CASE STUDY ASSESSMENT: CHAPTER ONE By David F. Dudley Week #1 January 16, 2009 CASE STUDY ASSESSMENT: CHAPTER ONE Introduction This document presents my opinions about the cases presented in (Boatright, R. , John (2003). Ethics and the Conduct of Business. Upper Saddle River, NJ: Prentice Hall. ) and articles from (Ambrose, John (2009, January 16). My Own Opinion, The Washington Case#1. 1: Johnson & Johnson: The Tylenol Crisis This case study was a powerful example to illustrate the presence of ethics within the business environment today and the impacts they can have on not just shareholder’s arnings, but on the public as a whole. First, we were presented with a shocking situation. Seven people had died in January of 1982 from taking cyanide-laced capsules of Extra-Strength Tylenol.
The news made national headlines, and the CEO of Johnson & Johnson, James Burke had to make some swift decisions about how the company was going to handle this problem. What added insult to injury, was that Extra-Strength Tylenol provided Johnson & Johnson with a large piece of the company’s total profits which amounted to seventeen percent. The company was now in risk of loosing this ncome at the hands of someone sabotaging their product line and the public was in danger if they consumed it. The company had to find out what the cause was and how to stop it. Had James Burke not acted swiftly, more people were at risk of being harmed and Johnson & Johnson could be looking at disastrous failure. By adhering to the Company Credo and pulling the product, he determined that the brand name could be saved if Johnson & Johnson restored public confidence by doing what was in the best interest for the public. This was the ethical decision that saved lives and the company. Case #1. 2. The Sales Rep
The case study titled “The Sales Rep” presents us with an interesting dilemma that forces one to think about how they would act if confronted with a personal choice on whether or not they should fully disclose to a potential client factors that could cost them money or the business-person a sale. Tell the truth or lie? This is the question that can be found when getting down to the crux of this situation. Sometimes, withholding the truth is as bad as telling an untruth. On one hand, the sales representative has a chance to close a multimillion-dollar deal for an office system to be installed. However, they are not sure hat the subsequent deliveries can be made on time due to issues stemming from the manufacturer. Since delays in delivering and installing the system could be costly to the client, the sales representative could potentially loose the sale if he divulges this information to the client pending their reaction to the news.
On the other hand, there is a chance that the client will never learn of the delay or that they are loosing money because of it. This would mean that the sales representative would keep the sale and the profit that would stem from its existence. It is here where the sales representative can build heir economic character by making the right decision based on ethics as opposed to compounding the difficulty of their decision making by adding deception through disinformation. By seeing past the immediate economic reward they would receive from landing the contract had they not said anything, they should see the possible business opportunities that could open up for them in the future with the client had they decided to share with them the information concerning the delay in process of delivery and installation. This could prove to be not just honorable, but the right thing to do as well. Case #1. 3.
The Ethics of Hardball There are two examples that have been illustrated by the third case study in chapter one that deals with hardball ethics. The first one depicts a gruesome exchange of dealings between two toy companies, Toys R Us and Child World. Child World announced a marketing promotion that sold products close to cost, such as diapers, baby food, and infant formula. These were items placed on their shelves for sale to the public with the addition of coupons to create even more incentive to move their products. When Toys R Us learned of the sale and not only purchased over one million dollars of this erchandise from Child World, but redeemed over three hundred sixty-five thousand dollars worth of coupons, Child World was outraged. What had originally been a ploy to detract business from their competitors was in fact a costly mistake since Toys R Us could turn around and sell the purchased merchandise for a profit. Now, I believe in playing fair. However, when Child World brought Toys R Us to court over this action and lost, I believe that the courts had acted favorably not only to the law, but within the guidelines of ethical practice. Child World had made a mistake through poor planning and foresight.
Toys R Us acted on the opportunity to save money and did so within the confines of the law. Also, if Child World did not want competitors to take advantage of their promotions, they should have designed them more carefully. This example is in extreme contrast to the one where Home Depot countered the actions of individual price gougers in the wake of a terrible South Florida Hurricane named Andrew. Instead of hiking up prices with a sudden increase in demand for building materials, Home Depot lowered their prices. They even went as far as negotiating with suppliers to roll back prices to pre-hurricane levels.
This was an honorable act in the eyes of the victims. Case #1. 4. A Sticky Situation Wow! This case study created some pretty serious food for thought. I would consider this case to be full of complexities that have many factors to consider. Being that the acting sales representative, Kent Green, is wavering on job security and unemployment that would not only effect him, but his two children and wife too, I would have to say that the situation must be looked at carefully before an outcome is determined. What is compounding the difficulty of the decision making process is that the label company idding for the job is relying upon the sale of these six-color labels probably due to economic reasons. So, the pressure is on for Kent. He must choose between the ethical choice and the non-ethical choice of selling the labels to Jack. However, since we are looking for the ethical answer, we must accept the solution that is ethical and not immediately gratifying. It ties into the issue of honesty that we discussed in the second case study of this chapter.
Tell the truth or lie? It is that plain when getting down to the root concerns here with this scenario. Even if Kent’s job is on the line and his company eeds the job, if he is to act ethically, he must choose to inform Jack of the truth since Jack’s decision is based on whether or not Dura-Stick is producing the labels under Tim Davis. If the job is being outsourced and the labels are being produced by another technician who is not Tim Davis, then Jack has the right to know. Kent also has the obligation to inform Jack of this. However, there is always a chance that Jack will not find out, and the outsourcing will go unnoticed. But, what if it doesn’t? I believe that if it were discovered that Dura-Stick was figured out then their reputation as a trustworthy ompany who produces a quality product would be in jeopardy. Dura-Stick’s reputation would not only be harmed, but they run the risk of loosing future business with that company and others. Case 1. 5. Argus Incorporated: A Leasing Triangle Susan has an obligation to notify her superiors of Mr. Hayes’ lease payments that are owed to him. Even though Argus Incorporated has terminated the lease, they still owe him money. It is the right and ethical thing to do. If they in fact owe money for a lease agreement that they were originally a partner in, then they should do the right thing and
The cases discussed above lead us to the following conclusions: 1. Honesty is always the best policy. 2. When confronted with a dilemma, weigh out the pros and cons. If there are more pros than cons, that does not necessarily arrive you at the correct answer. It just makes you better informed. 3. Do the right thing. Sometimes cutting profits now will create more profits later. 4. Karma is present and scientifically proven. With every action, there is a separate but equal reaction. So, make sure you take positive action. 5. Deception is just another form of lying.