the source was the management team, product development, marketing and sales, or something else. After several months, George was clear that it wasn't the people. Sure, there were a few problem areas, and some employees seemed a bit too comfortable. But the main issue was a lack of focus and a general weakness in the business systems required in this fastpaced industry. There was no clear vision of what ACI wanted to be and no acceptable plan on how to get there. What was it that someone said? "If you don't know where you are going, all roads will lead you there." To address this weakness, George implemented a task force made up of middle managers from all the various disciplines, as well as the executive team. He chaired the task force because he believed strongly that CEOs shouldn't delegate strategy. When it came to business systems, the problem seemed to be a lack of adequate cost accounting. The company didn't know its individual product costs to any reasonable degree of accuracy. To address this challenge, George brought in a new chief financial officer. But just as George was beginning to feel optimistic about where ACI was going, he got a phone call from sales to tell him that Alcatel was canceling its backlog. Apparently, Alcatel's customers were slowing their acquisition of new equipment, and Alcatel seized that opportunity to shift all of its business to a French competitor of ACI's that had a reputation for higher product quality. George's first call was to the chairman. To his surprise, Mike handled it well, voicing his empathy and support. But clearly, George was expected to take action quickly. He decided that one way of avoiding a layoff was to implement a fourday workweek. That spread the pain evenly among all employees. George called his executive team together to tell them the bad news and to get the necessary action underway. Next, he went to discuss the issue with union leadership. The regional head of the unionalso the local stewardwas in George's office before lunch with a stern look on his face. "Look, George, you're the new kid on the block, so we don't think this setback was your doing. No one likes to lose part of their paycheck, but your plan treats management the same as the bluecollar workers, so you've got our support. We want to give you a chance to act. If we don't like what you're doing, we'll be back." The fourday workweek was implemented. Without being told, the entire management staff knew that they got four day's pay, but they were expected to be there five. After about six weeks, the lower costs began to kick in, and ACI was again holding its head above water...barely.
Answer the following question.
Q1. What were the reasons for the business downturn? Comment.
Q2. How did new CEO Mr. George Anderson respond to the business downturn? Discuss, what was ethical in his decision.
CASE STUDY (20 Marks)
Mike is a senior public relations major at a large university preparing to join the work force. One night, he gets in a conversation with his roommate Anne about career options and applying for jobs. Anne is also public relations major, so they have similar interest in what they would like to do after college. Mike finds out that Anne has recently applied to a company called Reed PR. Anne went to the career fair the previous quarter and found a contact with Reed to network with. After some time networking and finding out more about the company, Anne determined that it was her first choice company to work for. She spent hours putting together a solid application. During her conversation with Mike, Anne shows him a blog that she created for her application with her cover letter, resume, recommendation letters, writing samples, and fun facts. The next morning, Mike decides to follow Anne’s example and create his own job application blog. He copies Anne’s format and finds out how Anne created her blog. He regularly checks Anne’s blog to look for tips in order to get a job. Mike decides to send his new blog to Reed PR as well, without telling Anne. He doesn’t think it’s important to let her know. About a month later, Mike hears back from Reed PR that he has been invited to interview with the company. Mike tells Anne this and finds out that Anne hasn’t made it on to the next round. Anne is surprised that Mike applied to Reed and is upset at him for not telling her and copying her application format. She feels betrayed.
Answer the following question.
Q1. In a competitive world, was it okay for Mike to apply to the same job as his roommate? Comment.
Q2. Should Mike have told Anne that he applied? Give your views.
Q3. Is it unethical that Mike copied Anne’s job application blog format? Discuss.
Q4. Does Anne have the right to be upset at Mike, or should she get over it? Justify your answer
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