(20 pts) Ethical Issue-Spotting – 1 paragraph Give an example of unethical busin
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(20 pts) Ethical Issue-Spotting – 1 paragraph
Give an example of unethical business behavior (briefly describe what is going on) and explain why it is unethical. You can choose from the list of unethical business examples in Ghillyer, p.25, choose any other example from the business news (provide citation), invent your own hypothetical scenario of unethical business behavior, or describe an ethical problem in your current work environment (IMPORTANT: change company and co-worker names to keep it anonymous). Whichever you choose, tell us which at the outset of this paragraph where you got it. And keep it to one paragraph.
(30 pts) Make a NUMBERED LIST of at least three (3) stakeholders who are impacted negatively by this unethical behavior. See Ghillyer, p. 25, Figure 2.2, for an example of a LIST using the WorldCom financial scandal of the 1990s. See Ghillyer, p. 24 for Who are the Stakeholders? if you are unclear what stakeholder means.
Penalties will apply If you do not LIST the stakeholders and negative impacts. For example, if you describe them in a written paragraph or full sentences without a numbered list. We need them listed to help us correlate your stakeholders and impacts by seeing them LISTED such as my example below or you will be penalized.
Just as in my example below, and in Ghillyer’s LIST of the six classifications of stakeholders and the impact upon each stakeholder in the WorldCom case at p. 25, YOU are to do the same for your chosen example of unethical business behavior by LISTING at least three (3) stakeholders and the negative impact upon each.
Here is my example (my own hypothetical but based on a real case):
This is my own hypothetical example of unethical business practice.
XYZ Tobacco Company imports a special Brand X tobacco from Brazil that is higher in nicotine content than U.S. tobacco. By blending Brand X tobacco into its products, XYZ manipulates the nicotine content of its products to better satisfy customer demand. The company conceals its activities from the Food and Drug Administration because blending Brand X tobacco to manipulate nicotine levels would subject the company to the FDA’s regulatory authority as a drug manufacturer. Each year, XYZ files false statements with the FDA that do not properly disclose its Brand X imports in response to official requests the government sends to all U.S. tobacco companies asking for a list of all tobacco imports. This behavior is unethical because it is dishonest, involves lying and concealing records, and exposes the company’s customers to a higher level of nicotine exposure than they voluntarily assumed.
XYZ’s customers - consume more nicotine than they were aware, may be harmful
XYZ’s competitors – unfair they follow the rules, and may lose business to XYZ
U.S. government - laws are broken, crime is committed
AIG. 2.2 Stakeholder Impact from Unethical Behavior Interest in the Organization or shareholders False and misleading financial information on which to base investment decisions . Loss of stock value tion of dividends Loss of employment Not enough money to pay sever ance packages or meet pension obligations . Poor service quality (as WorldCom struggled to combine the different operating and billing systems of each company It acquired, for example) Delayed payment for delivered goods and services Unpaid involces when the company deciared bankruptcy Federal . Loss of tax revenue Failure to comply with all relevant legislation Crediors Loss of principal and interest payments Failure to repay debt according to the agreed schedule Community Unemployment of local residents - Economic decline offices to the relevant stake- C holders, appears to be at system by which business the lowest level in businesscorporations are directed and history: Corporate Governance The PROGRESS 1/ QUESTIONS controlled. 1. Explain the term business ethics. 2. Explain the difference between a descriptive and .Several prominent organizations (all former "Wall prescriptive approach to business ethics. 3. Identify six stakeholders of an organization. 4. Give four examples of how stakeholders could Street darlings")-Enron, WorldCom, Lehman Brothers, Bear Stearns-were found to have hidden the true state of their precarious finances from their stakeholders be negatively impacted by unethical corporate behavior . Others-Adelphia Cable, Tyco, Merrill Lynch- were found to have senior officers who appeared to regard the organization's funds as their personal bank accounts Financial reports are released that are then restated at a later date. Products are rushed to market that have to be recalled at a later date due to safety problems (Takata air bags). >An Ethical Crisis: Is Business Ethics an Oxymoron? Our objective in identifying the types of unethical Organizations are being sued for monopolistic practices (Microsoft), race and gender discrimi concerns that can arise in the business environment and the impact that such unethical behavior can have nation (Walmart, Texaco, Denny's) on the stakeholders of an organization is to develop the ability to anticipate such events and ultimately toCEO salary increases far exceed those of the put the appropriate policies and procedures in place employees they lead. to prevent such behavior from happening , and environ- mental contamination (GE). Unfortunately, over the past two decades, the ethical track record of many organizations would lead us to believe that no such policies or procedures have been in place. The standard of corporate governance, the extent to which the officers of a corporation are fulfilling the duties and responsibilities of their CEO salaries have increased while shareholder returns have fallen. According to the High Pay Centre, for example, Bob Dudley, the chief executive of oil giant BP, received a 20 percent pay increase to nearly $20 million in 2015, despite laying off 7,000 employees and overseeing a performance deficit of $6.5 billion. Chapter 2/ Defining Business Ethics 25Explanation / Answer
I am providing the unethical business behavior of a renowned automobile company which put the risk of the customer at higher stake. The issue was about faulty design of the valve and fuel injection module. The product was already launched, and people were accepting the product in greater scale. When some customer raised the complain regarding the problem faced by them and internal quality monitoring committee was setup to analyze the problem. The committee got some horrendous report while analyzing the problem in detail. The finding was that If any thing goes wrong and car catch fire then the door lock won’t work. It will aggravate the incident further. Now the ethical concern was that If the faulty part will be changed then significant cost will be incurred but if any accident victim will be compensated then cost will be 10% of the replacement cost. Probability of accident is also not much more.
The 3 stakeholders of this ethical issue were first and most important customer who trust the brand and purchase the product, second were the shareholder whose value would have been depreciated when the issue cropped up and legal action would had been taken against the company. The third stakeholders were the government whom the company was trying to fool
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