The Shakedown. Harvard Business School Case. 2005 CASE: IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor. Harvard Business School Case. 2006. You access these two cases from: https://udallas.libguides.com/business_and_society Note that the E-Reserves tab contains the cases we will cover this term. The password is: business. i was born oct [1988] First, if you were born in an even year (2000, 1998, 1980, etc.) make your initial posting about the following case: The Shakedown If you were born in an odd year (2001, 1997, 1989, etc.) make your initial posting about this case: IKEA’s Global Sourcing Challenge OK, that is the easy part now you know which case to read first. After you have done so, prepare your initial posting about the case you were assigned above as follows: [1] Who is the protagonist and who are the primary stakeholders (list)? [2] What are the ethical issues and why? (List 2-3 in bullet format) [3] What could the protagonist do? (List 2-3 in bullet format) [4] What should the protagonist do? Support your course of action with one or more of the 5 Ethical Standards. This discussion is intended to provide us with additional practice applying the Ethical Decision Making Guidelines found under Course Home, as well as the insights from the two cases in this unit’s readings. As before, you wont see the postings of others until you make your initial post to the case/question assigned to you. Once you do, you can then respond to the postings of others with comments or questions. pls follow the Ethical Decision Making Guidelines below and download too ETHICAL DECISION MAKING GUIDELINES In each of our three Ethical Decision Making cases you will be presented with a short business ethics case and asked the same four Case Questions: The graphic in which these questions are embedded is intended to convey two critical ideas to keep in mind as you craft your response to each ethics case: Together the questions represent a process of reasoning and your response to any one question has implications for all the others. It is important to both answer them in order and to go back, if necessary, and revise your answer to an earlier question if needed because of how you have responded to a later question. Each question is critical. In earlier classes, you may have become familiar with focusing on Q4 as the primary deliverable of case analysis. To do well on the cases in our class, you will need to devote thoughtful attention to each question and answer each completely, as well as in such a way that the logic which brings you to Q4 is clearly demonstrated by your responses to each earlier question. In other words, Q4 is an important question, but it is not the only important question. Id like to provide you with the guidelines that you need to keep in mind as conduct each of your case analyses in this course. This is not unique material, it can be found in various places in the course, especially in the first few units. Ive pulled it all together here to jump-start your success at ethical decision making for our Ethical Decision Making cases. In the following sections, Ill go through the guidelines by first providing an example of the sort of ethics case you can expect to see in the Individual Assignments, and examples of what I expect to see in your responses. First of all, here is the case: Kirk was a bright individual who was being groomed for the Controllers position in a medium-sized manufacturing firm. After his first year as Assistant Controller, the officers of the firm were starting to include him in major company functions. For instance, today he was attending the monthly financial statement summary given at a prestigious consulting firm. During the meeting, Kirk was intrigued at how all the financial data he had been accumulating was transformed by the consultant into revealing charts and graphs. Kirk was generally optimistic about the session and the companys future until the consultant started talking about the new manufacturing plant the company was adding to the current location and the costs per unit of the chemically plated products it produced. At that time, Bob (the President) and John (the chemical engineer) started talking about waste treatment and disposal problems. John mentioned that the current waste facilities were not adequate to handle the waste products that would be created by the ultramodern new plant in a manner that would meet the industry’s fairly high standards, although they could still comply with federal standards. Kirks boss, Henry, noted that the estimated cost per unit would be increased if the waste treatment facilities were upgraded according to recent industry standards. While industry standards were presently more stringent than federal regulations, environmentalists were pressuring strongly for improving regulations at the federal level. Bob mentioned that since their closest competitor did not have the waste treatment facilities that already existed at their firm, he was not in favor of any more expenditures in this area. Most managers at this meeting resoundingly agreed with Bob, and business continued on to another topic. Kirk did not hear a word during the rest of the meeting. He kept wondering how the company could possibly have such a casual attitude toward the environment. Yet he did not know if, how, or when he could share his opinion. Soon he started reflecting on whether this was the right firm for him. Youve seen business school cases before and you already know that the basic set-up is that there is a central character (such as a CEO, manager or employee) facing an issue or challenge that will require him or her to make a decision as to what to do. That central character facing the issue or challenge is the protagonist. In all of our cases, there is a single protagonist. There may be others involved who have already made decisions, and they may regret those decisions, but our protagonist will always be the individual who has yet to make a decision. You also know from past experience that when you are asked to analyze a case you are asked to put yourself into the shoes of the protagonist and use the information found in the case to make a decision of what action to take relative to the issue or challenge facing him/her. While the protagonists perspective is critical, it is also important especially for cases involving ethical issues to identify who or what else might be impacted by the issue/challenge. That is why the first question that you are asked to consider in our sequence of questions is who is the protagonist and the primary (direct and indirect) stakeholders. Here is a hint. There is never a single stakeholder in any ethics case. Ethical issues arise in large part because of the involvement of multiple stakeholders with different and often conflicting perspectives and preferred outcomes.Some of these are more obvious and we’ll call those the direct stakeholders. Others are not so obvious and we’ll refer to those as indirect stakeholders. In unit 5 the Baron (2012) reading on market and nonmarket environments makes a clear distinction and provides examples. You’ll need to read it anyhow, so I recommend that you go ahead and read it now to help you with your responses to the Ethical Decision Making cases. Now, when I look to grade this question on the Ethics Quizzes, I wont necessarily be looking to see that you are in exact agreement with and include every stakeholder that I can identify. Reasonable people may disagree. I will be looking to see that you have identified and listed multiple primary stakeholders – both direct and indirect (somewhere in the range of 3 5). In this case, Kirk is obviously the protagonist and primary stakeholders include: Bob John Company and its stockholders and employees Community Future generations While our primary concern is for the ethical issues facing the protagonist, it isnt hard to understand that these are dependent, in part, on the responsibilities the protagonist has to the stakeholders. In the process of answering this question you may identify additional stakeholders that you hadnt thought of when you first got started. Here is an example of where you will want to go back and revise your original answer to Q1 by adding any newly identified stakeholders. Q2 reflects the fact that in order to behave ethically, ., choose the appropriate behavior for the situation, you need to first identify that there is an ethical issue. Obviously, the types of ethical issues are numerous and varied. Fortunately, we can break them down into a concise set of categories: Below are five broad categories for classifying ethical issues that may arise in business. Some examples of specific types of these issues are bullet-pointed in each category. Human Resource Issues (responsibilities employers have to their employees) hiring, compensation, performance appraisal, discipline, and termination procedures training company benefits privacy (drug testing) privacy (e-mail, voicemail, computer, hacking, whacking, phone eavesdropping) sexual harassment favoritism bullying occupational health & safety diversity discrimination work-life balance companys loyalty to employees Consumer Confidence Issues (responsibilities employers and employees have to their customers/clients) fiduciary responsibilities customer confidentiality/privacy product safety truth in advertising (withholding information from customers, hiding / distorting / falsifying information) treatment of customers regarding pricing, billing, quality, etc. selling customers products/services they dont need favoritism toward/discrimination against customers Use of Corporate Resources Issues (responsibilities employees have to their employers and fellow employees) use of corporate reputation use of corporate resources fraud compliance with oversight agencies (., accrediting bodies or regulators) reports & reporting practices employee loyalty to company providing honest information employee theft (ideas, supplies, time, expense account padding) employee integrity (honesty, taking credit for someone elses ideas/work, stealing someone elses ideas/work, not taking responsibility for ones mistakes, asking for special treatment that co-workers don’t receive, doing one’s share of work) Conflict of Interest Issues (responsibilities employees have to their employers and stakeholders) overt bribes subtle bribes (gifts, entertainment) company-vendor relations use of personal influence (to benefit family and/or friends) use of privileged information to benefit family/friends Corporate Social Responsibility Issues (responsibilities organizations have to their stakeholders) corporate social responsibility actions (., conservation of natural resources, environmental pollution) corporate philanthropy by company (includes community service) public health and safety sustainability (in)attention to/(in)consideration of a stakeholders needs and interests Just as you will always be expected to identify multiple stakeholders, you will also be expected to identify multiple ethical issues. And it is best to state these issues as questions to represent the fact that ethical issues are open to interpretation from a variety of perspectives. For this case, here are some of the ethical issues: To what extent is it Kirks responsibility to take any actions? How can the interests of the firm and its stockholders be balanced with the interests of the environment? What obligation does the company have to future generations of citizens and employees? If no changes are made, is Kirk under an obligation to leave the company? As in Q1, when I look to grade this question on the Ethical Decision-Making cases, I wont necessarily be looking to see that you are in exact agreement with and include every ethical issue that I can identify. Reasonable people may see things differently. I will be looking to see that you have identified and listed multiple ethical issues (somewhere in the range of 3 5). Hint: Every case has multiple ethical issues, some are not as obvious as others. Use the lists above if you need help identifying them. By the time you have reached Q3, you should have the big picture of who is involved and what ethical issues are at play in the case. You are now ready to consider what possible courses of action the protagonist could take. While you may have already formed an idea of what you think the protagonist would do, you need to push past the very human inclination to stop with the first right answer and force yourself to identify multiple right answers. They always exist and one of them will most likely be the best right answer (from your perspective), but you need to practice to considering multiple possible right answers before evaluating and selecting just one of them. So, just as with Qs 1&2, Ill be looking for multiple ideas about what the protagonist could do to address his or her ethical dilemma. For the case we are looking at here, a few that come to mind are: Kirk can determine on his own the decrease in profitability the firm would experience by purchasing more treatment equipment. At the next executive meeting, Kirk can mention his concerns. Kirk can approach Henry, the Controller, about his concerns. Kirk can talk to John, the chemical engineer, about potential problems. Kirk can contact an environmental group active in this area to learn more about their viewpoints. Kirk can do nothing and be satisfied that the company is already doing its share. Kirk can find a more environmentally concerned firm for which to work. To come up with multiple alternatives, you may worry that you are being forced to list some alternatives with which you dont necessarily agree. If that is the case, you are answering this question correctly. Q3 is the time to identify multiple ideas, not to judge them. That comes next. For Q4 it is not sufficient to simply state which of the alternatives you identified in Q3 that you recommend, you need to explain why you think that this is the best course of action. In other words, you need to provide the reasoning behind your recommendation. As the professor, I dont look at whether I agree or disagree with your recommendation. I grade you on your use of ethical reasoning which is a foundational topic in our course and the subject of multiple articles and discussions. Here is how to approach coming up with your answer to the 4th Case Question (after you have answered the first three case questions): Step 1: Evaluate Alternative Actions (Options) For our class, ethical reasoning (support for your proposed course of action) is demonstrated when you evaluate each possible option/alternative you identified earlier (Question 3) from the point of view of five principal ethical decision making approaches (standards) and select (and support) your recommended course of action on the basis of one or more of them. Evaluate the options by asking the following questions: 1. Which option will produce the most good and do the least harm? (The Utilitarian Approach) 2. Which option best respects the rights of all who have a stake? (The Rights Approach) 3. Which option treats people equally or proportionately? (The Justice Approach) 4. Which option best serves the community as a whole, not just some members? (The Common Good Approach) 5. Which option leads me to act as the sort of person I want to be? (The Virtue Approach) See below for more details on each standard. Step 2: Select a Course of Action and Support it by Describing Your Ethical Decision Making To get full credit for the case analysis question #4, you do not have to show your analysis of each option from each point of view. You do, however, need to clearly indicate which of the possible options/alternatives you identified earlier that you recommend and support it based on one or more of the five standards. It isnt enough to simply recommend a course of action and say that you recommend it based on one of the standards. You need to explain how you see that standard applying to the specific recommendation that you are making in this specific case. This is worth at least 50 percent of your response to this question. Let me repeat myself: To be quite clear, simply throwing in a gratuitous mention of one or more of the ethical standards won’t cut it. You need to be clear about how the standard(s) apply to the specific recommendation that you are making in this specific case. Neither will being wishy-washy about your recommendation. It needs to be clear, concise and compelling. Convince me that you are confident in what you are recommending and not just writing down an answer to a question. I may not agree with your recommendation and that has no impact on grading. What I do grade is the ethical decision-making supporting your recommendation. And that is what Ill be looking for when I grade Q4, a clear statement of what the protagonist should do and why (based on one or more of the five ethical standards and specific to the case). Five Sources of Ethical Standards 1. Which option will produce the most good and do the least harm? (The Utilitarian Approach) Some ethicists emphasize that the ethical action is the one that provides the most good or does the least harm, or, to put it another way, produces the greatest balance of good over harm. The ethical corporate action, then, is the one that produces the greatest good and does the least harm for all who are affected-customers, employees, shareholders, the community, and the environment. Ethical warfare balances the good achieved in ending terrorism with the harm done to all parties through death, injuries, and destruction. The utilitarian approach deals with consequences; it tries both to increase the good done and to reduce the harm done. Learn more about the Utilitarian Approach to Ethics 2. Which option best respects the rights of all who have a stake? (The Rights Approach) Other philosophers and ethicists suggest that the ethical action is the one that best protects and respects the moral rights of those affected. This approach starts from the belief that humans have a dignity based on their human nature per se or on their ability to choose freely what they do with their lives. On the basis of such dignity, they have a right to be treated as ends and not merely as means to other ends. The list of moral rights -including the rights to make one’s own choices about what kind of life to lead, to be told the truth, not to be injured, to a degree of privacy, and so on-is widely debated; some now argue that non-humans have rights, too. Also, it is often said that rights imply duties-in particular, the duty to respect others’ rights. Learn more about the Rights Approach to Ethics 3. Which option treats people equally or proportionately? (The Justice / Fairness Approach) Aristotle and other Greek philosophers have contributed the idea that all equals should be treated equally. Today we use this idea to say that ethical actions treat all human beings equally-or if unequally, then fairly based on some standard that is defensible. We pay people more based on their harder work or the greater amount that they contribute to an organization, and say that is fair. But there is a debate over CEO salaries that are hundreds of times larger than the pay of others; many ask whether the huge disparity is based on a defensible standard or whether it is the result of an imbalance of power and hence is unfair. Learn more about the Justice / Fairness Approach to Ethics 4. Which option best serves the community as a whole, not just some members? (The Common Good Approach) The Greek philosophers have also contributed the notion that life in community is a good in itself and our actions should contribute to that life. This approach suggests that the interlocking relationships of society are the basis of ethical reasoning and that respect and compassion for all others-especially the vulnerable-are requirements of such reasoning. This approach also calls attention to the common conditions that are important to the welfare of everyone. This may be a system of laws, effective police and fire departments, health care, a public educational system, or even public recreational areas. Learn more about the Common Good Approach to Ethics 5. Which option leads me to act as the sort of person I want to be? (The Virtue Approach) A very ancient approach to ethics is that ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. These virtues are dispositions and habits that enable us to act according to the highest potential of our character and on behalf of values like truth and beauty. Honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self-control, and prudence are all examples of virtues. Virtue ethics asks of any action, “What kind of person will I become if I do this?” or “Is this action consistent with my acting at my best?” Learn more about the Virtue Approach to Ethics