The questions are about Business Ethics comes down to hypothetical stand we are put in at Delectable Corp,

Business Ethics

Part A Questions (Based on the Part A background Facts)

If it comes down to hypothetical stand we are put in at Delectables Corp, there are numerous details, factors and moving areas to consider before we are able to come up with informed decisions on how to move on. Coming up with the right decisions will involve making the full use of the ethical decision making tools that we have learned in class. The first tool that comes in mind in this case is the 8 steps to ethical decision making process. When trying to make the right decisions, one has to ask themselves a few questions. For example; “What was the main cause of this situation?”, “What are the important historical facts that are related to this situation that I may need to know?”, “What are the facts concerning the current situation that I should be aware of?” These question are essential in moving forward.

At first, we are thrown straight into the shoes of a low level quality control manager at Delectables Corp. One of the primary issue is that employees are clearing jars of peanut butter for sale that may be contaminated. The quality control system in this company is not taken seriously by the hourly paid workers. In addition, the factory foremen are paid based on many finished boxes of products they can come up with, for this reason, they carry out this exercise without any regard to safety. In addition, there are other signs of marked neglect of quality control like rusty uncalibrated peanut roasters, employees’ risk of bringing contaminants from home by putting on their uniforms there, and the water leaks from the windows after rainstorms.

The second of the eight steps is to clearly define the ethical issues. What we ask ourselves here is what are the ethical issues? First of all you have the issue of loyalty to the company and co-workers, while you also have to truthfully comply with quality control procedures as well as the wellbeing of the clients who consume this company’s peanut products. In other words, is it important to blow the whistle or follow protocol by reporting the issue?

In step three, you have to identify the affected parties. Here, almost everyone can be described as a stakeholder. In step four is mainly characterized by looking at the consequence of each action. Questions such as “Who is harmed by a particular action”, “what is the solution that will bring the most net good to the most people” are asked here. In step 5, you identify the obligations, where one would ask, “What are the obligations to the different parties?” in this situation, one is needed to do their best. However, its counterbalanced by the obligation you have for the company. Step six needs us to consider ourselves like good characters of integrity. What would a person of integrity do? In step seven, one is needed to think creatively about the potential actions. Are there any creative solutions to this problem? That is just one of the question that you ask yourself in step seven. In step eight, one simply checks their gut. This is simply the act of asking yourself if you are fine with the decision that you have made.

When you are faced with the decision of whether to blow the whistle or not, there are three primary questions that need to be asked. First of all, one needs to check their gut and ask themselves, “Which decision are your comfortable making; blowing the whistle or not?” in addition, you also have to ask yourself if you have a strong case whether you want to blow the whistle. Blowing the whistle will accomplish nothing if you don’t have a substantial back up to your claim. Lastly, you have to consider if you have supporters to back up your claim in case you want to blow the whistle. If we blow the whistle no one will be pleased, from the employees to the company executives. The only person that maybe on our side is the quality control manager that is tucked in a corner filled with boxes.

There are different theories that can be applied when we look at it in different theories. First of all, the consequentialist theory focuses on the outcome or consequences of the decision taken. To engage in this, one has to consider all the harms as well as the benefits that it has to all the stakeholders. There are many types of consequentialist theories, they range from asceticism, egoism, hedonism, and altruism. The most popular one and most used in business ethics is the utilitarianism. According to it, the ideal action in any given situation is one that maximizes benefits to the society and minimizes the harms.

To apply utilitarianism to the Delectables Corp scenario, we must first look at the effects on the stakeholders at large. The most important stakeholders in this situation include you, the entire company, the consumers of the product, the co-workers and the QC director.  It’s not easy to blow the whistle. According to research, 82% of whistle-blowers faced harassment after doing it, and 60% were fired from their jobs. Therefore, it is inevitable that you will lose your job at Delectables just like the Georgia manager who found Salmonella in the peanut butter. Therefore, it boils down to a slim chance that your actions will be highlighted in the press and you will turn out to be a hero or you will be fired, scorned by your co-workers and harassed. Without any doubt, blowing the whistle will hurt the company. The factory workers responsible for removing stickers and replacing contaminated jars will be fired or face harsh punishment. Additionally, the loss of market shares from consumers not buying a lot of peanut butter from Delectable.

In that sense, the company and its employees almost deserve or at least are to blame and are responsible for the effects that will come of me whistleblowing and having their behaviour revealed. It would be very bad if someone suffered or became seriously sick or maybe died due to ingesting contaminated peanut butter.

The safety and lives of innocent people should come first above all else. I am not just blowing the whistle. I am saving the lives of babies, children, and the elderly whose immunity is not quite strong enough to battle off contaminants of the peanut butter. Even though it’s debatable, the value and safety of lives beats all other values as well as loyalty to a company and co-workers.

Delectable can maintain an ethical culture by setting up formal systems like policies and codes, executive leadership, orientation and training, the authority structure, performance management and decision processes. Moreover, they can start informal systems like rituals, norms, stories and language to guide the way in which employees behave.

Part B Questions (Based on the parts A and B background Facts)

                Controlling and regulating big food companies is a tough challenge for any government in so many ways. Just like in this article in the State of Georgia, there are just 60 inspectors that are responsible for looking at over 16,000 food businesses. Mathematically, that is just 1 inspector for every 267 businesses. This is just impossible to ask one inspector to take care of all those businesses. In the end, certain companies will slip through the cracks and won’t have federal inspectors checking their behaviour. Additionally, the government is faced with lack of funds or lack of thereof. To boast this awareness of food safety, the matter should be brought forward and categorized as a matter of national security. Moreover, the government should make the companies even regulate themselves. This can be done by coming up with handbooks that sanitize and direct them on matters of safety. To supplements this, the government should provide incentives for companies to deal with proper food protocols.

                Even though it may be hard for the state of Georgia to send an inspector to each food company, it may be important if the state government initiated other proactive, creative solutions to the problem rather than just look at the food industry collapsing and being ran anyhow. A possible action is for the state of Georgia to define the required processes and behaviours that these food firms should follow so that they can pass the necessary food inspection.

                When a clearly defined rulebook and food safety standards is released unto the companies and the public, it easily improves the way food industries approach food safety in general. With all the detailed guidelines in hand, all the companies will be on the same page just like the government. This helps them to know exactly what to do. 

                In order to encourage more companies to be responsible, the government should offer them incentives to follow food safety regulations. On the other side, the government should punish companies that do not adhere to food safety.

                Allowing food companies to control themselves when it comes to safety it’s definitely compatible with public interest on so many levels. It helps to keep costs down since resources in the government are constrained. To the public, this means less tax money that would be needed to control the food sector. Self-governance also maximizes flexibility and improves the time taken to respond to possible mishaps in many areas of the company. To sum this up, self-regulation can turn out to be a very effective technique that keeps costs down, reduces the government interference, promotes flexibility and incentivizes corporate responsibility.

Part C Questions (based on the Parts A, B and C Background facts)

                By the look of it, the idea of shipping these red-tagged cases of peanut butter to San Lopegattia does not look like something major. However, when inspected under the lens of business ethics theories and model, there is a lot more to the story. The supervisor that was responsible for the proposal to ship the red-tagged cases most certainly had Milton Friedman’s stockholder theory at the back of their mind. This is due to the fact that the supervisor was guided by the idea of coming up with profit from items that would have been wasteful. As stated in section C, the supervisor states that the “Delectables needs to convert every product it makes into case.” By chance or purpose, the supervisor acted while following Edward Freeman’s stakeholder theory. It states that the company’s objective is to create as much value as possible for stakeholders and make decisions with respect to all the stakeholders in mind. This is basically everyone. Moreover, selling the peanut jars to San Lopegattia helps the consumers by providing them nutritional needs.

                However, if the consumers in San Lopegattia contract Salmonella or any other illness due to the peanut butter, they are entitled to file a class-action lawsuit. This could spell out big trouble for Delectables if they decide to sell it. By deciding to sell these contaminated peanut butter jars to SL, the company is making a decision that they may regret. In case many people are realise that they are falling sick, the company may be faced with a class-action law suit. However, the company can come up with other excuses. Since SL is an impoverished country, the people are already consuming unhealthy amount of bacteria-laden food. If they can prove this in court that the peanut was not the proximate cause then they might just be off the hook.

                The bottom line is that selling peanut that is contaminated to people who will get sick from it is just wrong. However, selling that same peanut butter to people won’t get sick it’s not that bad. In short, selling contaminated peanut butter verses selling possibly contaminated peanut butter is the same thing.

Part D Questions (Based on parts A, B, C and D background facts)

                From the situation in Part C to Part D, things have certainly jumped from the frying pan into the fire. In Part C only two parties were involved and it looked simple, in this part its complex. While taking account and the deal with the San Lopegattia’a supermarkets executives, the deal can be looked at as a case of commercial bribery. However, in accordance to law, there is no federal statute that bars commercial bribery. However, in 36 states, there are state laws outlawing commercial bribery. Even though commercial bribery is not technically illegal, it still does not make it any less ethical. $250,00 may seem like a lot of money to be responsible for the shipment of peanut butter, it can be assumed that the money will be recovered from selling the peanut butter in SL.

                Nonetheless, if the executives of the supermarket chain had been in government then the whole proposal would technically be illegal under the Foreign Corrupt Practices  Act (FCPA) of 1977. The act bars US companies from giving out payments and resources to public officials in order to get a business favour.

My best advise to Delectables would be not to take the deal because of the risks of getting nabbed with bribing a government official could really be bad.

There are a number of examples when a decision is legal but not ethical. A good example; it is legal to pay employees minimum wage but it is ethical to pay them so little money so that they may not be able to live off it. Another good example is when a business causes environmental damage through their actions which may be considered legal. However, this damage to the environment can be disruptive to people as well as wildlife. Therefore, it isn’t really an ethical procedure.

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