Ethics in management and organizational practice

Business Ethics

Bottled water costs about 10,000 times more than tap water. In addition, in the U.S. alone over 2,000,000 PET plastic bottles are used every 5 minutes. What ethical issues must the Waterkeeper Alliance bear in mind when considering whether or not to discontinue its brand of bottled water?

This is a major ethical question for the Waterkeeper Alliance to resolve quickly, as many traditional bottling companies are under scrutiny for their pricing practices and lack of full disclosure relating to their bottled water products. As bottlers have set prices at ridiculously high levels relative to the true value of the water sold, outrage has steadily grown over this practice. On August 1st in the New York Times editorial pages researchers for the paper pointed out that for the typical American to consume eight glasses of water a day the cost would be $1,400 a year for water that would cost 49 cents. These excessive prices combined with the costs of transporting the bottled water to market including the expense for fuel and carbon emissions further increase the costs incurred by the environment.

While Waterkeeper Alliance promotes the fact that they are only getting their water from pure Vermont streams, there is still the issue of their credibility and pricing structures for their water, even if their profits are being donated. There is also the issue of how much revenue is being produced and if those dollars are in fact making their way to the most urgent needs of saving water resources. That issue requires even greater transparency.

For these reasons and the growing public distrust of pricing of bottled water products, its' clear that Waterkeeper needs to publish its financial statements pertaining to the bottled water and also show that it in indeed comes from Vermont and not from a tap somewhere in New England. As Waterkeeper Alliance is a non-profit it needs to act as one and provide complete visibility.

2) Some of the biggest industrial accidents, with the most severe damages and loss of life, have taken place between midnight and 8:00 AM. These include; Bhopal (1984), Three Mile Island (1979), the Exxon Valdez (1989), Chernobyl (1986), Cheakamus River (2005) and the Queen of the North (2006). Is it ethical for companies to engage in these potentially dangerous operations 24 hours a day, given what is known about the higher likelihood of mishaps and accidents on the midnight shift?

Given the abundance of research that shows the effects of sleep deprivation on performance, it is ethically wrong to require employees to manage such potentially damaging power and chemical plants and ships during hours they are not competent to perform the task. The insistence on running power and chemical plants, to keep ships moving, and to keep entire companies running despite the potential loss of life and environmental harm is clearly unethical. The fact that those employees who work the night shift (from 12 midnight to 8am) have a six times higher possibility of divorce, often leave their children alone without supervision, and when deprived 24 hours of sleep have the perception and motor skills of someone with a blood alcohol level of.10 all further support the fact that companies are being unethical to push employees into positions where causalities and environmental damage could potentially happen due to a lack of rest. On top of all these statistics the fact that there is a 20% greater likelihood of employees working the graveyard shift having an accident, it is unconscionable for companies to put lives and the environment at risk for the sake of running plants, ships, or air traffic when employees are not fully rested and not at their best levels of performance.

3) Since the Body Shop was founded in 1976, the company's ethical position has gained wide acceptance. What led to the Body Shop's ethics no longer being viewed as "weird" and the firm's ideas about environmental concern and sustainable development becoming part of the mainstream? Do you think that the pendulum could swing back?

What was so unique about the Body Shop was the founder Anita Roddicks' visionary approach to recycling, environmentally-friendly approaches to product design and packaging, and her insistence on animal-friendly approaches to product development all contributed to her reputation as the Queen of Green in the area of woman's beauty products. The roots of her recycling attitudes and philosophies began when her mother taught her how during World War II many British women would recycle containers and unused make-up. This practice of being fiscally prudent and also economical in the use of both cosmetics and containers serves as the impetus for her starting her first store in 1976, with the chain growing to over 2,000 stores in 50 countries today. Taken together, all these views she had formed a vision of what a woman's beauty supply shop could be, and in 1976, seemed quite odd and even eccentric. Yet today the concepts Anita Roddick envisioned have become critical for saving the environment for future generations. The concept of recycling containers alone will save millions of pounds of trash in landfills and also reduce the cost of containers as recycled plastic will be used more prevalently than before. All of these efforts combined with global warming have created a greater focus on the environment and the necessity of being green. In terms of the pendulum swinging back to businesses and consumers not be environmentally aware of their purchasing and consumption habits, it is doubtful that will happen. As eco-friendly brands now dominate the consumer landscape and the reliance on fossil fuels is showing the limited lifespan of that energy source, the concept of green technologies and green or eco-friendly approaches to living are here to stay.

4) Mattel, the large U.S.-based toy company, has faced a number of recent high-profile recent toy recalls. What obligations does the company have to its retailers and the toy buying public? How can it balance the ethical and reputation costs of recalls with the realities of off-shore manufacturing?

The company has the explicit responsibility to its retailers, supply chain and ultimately its customers to produce products that fulfill the explicit promises the company makes in its many communications, marketing messages, campaigns and product promises. The fact that entire supply chains are affected by the lack of quality in their products, including the use of lower-cost lead paint by Chinese manufacturers, is causing millions of dollars in losses for every member of their supplier network. Further, retailers now must pull all affected products from their shelves and re-stock with the correct products. Further exacerbating this costly logistics and supply chain disaster is the need to get new products ready for introduction for the most critical selling season of the year beginning in late October and extending through January, 2008. The implications of the lack of quality and the many obligations Mattel has to it supply chain partners, retailers, and the consumers are enormous.

Mattel specifically needs to excel at the logistics of the recall and then move aggressively into fine-tuning their manufacturing processes to make sure this does not happen again. Further, the customer owes a major apology to all consumers in the market who, through the company's advertising, expected to have lead-free and safe toys for their children.

In balancing the ethical and reputation costs of the recalls against the realities of off-shore manufacturing, Mattel needs to first alleviate the problem at its source, and that is in the outsourcing manufacturing operation. Putting in stricter and more stringent quality control standards is critical, along with the development of more effective quality assurance and quality management processes is critical. The need for also having oversight of the manufacturing operations and sourcing is also very important. Mattel needs to also re-consider the risks to their brand equity and value from having manufacturing outsourced and out of control for the most part when it comes to product quality. Clearly Mattel needs to show the world they have fixed the quality control problems in their outsourced manufacturing process if they are to be trusted through the most critical selling season of the year.

5) a young man, Ned, has been diagnosed with Non-Hodgkin's Lymphoma, a type of cancer. Ned's oncologist, Dr. Moriarty, discussed two treatment options. One involved 8 to 16 bi-weekly chemotherapy sessions with a combination of five drugs (ICBiNB), the other option, called OMG, required a two-week stay at the cancer clinic. During this stay Ned's bone marrow would be removed, his entire immune system would be wiped out with the OMG drug "cocktail," and then his bone marrow would be returned. Ned would have to stay in the sterile environment at the cancer clinic for the entire two weeks.

Doing some research into the OMG treatment option, Ned discovers that Dr. Moriarty has been doing research, funded by a drug company, in this area and has written the only published paper on the treatment. According to the published paper, the primary benefit of the OMG treatment is that it is cheaper than ICBiNB. Explore the ethical issues that arise due to Dr. Moriarty's recommendation of the OMG treatment option.

Clearly there is a conflict of interest in Dr. Moriarty prescribing a treatment he has received Drug Company funding to validate, promote and publish on. It is quite understandable that Ned would be troubled by the recommendation. There is the obvious conflict of interest issue to resolve, yet with only a single paper published on the procedure and the obliteration of his immune system and the replacement of bone marrow, the risks are just too high to go forward with the OMG treatment option. The entire procedure, from its nascent status and the role of Dr. Moriarty in its initial research and now prescribing it to the high level of risk to Ned's immune system all point to the need to consider second opinions. In addition to all these factors, Ned does not know if the ICBiNB treatment was presented as a "loss leader" to make the OMG treatment even the more attractive. Ned understandably could feel manipulated in this situation. The best ethical approach to resolving this problem is to seek second opinions from other physicians and not have any serious work done by Dr. Moriarty.

Mini-Case - 50 Marks - 3 to 5 Pages

China is emerging as a major automobile manufacturer, yet the country's manufacturers seem to be either unable or unwilling, to develop their own designs. BMW is just the latest company to complain that a Chinese automaker has copied designs. Examine the ethical implications of the actions of Chinese automakers.

Do you feel that the designs are merely the result of inspiration or are they an attempt to confuse the public?

What effects will the actions of these companies have on the future of Chinese automakers?

The ethics of Chinese automakers to blatantly copy designs and features of westernized cars is a living example of how a lack of ethics cripples and severally hurts the offender. For these Chinese companies they are losing valuable time in devising their own designs, establishing their own systems for collecting the unmet needs of customers, and working with distribution channels to also understand how the deficiencies in American and Japanese distribution practices globally leaves significant opportunity for Chinese companies to capitalize on these weaknesses. Yet the Chinese auto makers don't see any of these opportunities for growing their companies; they react to global competition by imitating only the facade or appearance, not taking the time to understand the intricacies of how the many sourcing, supply chain, development, selling and services systems need to be revamped to gain greater competitive strength. The myopic nature of Chinese car manufacturers' management to focus just on the veneer and model designs of cars is to completely miss the point of global competition. Their lack of ethics keeps them blind to the true competitive strengths of the auto manufacturers they compete with. The lack of appreciation for the Toyota Production System (TPS), the most state-of-the-art supply chain and procurement system in the auto industry is a case in point. Toyota has turned their TPS into a learning eco-system where suppliers learn from each other and from buyers on how to better integrate processes into production centers. Toyota is innovating processes, while Chinese manufacturers are duplicating only the evidence of a process, not the process itself. The cruel irony for Chinese manufacturers is that the focus purely on the evidence of an effective process in the form of an imitated product design just makes the gap between initial supply coordination for parts, through production, to delivery all the more tenuous and flimsy in execution. The lack of ethics in Chinese auto manufacturers then has become so pervasive that they are actually dissipating and wasting valuable time they could otherwise be using to learn how to modify common existing processes common to all manufacturers to their specific needs. The critical need for supply chain coordination is a case in point. In a sense the massive amounts of time Chinese manufacturers are wasting imitating and unethically copying the designs of the worlds' top manufacturers are costing them the most expensive resource of all: time.