Business Ethics paper assignment

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THE PAPER--NO LESS THAN 8 PAGES AND NO MORE THAN 11

  1. You are to chose 1 theory from the following: Ethics of Care, Virtue Theory, Kantian Deontology, Utilitarianism.
  2. You are to pick 5 case studies from either the one's already discussed or from the text. It's easier if you pick from the one's already discussed. But that's up to you. (There are total of 12 cases, I have attached most of the case study in the file, please choose 5)
  3. Clearly and accurately, explain/summarize the theory you have chosen. This is worth 40 points.
  4. Clearly and accurately, summarize each case study (This is worth 40 points) before analyzing that case study with the theory you have chosen (This is worth 40 points).
  5. Make sure your paper is well written, grammatically correct, properly punctuated etc. In other words, make sure it isreadable. This is worth 40 points.
  6. When grading these papers, the last thing I will consider is the quality of the paper: does it reflect critical thinking skills? Does the writer carefully consider the issue? Etc. This is the final 40 point.

The system can only allow me upload 5 files, I can send you the other 4 files I have through comments once the tutor is assigned.

This is a list of all the 12 cases, the ones with the page number I do not have the files:

case 1 Hacking into Harvard

case 2 Parable Sadhu

case 3 Nestle and advertising

case 4 Challenger

case 5 Deepwater Horizon Oil Spill p297

case 6 Enron

case 7 Housing Allowance

case 8 Walmart

case 9 Blood for Sale

case 10 shipbreaker of Bangladesh

case 11 Charity begins at home, Nepotism p229

case 12 Children and Targeting: Is it Ethical? p613

June 02, 2006 Naeem -- Ship-Breakers of Bangladesh This article is connected with an event at the Asia Society - rg Please come out for the opening of the SHIPBREAKERS OF BANGLADESH show @ Asia Society on June 6th. 80% of the world's ships are now dismantled in two countries: Bangladesh & India. In this exhibit, we look at how this dangerous and toxic work migrated from the developed world to South Asia. Below is more detail about the show, as well as an excerpt from an essay which will be in a catalogue given out to show visitors. 1. Ship-Breakers of Bangladesh: The Myth of Global Labor Equality Opening June 6 @ Asia Society http://deepquote.net/w8t0i9lrphu 2. Dirty Ships, Dangerous Work and Global Labor http://www.shobak.org/new_comments.php?id=218_0_26_0_C 3. Preview of Robert Bailey's Photos http://www.baileyphoto.com ************************************************** Shipbreakers of Bangladesh: Dirty Ships, Dangerous Work and Global Labor by Naeem Mohaiemen "It is brutal and primeval. One of many injustices in Bangladesh, dressed up as a success story by a deceitful elite." - Farid Bakht, journalist In 1992, The Economist revealed a memo written by the World Bank's former chief economist Lawrence Summers. The memo discussed the economic rationale for "encouraging more migration of dirty industries" to Less Developed Countries (LDC): "The measurements of the costs of health-impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages." The memo provoked outrage from the press, environmental groups, and LDCs. Brazil's Secretary of the Environment, Jose Lutzenburger, called it "a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and arrogant ignorance of many conventional 'economists'." Summers quickly disavowed the memo, explaining that the remarks were meant to be an ironic aside to illustrate that free trade would not necessarily lead to environmental improvements for LDCs. Whatever the provenance and intention of the memo, some of Summers' prescriptions have indeed been implemented -- not by the Bank, but rather through the logic of global markets. A prime example is the shipbreaking industry, which has migrated from Northern to Southern nations over the last three decades. Until the 1970s, the majority of ship cutting was done in the US and Europe, using heavy machinery on salvage decks. But increasing environmental regulations and labor costs resulted in the transfer of this work to countries like Korea and Taiwan. By the 1980s, as these fast-developing Asian "tigers" also started turning away from this work, the industry migrated again -- this time to India and Bangladesh. Rusting Hulks Out At Sea The statistics of the shipping industry are staggering in their long-term implications. There are approximately 45,000 ships in the world's seawaters. These include cargo ships, tankers, cruise ships, and military vessels. Every four years, these carriers are required to get a sea-worthiness certificate. After 25-30 years, the cost of reinvestment to acquire this certificate is no longer profitable. As a result, about 700 ships (15-25 million deadweight tonnes) are sold every year to one of the Asian scrap yards. The exceptions are military ships, which are not sold through the international brokerage system. Over the next few decades, the number of ships that will need to be decommissioned will increase dramatically. The reasons are threefold: the glut of post-1980s built ships, most of which are nearing the end of their sailing life; the increase in container ships, which has reduced the use of general cargo ships; and new maritime regulations that require double hulls for tankers, making many existing tankers obsolete. A majority of the world's ships are built in countries like Japan, South Korea and China. These constructions fill orders placed by industrialized nations, including Japan, UK, Greece, USA, Norway, Singapore, and Denmark. But when it comes to scrapping obsolete ships, there is a dramatic concentration in South Asian nations. Two decades ago, 79 countries engaged in some ship recycling activity. Today, 90% of that work is completed in India, Bangladesh or Pakistan. Ship-breaking yards in Bangladesh alone dismantle about 90 giant ships, mostly oil tankers, every year. There is little doubt that this is risky work. The International Labor Organization (ILO) and the UN Special Rapporteur on Toxic Products have extensively documented the dangers of this industry. The most obvious risk is from industrial accidents, especially explosions from leftover gas and fumes. Gas explosions have killed 50 workers in India and over 100 in Bangladesh. Even if a ship is gas-free, there can be many other accidents while using torches, saws, and grinders, especially because many workers do not have helmets, goggles or safety nets. What is more hotly debated is the level of toxins inside the ships. According to the ILO, the typical chemicals that are released during the ship scrapping process include asbestos, lead, arsenic, chromates and mercury. But the shipping lines refuse to acknowledge these toxins, for fear of being held in violation of the Basel Ban on exporting toxins. >From Accident To Industry Shipbreaking came to Bangladesh via a strange set of circumstances, first as a result of a cyclone, and then a civil war. Bangladesh's entry to the Indian Ocean is the Bay of Bengal, a particularly deep approach where the differential between high and low tide is over six meters. This makes it ideal for bringing giant ships as close as possible to the shoreline. This geographic advantage came to the attention of locals after a 1965 cyclone that beached a giant cargo ship on the beaches of Chittagong. Unable to rescue the ship, the owner finally abandoned it. In a country starved for raw materials, the local demand for steel was too high for the beached ship to stay only a curiosity. A few days after the accident, local businessmen started tearing the vessel apart. In a short period, the entire structure was stripped bare by hundreds of people who carried away everything on board. The accident had caused the loss of a good ship, but had given a bounty of free steel and other recyclable materials to Chittagong. This would-be industry stayed dormant until 1971, when the Pakistani army launched a crackdown on its eastern province (now Bangladesh). In the civil war that followed, a prime target was the Bay of Bengal shipping trade. Bangladesh emerged from a nine-month war as a newly independent nation with a shattered infrastructure. Among the numerous crises facing the new country were the crippled ships that were blocking the entrance to Chittagong's port. Hastily arranging a makeshift auction, the government sold two of these ships to the only bidder, local businessman Shirazul Islam Chowdhury. Although the new socialist government was nationalizing all businesses, shipbreaking was not considered an industry and was free from intervention. The methods used by Chowdhury to break apart the two ships were manual and low-tech, and they set the template for the future industry. Hundreds of workers climbed aboard the hull and took apart steel plates by hammering out rivets one by one -- a process that took weeks for just one plate. In order to bring sections of the ship further inland, the workers jerry-rigged crude mechanical pulleys using cogs, wheels and steel cables from the ship. Lacking powered machinery, hundreds of men used these pulleys to drag sections of the ship ashore. Once deeper inland, they could be taken apart at a faster rate. Today, blowtorches and other cutting equipment are more common than they were in 1972. But every ship that comes to the Chittagong yards is still taken apart in a labor-intensive process that has not changed much in thirty years. One key issue was that the ships were made of steel plates in a form that could not be used by local industry. To cope with this, ship-breakers also invested in re-rolling mills. These mills melt down the steel from the ships and recast them into rods or other shapes that can be used by steel factories. In the early days, Chowdhury even used diesel and engine oil from the ships to fuel his furnaces. Expelling massive quantities of black smoke into the air, the re-rolling mills did immense damage to the air of once-pristine Chittagong beach. But no one in Bangladesh was paying much attention to environmental standards at that time. In the 1970s, the lack of regulation caused the number of shipbreaking yards to mushroom. The government's antiquated import codes did not even have taxes on ships that were being imported for scrapping. Eventually, the bureaucracy did impose some regulations, reducing the number of yards to 37. But for the most part, this is still a highly unregulated industry. Because it directly and indirectly employs almost 300,000 people, and provides 80% of the country's steel needs, government agencies are loath to "tamper with success." As the amount of business continues to increase, the pressure is to be more efficient, not necessarily eco-friendly. William Langewiesche, a journalist who investigated both the India and Bangladesh yards, described the trade-off: "There was a vast and fast growing population of people living close to starvation, who would work hard for a dollar or two a day, keep the unions out, and accept injuries and deaths without complaint. Neither they nor the government authorities would dream of making an issue of labor or environmental conditions." India's Troubles Begin Developing countries compete against each other to offer the lowest wages and least regulation. As labor and environment activists target individual offenders, other countries rush in to lure away that business. Bangladesh experienced this phenomenon after a series of exposés on its garment sweatshops. Following reports by UNITE and other labor unions, and Senator Tom Harkin's child labor bill, the Bangladeshi garment industry was rocked in the 1990s by intense pressure to improve work standards. In the subsequent decade, many other newly industrialized countries have eaten away at Bangladesh's sizable lead in the garment industry. There are many reasons for this, but factory owners partially blame rights activists. Even as Bangladesh was suffering losses in the garment industry, the country gained traction in shipbreaking precisely because activists were targeting their main competition. A series of investigative reports made India's Alang yards a symbol of dirty shipbreaking. The thread started with an investigation by the Baltimore Sun into the large number of military vessels that were abandoned on the Baltimore docks. These ships were government-owned vessels that could not be sent overseas for scrapping because of an EPA ban on exporting PCBs (polychlorinated biphenyls), which were in the ship's hydraulic and electrical system. But because the cost of dismantling them was too prohibitive, the US firms that had been given this job had either gone bankrupt or abandoned the work. The reporters realized there were many more commercial vessels, also carrying the same toxins but not subject to the export ban. Following the trail, they landed at Alang, which was scrapping more than half the world's ships. The investigation resulted in a Pulitzer-prize winning report on Alang, portrayed as a dangerous work site with incredibly high levels of toxins. The story gained momentum because of Europe-wide interest, particularly in Holland where it became a national issue. In 1998, Greenpeace published its own report on Alang. The report made the explosive claim that there were approximately 365 deaths a year from accidents, which resulted in the slogan: "Every day one ship, every day one dead." Experienced in running campaigns that create international symbols, Greenpeace targeted P&O Nedlloyd, an Anglo-Dutch cargo company that sold ships in the Asian market. Public protests outside P&O offices were followed by the company being caught in the act of painting over the name of one of its Asia-bound ships. These confrontations led to intervention at the highest policy levels. Shipbreaking was inserted into the meeting agendas of the European Union and the International Maritime Organization. A Netherlands-sponsored international shipbreaking conference opened with a fiery denunciation of the industry by the Dutch Minister of Transport. In the US, Representative George Miller said: "The American people have been promised that the globalization of the economy and the liberalization of trade would not turn out to be a race to the bottom. In the shipbreaking business, Alang, India is about as far down as you can go." The Alang yards were now under pressure to reform their operations. One key step was the requirement that all ships provide a gas-free certificate. In response, ship owners looked for countries with fewer requirements and many more ships were now sent to the Bangladesh yards. Western activism and policy, by focusing on Alang rather than calling for structural change, may have accelerated the "race to the bottom" that Representative Miller wanted to avoid. Chasing Toxic Ships In its rush to enter world markets, Bangladesh has had a complicated history both as a source for cheap labor and as a dumping ground for unregulated products. The issue of rights and regulations in industries that are connected to global trade has always been a delicate dance. Because of the experience of the garment industry, local media sometimes hesitate to critique other trade-oriented industries. Shipbreaking is toxic and dangerous mainly to those employed by the yards. Because of this, there is also little spillage into the consumer space that would create mass awareness of the issue. In 2006, Bangladesh's shipbreaking business was finally forced out of the shadows because of a series of legal actions. Armed with Greenpeace's list of 50 toxic ships that were bound for scrapping, environmental activists started filing lawsuits against the Bangladesh government. Faced with a court order and intense media coverage, the government banned the asbestos-laden ship SS Norway (formerly SS France), which had been docked in Malaysian waters for years looking for a destination. In an illustration of the techniques the industry uses to avoid scrutiny, the ship even changed its name to Blue Lady in the middle of court proceedings. The government action marked a huge defeat for the Bangladeshi shipbreaker who purchased the vessel for $13 million. The ship was sent to India after Bangladesh's rejection, where it was again blocked by legal action. During the same period, French President Jacques Chirac ordered another asbestos-lined ship, Clemenceau, to return from India. This came after diplomatic wrangling and a French court's order to stop the transfer, in response to legal action by Greenpeace and anti-asbestos groups. In an example of increased cooperation among activists, major European NGOs joined representatives from Bangladesh and India to form the NGO Platform on Shipbreaking. This coalition was instrumental in tracking ships like the SS Norway from Bangladesh to India. Following this success, emboldened NGOs targeted two other ships from Greenpeace's list that were headed to Bangladesh -- the Mongolian flag carrier MV Teem (renamed from MV Lady Fatema to evade the list) and the Bahamian-registered Alfaship. The controversy over Alfaship prompted its owners to protest to the Bangladeshi press: "The Alfaship is a standard type of oil tanker no different from other tankers legally sold for demolition in Bangladesh this year or in past years." Mapping Global Solutions Although the NGO groups gained significant victories this year, there are tactical limits to interventions via ship-chasing. Ship ownership and registration operates through a complex system of FOC (Flags Of Convenience, often tax havens like the Bahamas) through which 50% of the world's ships are registered. This makes it difficult to hold any government accountable for sending a "dirty" ship. As a result, the pressure for reform focuses only on the destination countries. Advocates insist that developed nations need to take the primary steps, by guaranteeing that ships are not sent with toxic content, by forcing FOC tax havens to abide by international regulatory frameworks, and by enforcing the Basel Ban on export of toxic waste. Many people in Bangladesh watch the debate over toxic ships nervously. They fear that activists will deprive them of a growing industry and critical revenue. Industrialists point to the strong local demand for steel and claim that, without shipbreaking, industrial development will shrink. The business sector exerts pressure to maintain the status quo, including keeping out trade unions. To counter the harsh reputation of the work, others have portrayed the inventiveness, resilience, and pride displayed by many of the men working on the Chittagong yards. Because every part of the ship, down to toilet fixtures, is recycled and sold on the local market, supporters even call it a "100% Green Industry" and urge activists not to target this trade. The arguments against toxic ships are familiar, as are the typical responses. One argument is that developing nations also need a "dirty" period of industrialization, as western nations had in the past. This is the perennial question for poor countries. Should they accept lower environmental standards in order to get a share of world trade? Should future generations be left to deal with the potential fallout? When the Indian yards were being investigated, one local resident asked journalist, William Langewiesche: "The question I want to ask the environmentalists is if you should want to die first of starvation or pollution." It is a transparently inadequate binary, but one that is used to stymie reform conversations. New theoretical frameworks and practical solutions must be developed through debates on development, free markets and globalization. LDCs desperately need new industries, but the model of development at any price will render them vulnerable to public health crises and labor disasters. Cleaning up dirty industries must start at the source, with the shipping companies and countries of origin. Having these ships arrive free of toxic ingredients would be an important first step. In the shipbreaking nations, unionization and safety standards have been resisted in the name of "staying competitive." NGOs and activist groups in Bangladesh need to push for reforms that will create sustainable development. The challenge is to keep competitive industries like shipbreaking in Bangladesh, while making them truly "100% green." Bibliography Buerk, Roland, Breaking Ships: How Supertankers and Cargo Ships are Dismantled on the Beaches of Bangladesh, Penguin Books, 2006. CBC News, The Big Break, February 2005. Corr, Brendan, "End of the Line," Foreign Policy, January 2006. Daily Star, January-May, 2006. Det Norske Veritas, Decommissioning of Ships, Report 2000-3158, May 2000. FIDH Report, "Where do the 'floating dustbins' end up?" December 2002. Gohre, Sanja, "From shipyard to graveyard: Is there a decent way to break ships?" World Of Work, December 2000. Langewiesche, William, "The Shipbreakers," Atlantic Monthly, August 2000. Miller, Hon. George, Statement to the House Committee on Resources, March 5, 1998. Salgado, Sebastião, Workers: An Archaeology of the Industrial Age, Phaidon, 1997.
COMPANY: Enron INDUSTRY: Energy SITUATION In 2002, Fortune magazine still ranked Enron as the fifth-largest company in the United States, although by the time the magazine was published, Enron had already filed for Chapter 11 bankruptcy protection.12 It was quite a ride: from a . regional gas pipeline trader to the largest energy trader in the world, and then back down the hill into bankruptcy and disgrace. Since some of Enron's former executives were still involved in litigation as this book went to press, some of the details were not known. We do know that the company, with the help of its investment bankers, accountants, and others, constructed a series of off-the-books partnerships that were used to hide Enron's massive debt and inflate its stock price. These partnerships were managed by Enron executives-a clear conflict of interest-who stood to benefit financially from the deals. Enron also used very aggressive accounting practices to bolster the bottom line. A particularly sad aspect of this debacle was how much Enron employees lost in their 401(k) plans as the stock price plummeted. In the fall of 2000, Enron changed administrators for its 40 I(k) plan and, as is typical, the plan was "closed" while that transfer took place. When a plan is closed, no one can buy, sell, or trade in his or her 40 1(k) until the moratorium is over. Sadly, this moratorium began just as the stock really began to tank, and by the time Enron employees could once again make changes in their 40 I (k) elections, the stock price had dramatically decreased and the retirement savings of many average employees were wiped out. HOW THE COMPANY HANDLED IT Executives denied there was trouble for as long as they could, but the fall from grace was swift and dramatic. Top executives resigned in disgrace and one committed suicide. The company filed for Chapter 11 bankruptcy in December 2001 and later sold its primary energy trading unit. 13 RESULTS The results continue to evolve as this book goes to press. Andrew Fastow, . Enron's former CFO, settled civil and criminal lawsuits in 2004. The complaint by the Securities and Exchange Commission charged that he "defrauded Enron's shareholders and enriched himself and others by, among other things, entering into undisclosed side deals, manufacturing earnings for Enron through sham transactions, and inflating the value of Enron's investments." Fastow agreed to serve a lO-year prison sentence, pay a fine of more than $23 million, cooperate with the government's ongoing investigation into Enron, and be permanently barred from acting as a director or officer in a public company.14 In addition, Lea Fastow, Andrew Fastow's wife and a former assistant treasurer of Enron, was sentenced to serve a year in prison for pleading guilty to charges relating to the Enron mess. IS In May 2006, former CEO Kenneth Lay and former president Jeffrey Skilling were convicted of mutiple counts of fraud and conspiracy and will be sentenced in September 2006 (after this book goes to press). Matthew Kopper, a former managing director, pleaded guilty to money laundering and conspiracy to commit wire fraud, and he forfeited $8 million to settle an SEC civil fraud case. The accounting firm, Arthur Andersen, was convicted in a federal court of obstruction of justice and relinquished its license to practice public accountancy. 16 Finally, the fines paid by various other players in the Enron collapse are startling. Enron itself paid over $2 billion in fines, including $1.5 billion for manipulating energy markets in California. And financial services corporations paid huge sums to settle investor lawsuits connected to Enron: Citigroup paid $2.4 billion; JP Morgan Chase paid $2.2 billion; and other banks paid fines in the hundreds of millions to settle similar suits. 17 COMMENTS j Once again, former SEC chairman Levitt aptly described the scope of the problems at Enron: I think the Enron story was a story, not just of the failure of the firm but also the traditional gatekeepers: the board, the audit committee, the lawyers, the investment bankers, the rating agencies. All of them had a part in this. Take the rating agencies, for instance. They deferred downgrading Enron, pending a merger which they knew very well might never have taken place. Take the investment bankers, who developed the elaborate scheme that Enron used to hide the obligations of the parent company in subsidiaries. That didn't come out of the blue; that was a scheme concocted between the investment bankers and the chief financial officer of Enron. Take the accounting firm .... Enron was the most important audit client that they had, and Enron was also the largest consulting client that they had-a client that paid them over a million dollars a week in fees. In my judgment, that accounting firm was compromised. Their audit was compromised. Putting aside any fraudulent activity that may have been part of this, they were clearly compromised by the nexus of consulting with auditing. Take the lawyers that were paid vast fees. I think here you have a very interesting case where the American Bar Association prevents lawyers from revealing financial fraud of clients to regulators. And here we had a case in point where a major client of the law firm was obviously involved in practices that may well prove to have been fraudulent, and they didn't blow the whistle. And [take] the analysts, who were claiming that Enron was a buy even after this story had broken and Enron had declared bankruptcy. These are analysts that were being paid by investment bankers that were receiving large fees from Enron for performing a variety of services. How independent could their research have been? And what could an investor have expected from an analyst who was recommending the purchase of Enron, while at the same time his employer was receiving millions of dollars in fees from that company? How likely was it that the analysts would tell it as it was? Very unlikely, in my judgment. 18 It appears that Enron had plenty of help in constructing its massive fraud. Its true financial performance was shrouded in partnerships that hid debt from its books and, as a result, from investors and from rank-and-file employees. Enron was not alone, however, in its involvement in corporate conflicts of interest. The investment banking community has also been embroiled in myriad conflicts in recent years. In fact, investment banking firms-by their very nature-face a huge potential conflict of interest. They are in the business of helping corporations raise money in the markets and are consequently focused on keeping a client company's stock price as high as possible. Yet these same investment banks also serve investors, who are interested in buying stocks at as Iowa price as they can.19 Talk about tension! And that tension spilled over for several big firms in the late 1990s and early 2000s. Merrill Lynch was fined $100 million when its analysts-in e-mails to one anotherpIivately trashed the stocks of the companies they were publicly touting to investors.2o That case and others like it were later parodied in a television commercial by investment firm Charles Schwab & Co. In the commercial, a Wall Street manager is seen urging his brokers to push an unfavorable stock. He tells them, "Let's put some lipstick on this pig." (Schwab does not underwrite stocks and consequently does not face L the same conflict that other brokerage firms do.) James P. Gorman, a Merrill Lynch executive, called Schwab's commercial a "cheap shot" for "kicking someone when they're down."21 We wonder whether investors thought Schwab's commercial was a cheap shot or a pretty accurate portrayal of some Wall Street bankers. Investment bankers were investigated for another major conflict-how much they knew about the alleged frauds committed at Emon, WorldCom, Adelphia, and other companies. At Enron, for example, banks such as Credit Suisse First Boston, Citigroup, and JP Morgan Chase helped Emon structure the secret partnerships that hid Emon's debt and kept Enron's stock price high. Then these investment banks not only received fees for helping to structure debt, they also made money from their investments in Emon stock.22 And as we've seen, those firms paid enormous fines for assisting Emon with its shenanigans. But perhaps no conflict in investment banking is as egregious as what happened in a series of initial public offerings (!POs) for dot. com companies before the bottom of that market fell out in late 2000. According to some observers, many dot.com IPOs in the late 1990s were nothing less than high-stakes poker games-with stacked decks-in which the young companies going public eventually got shafted and the investment bankers and their cronies made out like bandits. Traditionally, the objective of an !PO is to raise money for fledgling companies-money that is used to grow the business, for marketing, to expand into new markets, and to invest in new technology. In the late 1990s and into 2000, investment banks began to aggressively underprice the stock in IPOs-instead of selling the shares to the investors who would pay the most for them, they handed them out to favored cronies or clients (in an effort to gain favor) at a much reduced price. These cronies and clients-generally large, institutional investors-would flip the shares when the stock reached its full market price on the first day of trading. The money that should have gone to the issuers went to the clients of the investment banks. Things got so bad that in 19-99and 2000, investment banking fees and forgone proceeds accounted for 57 cents of every dollar raised for IPO corporations.23 Those dot.com companies might have done better by going to mob loan sharks.
More Questions and Alternative Scenarios for the Challenger Disaster Thequestion explosion the of the disaster space shuttle in January 1986The is without worst in thisChallenger nation's space program. seven astronauts aboard died, and the shuttle was grounded until it could fly safely. The explosion resulted from the failure of O-rings to seal in the booster rocket joints, apparently because of unusually low temperatures that day in Florida. The catastrophe is also remembered as a classic example of alleged retribution against whistleblowers by their employer-Morton Thiokol, Inc., maker of the shuttle's booster rockets. Some Thiokol employees were critical of the company and of NASA in their testimony before the presidential commission investigating the accident, and they believed that they were punished as a result. Most notable among these individuals was Roger Boisjoly, an engineer who for several months had voiced concerns about the O-rings and whose warnings against launching Challenger were ignored. For a year before the Challenger explosion, Boisjoly conducted research into concerns that low temperatures could compromise critical joints and seals in the shuttle's booster rockets. He advised his superiors about his concerns, but they did not view the matter with the same degree of urgency. On the evening before the Challenger liftoff, Boisjoly and other engineers opposed the launch because of the low temperature. After NASA officials objected, Thiokol senior managers overruled the engineers and authorized the flight. After the disaster, Boisjoly was initially placed on the investigating team. But after testifying before the Rogers Commission about the disagreement over launching the shuttle, his position was changed and he was isolated from NASA and the effort to redesign the seal. After the commission chairman criticized the company for what appeared to be punishment of Boisjoly and Allan McDonald, another engineer whose testimony was critical of Thiokol and NASA, both men were given their jobs back. A couple of months later, however, Boisjoly left Thiokol on extended sick leave .• Discussion Questions 1. It is generally conceded that the Thiokol engineers did what they could to prevent the Challenger launch. But did they? In view of what was at stake, did they have a moral responsibility to do more? What more could they have done? 2. Consider the following scenario: After the engineers are overruled, Boisjoly calls a major television news reporter and goes public with his concerns. The story is aired, the flight is stopped, and Boisjoly is eventually eased out of the company. How do you assess the moral character of Boisjoly's actions? Are there conditions under which a whistleblower has a moral obligation to publicize a matter outside company channels? Even ifhis or her job will be at risk? 3. Imagine that when the reporter checks with an engineer at NASA, she is told that Boisjoly is absolutely wrong and that the risk is minimal. Not having enough time to check out the facts, the reporter chooses to kill the story and tells Boisjoly of her decision. Boisjoly then calls another reporter and anonymously claims that a terrorist group has planted a bomb on the shuttle. As a rocket engineer, Boisjoly is able to convince the reporter that the threat is genuine. The story runs, the flight is postponed, and the shuttle launches safely on a warmer day. The original reporter never reveals that Boisjoly called her, and Boisjoly keeps his job. Assess the moral character ofBoisjoly's actions. Are there conditions under which a whistleblower has a moral obligation to resort to deception or law breaking? 4. Imagine that Boisjoly's original story is reported, the flight is delayed, and Boisjoly is gradually eased out of the company. The news story causes a precipitous drop in Thiokol's stock price. The price remains depressed for a year while the O-ring problem is solved. The next launch is successful, but a massive unrelated computer malfunction causes the shuttle to burn up during reentry. NASA decides to cancel such space flights for good, costing Thiokol millions of dollars and hundreds of jobs. Assess the moral character of Boisjoly's actions. Sources Boisjoly, Russell P., Ellen Foster Curtis, and Eugene Melican, "Roger Boisjoly and the Challenger Disaster: The Ethical Dimensions," Journal of Business Ethics, 8 (1989),217 -230. Rossiter, AI, Jr., "Company Sidelines Exec Who Objected to Challenger Launch," Sunday StarLedger, May 11, 1986, I, 10. L
COMPANY: Enron INDUSTRY: Energy SITUATION In 2002, Fortune magazine still ranked Enron as the fifth-largest company in the United States, although by the time the magazine was published, Enron had already filed for Chapter 11 bankruptcy protection.12 It was quite a ride: from a . regional gas pipeline trader to the largest energy trader in the world, and then back down the hill into bankruptcy and disgrace. Since some of Enron's former executives were still involved in litigation as this book went to press, some of the details were not known. We do know that the company, with the help of its investment bankers, accountants, and others, constructed a series of off-the-books partnerships that were used to hide Enron's massive debt and inflate its stock price. These partnerships were managed by Enron executives-a clear conflict of interest-who stood to benefit financially from the deals. Enron also used very aggressive accounting practices to bolster the bottom line. A particularly sad aspect of this debacle was how much Enron employees lost in their 401(k) plans as the stock price plummeted. In the fall of 2000, Enron changed administrators for its 40 I(k) plan and, as is typical, the plan was "closed" while that transfer took place. When a plan is closed, no one can buy, sell, or trade in his or her 40 1(k) until the moratorium is over. Sadly, this moratorium began just as the stock really began to tank, and by the time Enron employees could once again make changes in their 40 I (k) elections, the stock price had dramatically decreased and the retirement savings of many average employees were wiped out. HOW THE COMPANY HANDLED IT Executives denied there was trouble for as long as they could, but the fall from grace was swift and dramatic. Top executives resigned in disgrace and one committed suicide. The company filed for Chapter 11 bankruptcy in December 2001 and later sold its primary energy trading unit. 13 RESULTS The results continue to evolve as this book goes to press. Andrew Fastow, . Enron's former CFO, settled civil and criminal lawsuits in 2004. The complaint by the Securities and Exchange Commission charged that he "defrauded Enron's shareholders and enriched himself and others by, among other things, entering into undisclosed side deals, manufacturing earnings for Enron through sham transactions, and inflating the value of Enron's investments." Fastow agreed to serve a lO-year prison sentence, pay a fine of more than $23 million, cooperate with the government's ongoing investigation into Enron, and be permanently barred from acting as a director or officer in a public company.14 In addition, Lea Fastow, Andrew Fastow's wife and a former assistant treasurer of Enron, was sentenced to serve a year in prison for pleading guilty to charges relating to the Enron mess. IS In May 2006, former CEO Kenneth Lay and former president Jeffrey Skilling were convicted of mutiple counts of fraud and conspiracy and will be sentenced in September 2006 (after this book goes to press). Matthew Kopper, a former managing director, pleaded guilty to money laundering and conspiracy to commit wire fraud, and he forfeited $8 million to settle an SEC civil fraud case. The accounting firm, Arthur Andersen, was convicted in a federal court of obstruction of justice and relinquished its license to practice public accountancy. 16 Finally, the fines paid by various other players in the Enron collapse are startling. Enron itself paid over $2 billion in fines, including $1.5 billion for manipulating energy markets in California. And financial services corporations paid huge sums to settle investor lawsuits connected to Enron: Citigroup paid $2.4 billion; JP Morgan Chase paid $2.2 billion; and other banks paid fines in the hundreds of millions to settle similar suits. 17 COMMENTS j Once again, former SEC chairman Levitt aptly described the scope of the problems at Enron: I think the Enron story was a story, not just of the failure of the firm but also the traditional gatekeepers: the board, the audit committee, the lawyers, the investment bankers, the rating agencies. All of them had a part in this. Take the rating agencies, for instance. They deferred downgrading Enron, pending a merger which they knew very well might never have taken place. Take the investment bankers, who developed the elaborate scheme that Enron used to hide the obligations of the parent company in subsidiaries. That didn't come out of the blue; that was a scheme concocted between the investment bankers and the chief financial officer of Enron. Take the accounting firm .... Enron was the most important audit client that they had, and Enron was also the largest consulting client that they had-a client that paid them over a million dollars a week in fees. In my judgment, that accounting firm was compromised. Their audit was compromised. Putting aside any fraudulent activity that may have been part of this, they were clearly compromised by the nexus of consulting with auditing. Take the lawyers that were paid vast fees. I think here you have a very interesting case where the American Bar Association prevents lawyers from revealing financial fraud of clients to regulators. And here we had a case in point where a major client of the law firm was obviously involved in practices that may well prove to have been fraudulent, and they didn't blow the whistle. And [take] the analysts, who were claiming that Enron was a buy even after this story had broken and Enron had declared bankruptcy. These are analysts that were being paid by investment bankers that were receiving large fees from Enron for performing a variety of services. How independent could their research have been? And what could an investor have expected from an analyst who was recommending the purchase of Enron, while at the same time his employer was receiving millions of dollars in fees from that company? How likely was it that the analysts would tell it as it was? Very unlikely, in my judgment. 18 It appears that Enron had plenty of help in constructing its massive fraud. Its true financial performance was shrouded in partnerships that hid debt from its books and, as a result, from investors and from rank-and-file employees. Enron was not alone, however, in its involvement in corporate conflicts of interest. The investment banking community has also been embroiled in myriad conflicts in recent years. In fact, investment banking firms-by their very nature-face a huge potential conflict of interest. They are in the business of helping corporations raise money in the markets and are consequently focused on keeping a client company's stock price as high as possible. Yet these same investment banks also serve investors, who are interested in buying stocks at as Iowa price as they can.19 Talk about tension! And that tension spilled over for several big firms in the late 1990s and early 2000s. Merrill Lynch was fined $100 million when its analysts-in e-mails to one anotherpIivately trashed the stocks of the companies they were publicly touting to investors.2o That case and others like it were later parodied in a television commercial by investment firm Charles Schwab & Co. In the commercial, a Wall Street manager is seen urging his brokers to push an unfavorable stock. He tells them, "Let's put some lipstick on this pig." (Schwab does not underwrite stocks and consequently does not face L the same conflict that other brokerage firms do.) James P. Gorman, a Merrill Lynch executive, called Schwab's commercial a "cheap shot" for "kicking someone when they're down."21 We wonder whether investors thought Schwab's commercial was a cheap shot or a pretty accurate portrayal of some Wall Street bankers. Investment bankers were investigated for another major conflict-how much they knew about the alleged frauds committed at Emon, WorldCom, Adelphia, and other companies. At Enron, for example, banks such as Credit Suisse First Boston, Citigroup, and JP Morgan Chase helped Emon structure the secret partnerships that hid Emon's debt and kept Enron's stock price high. Then these investment banks not only received fees for helping to structure debt, they also made money from their investments in Emon stock.22 And as we've seen, those firms paid enormous fines for assisting Emon with its shenanigans. But perhaps no conflict in investment banking is as egregious as what happened in a series of initial public offerings (!POs) for dot. com companies before the bottom of that market fell out in late 2000. According to some observers, many dot.com IPOs in the late 1990s were nothing less than high-stakes poker games-with stacked decks-in which the young companies going public eventually got shafted and the investment bankers and their cronies made out like bandits. Traditionally, the objective of an !PO is to raise money for fledgling companies-money that is used to grow the business, for marketing, to expand into new markets, and to invest in new technology. In the late 1990s and into 2000, investment banks began to aggressively underprice the stock in IPOs-instead of selling the shares to the investors who would pay the most for them, they handed them out to favored cronies or clients (in an effort to gain favor) at a much reduced price. These cronies and clients-generally large, institutional investors-would flip the shares when the stock reached its full market price on the first day of trading. The money that should have gone to the issuers went to the clients of the investment banks. Things got so bad that in 19-99and 2000, investment banking fees and forgone proceeds accounted for 57 cents of every dollar raised for IPO corporations.23 Those dot.com companies might have done better by going to mob loan sharks.

Tutor Answer

NKURUMAH
School: UCLA

Attached.

Business Ethics Paper

1

Business Ethics paper
Theory: Ethics of Care
Insert name of school
Insert your name
Insert professor name
January 2018

Business Ethics Paper

2
Theory: Ethics of Care

Care ethics is a unique theory since it differs from other alternative theories of Utilitarianism,
Kantian ethics and virtue theory. The ethics of care can be described as the right thing is to care
for other people. It is presumed to be a feminine ethical point of view and it states that the key
moral obligation is to embrace those who are in need and not to turn away from their neediness.
First, care ethics begins with a compelling moral importance of attending to something and then
meeting needs of those individuals who are in need or to whom we owe a responsibility
regardless of whether we are related or not.
Therefore, care ethics is intended to build up on our universal experience of caring for
other people and also in receiving care as children from other people. Secondly, care ethics is
more concerned with a person’s emotions and feelings since this aspect is what creates the
foundation for understanding what general morality requires. These emotions include a person’s
responsiveness, empathy, sympathy, responsiveness and sensitivity. Thirdly, care ethics doesn’t
treat impartial and universal moral values as any important factor in the creation of moral
understanding since there is a possibility of treating the compelling moral claim of the other to be
of more weight and of significance than any universal rules with which it happens to conflict.
Fourth, care ethic re conceptualizes the traditional dichotomy of private and public.
The fifth key feature of care ethics is that it conceptualizes an individual’s as
interdependent and rational being and not independent in the sense of self interested, or a self
independent agent or self sufficient agent.( Virginia Held 2006) According to Held, care is a
value and a practice. Therefore ethics of care criticizes the application of universal standards in
the sense that its outcome is creation indifference or moral blindness.

Business Ethics Paper

3

Case Study 1
Blood for Sale
Plasma International is a company that was formed in Tampa Florid by efforts of Sol Levin and
friends who as entrepreneurs identified the need to take advantage of the market for
uncontaminated blood. Selling blood per se is not actually a good business to indulge in by any
individual; nevertheless Plasma International was a company that went over and above limits by
acquiring blood from even addicts of drugs and alcohol. The company utilized innovative
techniques to boost sales revenue but the outcome of the sales were that recipient patients
complained of Hepatitis. This prompted the company to search for new sources of blood. After
an extensive research and tests with the assistance of experts, it was discovered that the most
ideal donors were actually inhabitants of a certain tribe in West Africa. Therefore after several
agreements with the local government and chieftains the company acquired a contract to
purchase blood from the tribe. The company experienced its first business stumbling block when
it was exposed by Tampa paper that the company was buying fresh blood from West Africa for
as low as 15 cents and later on selling to the U.S for over 25 dollars a pint and the company was
making superfluous profit from the trade. The existence of Commercialized blood market system
has been in existence through time and at times even 40% of blood is simply donated to ensure
sufficiency in hospitals as and when it is needed by patients. This is so different compared to the
health care system existing in Great Britain where donation is done voluntary and no trading of
donated blood is permitted both for donors or non donors. According Richard Titmus the
economist, his perspective is tha...

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Wow this is really good.... didn't expect it. Sweet!!!!

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