Freeman

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 →

The Ethics Behind Advertising Alcohol to the Teenage Demographic

Kids who start drinking young are seven times more likely to be in an alcohol related crash.[1] Teen alcohol use kills about 6,000 people each year, more than any illegal combined drug.[2] Car crashes are the leading cause of death for teens and one out of three of those are alcohol related.[3] Based on the abovementioned statistics, it is evident that underage drinking is a growing epidemic that continues to plague the American social landscape. Although many attribute parents, peers and other environmental factors to shaping teenager’s perception of alcohol and alcohol consumption, “research on alcohol advertising and youth has shown small but significant correlations between exposure to alcohol advertising and drinking beliefs and behaviors.”[4] Regardless of the statistics, beer and alcoholic beverage companies continue to bombard the American public with alcohol marketing, often placing advertisements with youth-oriented themes in medium where audiences are predominantly underage.[5] Despite public outcries for change with the industry’s placement of advertisements during programs that are predominately viewed by underage audiences, beverage companies and their respective ad agencies would justify their practices with a Milton Friedman approach to stakeholder’s management. By focusing on a profit-driven model, companies can validate their practices, further perpetuating the growing rate of teen alcohol consumption. Ultimately, companies should adopt an Edward Freeman outlook on stakeholder theory, for ethically, it would satiate the demands and concerns of their apprehensive stakeholders while also acting in a more socially responsible manner. Continue reading →

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 →

Beyond the Game

Sheth and Babiak talk mention an NBA social responsibilty initaitive in their study of CSR and sports.

Milton Freidman’s article regarding the corporation’s social responsibility has been the most intriguing article I’ve read in this class all semester.  I agree with it on many levels, but also keep finding good arguments against it, as we have discussed in class.  I decided to dig a little deeper on Google Scholar, seeing which articles, specifically about sports, had cited Friedman.  367 articles had popped up as articles about or including sports that had also cited Freidman, but many past the first page only mentioned sports in passing and was not going to be useful.  The second article that was listed was unavailable to view, so I clicked on a link that gave me related articles.  After browsing for a few minutes,  I came upon an article from the Journal of Business Ethics published by Hela Sheth and Kathy Babiak, called “Beyond the Game: Perceptions and Practices of Corporate Social Responsibility in the Professional Sport Industry.”  This was perfect, and it even cited both Friedman and Freeman.   Continue reading →

Scott Forstall: The Sorcerer’s Apprentice at Apple

Admittedly, what comes to mind when I think of Apple is the former head honcho, Steve Jobs.  But then again, who doesn’t?  As creative and innovative as Jobs was, there are many powerful brains that contribute to the success that Apple has had over the years.  Perhaps one of the most noteworthy contributors is Scott Forstall: Senior Vice President, iOS Software.

Before joining Apple, the Stanford grad worked at an American computer company called NeXT, Inc. where he developed core technologies.  In 1997, Forstall joined the Apple team when Apple purchased NeXT.  Today, Scott Forstall is the Senior Vice President of iPhone software at Apple.  Bloomberg Businessweek, in an article published in October 2011, named Forstall as the Sorcerer’s Apprentice at Apple.  Undoubtedly, Forstall has transitioned from once being a behind the scenes computer science genius to a much more visible member of Apple’s leadership team, particularly after the death of CEO Steve Jobs.  Not only is Forstall responsible for Apple’s mobile software division, which accounts for 70% of Apple’s revenues, but he is also the youngest senior executive at Apple.  Pretty remarkable, don’t you think?

Fast Company certainly seemed to agree, as they listed Scott Forstall as number two on their 2011 list of “The 100 most creative people in business.” In today’s world, Apple is known for their cutting edge innovations.  The company’s slogan, “think different” certainly describes the business model well.  Without a doubt, Apple’s success can be attributed to the company’s ability to innovate products that are not demanded by consumers.  This is not saying that these consumers don’t want Apple’s technologies, but rather that they don’t know they want them…yet.  According to an Outside Innovation article, Jonathan Seybold praises both Apple’s ability to look at where technology is going and the ability to innovate a new product that is not only better than an existing product, but one that is much different.  Not to mention, Apple is always a step or two ahead of the competition.

Over the past few weeks we’ve spoken a lot about the stakeholder theory and what responsibility a company has to its stakeholders.  It’s clear Apple’s identifies its stakeholders as Edward Freeman believes a company should.  Freeman believes that business must figure out how to create value for their customers, rather than solely focus on maximizing profits.  Apple operates by constantly innovating and creating value for their customers.  Although customers cannot imagine all of the new possibilities of products, Apple nevertheless spends each day finding ways to make their existing products better.  Steve Jobs once said, “we put ourselves in the customer’s shoes and ask: What do we want?”

Undoubtedly, Apple has created a powerful brand by never being complacent and always working to improve their existing products.  By putting themselves in the customer’s shoes, Apple has innovated products consumers never even imagined they could want.  Companies who struggle to create value should look up to Apple.  While not everyone on the Apple team can be recognized for their pivotal role in value creation, I’m very pleased that Scott Forstall had the opportunity to gain recognition for all of his hard work and dedication to the company.

The Hershey Company: How Sweet Are Those Kisses?

Ahhh, Hershey’s. How much more relevant could they be on this day of excessive chocolate consumption? Lamentations on Single’s Awareness Day aside, Hershey’s is a company with a very high profile, both domestic and abroad. You can find a Hershey’s product calling out to every young child in the checkout aisles of grocery stores the whole world around, or in every baking aisle in a store, or dancing across our TV screens in one chocolatey form or another. Additionally, they’re considered a local company for Bucknell students – collaborations with the Milton Hershey school are not uncommon, nor are trips to the beloved Hershey Park.

But what does Hershey Co. do besides help us expand our waistlines and indulge our guilty pleasures? My investigation began on the Hershey Company website. 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.