Business ethics

The Cost of Safety: Ethics and the Airline Industry

INTRODUCTION

Today, regional airline carriers account for more than half of all domestic flights in the United States, as major airlines have been outsourcing more of their flights.  According to the U.S. government Accountability Office, the regional airlines are responsible for the last six fatal commercial airline accidents (Dillingham).  Thus, their business operations, especially with respect to safety standards, implicate a variety of ethical dimensions and perspectives.

THE STORY OF THE REGIONAL CARRIERS IN THE AIRLINE INDUSTRY

Over the past thirty years, a major transformation has been occurring in the United States airline industry.  It began in the late 1970s when the U.S. government deregulated the airline industry, which inevitably led to increased competition among the major airlines to offer lower airfares (Cunningham, et al).   In response, the airline companies created the regional industry and developed a new business operating strategy called the hub and spoke model as a way of lowering costs.  Basically, the major airlines created central hubs in large cities or metropolitan areas and began relying on small regional carriers or commuters to feed their domestic network system (Wei & Yanji).  (See Appendix A) Continue reading →

Whole Foods Market

In 1978, John Mackey and Rene Lawson Hardy borrowed $45,000 to open a natural foods store in Austin, Texas.  In 1980, they renamed it Whole Foods Market and it was an immediate success due to the extremely low supply of natural foods stores at that time.  Since then, Whole Foods Market employs over 65,000 workers and has opened 310 stores across North America and in the United Kingdom.  The executives at Whole Foods Market have established a mission that focuses on Whole Foods-Whole People-Whole Planet.  Each of these is believed to play a major role in their success as a company.  In addition, the executives have embedded in the company culture the idea that “companies, like individuals, must assume their share of the responsibility as tenants of Planet Earth”.  As a profitable, public company, Whole Foods Market is proving that a company can generate returns to its stockholders and act responsibly toward other stakeholders such as customers, suppliers and the community.  (Wholefoodsmarket.com)

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Titles of Second Papers (for easy ref)

“Employers Creative Use of Facebook” by Amanda

“Costs of Being Costco” by Caitlin

The Costs of Being Costco: Why Ethics Matter

Almost everyone has heard of the membership warehouse retailer, Costco Wholesale, whether or not you actually choose to shop there. You can find one of their warehouses in over 400 locations around the United States, as well as an additional 200 warehouses in Canada, Mexico, Australia, the United Kingdom, and parts of Asia. Although they are not quite as instantly recognizable as their main competitor, Sam’s Club of Wal-Mart Inc., Costco has attracted somewhat of a cult following due to their unusual business operations. In many financial comparisons, Costco seems to beat out all of their industry competitors. Even in the recent economic downtown, Costco still posted growth in their stock, as well as higher than industry average profits. So what exactly makes Costco so successful? Many business analysts argue that Costco’s focus on corporate social responsibility is what sets them apart from other retailers such as Sam’s Club or BJ’s Warehouse. Their focus on doing “the right thing” for all of their stakeholders, as well as a vision that aims for long-term success, is a unique business model that has interesting implications for many debates within the business world today. Should a company’s main focus be profit? Do they have a responsibility to act in the best interest of all stakeholders? What are the effects of these decisions? Using Costco as a prime example of a socially responsible corporation, I hope to prove that acting in a socially responsible manner towards all stakeholders is ultimately more beneficial for a company. Continue reading →

Hartman’s Article Cited by Thesis 20 Years Later

I chose to explore Edwin Hartman’s article “Donaldson on Rights and Corporate Obligations” for this week’s cited reference search blog post.  Just to recap, the article discusses Donaldson’s belief that certain fundamental human rights generate correlative duties for the corporation, including 1) the duty to avoid depriving people of their rights, 2) the duty to help protect people from such deprivation, and 3) the duty to aid those who are deprived.  Hartman introduces a fourth category of duty to the list, which he refers to as the duty to avoid helping to deprive. He argues that the corporation is not obligated to contribute to protecting anyone from deprivation, but it needs to make sure that no action it takes helps the depriver succeed in depriving.

Since the article was published in 1991, I thought that it would be interesting to see what other publications have cited it since then.  Using Google Scholar, I found that Hartman’s original article had only been cited by 3 other publications.

The one I chose to examine more closely is “La responsabilidad moral de la empresa. Una revisión de la teoría de Stakeholder desde la ética discursiva”/”The moral responsibility of the business. A review of the Stakeholder theory from discursive ethics”.  It is a doctoral thesis presented by Elsa González Esteban and directed by Dr. Domingo Garcia-Marza of the Universitat Jaume I de Castellón.  It was published in 2011, so it is rather recent information.  In total, it has 576 pages and it is written in Spanish.  Continue reading →

Business Ethics Guild Awards – Courtesy of the Blog Council

A Business Ethics Guild Award is an accolade given by the BGS Blog Council (BGSBC) to recognize outstanding blogging by class members. The award given features a nude male figure holding both a mask of comedy and a mask of tragedy and is called “The Blogger.” It is 16 inches tall, weighs over 12 pounds, and is cast in solid bronze.

Nominations for the awards are determined by and debated by the blog council of approximately 3-5 members. Winners are also chosen by the Blog Council and are notified through a post on the blog site.

This week’s prompt asked that we select a TV episode of our choosing and relate it to either management or business. We were asked to select an episode that on the surface seems to have little relation to business or management. Then, we were asked to analyze it in a way that clearly connects the show to our subject matter.

The Blog council thoroughly enjoyed reading about your shows and pondering your intuitive remarks about how each particular episode connected to our course. That being said, there were six categories that we focused heavily on:

1. Originality and Uniqueness of Episode/ Show Chosen
2. Integration of selected episode and thoughtful analysis with course material
3. Creativity/ Quality of Writing
4. Organization of Writing
5. Use of Comedy in Blog Post
6. Use of Drama in Blog Post

With these award categories, there were three posts this week that stole the awards show.

Amanda Skonezney’s “Drama in Beverly Hills”

Winner of:

Award for Originality and Uniqueness of Blog Post

Alyssa Kinell’s “A Jet Stream of Bullshit”

Winner of:

Award for the Best Use of Comedy in a Blog Post

Award for the Best Integration of Episode and Analysis

There is one blog post that stood out above the rest. It earned the majority of the above awards and thus distinguished itself as the best post of the week:

Caitlin Hume’s “Shady Superpowers”

Winner of:  

Award for Best Creativity/ Quality of Writing

Award for Best Use of Drama in a Blog Post

Award for Best Organization of Writing

Award for Blog Post of the Week

Congratulations Caitlin! In addition to your invisible “Blogger” statuette, you also get the opportunity to choose one week where you only have to complete half of the homework questions for FULL credit!!

Feeney Finds Out

The TV episode I chose to examine from a business, government, and society perspective is from the show Boy Meets World.  I am sure many of you are familiar with the sitcom comedy-drama, as it aired for seven seasons on ABC from 1993 through 2000, but for those of you who aren’t, I will sum it up.  Basically, the show chronicles the experiences and everyday life lessons in the world of Cory Matthews, your typical teenage boy from Philadelphia as he grows up from a young boy, through middle school, high school, college, and later married life.

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A Jet Stream of Bullshit

If you’ve never seen the show Curb Your Enthusiasm before, you are missing out. This show stars Larry David, creator of Seinfeld, who plays himself in the most ridiculous situations. Larry always seems to find himself in some sort of predicament and attempts to talk his way out of it. I chose what I think is one of the funniest episodes out of all of the nine seasons, “The Weatherman” to talk about for the blog; Some issues that pop up are Larry’s plaque, the idea of rolling up a sleeve and ruining the elasticity of a shirt, and peeing sitting down and falling in the toilet (this is why he walks with a cane in the video clip). Of all the episodes, one of the most ridiculous theories he comes up with is that the weatherman predicts rain to get everyone off the golf course, in order to clear it for himself. You can watch a short clip of the episode here:

The Weatherman

A Lasting Bond

From an early age, I have always been interested in the larger fortune 500 companies, as my grandfather was the CEO for a rather well-known company, JLG Industries, Inc. My grandfather has always been a source of inspiration for me as he has and will continue to harp on hard work and academic excellence. I could always count on him no matter what the issue; he always had my best interest at heart. When I would visit the JLG headquarters as a “youngin”, I never fully understood the responsibilities that he took on as the chief executive. As we have been digging deeper into Enron, AIG, and Nike, it has become much clearer to me what kind of role he took on and how important good business ethics are.

Various Products Offered by JLG:

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How toxic is your nail polish?

Polished nails are a popular touch to any girl’s look.  But how much do we really know about nail polish?  The smell alone makes many people nauseous.  OPI is a brand many of us have seen on store shelves at beauty shops, drug stores and nail salons.  It is considered a quality nail polish for a reasonable price.  But is it worth the toxins?

OPI is the largest manufacturer of nail polish in the world.  They sell nail polish around the world and the chemicals in nail polish differ in each country.   In 2006, OPI nail polish was ranked as one of the most toxic cosmetic products on the EWG’s Skin Deep database (of more than 14,000 cosmetic products).  They were criticized for selling nail polish in the US with much higher levels of toxic chemicals than what they sell in Europe.  The EU laws are much stricter than the US laws which are administered by the Food and Drug Administration. Continue reading →

Get Rid of Those Bad Apples

In looking through the blog choices for this week, the Work Matters blog stood out to me. I’ve worked since I legally could (and the typical babysitting prior to that) so work for me has always mattered. In clicking this link, I found Bob Sutton’s writing engaging and also gives the reader a bit of a chuckle. His style of writing is almost pointing out the common sense in things, yet somehow these topics might not necessarily seem obvious. His blogging is pretty addictive; I’ve read about five in a row now.

He has covered an array of topics but a similar theme I found is separating the good from the bad. In the blog posting I’m focusing on for this week, Sutton is arguing Bad is Stronger than Good . What I find interesting is he describes the first order of business is to actually eliminate the negative in a working environment prior to even thinking of acknowledging the positive. In bosses providing positive reinforcement and career development for individuals, this seems to create a more productive environment. While bringing in great people and rewarding their efforts is beneficial, Sutton feels ‘bad apples’ will undermine this culture. Continue reading →

Enron — one of the greatest frauds in American history

The Enron fraud scandal is undoubtedly unparalleled to any case of its kind.  After a 56 day trial, former CEO and president Jeffrey K. Skilling and former chairman Kenneth L. Lay were found guilty of hiding more than a billion dollars of debt, manipulating energy markets, bribing foreign governments and wiping out their shareholder equity.  Now, a textbook example of how not to conduct business, the case of Enron stands at the center of business ethics.

Google “biggest business ethics scandal” and what comes up? Enron, of course.  The Enron scandal severely damaged the reputation of corporate America.  The downfall began when Enron failed to accurately report their financial statements.  Instead of admitting the company wasn’t performing as well as in previous quarters, executives jumped through several loopholes to modify the company’s balance sheet to portray a favorable depiction of its performance.  Moreover, the company’s accounting practices became sketchier when they chose not to release their financial statements.  What did they have to hide?  Well, apparently a lot.

By the late 1990s, Enron appeared to be performing quite well — or so people thought. Its stock was trading for about $80-$90 per share.  Then, strangely, CEO Skilling quit, citing that he wanted to spend more time with his family and that it had nothing to do with the fact that Enron was about to collapse.  Later in trial, Skilling argued “on the day I left, I absolutely and unequivocally thought the company was in good shape.” Sure he did…

Needless to say, the company fell apart.  Enron declared bankruptcy and shareholders lost around $70 billion dollars — all because of a deliberate ignorance to fraud and ethics.  Now because of the Sarbanes-Oxley Act (SOX), there is more protection for the investors by improving the accuracy and reliability of corporate disclosures.  Hopefully with more responsibility placed on the top management team, an Enron-like scandal will never occur again.  Moral of the story: do the right thing!

Business Ethics: Practice versus Concept

According to the Stanford Encyclopedia of Philosophy, there is a difference between the concept of business ethics and what is actually put into practice. There are many debates among academic business ethicists over the different aspects of business ethics. However, in my opinion, these debates focus only on the conceptual ideas behind business ethics and what they think should be taught in universities throughout the country instead of on practical and helpful information regarding ethics. Another issue is that the business ethics discussed in this article only revolve around large, publically traded companies. In reality, this type of business is a minority compared to the multiple styles of business so the article cannot really represent all business ethics.

In the article, business ethics is discussed in segments starting with the history, the role of the corporation, employment relations, international business ethics, and criticisms. The history section of the article is pretty Continue reading →

Business Ethics According to Stanford Encyclopedia

The Stanford Encyclopedia of Philosophy’s article entitled Business Ethics was interesting to read.  Although it was published in April of 2008, many of the issues addressed are still relevant at the present time.  First, the entry discusses business ethics on a broad level, defining the concept as “the applied ethics discipline that addresses the moral features of commercial activity.”  But, what exactly is business ethics in practice?  The article goes on to explore the answer(s) to this question, touching upon the role of the corporation, the employment relation, international issues, and criticisms of the focus and methodology of business ethics.

I would agree with the idea presented in the article that business ethics is rooted in corporate social responsibility. According to Forbes, corporate social responsibility refers to “demonstrating concern for the environment, human rights, community development and the welfare of their employees both in the U.S. and abroad.”  In order for a business to be perceived as socially responsible, it must behave in an ethical manner.  As a result, the business may become even more profitable by appealing to increasingly socially and environmentally conscious consumers.

I also liked the idea that business ethics encompasses a business’s relationship to the well-being of society.  This point ties into our class discussion from last week regarding stakeholder theory.  As you might recall from Freeman’s Business Ethics at the Millennium, stakeholder theory argues that a business should be managed in a way that achieves a balance among the interests of all stakeholders, or those who can have some effect on the firm or may be affected by the firm’s actions.  A business needs to be accountable to others and society as a whole by attending to the interests of stakeholders when creating policies and making decisions.

I found the section of the article that described international business ethics particularly interesting as it brought up the emergence of globalization.  I had never really considered the fact that ethical norms may not always be consistent across cultures.  The article explores the question of which ethical norms should guide one’s business conduct in other countries and cultures, with a particular focus on business in less developed countries. The basic guidelines call for the avoiding harm, doing good, respecting human rights, respecting the local culture, cooperating with just governments and institutions, and accepting ethical responsibility for one’s actions.

In addition, international ethical business conduct is directly tied to the debate over sweatshop labor, or the hiring of workers in less developed countries, usually at minimal wages and under poor work conditions, to manufacture products for the developed world.  It is troublesome to me that many multinational firms outsource labor and exploit poor working and wage conditions in less developed countries.  They engage in this practice to increase their profits.  This is unethical.  These firms need to consider the stakeholders involved and pay reasonable living wages and ensure better working conditions for those involved.

Background on Session 2 Readings

C. Wright Mills rode a motorcycle.  He was a sociologist at Columbia U.  Some people may think he does not fit into a management or business class since he was more well known for describing the way the elites in US society wielded power.  He did not believe in value-free social science (in contrast to many sociologists of the day and now).  A book list is here.

Click for more on Session 2 Readings.

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