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Ethical leadership in organizations
Business ethics and environmental values
Ethical leadership in organizations
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Business Regulation Simulation: Alumina Inc.
Alumina is a 4 billion dollar aluminum manufacturer based in the US. Although the company operates out of 8 different countries, 70% of Alumina's sales derive from the US market. Five years ago, during a regular compliance inspection, Alumina was found to be in violation of environmental discharge norms due to high levels of PAH (Polycyclic Aromatic Hydrocarbon). Following this discovery, the EPA ordered a clean up and Alumina was found to be in compliance during subsequent inspections. Although this was Alumina's first violation in history, the company recently found itself headlining the local news because of allegations by a city resident that Alumina was environmentally responsible for her daughter's Leukemia.
As with many corporate ethical dilemmas, Alumina's executives unexpectedly found themselves walking the difficult line between adhering to their personal values and helping their company to survive. When local resident Kelly Bates alleged that Alumina was responsible for her ten year old daughter's Leukemia, company employees were not only faced with questions between right and wrong but also between right and right.
From an ends-based perspective, employees understood that Alumina wanted to arrive at a resolution that provided the greatest good to the company and its investors. For this reason, Alumina's leadership team opted to limit the disclosure of its environmental compliance records rather than to disclose all the information that was available when the plaintiff requested to evoke the Freedom of Information Act. Under different circumstances, Alumina's employees may have responded differently and allowed for full disclosure so the plaintiff could demonstrate the merits of her allegations or discover the lack thereof. After all, while a company's reputation is a critical element of its success, it's less relevant than humanity and life itself. However, given the circumstances, Alumina's reputation was of central concern to its employees so protecting Alumina from negative press became the priority. As often is the case, circumstances and context have a compelling influence on how individuals will respond to ethical issues. If in fact Alumina was responsible for Mrs. Bates daughters' Leukemia, then the company and its employees shared an ethical obligation to share their information in the spirit of true disclosure. It wouldn't be ethical for Alumina to lawyer up and protect itself from consequences which were incurred as a result of known environmental violations. On the other hand, it would also be ethically wrong if Mrs. Bates were seeking compensatory and punitive damages from Alumina if the company didn't have anything to do with her daughter's Leukemia.
How CAPSIM Works: The business simulation is relatively unaffected by external factors such as politics. The only time CAPSIM required additional decision-making was in regards to the ethical dilemma of offshore cost-cutting. Not once did CAPSIM require the teams to make additional decisions in regards to changing labour, tax, regulatory and other legislations.
Schwarze, S. (2003). Corporate – State Irresponsibility, Critical Publicity, and Asbestos Exposure in Libby, Montana. Management Communication Quarterly, 16(4), 625.
Exxon/Mobil, one of the nation’s leading oil producers, has its main refinery located in Beaumont, Texas. Each year, the residents of Beaumont/Port Arthur have to contend with the 39,000 pounds of pollution spewed each year by the Exxon refinery. Exxon’s emissions are 385% above the state refinery average. In 1999, the Texas Natural Resources Conservation Committee (TNRCC) allowed the plant to increase their emissions, without allowing the public to have a say in the matter. Interestingly, 95% of the people living near the plant are of African American descent and are in the poverty range. Some believe that this, along with the lack of education in the area, allows Exxon to get away with such high emissions. Residents in nearby neighborhoods have been complaining of headaches, nausea, eye, and throat irritation for years. Since 1997, Mobil has repeatedly violated health standards in its emissions of two key air pollutants: sulfur dioxide and hydrogen sulfide, These “rotten egg” smells are so strong, one can smell it through a car driving past the refinery. After numerous complaints and one record of a refinery worker becoming unconscious because of the fumes, the EPA awarded Exxon with a $100,000 environmental justice grant in October of 1998. Hopefully, Exxon has put the money to good use and cleaned up their emissions.
The jury found that “Monsanto had engaged in outrageous behavior, and held the corporations and its corporate successors liable on all six counts it considered - including negligence, nuisance, wantonness and suppression of the truth.” (Crean) Monsanto faced many lawsuits over the harm caused by PCB between 1990 and today.
Their organizational initiatives are often self-serving; however, the emerging workforce isn’t motivated by selfish managers. This selfish behavior often turns into unethical conduct. Unethical dealings in the workplace are always wrong. It is crucial to promote ethical behavior. Everyone must understand that once caught, unethical behavior is not just a problem for those directly involved, it is everyone’s problem.
They try to prove that the emission of chemicals from the Shell company are actually hazardous and are released at unsafe concentrations. With respect to the Ecological Model of health, the focus here is the relationship between the citizens and their environment, so any change in the environment can affect the health of citizens (Drummer. 2008). Another focus is the location relative to the Shell company that is an issue. The residents of this town are faced with health problems due to the location of the Shell company, which enforces that Health Geography is a big influence here (Drummer. 2003). Citizens within the Diamond community report increasing rates of asthma in children, along with machines in their house to help prevent/cope with allergies. The location plays a major role as to why these negative health effects are occurring since the chemical plant is emitting these chemicals nearby. When the air was tested, multiple chemicals were found but one that stood out was Benzene which is known to have cancer causing effects (WHO. 2018). Even with this knowledge, the Shell company continued to claim that the living conditions within this city were adequate (Grunberg.
Many other businesses may not want to do business as the company was involved with immoral behavior. The unethical business practices of the company will also gain exposure in the media and to the public (Nicol, 2015, n.p). Employees no longer keep unethical activities of the company to themselves. As a whistleblower, they may be perceived as a traitor, but in this case the senior executives are being traitors. They are taking money from immoral behavior and tarnishing the name of the company (Nicol, 2015, n.p).
Case Study - Corporate Obstacles to Pollution Prevention. Overview This case focuses on corporate obstacles to pollution prevention. Pollution prevention can be complex, especially for large corporations. There are many different forms of pollution prevention, including emissions control devices and incremental changes in existing technology.
Arnold & Porter chose to sue Pittston rather than the Buffalo Mining Company because the value of the corporation allowed for adequate compensation to the victims. Author and head lawyer for the plaintiffs, Gerald M. Stern, writes that the original goal was sue to sue for $21 million for the disaster to have a material effect on the cooperation (51). To avoid responsibility Pittston attempted to prove that the Buffalo Mining Company was an independent corporation with its own board of directors. The lawyers for the plaintiffs disproved this claim by arguing the Buffalo Mining Company never held formal meetings of the board of directors and was not independent of the parent company. During this case Pittston’s Oil division had applied to build an oil refinery in Maine. The ...
Hughes Microelectronics is a company that were found to have unethical practices during the 1980’s when handling government contracts. This was brought to light by two whistleblowers that worked for the company at the time. The purpose of this is to review four main questions concerning the situation and how it was handled ethically by the whistleblower. The first and second parts will be fairly similar what were the responsibilities of the company itself, what were the responsibilities of the main whistleblower Margaret Goodearl. Next, the conflict between the two parties will be examined and also whether or not the situation was handled ethically. Lastly the question of whether or not whistleblowing is the most ethical solution
Rather than being sticklers for following GAAP accounting principles and internal controls, this company took unethical behavior to a whole new level. They lied when the truth would have been easier to tell. It is almost as if they had no comprehension that the meaning of the word ethics is “the principles of conduct governing an individual or a group (professional ethics); the discipline dealing with what is good and bad and with moral duty and obligation”, (Mirriam-Webster, 2011). To be ethical all one has to do is follow laws, rules, regulations and your own internal moral compass, all things this company seemed to know nothing about.
After news of the scandal of Enron, one of the hottest items on e-Bay was a 64-page copy of Enron’s corporate code of ethics. One seller/former employee proclaimed it had “never been opened.” In the forward Kenneth L. Lay, CEO of Enron stated, “We want to be proud of Enron and to know that it enjoys a reputation for fairness and honesty and that it is respected (Enron 2).” For a company with such an extensive code of ethics and a CEO who seemed to want the company to be respected for that, there are still so many unanswered questions of what exactly went wrong. I believe that simply having a solid and thorough code of ethics alone does not prevent a company from acting unethically when given the right opportunity.
This case involves Ford and the Japanese tire manufacturer, Bridgestone/Firestone. The Ford Explorers which were prone to rolling over, came equipped with Firestone defected tires. The tire seemed to have a defect that caused the tread to separate from the whole of the tire and cause the vehicle to flip. Although Firestone knew about such defects, they continued to produce despite knowing the deadly consequences that lay behind their actions. The Explorer also had a bad reputation of rolling over and Ford knew it. As a result, fatal accidents occurred from these two combinations. Since this was a very serious safety issue, Ford and Firestone were ordering the recall of problem tires in Saudi Arabia, Venezuela and Asia but not in the United States. So, did the company act ethically in resolving this crisis? No, the companies failed to fix the problem in the United States. According to NHTSA, the tires have caused many deaths and injuries in the United States. In fact, these accidents would have not occurred if both companies have solved the problem immediately. Thus, despite the obvious safety issues, there were also fundamental ethical issues.
The act of whistle-blowing is an ethical issue that all employees have the right to. Whether they decide to make the corrupt information known publicly or anonymously, the information they provide can protect everyone involved. The ethical and moral sides of whistle-blowing can go both ways. In order to protect the customers, patients, or consumers of the harmful products the companies are offering, employees that have morals and feel the need to make the truth be known have an ethical responsibility to do so. Issues of being a whistle-blower are more controversial than the responsibilities of the employees doing so. When a whistle-blower takes action, they expose information from their company that it not meant to be public. They basically turn their backs away from their company and colleagues by revealing the truth. When surveying these issues, an employee who is torn by exposing information or keeping silent must decide whether it is more ethical to stay loyal to their organization or to the organization's
The Enron case is very intriguing case of corporate corruption and greed. As we review some of the company’s facts and history along with other areas of the corporation, we can see that this case is filled with great examples of business ethics put to the