Choicepoint: Individual Case Study Case Study

Length: 7 pages Sources: 10 Subject: Business Type: Case Study Paper: #27371748 Related Topics: Individual Rights, Independent Contractors, Sex Offenders, Study Guide
Excerpt from Case Study :

¶ … Ethical Case Analysis

A productive organization is one that ensures customer satisfaction and protects the interests of its workers, thereby enhancing the welfare of the society and business.There is a growing belief that good ethics mean good business for an organization; however, ethical cultures emerge from strong leadership that is also ethical. The rewards to organizations supporting ethical cultures include increased efficiency in decision making in operational issues, employee commitment, product quality improvements, customer loyalty and improved financial performance. Typically, business firms use several different approaches to implement ethics initiatives. Two of the most popular ones are first, complying with the law of the land and this helps the organizations by effectively using internal controls to gain ethical conformity (Boyce & Jensen 1971). Secondly, organizations may use ethics in public relations to enhance their reputation and gain attention from all stakeholders including media which has become a watchdog for the society. In the case of Choice Point, we clearly find a succesful company headed by experience management who failed to protect and provide satisfaction to his stakeholders through gross inaccuracies and inconsistencies in handling data. Choice Point, a leading company in its field at the time, amassed by 2004 fifty companies in fragmentated markets; providing information after September 11, 2001 to seven thousand federal, state and local law enforcement offices and at least thirty six federal agencies. By early 2005 Choice Point held more than nineteen billion public records up from thirteen billion in 2000. Ethical dillemma presents itself when its management becomes more concern with company growth and revenues rather than protecting individual personal information or the consolidation of said information. As a result of Choice Point negligence, many of its stakeholders where adversely affected.The major stakeholders can be listed as follows: the employees (corporate and independently contracted), the governement agencies at all levels, and most importantly the consumer. Personal sensitive individual information acquired through the acquisitions of splinter companies failed to be updated and accurate hence with its dissimination to law enforcement agents with whom they were contracted providing accurate information whether they were publicly accessible or required authorization.Choice Point failed its employees in that it provided inconsistent training methods. Regardless of internal corporate distinction of employees ( in house or independent contractors) training should be consistent across the board. In order to assure accuracy and consistency, Choice Point needed to provide guidelines and manuals to both employee types. Also the recording of personal information by hand writing is also unacceptable as it leaves way for a greater margin of error as clearly demonstrate in the case. Their negligence further affected law enforcement agencies. Their lapse in procedural guidelines twice mentioned in the case study had individuals mistakenly identified as felons causing them lost of gainful employment.

Teleological philosophical thought judges the rightness or wrongness of actions according to their consequences. An act is wrong if its total consequences are intrinsically less good than those of an alternative act that might have been chosen. It is right if it tends to produce certain consequences (Garvin, 1953). Utilitarianism is the dominant force in the area of teleological thought. This principle requires that the consequences of an act be the guiding principle in choosing the proper course of action in any given situation. For an action to be right, it must produce the greatest good for the greatest number (Garvin, 1953).Although our civic culture, public policies and legal doctrines are attentive to privacy when it is violated by the state when privacy is threatened by the private sector our culture, policies and doctrines provide a surprisingly weak defense. Consumers, employees, even children have little protection from marketers, insurance companies, bankers and corporate surveillance. If privacy is to be better protected from commercial and private intrusions, a new approach needs to be developed .This approach should rely in part on new technological and most social sciences and in part on a more benign view of taking an active role in the protection of privacy. Totalitarianism has deeply concerned


However, renewed attention will have to be paid to the ill effects of the new unfettering of market forces. Although privacy advocates fear Big Brother the most, they need to lean on him to protect privacy better from those who are capable and willing to purchase it at any cost . The specific studies of public policy, aside from whatever light they cast on the measures needed to improve the ways we protect public safety also seek to illustrate a mode of policy analysis that encompasses ethical, legal and practical considerations in the quest for a better society .Much of the discussion reflects a pivotal fact about society: unlike ideologies, which can be centered on one core value, society cannot but serve multiple needs and wants (Etzioni, 1999). This fact has an important consequence that deserves much more attention: the fact that societies cannot make perfect choices, because often they must sacrifice more measure of one good for the sake of another. Indeed, much is what under discussion here pertains to trade offs between privacy issues and the common good. As we come to realize trade offs are not always a pre-requisite. The discussion of most privacy issues should start with the quest for policies and laws that could enhance both goods. A well balanced communitarian society will take steps to limit privacy only if it faces well documented and macroscopic threat to the common good. The principle of limiting the intrusiveness of privacy curbing measures is further illustrated by the example of a Choice Point national database containing personal information about individuals who had past financial indiscretions and had been sanctioned or otherwise penalized. Measures treating undesirable side effects of needed privacy diminishing measures are to be preferred over those that ignore these effects.

A good society, to reiterate, is not one that maximizes liberty or allows its concern for public safety, even children to override individual rights but one that crafts a balance between the two. A major justification for treating child sex offenders differently then those who engage in crimes of violence against adults is found in our society's values and reflected in our laws. Individuals who are hired to work in child care centers, kindergartens and schools cannot be effectively screened to keep out our child abusers and sex offenders. The major reason is that when background checks are conducted, convicted criminals escape detection by using false identification and aliases. In 1990, six states identified over six thousand two hundred individuals convicted of serious criminal offenses such as sex offenses, child abuse, violent crimes and drug felony charges who were working in jobs as child care providers. Although many were identified many more using fraudulent identification tactics continue to escape notice .

People who fraudulently file multiple refunds using fake identities and multiple social security numbers cost the nation between $1 billion and $5 billion per year. In the 1970s the Federal Advisory Committee on False Identification reported taxpayers' losses through identity crimes exceeded $16 billion (in1976 dollars). Between 1993 and 1997 the IRS's Questionable Refund Program, just one of the agency's many criminal program detected thousands of questionable returns claiming between $83 million and $161 million in refund each year (Sternberg, 2009). As for the consequences of releasing individual's information to the wrong or fraudulent parties, it results in identity theft amongst other crimes. Then the burden is on the victim to clear his name by providing certified letters and keeping records as well as multiple follow ups until the matter is cleared.

Is it evident that Choice Point performed very poorly its corporate social responsibilities in face of this crisis. Crisis management scholars agree that effective response to crises involves to minimize stakeholders'losses.More traditional corporate governance scholars agree that, within legal limits and ethical customs, the only duty of managers is to maximize shareholder value. Proper attitude that should have been adopted by Choice Point is that of the stakeholder model which is generally in agreement with the principle of fairness.(Arjoon 2005). The stakeholder model leads companies to engage more frequently in proactive and/or accomodating crisis management behaviours even if these behaviors may not maximize shareholder value (Alpaslan 2009). Choice Point made no effort to remedy the issues in protecting personal data acquired through mergers. Rather than taking a proactive stance to accepting responsibility, identify and help victimized stakeholders it reacted defensively complying when forced by individual lawsuit.

Managerial experience and expertise could have easily foreseen this melt down.

Had Mr. Smith not been so entralled by grossing profits, he would have had in place preventive measures or set up a contingency plan in lieu of said situation. His lack of managerial forthought is what has birthed companies like Lifelock out the complaints and victimization of the consumer as well as major stakeholders. The consumer no longer wants to be victimed and carry the burden of proving him or herself innocent, affiliated…

Sources Used in Documents:


Alpaslan, C. (2009). Ethical Management of Crises: Shareholder Value

Maximisation or Stakeholder Loss Minimisation? The Journal of Corporate

Citizenship,(36), 41-50.

Arjoon, S.: 2005 "Corporate Governance: An Ethical Perspective." Journal of Business Ethics. 61 (4), 343-352.

Cite this Document:

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