Case Study Analysis of Personal and Organizational Ethics and Values Between For-Profit and Not-For-Profit Organizations

Ethics Case Study This report presents an analysis of the ethical challenges faced by two organizations -- one in the not-for-profit sector named Susan G. Komen for the Cure and one in the for-profit sector named The Lubrizol Corporation. A brief background of the two organizations is provided which also includes a description of the ethical challenge. Several alternatives for each organization are discussed along with implications for various stakeholders. Out of the three alternatives for each organization, two are rejected and the reasons for rejection are also presented.

The proposed solution for each organization is discussed and is followed by a detailed recommendation based on specific steps and measures to be taken by the management. The report concludes with a reflection on the qualities of an effective response to real-life ethical challenges faced by organizations. Table of Contents Abstract ETHICS CASE STUDY Introduction Background Susan G. Komen for the Cure 3 2.2 The Lubrizol Corporation 4 3.0 Analysis of Alternatives 5 3.1 Alternatives for Susan G.

Komen for the Cure 5 3.2 Alternatives for The Lubrizol Corporation 6 3.3 Reasons for Rejection 8 4.0 Proposed Solutions 9 4.1 Proposed Solution for Susan G. Komen for the Cure 9 4.2 Proposed Solution for The Lubrizol Corporation 10 5.0 Recommendations 11 6.0 Conclusion 12 References 12 ETHICS CASE STUDY 1.0 Introduction Susan G. Komen for the Cure, a not-for-profit organization, faces the challenge of conflicting values and priorities for its funding decisions. This has resulted in the organization becoming embroiled in a controversy about discrimination and hypocrisy in providing funding to other charitable institutions.

On the other hand, The Lubrizol Corporation, a for-profit organization, is likely to face a challenge from environmental investors who may not want to invest in the company because of its supporting the consumption of fossil fuels, which leads to environmental pollution. This organization has to balance the duty to be economically efficient and profitable for its investors with the demands for being socially and environmentally responsible. This paper analyzes the ethical implications of various alternatives available to the two organizations and proposes a solution to each of them.

These solutions reflect the need for organizations to formulate a formal code of ethics that accommodates economic principles for organizational sustainability, reasonable expectations of important stakeholders and the personal values of the organizational members. 2.0 Background 2.1 Susan G. Komen for the Cure Susan G. Komen for the Cure is a not-for-profit organization that was established in 1982 by current CEO Nancy Brinker in memory of her sister's struggle with breast cancer (Susan G. Komen, 2012).

The organization is widely respected as one of the leading and most influential advocates for raising awareness of breast cancer and funding research for its treatment. The organization has affiliates operating across the United States where teams of employees, inters and volunteers strive to improve the quality of life for the women suffering from breast cancer and helping their families get along with their life. The organization attracts millions in donations every year that it spends on breast cancer research and the treatment of breast cancer patients.

The official slogan, Race for the Cure, has found resonance among the public so much that the organization has had to make quite an effort to prevent other organizations from appropriating it for their own drives. To date, the organization has contributed two billion dollars to breast cancer research.

An ethical dilemma that faces this organization emerged in February of 2012 when the organization decided to withdraw funding from Planned Parenthood on the grounds that it was following a policy of not providing funding to organizations that were under state or federal investigation. Planned Parenthood was at that time under investigation for whether it was using donation from federal funding to finance its abortion services (Roan, 2012). It also offers breast cancer screening and mammography services.

This withdrawal caused a huge controversy and the organization was accused of discriminating against those opting for abortion for the reason that it was discovered that Susan Komen regularly funds organizations under state or federal investigation. These include the University of Texas at Austin, Duke University's Medical Center and the University of California at San Diego's Medical School (Ryan, 2012). The ethical issue faced by the organization is whether or not to resume funding to Planned Parenthood.

2.2 The Lubrizol Corporation The Lubrizol Corporation is one of the world's renowned oil additives manufacturers. The company was established in 1928 and today it employs more than 7000 employees (The Lubrizol Corporation, 2012). The company relies on its scientific research as the core strength behind its phenomenal success and leadership. In 2011, the revenues of the company exceeded $6 billion. In addition, the company has embarked n continuous innovation and diversification to expand its product base and the number of patents under its belt.

Based in Ohio, United States, the company manages operations across the world in countries as diverse as Germany, China and Australia. The company has diversified away from its core competency in developing fuel additives to manufacturing engine oils, household lubricants and personal care products. This has allowed it to become a more stable company without depending on a limited range of products and markets for its success. Despite the current recession in the economy, the company has been able to grow because of effective structural changes initiated by the management.

One ethical issue that applies to this company is that of being aligned with companies that produce environmentally-damaging products or who habitually pollute the environment as a result of their operations. The Lubrizol Corporation manufactures fuel additives as its primary product. This has made it the famous and respected company that it is. However, from an ethical viewpoint, the company may not attract investment from ethical or environmentally-conscious investors on the grounds that it manufactures products that are used by industries that pollute the environment.

Recently, the company has also diversified into polymers, which is also a sector that produces non-biodegradable products, thus adding to the problems of environmental pollution. In this regard, it must be seen what the company can do to demonstrate its principles and ethical stand on environmental issues such as pollution and resource conservation. 3.0 Analysis of Alternatives 3.1 Alternatives for Susan G.

Komen for the Cure The first alternative available to Susan Komen for resolving the ethical dilemma is to develop a clear articulation of its funding policy and to describe the criteria that were used to withdraw the funding from Planned Parenthood. Abortion is a controversial issue in American society while Susan Komen works for a cause that is widely appreciated.

It should detach itself from controversial issues by clearly stating that it makes economic sense for the organization to seek funding from the broad spectrum of society without causing hurt feelings or sensibilities to any particular section of the community. Although Planned Parenthood provides breast cancer screening services, but as the name suggests, its primary service is abortion, which may be offensive to many people.

Therefore, in order to maintain its general appeal and acceptability in the community, Susan Komen should withdraw funding from Planned Parenthood by clearly articulating its donation policy. The second alternative available to Susan Komen is to continue to fund Planned Parenthood as it continues to fund other organizations currently under state or federal investigation. It should develop a policy that states its desire to focus on the welfare of breast cancer patients as its primary aim.

Any other activity of the organization, even if controversial, would be irrelevant for the purpose of deciding the funding to the organization. According to this argument, Susan Komen should continue to fund Planned Parenthood as long as that organization provides breast cancer screening services to the community. That it also provides abortion services that are viewed controversially by certain sections of the community does not in any way help or hinder the provision of breast cancer services, which is the reason why donors give millions to Susan Komen.

A third alternative for Susan Komen is to withdraw funding from all organizations that are under investigation by federal or state agencies. This policy should be developed and applied uniformly across all sections of society. This policy should appear objective and should not be viewed as a bias by members of the public because the decision is made on the basis of how the law-enforcing agencies perceive recipient organizations and not how Susan Komen perceives their activities.

Under the previous two alternatives, the decision to fund or withdraw would invite suspicion and criticism from certain sections of society who would be offended by the decision. On the other hand, the present alternative would result in an objective criterion for funding that might result in reduced donations to Susan Komen by philanthropists and organizations who perceive such a policy as an excuse for discriminating against organizations like Planned Parenthood and the concept of individual rights.

3.2 Alternatives for The Lubrizol Corporation The first alternative available to The Lubrizol Corporation is to continue to diversify into other areas while maintaining its core competency within the oil additives segment. This is the identity of the company and a mark of its excellence as well. The company has been known to produce products that have helped businesses reduce their pollution levels. The company can use this as social capital against arguments that it supports industries that increase environmental pollution.

The company can then diversify into other products based on its research and development competency. The company can argue for its environmentally responsible goals by stressing scientific evidence from its research and development efforts. Letting go of a key market and core competency would damage the credibility and reputation of the company as it would be perceived as erratic and marred by knee-jerk responses to ethical challenges.

The second alternative for The Lubrizol Corporation is to follow the sentiments of the society and to withdraw its operations that are linked to the oil and petroleum industries. It can enter into building components for firms that invest in alternative energy development. This would enable the company to attract investment for the long-term through ethical investors. This would also result in the company losing out on important clients and customers, for which the investors will have to be taken on board.

Despite this risk, the management should demonstrate confidence in its decision making and ethics policy because companies can improve their bottom line while pursuing ethical decisions and strategies (Nelson, 2003). The management would also have to appoint a spokesperson to articulate the change and explain its justification to the shareholders and to the public. A third alternative for the company is to prioritize its values as given on its website (The Lubrizol Corporation, 2012). These values include statements about the importance of various stakeholder groups such as customers, investors and employees.

The company needs to prioritize which stakeholders are most important so that it can use this as a justification for its policy decisions. Therefore, if the board of directors decide that the investors are the most important stakeholder group, then decisions can be made to maximize shareholder value by staying within the existing product categories and markets or by exploring new ones.

3.3 Reasons for Rejection For Susan Komen, the first and second alternatives are rejected because these would result in undesirable negative consequences for the acceptability and positive image of the organization. Also, these alternatives would reflect an opportunistic and myopic view of the effect of the organization's decisions on the stakeholders. These alternatives do not reflect honesty and passion that are my core values for managing an organization as well. They also do not reflect a balance between compassion and objectivity that are essential for a not-for-profit organization.

These two alternatives would result in significant loss of donations to the organization because it would alienate important sections of the donating public. This does not have to be the case as nonprofit organizations too are responsible to their constituents for increasing their funding progressively (Kohnen, 2010). For The Lubrizol Corporation, the second and third alternatives are rejected because they do not support the economic objectives of the business. The primary objective of a business is to provide goods and services that are valued by its target market (Fieser & Moseley, 2012).

The two alternatives do not measure up against this criterion and therefore do not make economic sense for the business. Furthermore, these alternatives reflect an escapist mindset and a shying away from the ethical challenge, which also goes against my personal values for running a business enterprise. They also do not reflect loyalty towards existing customers and clients by failing to stand by them during an ethical crisis.

I believe that these alternatives shy away from the reality while I believe that the issue should be faced at the frontlines by finding a middle path between the two alternatives. 4.0 Proposed Solutions The sections below describe the proposed solutions that can be adopted by Susan Komen and The Lubrizol Corporation to resolve their ethical challenges. 4.1 Proposed Solution for Susan G. Komen for the Cure For Susan G. Komen for the Cure, the proposed solution is to articulate an unambiguous and clear policy for funding decisions.

It is common among not-for-profit organizations like Susan Komen to face policy challenges in terms of funding decisions (MacDonald, McDonald, & Norman, 2002). The particular challenge for Susan Komen can be overcome by developing an objective criterion for funding research and charitable organizations like Planning Parenthood. The criterion should be made public by the CEO Nancy Brinker in the capacity of chief director and spokesperson for the company to build confidence of the donors, the media and the people served by the organization.

Had the role of spokesperson been performed effectively by Ms Brinker, the controversy would not have grown as rapidly as it did because of the delayed response and conflicting statements made by the company (Ryan, 2012). As stated by Pies, Beckmann, and Hielscher, (2010), ethics should be a part of management competenccies and should reflect clear values shared by organizational members as it helps the organization to grow. This capacity should be inculcated within the management at Susan Komen. Furthermore, the donation policy should then be implemented across the board without exceptions.

All organizations undergoing investigation by local, state or federal agencies should be excluded from Susan Komen funding regardless of their activities or association with the organization for the sake of credibility and dependability. It is also important to empower the board of directors to take up such issues before they become public and damage the credibility of the organization.

As noted by Green (1997), because not-for-profit organizations have assumed a number of social service functions and control over significant resources, there needs to be control over management decisions so that management oversight can be compensated for. 4.2 Proposed Solution for The Lubrizol Corporation On the basis of the analysis of the alternatives available to the Lubrizol Corporation, he proposed solution for the company is to continue to work within its traditional markets and product categories, while continue to explore new ones as part of its diversification strategy.

The success of the company is based on its efforts at enabling consumers to use their machinery, equipment and fuel more efficiently, which has helped them to reduce releasing pollutants into the environment. In this way, the company has played an important role in reducing environmental pollution rather than colluding with others in creating it. The company should employ an effective spokesperson, preferably from the company leadership, to increase the effectiveness of the message and to inspire confidence that the company is committed to the cause of being environmentally responsible.

Moreover, because of its long association with the local community, The Lubrizol Corporation has been successful at creating a family culture (Feldman, 2007) where the company is respected and accepted by its employees and the management. Its success is also evidenced by the fact that Warren Buffett acquired the company at a value of $9 billion (Frye, 2011). The company is primarily a profit making organization and has as its primary responsibility the duty to continue as an economically viable entity. In doing so, it has to continue to maintain profitable operations.

It cannot do so by withdrawing from its core products and markets. While it is capable of investing in other environmentally-friendly sectors, there is no evidence to support the claim that current practices of the organization are damaging to the environment. Moreover, the return from investment in alternate fuels may be realized over the long-term and the company may face difficulty in keeping investors satisfied during the period. By pursuing the first alternative, the company will continue to maintain its competitive advantage by retaining its core products and markets.