The Ethics Behind Net-Neutrality

I recently came across a news worthy topic of ethical controversy from the Wall Street Journal regarding “net-neutrality” efforts among the large Internet cable companies. The article summarizes the complaints received about Comcast deliberately slowing broadband traffic and controlling the Internet. These concerns have recently prompted the FCC to become more involved and look at potentially enforcing more strict regulation. Additionally, Comcast and various other Internet giants are looking at a tier pricing plan that focuses on capacity based pricing. From my perspective, the ethic delminia seems to be twofold; Comcast is deciding who and what should be controlled and also enforcing specific pricing on what type of media/usage customer’s choice to engage in.

If the real problem here is that our universal airwaves are more congested due to the large space and downloading necessary for certain types of media such as movie and music downloads, then maybe a price increase would be justifiable. However, I believe the real issue here is that Comcast is concerned they will loose market share and customers to the ever increasing usage of Interest video/movies. This is just another move for Comcast and companies alike to maintain their monopolistic power and limiting the choices for customers. Is Comcast going to begin telling us what we can and can not watch? Or increase pricing on specific channels? This topic of conversation goes back to our class discussion regarding the broadband companies and the limitations of freedom of information. There should be ethic ramifications for Cable companies that interfere with the free flow of communication.

There seems to already be strong control over the media and their outlandish pricing, why is it necessary to put more control on what type of media is more acceptable?

References:
"Officials Step Up Net-Neutrality Efforts" Amy Schatzm Dionne Searcey and Vishesh Kumar
February 13, 2008

Distributive Justice

The idea of distributive justice in our reading brings to light the issue of justice. According to John Rawls’ definition justice is “maximizing the good”. As he points out in the reading, this is utilitarian view. The interpretation of the word justice can create undistributive justice because the interpretation does not indicate good for all; it is in terms of the society as a whole.

The Case Study entitled “The Oil Rig”, displays a situation where employees on the bottom rung are not treated as good as the upper level. The idea that an unskilled worker would be forced to amputate a limb in the case of an accident is not justice. This treatment is not in the interest of the greater good. The oil rig’s rules in this situation lead to individuals becoming less productive in society. According to the principles of distributive justice, “each person…has an equal right to the most extensive liberty compatible with a like liberty for all…”. My interpretation of this would be that if everyone was subject to the same rules then distributive justice would exist. The goal, according the Rawls, is for the fortunate to assist the less fortunate to create a better society. In this example, this is not being achieved. The upper level employees are not helping the lower class they are actually hindering them.

Our society is not a perfect example of distributive justice but we do have some aspects in place to create a equality. Taxes are collected to create facilities for everyone and to assist those in need through programs such as welfare.

Why do I shop at Wal-Mart

As I was reading the posts on the blog I was reminded of a case I worked on. We were studying Wal-Mart (yes I know we study Wal-Mart every semester!) and its success as a company. It is no news to us that Wal-Mart is embroiled in literally thousands of law suits for a whole range of issues including discriminatory employee practices, less than standard health care benefits to its employees, effect on the community, non eco-friendly practices, unfair business practices etc. The biggest is the class action law suit being brought up against the company for discriminatory practices. Not to mention Michael Moore’s film that cast Wal-Mart in a new light. As true are these facts as is the success of Wal-Mart as the biggest employer in the United States with revenue larger than the GDP of some countries and even larger than some others. They also experienced continued growth even during tough economic times (net sales rose 9.5% $312.4 billion, and net income rose 9.4% to $11.2 billion in 2006).

What is happening here? Despite several Ethical controversies, Wal-Mart manages to attract consumers who are responsible for the company’s growth. So the question here is, are we really socially responsible or do we only force our corporations to be?

Friedman...a true revolutionary thinker.

For Friedman the role of an executive is to execute the objectives of the corporation in a manner that is consistent with the contract between the CEO and the shareholders. Friedman has really brought nothing new to my index of the many definitions that I’ve heard regarding the role of a corporation and it’s executives’, and provides further justification to legitimize the wealth of big business. As I was finishing the article, I found myself not all that impressed with this continuation of the status quo position of why corporations do not have any “social responsibility” except to increase profits.

As I read the final statement of this article, I realized that I would need to take another look at Friedman. The final statement: “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
John Locke might maintain that Friedman is either an idealist, or is not very perceptive. Locke would argue that man is by nature a self-maximizer which is why there is a need for (limited) government involvement in society. How does Friedman suggest that corporations accomplish this one “social responsibility?” If (most) corporations behaved in this manner, this course would not be necessary, and my guess is that the editorial pages of the newspapers would get quite small. Friedman…revolutionary.

Whose responsibility is this

In days of greener environment and socially responsible companies spend substantial dollars in welfare projects ranging from waste treatment, social welfare to contributions. The rise in the corporate conscience can be plotted back to the idea of social responsibility and its growing importance. Companies have come to realize that by not being socially responsible, they undermine the image of the company, run the risk of losing market share and more importantly alienate potential investors.
Popular web definitions of Corporate social responsibility (CSR) define CSR as a concept that organizations, especially (but not only) corporations, have an obligation to consider the interests of customers, employees, shareholders, communities, and ecological considerations in all aspects of their operations. But is the management of the corporation collectively responsible for deploying corporate funds in social causes or in turning the organization into a greener entity? Will this be justifiable to the investing shareholders? Sure, the entity is responsible for clean accounting practices, quality of its product and any adverse effects on its consumers, not polluting its environment and fair and ethical treatment of its employees. But should a corporation be held responsible for the development of community? If yes what could be the justification for such investments given that these are typically not for profit?

Marketers Say They Pay for Play in News Media

Every marketing executive wants to advertise their products via various ways such as magazine, newspaper, TV and so on, but not all method is correct or I should say that some methods will lead to ethical issues. I think it is difficult to define what kind of methods of broadcasting will meet the moral standard because I don’t think there is an exact answer for that. At least I don’t know the answer.

Sometimes we could see a particular branded product appear on the movies, TV or other media and the name of brand is clear to see or hear. The reason is the marketing executives pay for advertising, a commercial exchange, and it should be okay with anyone. However, the similar commercial exchange in different situations will be judged reversely. For example, the government wants to build a bridge and there are ten companies suitable for competing with this contract. Finally, one of them got this contract because he paid a lot of money for someone who is in charge this case. At this point, I will stand for this commercial exchange is unmoral for sue. Nevertheless, if I am the boss of one of ten companies and my company will be bankruptcy without this contract, whether or not I should use money to exchange for the contract. If I know other nine companies all sent money to someone in charge under the table, whether I should do the same way or even more to ensure that I can get the contract. At this point, I am really not sure how I will do. If you are the boss, would you use the money to exchange for the contract?

Reference: http://www.nytimes.com/2006/06/26/business/media/26message.html?_r=1&scp=8&sq=Ethical+issue&st=nyt&oref=login

Where is the line drawn?

At the end of the day, I found the articles from Friedman, Locke, and Carnegie to be the most interesting presentations. The simple social responsibility of business to increase its own profitability so long as it stays within the rules of the game, as Friedman espoused, seems similar to Locke’s proposition that man is endowed with the ultimate responsibility to maximize available resources to the greatest advantage. This may be a gross oversimplification, but is it wrong to apply this concept to modern business? It stands in stark contrast to the stakeholder concept and further seems to stand in contrast to the idea of corporate social responsibility that is so prevalent in modern business philosophy. Is the Darwinian concept of business survival that far-fetched? American businesses have sought cheap labor outside of our borders in order to reduce their costs and provide a cheaper, more affordable product to consumers. Is this an unethical way for businessmen to achieve their ends? Friedman would not think so, and I am not sure that I disagree. Unfortunate for the worker does not mean unethical for the business manager.

Where I see the line drawn between making a profit and unscrupulous business choices is at a point when the customer is adversely affected. At that point, as seen in the prescription drug market, a new approach to ethical business behavior must be entertained. This is where the stakeholder is being adversely affected and social progress can actually be stunted in the name of bigger earnings. The issue can certainly be examined from multiple perspectives, but a blog only needs one! See everyone in class.

Why is this ad any different?

Since coming under Congressional scrutiny, Pfizer recently pulled the “Jarvik-Lipitor” ad campaign featuring Dr. Robert Jarvik (inventor of the “Jarvik” artificial heart) as a spokesperson for its cholesterol reducing drug Lipitor. Briefly, Lipitor is the #1 selling drug in the world and is losing market share to cheaper generics. Pfizer signed Jarvik to a 2-year deal to help protect their Lipitor franchise. At the “heart” of the issue is that the ads are misleading consumers. Most importantly, Dr. Jarvik is not a cardiologist nor is he licensed to practice medicine (can’t write prescriptions) and they use a body double of him being “active” (for a rowing scene). Yet the ad depicts him dispensing “credible” medical advice for an expensive and important drug (to Pfizer and people with high cholesterol). So, is Pfizer behaving unethically in trying to protect a blockbuster drug by capitalizing on the notoriety of a famous doctor or is this just reading too much into an advertisement where Jarvik is expressing his personal experience and recommends you to discuss Lipitor with your doctor. Isn’t this just like the many other ads showing “famous” people recommending a product (Jenny Craig, AAMCO, Gatorade, etc)? I feel that Pfizer has behaved responsibly in trying to promote their product but are being wrongly accused or questioned for intentional wrong-doing to sell expensive drugs…you know, the typical unethical behavior exhibited by many “Big Pharma” companies. Any thought/comments?

http://www.nytimes.com/2008/02/25/business/25cnd-pfizer.html?em&ex=1204174800&en=46f62e7cf0f9683d&ei=5087%0A

http://www.youtube.com/watch?v=7SY2YDwUMP8

Medicare overpaying hospitals

I’m sure we will discuss in class how the drug companies are acting unethical by gauging the prices of prescription drugs. I just wanted to mention another side of this, why Medicare is losing money and is not able help out more with the costs of prescription drugs.

In California, New York and Florida, independent auditors had found in 2006, $357.2 million in overpayments from Medicare to hospitals of which $247.4 million was returned to the Medicare Trust Fund. Now California members of the House this month are attempting to impede the recovery of hundreds of millions in overpayments to Medicare providers. They are trying to pass a bill stating that a moratorium be placed on the audit program. The bill appears to be nothing more than an attempt to shield hospitals in their district from having to repay the piper after years of receiving too much money from the Medicare system.

Despite Medicare officials’ pronouncements that the audits are a deterrent to fraud, these Representatives are lining up to gut the program before it rolls out nationwide even though hundreds of millions of dollars are being funneled back into the Medicare Trust Fund.

The ethical question is; Should these representatives be more interested in kowtowing to pressure from hospitals in their districts that billed for millions they were not entitled OR in shielding the Medicare program and taxpayers from huge losses.

Business Ethics in India

In countries where institutional and public champions promoting corporate responsibility are weak, companies tend to have a narrow approach to business ethics. Such a narrow approach to corporate responsibility can take several forms, but in essence boils down to a limited response to the concerns of communities where a company operates.

India, where corporate responsibility has become an over-used catchphrase, some close scrutiny, however, throws-up a somewhat unique situation. A good illustration of this is the article I recently read which talks about the recent crisis faced by Tata Motors, a major part of the Tata Group.

It is indeed ironic that on 2 December 2006, while Ratan Tata, chairman of the Tata Group, was being honoured for “Responsible Capitalism” by the Princess Royal in London, in an obscure Singur neighbourhood in the Indian state of West Bengal, thousands of farmers and labourers were being attacked by armed police. Newspaper reports said that at least 80 people, including women and children, were injured. The Singur farmers were protesting against the forced acquisition of their lands by the government so that Tata’s latest dream project – a plant to build India’s “one lakh car” (100,000 rupees or just over $2000) – could become a reality. Tata had decided to locate their small-car plant at Singur, about 40 kilometres north of Kolkata, and wanted to get hold of about 500 hectares of land. The plan is for the cars to be in full production by 2008. For the Left Front chief minister of West Bengal, securing this project has been an issue of prestige, especially considering the competition from several other industry-friendly Indian states. More than 5,000 families in 11 villages had been evicted. The news reports suggested only 1,600 farmers agreed to sell their land. Tata, however, has chosen to maintain a silence on the matter, leaving the government with a deadline to complete the acquisition and handover the land, and ignoring petitions by campaigning organisations.

Tata has cultivated, and now enjoys, an outstanding image in India, and beyond, of being a very socially responsible group. Many companies in India perceive Tata’s corporate responsibility as a benchmark to emulate. With the number of awards and recognitions that different companies in the group receive every year, one may be tempted to believe that many broad approaches to corporate responsibility would be evident in the company’s actions. However, as the Singur case demonstrates, Tata Motors seems to be caught up in a narrow approach, where social responsibility begins only after the land is handed over and the plant is commissioned. So, this case raises a number of issues. When and where does the responsibility of companies begin and end? Does over-reliance on community development make a company responsible? It is high time companies in countries like India start reflecting upon their corporate practices and look beyond traditional community development and a simple focus on compliance.

Re: Congressional “earmarks”

It is truly obscene how much money is wasted in our government. In 2005, President Bush signed a transportation bill with $24 Billion in earmarks. This goes to the heart of ethics and politics. An example of just 2 ethical issues with the earmarks that were approved called for “improvements to an exit ramp”.

California Congressman Ken Calvert. In July 2005, received $8 million for improvements to an exit ramp – an earmark, he proclaimed, would streamline access to a local military base. What Calvert didn't disclose was just two months earlier, he bought land about a mile from the base. Public records reveal that within a year, Calvert and a partner sold the land at a profit of $435,000

California Congressman Gary Miller, who sits on the Transportation Committee purchased a piece of land for $1.5 million from his top campaign donor – who also loaned him the money for the deal. Eight months later, Congress approved millions of dollars worth of improvements to a nearby exit ramp – an earmark overseen by Miller's committee. He then sold the land back to his campaign donor for $100,000 profit.

Neither man had any repercussions for these blatant abuses. It should be said that they did not necessarily “break the law”. But is what they are doing ethical? They are using our taxes to make themselves rich. If these congressmen did not own the land next to the ramps, would they still have pushed for the millions to be spent on it?

Plasma International

I enjoyed the readings for this week. I would like to focus this week's blog on the case study entitled: "Plasma International." My argument is that Corporate Social Responsibility is not tied to a company's conscientiousness, but rather comes as an outhgrowth of wealth-building and, when caught, serves as a bi-product and convenient tool to legitimize unscrupulous behavior.

All of the case studies and the philosophical perspectives we have read about recently have had a profound thought-provoking impact on me. However, none was more unnerving then this case study where a business buys and sells the blood of West African tribes like they are operating a prostitution ring. I've often been amused at how we as individuals and as corporate leaders process our thoughts in such a way that the outcomes are clear to us, if not to anyone else. These are especially lethal practices when used as an attempt to justify our actions by legitimizing our behavior.

Plasma International, like all corporations that we have studied or will study, went into business to make a profit. Period. It appears that this company had no scruples, no conscience or common sense when they began this operation. By using the blood of street people and derelicts to supply unknowing recipients, their costs were low and their profits were high. There were no other basis for operating a business such as this. But the questions are these:

• Were they thinking of corporate responsibility during their start up phase?
• Did they attempt to select donors based on any kind of criteria (safety, fragile, etc.,) other than their donors were human?
• Did they care anything about the patients that would be receiving this blood?

The answer to these questions are obvious. But did their actions invoike CSR at this point. "No." However, even when they got caught selling tainted blood, it did'nt force them to stop the practice. Why? Because it would impact profits. So they chose to find another source.

Instead, they, like many other companies (H. B. Fuller, Resistol, etc.,) that pounce on the poor and disenfranchised to line the profits of their industries, found new sources of blood in underdeveloped countries, purchasing it for 90 cents a pint and reselling blood to hospitals in the United States or South America at $150 a pint (Thomas Donaldson & Patricia Werhane 156).

The article ended with Smith refusing to open up about his business practice, leaving the reader wondering if he infact, practiced any CSR aftwerwards. Of course, many of the businesses studied, after becoming large enough (through profits, government subsidies, etc.,) jump onto the conscience-train as they then attempt to legitimize their activities by invoking corporate social responsibility.

Take any of the companies that we have studied so far. H. B. Fuller could have taken several actions to curtail the effect of glue-sniffing amongst the street people of Honduras:

1. They could have removed the glue from that market
2. They could have added a water-based substance to the product that would make it less
attractive to the street children.
3. They could have helped the government start programs that would get the street children off
the street and get them into clinics for treatment (more jobs) and later, help them by offering
employment opportunities(more jobs).

Instead, they chose to attempt to put a law on the books that would allow them to add oil of mustard to their product, thereby continuing to increase profits.

Resistol was unbelievable. They take a product that cannot be patented and patent aspects of their business in order to secure huge profits on the drug. They continue to raise profits as they pleased. Yes, they spend billions of dollars on R&D but the case basically mentioned one new product that has a potential for this company, and they intend to price that product higher still. The question here is: "Where is their social conscience?" They give the drug away free in some underdeveloped countries, as European countries are selling the same produce for $2.60.

Back to Plasma International. The article mentioned that Jack Smith went into the blood and blood plasma business after recognizing the world's need for safe, uncontaminated blood. So he turns around and sells tainted and unsafe blood through storefronts and spends his company's resources to fund a highly-qualified team of medical consultants to find new sources. When questioned about his activities, his response is: "I just don't understand it. We run a business just like any other buseness: we pay taxes and we try to make an honest profit (157)."

Honest? No. Profit? Like any other business, Smith is right.

Is Social Responsibility Really Important for all Business?

Just to be clear, all my opinions here are based in the principle that all the companies follow the laws/rules, or they should do.

I do agree with the idea that Corporate Social Responsibility is something that was created just looking to improve the profits. Because of that, I see that Corporate Social Responsibility as some thing that applies for some company and doesn’t apply to others. This doesn’t mean that it’s not important and it shouldn’t be done by all the companies.
Because we are talking about the real world, we know that companies are always trying to maximize their profits and if they don’t NEED to spend extra money, they probably won’t do it.

To me, is this concept of Corporate Social Responsibility is more important to the companies which sell to their consumers and could be their profits affected with the implement, or not, of the Corporate Social Responsibility.
Companies which sell to a costumer, that will manufacture and transform their product in a final product, is difficult to measure, if it exist, the impact on their image, sells and profits. To be more clear, for example a company which produces shampoo, the consumer could be inclined to choose, or change, his/her preference to a company that is social responsible and this would affect the company’s profit.

On the other hand do you, as a consumer, care about where the gold in your ring came from? So, why should a miner company invest lots of money in Corporate Social Responsibility, if it will not affect its profit? Why RESISTOL has to spend money, if you don’t care about what glue the guy who fixes your shoes uses? To all the companies, is important to act legally, and to SOME companies is important to be more, to be social responsible.

This I think is the vision from the people who own or manager companies. Is this the ideal? Is this illegal? Is this ethical? This is business!

I can not blame the companies and the people, because I think the same way and I would do the same think. And you?

H.B. Fuller in Honduras Recap & Comments

During the mid-80’s, Honduras was facing critical social/economic issues that were directly affecting the lives of children. Many of the children between the ages of 5~12 in the Nation’s capital were addicted to sniffing glue to “seek escape from the squalor and misery of their daily existence”. This practice created a hallucinogenic effect that helped the children cove with their reality but with fatal effect in the child’s body (causes burns, carcinogen, destructs tissue, nausea, asthma, death).

One of the main providers of glue in Honduras is H.B. Fuller, which produces the Resistol brand. Resistol is so commonly used contact cement glue readily accessible in household good stores. The problem that H.B Fuller faces is that since, this is the commonly used glue, children are buying it to sniff it and society have linked the brand name with the addiction & now use the term “Resistolero” to refer to all street children. Now, H.B. Fuller seems like the solely responsible agent for the glue addiction.
Aside from damaging their company’s reputation, they had to be socially responsible & try to fix this social/health problem. The company’s leadership came up with various ideas to solve the situation like changing the glue’s formula and education. I believe that a more effective solution should have been restricting the sales of the glue to people > 18 years old or by selling in bigger packages in order to reduce sales to lower income (price sensitive) individuals (i.e.: children).

How important is Ethics Training!

Business Ethics plays very important role in today’s corporate world and it has been realized by the companies. Most of the big companies are now trying and providing their employees with ethical training.

In the recent business ethics article said ethics are making a comeback. More and more corporations and businessmen and woman are now realizing that ethics aren’t checked at the door when entering the workplace.

Most companies have training sessions but now they are incorporating ethics into their training. The companies think that these training will not only increase companies’ job satisfaction but also the customer satisfaction and lower the turn over.
The CEO’s of company anticipate that employee after taking the ethical training they will feel proud of their companies and also feel empowered in making their ethical decisions.
Big companies like Dell etc have incorporated ethical training. These companies are trying to attain world of business ethics and help employee to make ethical decisions

Lot of companies is totally anti ethics and training their team to be unethical and make more profitable numbers for the company. For e.g. lot of companies try and sell lot of stuff which customers do not want. Many times the customer is naïve and do not know much technical know and how and totally relies on the salesperson’s recommendation. If the company has trained employee to make numbers in unethical way the customer might end up buying lot of unwanted stuff and may be not the right thing. Another example for why unethical behavior might exist is from corporate pressure. An accountant may feel pressured from his or her client to report false information.

Ethics training promoted with the Sarbanes-Oxley Act of 2002.It required publicly traded companies to disclose whether they have adopted a code of ethics for senior officers. In an HR magazine artice it shows that "More for-profit companies have provided ethics and compliance training than ever before," says Harned, citing 2003 research by the ERC showing that 54 percent of employees say their organizations provide ethics training.

My thoughts on Resistol

I agree with the majority of points made by my classmates in the two previous posts on Resistol; however I believe that the situation in Honduras has spiraled out of control and for change to occur it must include a holistic approach to the problem. The problem is twofold, trying to modify current behaviors that are rooted in social and economic problems, but also the need to make changes to prevent future children from this addictive behavior.

I do not believe that one solution will solve the glue sniffing. Education, product modification, changes in legislation, community relations strategies and determining root causes all have a role in changing the current substance abuse situation. While I do not advocate adding a known carcinogen to the glue, Fuller might consider looking in to other additives other than oil of mustard that would have less negative side effects. If the smell were able to be changed safely, this may deter children from starting to sniff glue as well as deter the less addicted children. While it is possible that children might switch to other substances this would be a critical time to push education and behavior modification. While Beto also used politics and government to assist, he was unsuccessful in getting legislation that he supported approved. The Honduran government has a major responsibility in curbing controlled substance abuse in their youth, but from the case it appears that the government has lots of turnover and stability issues.

Supply and demand.

Wikipedea describes supply and demand as “market relations between prospective sellers and buyers of a good. The supply and demand model determines price and quantity sold in the market.” Most student that have taken an economics course view a free market economy as a good thing and recognize that supply and demand forces naturally reaches an equilibrium. When demand for a product rises, the sellers will be able to demand higher prices for the same product.

An argument can be made that in the case of Thalidomide, demand is highly inelastic. Rather than suffer with the effects of cancer, cancer patients will pay almost anything for the drug. From this point of view, raising the price from $6 to $29 can be considered highly unethical.
However, Thalidomide is not the only drug that is effective in treating cancer, and among it's competition it one of the cheaper drug available for cancer treatment. Should Celgene management strategy of raising prises be considered unethical when it sells it's product for less than it's competitors?

Celgene has an obligation towards it shareholders. This obligation is purely financial. After posting losses for a number of years, it's moral obligation to it's shareholders is to turn the company around. Unfortunately this includes tactices such as raising the prices of Thalidomide.

Web source
“http://en.wikipedia.org/wiki/Supply_and_demand”

International Bribery.

I had a friend who works as a representative in Beijing, China for a big company in Europe. He expressed the complexity of working in totally different environments and culture, similar to the case we discussed in the class. As a native Chinese, he knows quite well that, to finish projects more smoothly and efficiently, relation is indispensable. This doesn’t mean simple networking, but implies “networking” through luxury dinners, entertainment and “gifts”. He tried to inform the situation to his boss in Europe, actually hoping to get support and “sponsorship” for the process. However, this was a big shock to other people, who seriously considered this activity as bribery. They tried to do things their way, without treating some related Chinese government people specially; the results were not positive. My friend said people involved in the case in the company are still struggling about this.

I think this is a very typical in the world business now, since a lot of international industry is going on. Although most countries, such as China, are trying their best to combat bribery by severely punishing people involved, still this is quite popular around the world. How multinational/multicultural corporation adapts this or deal with this is critical to their business, as well as the economy of the country. Should we have some specific laws or rules about this issue in the companies, even making this “dirty” work as part of the business plan? Meanwhile everybody should consider about how to end the corruption/bribery, which has both demand and supply sides all the time. I know it’s hard and will definitely take long time.

Chapter 4- Case Study New Protocol:

Chapter 4- Case Study New Protocol:

The United States is currently faced with the dilemma of affordable healthcare. Individuals who are not covered by an insurance company or Medicare struggle to afford necessary care. The case study “New Protocol” highlights an example of inflated drug costs. The profit margin of this drug is absorbed by Medicare, insurance companies, and individuals needing the drug.
The pharmaceutical industry plows money into Research and Development. In return, companies in this industry manufacture drugs which are greatly valuable to society. But, what should the price tag be on these drugs? The case study breaks down the cost makeup and profit analysis of the drug thalidomide. Should the U.S. regulate the price in which private companies sell drugs at?
Insurance premiums reflect the cost of purchasing drugs like thalidomide from companies such as Celgene. Should someone step in to create price ranges for pharmaceutical products? This idea does not align with the rest of the US marketplace. Why should companies such as Celgene have to cut profit margins to accommodate the health care crisis in the U.S.?

CSR from an Executives Point of View

I subscribe to the Economist magazine, which is a magazine targeted to global executives. I am scared to bring this magazine up in Ethics class because the authors tend to be judgemental and highly persuasive towards popular demand and not to scholarly research. Nevertheless, in the January 19th issue of this year, they compiled a large special report on CSR and the many views surrounding how big companies and executives view the "booming" industry of CSR. Here is a link to read part of the report: (Unfortunately, the entire report costs money but I will try to remember to bring in the magazine so if anyone is interested.)

http://www.economist.com/specialreports/displayStory.cfm?story_id=10491077

What I found interesting is how the author of this report summed up CSR into three broad layers:

1. Corporate Philanthropy
2. Risk Management
3. Opportunity

The opportunity layer is described as "trendy" and suggests that by focusing on CSR, companies can create value. Even well known scholars have chimed in on this section of CSR. Porter and Kramer believe that companies that exploit CSR can make their company have an advantage over the competition.

This is where the ethical question comes into play for me, are executives doing CSR out of the goodness of their hearts or only to keep up with the trends of business, to become more profitable? Is it wrong if everyone can do it? And, do we [society] care if companies are acting unethically just to make profits because in the end, CSR helps and benefits society?

I am very interested on this subject so any opinions are highly welcome :)

Toyota and Corporate Social Responsibility..!!

This weekend I came across an exemplary example of corporate social responsibility (CSR). It was an article about Toyota operating in India. Toyota has recently started “Toyota Technical Training Institute” on the outskirts of Bangalore. This institute is worth $5.6 million and would encourage the poor, needy and below poverty line applicants of age 17, to apply in order to receive a full fledged factory training in the field of automobile industry. I would not have addressed this as a step towards Toyota’s corporate social responsibility, if the trainees of this institute had no choice but to work at Toyota and only Toyota once the training was over. I was impressed by the fact that the company plans to employ the students once they have completed their three-year training, though they will have the option of leaving the company and working elsewhere. There is no bond to be signed, and students are free to join other automakers. Toyota also adopts a curriculum that fits with the technical needs of the automotive industry today. It further provides a monthly stipend to the trainees in order to enable them support their families while they are away from them

My idea of corporate social responsibility is to return a part of your earnings back to the society, without an expectation of getting anything back. Further, the portion that is invested in the society has to be proportionate to whatever the business consumes from the natural resources, the infrastructure and the environment. In my opinion every company that survives in today’s competition is capable to make profits and keep going in future. But it is CSR that makes one company distinct from the other!! In simple terms it is morally and ethically correct to pay back whatever you owe to an entity. I also think that CSR plays a much important role when it comes to operating in a foreign country. A company is even more liable to a foreign country in which it operates. It has to make sure to keep within the laws and rules of the other country and function in such a way that the country is eventually benefitted by its presence.

Ref: "How Toyota trains India's teens," BusinessWeek February 07, 2008

Business Social Responsibility

I enjoyed the readings for this week (mostly - Marx was a bit abstruse), but took particular interest in the section on social responsibility. The article by Milton Friedman was particularly meaningful for me. He says in summary that, "there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game...without deception or fraud." I think the key with Friedman's thoughts are the part about staying within the rules and without fraud or deception. He further elaborates on this by saying, "...make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom." To do anything otherwise, would be to ignore your responsibility to the owners of the business whom employ you.

Freeman's essay gives further elaboration on this thought by expounding on those "basic rules and customs". He frames it as creating value for as many stakeholders as possible. Stakeholders include financiers (owners), customers, employees, communities, and suppliers.

Are Friedman and Freeman in conflict? Perhaps somewhat, but I don't think they are diametrically opposed. Friedman's premise is certainly more basic and simple while Freeman's framework is much more elaborate. That said, Friedman recognizes the responsibility to comply with laws and customs. Freeman gives us tools to do this. I do tend to agree with Friedman, though, that its not the responsibility of business to get deeply embedded in systematic social evils. That is better left to the political establishment.

How do I interpret these positions on the case of Resistol products in Honduras? I think Fuller definitely had a responsibility to address the abuse of its product by the children. As I sit here at my desk I see that the dust remover I use (in the form of a compressed can of gas) has a product called Bittergent added to it to deter huffing abuse (makes the substance horribly bitter). This responsibility is clearly a custom, if not a law, in the US. I think it was wrong for Fuller to get themselves bogged down in the social and political debate surrounding the best way to control this substance abuse. Oil of mustard was not perfect, but it was the law, and it was used elsewhere. The proposed alternative, education, seemed unrealistic in a country with such limited resources. Fuller's should have followed the law and used the Oil of Mustard. If in the future a better deterrent was available, it would be Fuller's responsibility to investigate it and make a recommendation to the appropriate authorities.

Congressional "earmarks"

Did anyone watch Bill Moyer on PBS, along with Expose? (http://www.pbs.org/moyers/journal/02222008/watch.html)

The program featured an investigative reporter, David Heath's, research on over 12,000 "earmarks" in one year, totaling $12 billion, on funding bills. Earmarks are add-ons to major bills, many at the last minute before passage. What is so wrong or unethical is that many of these earmarks provide funding for dubious, ludicrous, conflict-of-interest, or other questionable causes. Lobbyists and campaign funders factor heavily in these earmarks. Some congressional members stand out more than others.

I know there's alot of graft and corruption out there but it sure is easier to go about the day-to-day living in "lower capacities" of pleasure as far as external events go. This course is shaking my conscienciousness in ways that make it harder to not get involved. Jane

Ethical deception

Though ethical deception (informally well known as 'bending the rules') still prevails with high magnitude, it was upgraded to a high level by one person starting from the 1950s. This person was a very popular business tycoon in India who started from the streets to create an empire of his own. His name was Dhirubhai Ambani, the founder of Reliance Industries.  He was proven to be ethically misleading the public in at-least 2 confirmed scenarios. One was when he worked as a pump attendant at Shell in Aden, Yemen. In those times, Yemen's currency, rial, comprised of coins made of pure silver. Surprisingly the face value of the silver used in these coins was worth more than the currency value of the coin itself. After a while, the Yemen government discovered that there was a sudden drop of the quantity of silver rials in the market. Further investigations pointed out the source to be Mr.Ambani who was actually melting these coins and selling to dealers in London. Ethically, he wasn't breaking any rule but he made lots of money out of it.

Another time, Mr.Ambani went back to India and started playing with the stock market. He used to create these ghost companies offshore from Cuba, et cetera calling them the Crocodile Corporation and so on, and started to buy very huge quantities of stock options of Indian companies. Usually, these options are traded between brokers and they never physically exist. Mr.Ambani took advantage of this loop hole and one day, went to the stock exchange and demanded the physical form of his millions of stock options to be dispatched to him immediately. The stock market was puzzled and didn't know what had to be done. So, they had to shut down the market for three consecutive days. That was the only time the Bombay Stock Market ever close down. Though, Mr.Ambani wasn't breaking any rule, he made the stock market realize its fragility and prepped them for any further such instances.

References :

http://findarticles.com/p/articles/mi_qn4158/is_20020718/ai_n12642708

http://en.wikipedia.org/wiki/Dhirubhai_Ambani

Questions and Thoughts

My post is not about a specific case, it is about general thoughts that came to me after the second class.
I was wondering if a person that is following all the rules/laws could be unethical. Is ethic something that can change depending on where and/or when you are? Can culture interfere in the people ethics? Are laws that are unethical? How to deal with different kind of ethics? For example: If a company is multinational, how to deal with different ethics from all around the world?
Taking as an example the last two cases in class, I had some opinions that came to me just after class that I couldn’t expose them and I will try to do it here. And if you guys could put your opinions/ answers here I appreciate, because then I can see if some one think like me.
In the Honduras problem with Resistol, In my opinion, we can not say that the company was unethical. They weren’t making something wrong or illegal, its product is made for something else. Why does they company have to spend its money to adapt its product if the government is not combating the illegal commerce? To me, maybe, the company should think about spend its money, but I don’t see the ethical issue if they decided not to do considering this a government problem.
In the other case, the Italian tax, my opinion is that if you are in a different culture, with different ethics, you can still be ethic, if you are following the laws and rules, even if it is different from your ethic. To me if the guy (or anyone that) had accepted the Italian rules he would not be unethical.
Of course that even being legal, that are some behaviors that to me, in my moral, are unethical. I can not agree with some behaviors, but if they are legal in somewhere, I can not label the people that follow them as unethical people. I agree that we can have different ethics in different places and times. Therefore, I don’t see ethical issues in the cases studied.
I really appreciate if you comment my opinions. Do you agree or not? And answer the questions posted above.

Resistol - fighting a larger problem in Honduras

My post focuses on the case study, “H.B. Fuller in Honduras: Street Children and Substance Abuse.” This case was packed with conflict, and I realized that this type of issue is probably one that large corporations, particularly those that deal with solvents and chemically-based products, encounter.

I actually felt somewhat sympathetic toward H.B. Fuller/Kativo, because its tradename was being slandered by becoming synonymous with substance abuse, despite its Resistol product not being the only one abused by the street children in Honduras. The company had fallen victim to a much larger, economic, political, and social problem than they could control. I feel that Beto, Kativo’s VP, did try to rectify the situation and promote social change as best as he could, and the group that went down to Honduras after the stockholders raised the Resistol issue was diligent in trying to find a solution.

I was not sure what steps the company should take. It seems like it could have poured money into the CONATNSI group, which had strong improvement objectives, but to what end? I don’t think that a single company’s actions would make much of a difference here. Perhaps it should have focused on improving its Resistol product so it was not harmful (even if it put a dent in profits), and assigned associates to the CONATSI group to demonstrate the company was dedicated to improving the social situation. Maybe that’s what all companies in this situation should do. Try to make their products as harmless as possible, evaluate if they should even make them at all (depending on their negative impacts), and become involved in community relations so they can become directly connected to the very relevant social environment in which they operate.

Wrangling Over 'Reasonable' Fees

New York Attorney General Andrew Cuomo announced on Feb. 13 that a six-month investigation by his office found the nation's biggest health insurers have systematically defrauded consumers in the state by setting their reimbursement rates for out-of-network care artificially low. He has issued subpoenas to 16 insurers and intends to sue industry giant UnitedHealth Group.
Actuall there has been a long-simmering battle between insurers and health-care providers over how much should be paid for medical procedures. It's not just hospitals that get shortchanged by insurers. The out-of-network doctors that treat patients that come to the emergency room are routinely denied their usual and customary charges. Since most of those out-of-network doctors are in solo practice, they cannot legally collectively bargain with the insurers. So they have no recourse but to simply stop seeing patients in the emergency room. Finally, patients are caught between two warring bodies.
Insurers argue that hospitals charge for medical procedures far beyond their actual costs. Insurer say they have to compare area hospitals' rates to determine what's reasonable because health-care providers all have consultants showing them how to raise prices.
I think there is the ethic issues in it:
1. Insurers should not collect premiums when they know they don't have the contracted physicians that they need to provide adequate emergency care and yet refuse to pay the out-of-network physicians that come to bail them out.
2. health-care providers should not overcharge their patients. The overcharging proplem directly plauges the whole industry. At the end, it hurts patients.

The Internet and Social Conversations

Last week, I learned about TED.com, an organization formed with a unifying theme of Technology, Entertainment and Design. Its mission, paraphrased, is to bring the best thinkers and innovators from around the world to explore deeper understandings of our world and to turn this understanding into a better future for us all. I immediately thought of our Business Ethics class.

Of interest, is that TED’s annual conference invites “world class” citizens (not sure how they are chosen) in their respective fields to present for “18 minutes”. Each presenter has one year to prepare for this moment! These presentations are available, without cost, on the web site. I have only just begun to explore…

Today, I watched a video clip of Chris Anderson. He is the current “Curator” of TED.com. He spoke of his own business success and failure that led him to value “truth, curiosity, diversity…” with “no selling, no corporate bullshit, no bandwagons, no platform…” (Corporate logos, however, are throughout the site.) He said he wanted to present the most interesting people in the world in short vignettes in order to explore our interconnections and to ask important questions about life.

TED is one of many Internet communities today that challenge businesses through social conversation within global communities. This is likely to continue to increase due to a legal system that becomes “broken” once ethics are unchallenged or disguised.

How Drug’s Rebirth as Treatment for Cancer Fueled Price Rises

My comment is in regards to the case study New Protocol: How Drug’s Rebirth as Treatment for Cancer Fueled Price Rises. This is a perfect example of a company with a social responsibility conflict. On one hand they are acting in a socially responsible manner by making a drug that helps patients who are suffering. On the other hand they are taking advantage of society by charging a higher price simply because it has been determined that this medication can also be used as a cancer drug. From this prospective, they are managing for the stakeholder’s interest. It does not seem ethical to price gouge customers simply for the benefit of the stakeholders; especially when the cost to manufacture the product has not increased with the rate of the price increase.

This case is related to an article that I read in the New York Times. The article entitled “Cancer Drug Ruling Will Have Wide Impact”, which describes a company that has created a cancer drug that fights the cancer but does not prolong life. At this time, this drug is approved for the use in advanced stage colon and lung cancer. The drug’s benefits do not out weigh its effects and could potentially lower the bar for future drug approvals, if approved. Where is the social responsibility of this company? Why would they create a drug that fights the cancer but does not provide any benefit to the patient? It seems this company’s focus is skewed and perhaps geared towards the stakeholder, just as in our case study.

Reference: http://www.nytimes.com/aponline/health/AP-Cancer-Treatment-FDA.html

Excellence: The virtue Google is trying to possess?

After a few over head transmissions, I managed to understand a few philosophies behind business ethics. What caught my eyes was the six dimensions of vitue ethics. It was enlighting to know that even a good sense of humor could be a virtue in corporate life!

Excellence as a virtue, in business ethics, has been discussed as something more than "knowingly do no harm". This reminds me of Google's corporate code of conduct: "Don't be evil". If it is not enough to do no wrong, is it, in turn, enough to not be evil? Apparently, people from Google read the last paragraph in page 70 of 'Ethical Issues in Business' (our textbook for the BUAD840 course) and thus, decided to do something more. Now, it is also trying to stop the evil. The evil I am talking about is the long speculated and much talked about merger between Microsoft and Yahoo!.

Google clearly considers the merger an evil to the consumers. In its official blog, Google openly talks about Microsoft's legacy of serious legal and regulatory offences. Google's concerns over "perserving the underlying principles of the Internet: openess and innovation" are seemingly altruist. Google questions the the ability of consumers to freely access conpetitors' email, IM, and web-based services. It fears that the combination of the two (Microsoft and Yahoo!) could take advantage of the a PC software monopoly into Internet monopoly. Competitive innovation has been highly stressed which Google thinks would be lost due to Microsoft's tendency to establish proprietary monopoly.
On the other hand, Microsoft expressed its commitment to openness, innovation and the protection of privacy on the Internet. Besides, it pointed out Google's market shares hinting Google's possible monopoly and Microsoft's attempt to establish a compelling number two, thus creating a more competitive marketplace.

Whether Google is trying to achieve the virtue of excellence by trying to stop th evil or itself indulging in it by avoiding stronger competition is the question!

Just a thought...

The overall objective of a Business School is to provide future leaders with the skills and tools necessary to successfully manage a business enterprise. The goal of an Ethics course in business is to enlighten and, hopefully, ensure that these leaders conduct their business ethically.

After reading these chapters and trying to integrate the information with “real world” business practices, I thought what manager (in their right mind) would conduct an unethical business? Granted, there will always be a few bad apples with the intention of practicing unethical behavior, but would or could there be an organization of “unethical” people working together for a common goal? For example, could there be a highly successful pharmaceutical company that intentionally, yet legally, made a drug that would harm people? Or an internationally popular auto-maker that made unsafe vehicles for decades? How could these employees knowingly and willingly participate in these activities; would this qualify as a “meaningful work” according to Kant? Perhaps these examples seem a bit preposterous, but how about a tobacco company?

I must state that I am not taking a stand for or against smoking, but was wondering what I would do if I were a manager at R.J. Reynolds. Where would I reside on the ethical spectrum? Could I disassociate my responsibilities (to provide a safe work environment and increase shareholder value) from the “effects” of consuming our products because it’s culturally acceptable to smoke (Cultural Relativism)? Am I an unethical manager participating in an activity that may not be in the best interest of the overall community, but I am providing my employees an “honest wage”. I guess my point is, if possible, can you differentiate ethical from unethical behavior if its 1) accepted by society, 2) provide meaningful work and 3) conducting day-to-day business ethically though it may harm many (directly or indirectly). Any thoughts?

Embrace the Grey

It is no easy exercise to read this stuff. Sorry to refer to Kant, Aristotle, and gang as stuff… I mean it in only the most endearing manner…of course.

Our first reading reinforces my perception that we live in a world of grey, and that black and white solutions, while they look very reassuring, have less application in the modern day-to-day struggle for ethical continuity. While Kant, Bentham, and even Mill are no ethical wimps, they present a dilemma in that they are a bit formulaic in their approach to determining the “right” course of action in modern business ethics problems. You kind of get the feel of, “If this, then that” problem solving in which if you plug in the “this”, then you can get the appropriate “that” and move on your way. As long as you follow these principles, you will be ethically golden. The problem I have with this approach is that it misses the significance of the contextual and situational relevance of particular problems with their own special circumstances, especially in a modern corporation. This -follow the principle- approach seems to absolve to decision-maker from conducting a thorough intelligent analysis of a particular problem.

While Aristotle and Dewey have their own issues, the Aristotelian view leaves some practical room for business decisions by allowing for businesses (and managers) to make calculated decisions, that are on the surface “not good” (says Kant), even though necessary for the good of the company (i.e., laying off qualified – loyal employees). These are ethically “tough” decisions that are sometimes part of the territory. An extreme focus on motives as needing to be only virtuous is placed on the back-burner for a more moderate view that recognizes that the companies health will require actions that may be “selfishly” motivated (though not necessarily in a way inconsistent with Aristotle’s six virtues).

Dewey finally gives us morally/ethically challenged business people something we can use: Dewey treats ethics as a pragmatic process of intelligent deliberation based on the context of the problem to be solved, and its environment. When reading the case “What Price for Safety” in the context of Dewey, I find myself informed by Dewey’s need to find a solution that brings harmony to the environment. And even Aristotle would allow you to make a “judgement call” in this case. Dewey’s empiricism might want to take more time to deliberate than the real world would usually allow, but Dewey is aware that sometimes empirical data will need to be processed from real time applications (experiments) that will inform and evolve us toward better processes and improved character. At least Dewey gives us hope in that, with practice (or experimentation) we will get better. One can only hope.

Applying Ethics to Today

While the foundations of ethical behavior described in the first section of the reading did provide us with the contextual framework for later ethicists, it was difficult to properly blend them with our training in the management of business and its various resources. I gained far more insight from the second reading in Chapter 11, whereby the ethics of business as a social entity within a larger framework of humanity can be viewed as more of a game. The fragile question of right and wrong will certainly be brought up in countless classrooms and discussion boards in all its breadth throughout academic America. To apply the same guidelines to business as one would to the conduct of a good and honest life would be akin, as is mentioned in the text, to applying the rules of life, to the rules of football. I think I'd change the channel.

There is no doubt that having a set of clearly understood and codified human rights is crucial to making good decisions in economics, defense, politics, healthcare, and virtually every field of social relations. Corporate giants are becoming aware of the social responsibility they face and have begun taking measures to promote their images in this regard. An article in last months Economist entitled “Just Good Business” delves into some of the strides and setbacks made. It also mentions that this is a very lucrative new avenue for students in the MBA training pipeline. It's a great read and I think the timing is just perfect for those of us who are still unsure of how this class pertains to our future in the business world.

“Business schools, for their part, are adding courses and specialised departments to keep their MBA students happy. “Demand for CSR activities has just soared in the past three years,” says Thomas Cooley, the dean of New York University's Stern Business School.”

Reference:

http://www.economist.com/specialreports/displaystory.cfm?story_id=10491077&CFID=6757091&CFTOKEN=26cf341fb4994cc4-3247BAE5-B27C-BB00-0143B05AE630661E

Ethical Shoppers!

I just read an article in the cnn.com about the Ethical issue involved in buying Made in China.

http://www.cnn.com/2007/LIVING/wayoflife/07/26/china.products/index.html

We discussed the first day in the class that the ethics is not about the numbers or making profit or loss. We also discussed about the Chinese products quality going down and people starting avoiding products made in China and stuff.

Now lot of people in America and American companies have started making a statement like “be American and buy American”. This was not only applied to automobile industry but also many other industries which are hit by the Chinese inflow of goods.

In the article above the lady tried to avoid everything which was made in china and found it impossible to do so.

In America, American products are costlier but will certainly help in saving countries economy if people buy American. Now the question arises will it be ethical on ones part not to buy American where it can be avoided because of saving money?

If you buy something which is available made in America as well as made in somewhere else which is cheaper, what would you buy?
Will it be ethical to buy the non American products even if your are American and your contribution can help reducing the lays off and the countries economy?
The trade deficit with china has been growing continuously.

In the recent article which I came across said that now a days people are trying to become ethical shoppers as many people who think it’s unethical to buy from Wal-Mart (due to their monopolistic pricing, environmental negligence and lack of concern about sweatshop labor), Kraft products since discovering that they are a subsidiary of Phillip Morris (the tobacco company), buying any clothing that I fear could have been produced under sweatshop conditions.

Game creators tackle ethical issues

How to crate a game which can meet marketing’s need and display a little social responsibility at the same time? I think this should be a very tough question for any game creator. It seems very difficult to find the balance between making more profit and having responsibility for the society. For example, most game players are teenagers. This age could be easy to addict to anything they like or something they only could think of such as violence, sex and so on. As a game designer, he/she might add some plots related to those that game players may interest in. No matter how it would affect game players even though in the negative side, as long as it would help in marketing result.

In fact, certain game creators did make some impressive changes in designing the games especially when we compare to those who still use violence and sex attracting game players. They crated the games based on the stories, either fiction or faction, and the characters in the games would react to each move which the players gave to. However, even though there are no negative scenes in the game, the game itself could be a big problem as well once you addict to it. Sometimes, the game itself could not bring much fun to the players, but they still want to continue to finish the game because they already invest too much time on it. Sometimes, the game itself did bring a lot of fun to the players; as a result, they do not want to stop it until the game is over.

Actually, this article let me recall my roommate in college. In the regular time, we all were supposed to graduate in four years, but he spent six years in college and did not get degree in the end of sixth year. The educational system in Taiwan, college student has maximum six years to take enough credits to graduate. In the end of sixth year, if you still can not take all credits you need, you will get nothing. At that time, he almost spent more than eight hours per day to play on-line games. I think we can not blame that he would go like this way because of games. The game itself could be good in some ways like it could help people to relax; as long as you do not addict to it.

Reference: http://www.news.com/2100-1040-867451.html

Waterboarding

I, too, found cultural relativism more thought provoking than the traditional theories referenced in chapter two.

After reading the United Nations Universal Declaration of Human Rights in chapter eleven, I was reminded of a recent article on waterboarding from the New York Times. Waterboarding is an interrogation technique that makes a person believe they are drowning and death is forthcoming. Article five states that “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment” yet the Central Intelligence Agency has admitted in that it utilized waterboarding as an interrogation tactic on a small number of alleged terrorists after 9-11 with the knowledge of the Justice Department. If these 30 principles are to standardize behaviors across Member States, how does the United States get away with torturing individuals using this technique? In addition, if our government is “bending” the definition of torture to skirt this principle, what other principles are not being followed by the United States and other Member Countries? Wikipedia defines waterboarding as a form of torture, yet the U.S. Government claims it is not illegal. Interrogating prisoners may at times be necessary, but there are other methods available that are more humane and ethically responsible.



Article referenced:

http://www.nytimes.com/2008/01/30/washington/30justice.html

The Challenge of Cultural Relativism

Cultures, beliefs, and values have solid impact on developing socially acceptable behaviors and customs. When customs differ across cultures, the values often change also. When an individual examines a different culture, questions and feelings arise due to their own beliefs. The challenge of cultural relativism is to make rational decisions on what morals can be considered absolute. This is not an easy task because morals differ in every society.
Chapter 11 briefly describes some of the characteristics of the Eskimos. This culture is far different than any stereotypical nuclear family in the United States. For example, the Eskimos practice polygamy and infanticide. To many Americans these two common practices among a different culture may seem extreme. On the other hand, Eskimos feel what they do is acceptable within their own culture. The author illustrates this example as a way to demonstrate the challenge of accepting cultural relativism
As we all know, the United States is a complex system of many different cultures interacting at all times. Professionals working in the field of ethics must have a terrible time defining those absolutes in the U.S. where customs are variable. Does Cultural Relativism apply in our country?

Cultural relativism

As the reading for this first assignment was my first dive into philosophical reasoning, I found it somewhat difficult to relate the subject matter presented in Chapter 2 to the real world of business. The different approaches to business ethics (Kantian, Aristotelean, Utilitarianism, and Pragmatic), although apparently well-founded and logical, were a bit esoteric for my taste; perhaps I just need to become acquainted with the material. It did provide grounding for what is surely to come in later chapters.

On the other hand, I found the reading in Chapter 11 much more enjoyable and relevant. In particular, the section entitled “The Challenge of Cultural Relativism” (p. 438) was very interesting and thought-provoking. As I began reading this section, I realized that I am (or was) somewhat of a cultural relativist in my thinking, although I never realized there was an actual term that defined how I thought. In general, without going into any depth of analysis, I tended to agree that customs of different societies could not be said to be “correct” or “incorrect” – they simply are what they are. Also, however difficult to fully accept, I felt that our own particular moral code really has no special status; it is simply one of many that exist in the world. As I continued with the reading, I found my very broad point of view challenged. The discussion about the various consequences of taking cultural relativism seriously was most interesting. This section allowed me to question and develop my opinions more fully, something I had never done before. When presented with detailed arguments against the entirety of cultural relativism, I can definitely see some logical reasons why one might not necessarily be able to accept this view of the world. I was pleased to see that the author of this section, James Rachels, did present the positive aspects of the idea of cultural relativism, rather than simply arguing for its implausibility.

chapter 2 review

After reading Chapter 2, I questioned which ethical theory (Kant’s or Mill’s) would make for a better societal order.

Mill believed in the theory of utilitarianism where everyone should act in such a way to bring the largest possible balance of good over evil for all of society. Kant has a different ethical theory. It is based on a belief that the reason is the final authority for morality. Actions of any sort must be undertaken from a sense of duty dictated by reason, and any action performed for expediency or solely to follow the law is regarded as not moral. Basically, a moral act is an act done for the right reasons. Kant would argue that to make a promise for the wrong reason is not moral - you might as well not make the promise. (By reading Ch 2, you can further explain examine the differences between the two).
So the question is, which of the two theories would make a better societal order? That is a difficult question because both theories have flaws.

The reason that Kant’s theory would not make for a better societal order is because his rules are absolute and unyielding. Killing, for example, could never be justified; therefore it is wrong in each and every situation. There are never any extenuating circumstances, such as self-defense or punishment (death penalty). An act is either wrong or right, based on his universality law. The result would be a dogmatic government doling out Draconian punishments without considering the circumstances to what it deems a crime.

Mill’s theory also has problems. If properly followed, utilitarianism could lead to obviously wrong actions being considered right because the rightness or wrongness of an action is determined by the net consequences. Therefore, conceivably, it would morally okay for a very large and powerful country that had run out of food or natural resources for it’s 500 million citizens to overpower an island of 1000 people who had an overabundance of food and/or resources and steal from them. In stealing all their food, the larger nation is condemning all the inhabitants of this island to death. Is this right? Of course not. Yet under Mill's theory of consequences, since the greater good was served, then the act is morally okay. Mill's theories could also bring about unjust rules, if the rules served the greater majority. Suppose 3 legged people were not allowed to be seen in public (except in doctor's offices) because they made the greater majority feel inadequate and sick. Is this benefiting to the small number of three legged people? No it is not. However, to the greater majority it is beneficial. Machiavelli’s The Prince is a good illustration of this premise. According to Mill, the ends justify the means. Therefore, would all members of this society be safe and secure? Unlikely since there is always a minority.

So, perhaps the right question is, which of the two theories is the lesser of two evils? I would have to argue for Mill (that is, unless I was one of the 1000 on the island or a three legged person) - on a limited basis. Suppose I am a wealthy individual such as Bill Gates and I were pestered by someone asking me for money but who desperately needed it. If I gave a small amount of money to that person, Kant would judge it not moral because I did it for the wrong reason. Mill would examine the consequences of my giving money away. Did it hurt me? No. Did it help the stranger? Yes. Therefore, the net consequence is good. Whether or not I truly felt the act in my heart does not make it any less good than the person that gives his money away to charity because he feels so deeply about it. I also see cons to taking Mill's values on as societal ethics - they could conceivably give rise to the next Hitler. But with Kant, people would be prosecuted for EVERYTHING since there are no extenuating circumstances. Think of the court system - innocent men who had to protect their family and home alongside hardened criminals, both receiving the same sentence. In my personal opinion, Kant may go as far as to say to the starving nation, starve equally. And then, the nation slowly starves equally when they could have killed 1000 people to save themselves. Therefore, in my humble opinion, Mill's theories would make a better societal order.

Drug safety vs Company profit

I was watching CBS Televesion’s 60 Minutes program tonight. It focused on the drug Trasylol developed by Bayer Pharmaceuticals Corporation. Trasylol (aprontinin), which was commonly prescribed to patients undergoing heart surgery, was released in 1993 following approval from FDA. However in Jan 2006, an independent study on 5000 Trasylol users worldwide by Dr. Mangano found the severity of Trasylol failure risk and other serious side effects. Same dangers were confirmed by a Harvard researcher who was hired by the Bayer to conduct research on Trasylol. In September 2006, during an FDA advisory panel meeting, when Dr. Mangano presented his work on Trasylo and suggested the panel to stop using the drug; however Bayer did not disclose the negative result they already got from the Harvard researcher. Therefore, the Trasylol was still on market until November 2007, it was estimated that during the two years (Jan 2006-Nov 2007) one thousand lives were lost a month.

I think ethical issues are involved in the case. Bayer was expecting a billion dollars from this drug. They marketed the drug aggressively worldwide. As a biology major student, I deeply understand how much effort and money needs to be spent for developing a drug. The approval from FDA for marketing means a lot to the company—money is coming! However good medicine should pay great attention on patients, the company should not focus just on profit. Hiding data in the FDA review session resulted loss of so many patients’ life. Transparency in the drug study is really a must in the future based on Bayer case. On the company side, how to balance the profit margin and ethical concern, how to make decision on these issues is really crucial for the company and for people.

Related link: http://www.cbsnews.com/sections/i_video/main500251.shtml

Intel vs AMD: Ethical Issues !!

The recent update "EU Raids Intel's Office in Germany" from Wall Street Journal was very thought provoking. I further got to know from other press releases that Intel, the world's biggest chip maker, is already facing formal EU charges of monopoly abuse for below-cost customer rebates and pricing. It has been using several strategies to increase its market share in comparison to AMD (Advanced Micro Devices Inc.). Now the question is to what extent is this competitive? There is no doubt that the competition in today’s era knows no national or regional bounds. Each company is putting its best possible strategies into practice to supercede the next stronger player in that industry. In my opinion there is no harm in this cut throat competition as long as the end user or the customer is benefited from it. Here, in case of Intel vs. AMD rivalry, Intel used predatory/below-cost pricing to push AMD out of the market. But eventually it is the customer who would end up buying a monopolized product with the least choice of variety. Would creativity and innovation continue to thrive in such a monopolistic industry? I think that the extent of research and development would also be decided by that one major player of the industry.

When it comes to ethics, I strongly think that the multinationals should take care of the host country’s norms. So “Glocalization” (Globalize plus Localize) seems to be a better approach than “Globalization”. In this case for Intel, the company undertook certain steps that did not fall inside the limitations of European Union regulations. What is ethical and correct from U.S standpoint might not be appreciated in Europe! This new release was really interesting as it brings into light the importance of commercial and cultural norms across the borders.

My conclusion of chapter two

In chapter two, contents are concentrated on the ethical reasoning in Practice. There are four main approaches mentioned in this chapter.
The first is Kantian Approach. Kant’s moral philosophy has rich implications for business practice. Kant introduces three formulations of the categorical imperative, which are considered together as a coherent whole. Author assessed that Kant may be mistaken bout requiring purity of motive. Yet even if Kant is wrong about the necessity of pure motivation for an act’s being moral, he still has a lot to offer the business ethicist.
The second is Aristotelean approach. In text, author lists six considerations making up the framework of virtue ethics in business – community, excellence, role identity, holism, integrity, judgment. Then author points out that there is no “business world” apart from the people who work in business and the integrity of those people determines the integrity of the organization as well as vice versa. The Aristotelean approach to business ethics is just another way of saying that people come before profits.
The third is utilitarianism to business. Author suggests some business decision-making questions root in utilitarianism. He said that the goal is utilitarian business-ethic which evaluates business in term of its contributions towards higher-pleasure capacities in society. He introduces two utilitarianisms – Bentham and Mill. Author accessed that through Bentham-style utilitarianism could be seen as a precursor to upsurge in “happiness economics”, it still had some problems. For Mills utilitarianism, author has pretty good evaluation – “Mills vision of utilitarianism is an interesting and exciting model for business ethics, when properly understood.”
The fourth is deliberative approach. Author thinks Ethics is not about proving what is good or right. Ethics is a way of living that enables enlightened conduce. Most soul of Dewey’s approach to ethics is first, ethics is a process. Second, ethics grows out of our concrete everyday experience. Third, ethics should liberate intelligence, analysis and imagination. Fourth, ethics should first and foremost, be a process of self-realization. Dewey’s approach to ethical decision-making through intelligent deliberation sheds light on both the process of deliberation and the role of values and ethics in the practice of managerial decision-making.

Poverty Loans - Miracle or Menace?

Loans to poverty stricken people can be view from different points of view. They are either a Nobel prize winning idea that helps poor people lift themselves out of poverty, or they are a scourge that traps people in an endless cycle of debt from which they can never recover. Which is it?

In 2006 Muhammad Yunus of Bangladesh was awarded the Nobel peace prize for a subject that would normally be grouped with economics. He and the bank he founded, Grameen Bank, were recgonized for their work with microcredit. Simply stated, this concept extends loans to poor people who would otherwise not be credit worthy. The loans are small, a few tens or hundreds of dollars, and enable the borrowers to make small business investments. A person could use the loan to purchase a cell phone. For a small fee he or she could allow other villagers to use the phone and start a small business around this concept. Grameen has stated that repayment rates for these small loans is greater than 90% and the idea of microcedit has spreadaround the world to many other places.

However, the idea is not without criticism. A political opponent of Yunus, Sheikh Hasina, has pointd out that the loans charge as much as 30%. Several goverments have made mention of the high interest rates for microcredit loans and their concern for the borrowers. Lenders of microcredit counter that they must charge higher rates to contend with losses from loan defaults and the need to build their capital base in order to provide even more microcedit loans. However, the excessive rates from these loans can trap people into endless interest payments, especially if their business venture doesn't succeed.

While not called microcedit, this ethical dilemma is also present in the US. Payday loans, no downpayment necessary loans, layway loans, all other these provide small amounts of credit to people who might otherwise not be qualified for it. Take the example of Roxanne Tsosie of Albuquerque who entered into a car payment loan of 24.9%. She needed the car to start a business as a home health aid, her version of a village cell phone. Ulimately she didn't understand the loan terms, lost the car, and lost over $900 which was not refundable.

Loan businesses have found a lucrative target in poor people. Uneducated and desparate, they will frequently signup for high interest loans. While a give individuals may default, in total the poor people generate a lot of income for loan companies. Even Gateway computer,an otherwise responsible corpoate citizen was caught up in a relationship with a unsavory computer distributor. Ultimately Gateway dissolved the relationship, but when asked why they didn't do it sooner,a spokesman stated, "we're publicly traded and trying to make a profit, so that's a consideration."

Ultimately, who is to blame or commend for this situation? The responsible lenders who win Nobel prizes for lending to people would would otherwise not be able to obtain loans (but charge 30% interest in doing so)? The dishonest lenders who specifically target poor and uneducated borrowers and charge interest rates of 30, 50, 120%? What responsibilities do the borrowers have? One stated that "my life is full of bad decsions." Another stated "I don't read things, I sign them."

This is a difficult ethical dilemma to sort through.

Consequences of reading Chapter 2

Reading through the 2nd chapter has filled me with an acute nostalgia for my days in college. My Professor of Literature, while taking the regular class, suddenly interrupted his own lecture and started talking about reality and its human perceptions. He said, " The people are living in an environment that was created by themselves". It basically means that rules or ethics being followed by the humans, was actually created by themselves. He proceeded explaining his point of view saying that rights and wrongs were defined and classified by humans, particularly a single scholar,  and it was in the sole discretion of this person to segregate them according to his perceptions. This was the guy who said pain is bad and joy is good, killing is a crime, and also defined a new term called 'shame'. Later on, my Professor ignited our imagination asking us to picture a world without these beliefs and perceptions. I started to think how chaotic things would be, but then how free the world would be with no obligations.

I think that the Kantian approach is very much similar to this. They speak about universal laws, which were actually postulated by humans themselves. A Kantian approach to the recent shootings in the United States universities leads us to an anecdote. Apparently, the weapons that were used in the Northern Illinois University and the Virginia Tech University shootings were actually bought from the same store. So, do we infer that all shootings arise from the weapons sold in this particular store?? Heath Ledger was autopsied and his death was concluded to have occurred from the fateful mix of his six medications, and not suicide. But, isn't almost every shocking death in Hollywood or the music industry occurs due to mixing or overdose of some fateful product or the other? And, can this be categorized as almost a suicide?? Some food for thought.

Facing Face

My comment is in reference to the case study in chapter 11, entitled “Facing Face”.
I found this situation very thought provoking. In my life, when I have had to deliver bad news I have always attempted to provide a sliver lining even if it is not completely true. A lie is a lie no matter how you look at it, but there is difference when the lie can potentially hurt someone else. My morals dictate that I should always try to consider the other person’s feelings but at the same time not to lie to intentionaly hurt. In this case study, I would agree with Ingrid’s suggestion to allow the employee to save face. The application of Cultural Relativism in this situation, however, creates a dilemma. Should Ingrid go against her own moral codes of truth in order to satisfy another’s moral codes?

Personally, based upon the fact that Ingrid and the other supervisors are guests in this country, they should modify their moral codes slightly to appease the morals of the employee’s country. And besides, it is not like Frank has never lied in his business life.

I personally believe there is no objective truth in morality. Although a complete following of Cultural Relativism allows for abuses of human life, I believe that the overall teaching of tolerance should be followed. Cultures develop their moral codes through many years of trials and tribulations that allow them to come to create a set of values. These values maybe not be understood but at the very least should be accepted.

Revolutions of change are necessary to alter a culture’s moral codes to break the mistakes of the past. For example, South Africa’s tradition of the apartheid was ended with the guidance of Nelson Mandela. This revolution was necessary to evoke change in this country to allow for more equality amongst their citizens.

Overall, I think that Culutral Relativism is a belief that should be considered carfeully when examining other cultures.

My thoughts after the readings

Reading Chapter Two brought back memories of my undergrad years when I first became aware of Utilitarianism and Consequentialism. As I recall, the information was less intriquing to me at the time because it seemed so obvious that anyone with an ounce of integrity would know that to do what was 'good' and what was 'right' were the only options. These were the foundation of my upbringing - what my parents and grandparents professed throughout their lives.

Unfortunately, the moral (or not) and (un)ethical behaviors of people in general, our government and American corporations of today have proven me wrong. What used to be considered the foundations for fairness, equity and prosperity - ethical reasoning - as a practical basis for decision-making, seems entirely unheard of today - business or otherwise.

There were so many points in the chapter that I wanted to debate, not because they were right or wrong, but because there are so many variations to be discussed in each of the approaches to ethical reasoning. There were good and bad aspects of both the Kantian and Aristotlean
approaches to reasoning that needed to be addressed from different perspectives so I hope we discuss them in class.

As I read, it struck me as strange that much of what is viewed as leadership and governance today lacks the focus, forethought or even the guts to make the hard and right decisions needed to turn this trend towards self-destruction around. Today, instead of punishing ill-begotten wealth, greed, intolerance and bad behavior, we actually reward it. Instead of monitoring our actions so that we do the least amount of harm and the most amount of good, we are somehow reversing the outcome to produce the most amount of harm to the largest number of indiviuals while providing the least amount of good to ensure the pleasures and prosperity of the fewest amount of individuals.

What used to be considered acts of benevolent behavior towards humanity has now become a litany of intolerance and self-preservation. Our heroes and role-models are mindless, weightless talking heads on the television screens and drug-induced atheletes, music and movie stars. We are outraged that our government questions the actions of wealthy individuals but murmur not a word about the rape of our nation by corporate greed, the plight of the homeless, the poor, the middle-class or the deterioration of our economy.

Today, instead of providing reasonable and swift solutions to damages created by corporate and government overseers to our U. S. citizens, our government takes away Welfare from the poor and turns around and creates corpororate welfare by giving billions of dollars to corporations and other institutions that don't need the money. We watch our corporations reduce workforces in the U. S. for the sake of increasing stakeholder wealth and reducing cost (so they claim), while they build mega-facilities in foreign nations and create thousands of new jobs at lower wages.

Let me get off of my soap box. I must add that Chapter 11 was very good. I too am learning to be more accepting of cultures that are different from my own. I had an opportunity to visit China two years ago and have met many wonderful people from other countries including Africa, Russia, Pakistan and India and am very proud to embrace so many wonderful people as our world becomes increasingly more diverse and touches closer to home.

Expropriation of private property

As some of you know, Venezuela has nationalized the assets of all the private oil companies operating in the country. BP, Chonoco/Philips, Exxon Mobile, etc. Exxon has been fighting back.
So what happens if we apply Kantianism to this situation. What happens if all countries decide at anytime to take over a private run business? Obviously the risk of starting a business goes up, the cost of doing business goes up, its harder to find investors. I would consider these to be negative outcomes of this strategy.

However, perhaps there is a greater good here. Why did Chavez nationalize the oil industry assets.
Political control is one reason. Anything other reasons? Can their State run Oil company do better? History has shown that state run companies are run less efficiently than private owned forms. I'm open to anyone who has some ideas.

Here's the link to the story
http://www.marketwatch.com/news/story/exxon-mobil-take-hard-line/story.aspx?guid=%7B50AED756-680F-4B1C-BE4B-61AAABF4271B%7D&dist=hplatest

My mother introduced me to Kantianism as a child

My mother and father introduced me to the idea of Kantianism early in my childhood. It goes something like this.

"Why did you leave the water running??????-What if everyone left the water running?????-Do you think the world has just an unlimted supply of water?-No!-It doesn't!!-Now go to your room!"

Or is was something else: lying, stealing, leaving the backdoor open and running the air conditioner at the same time.

I think most of your folks probably had a similar talk with you. I'm betting Kant did with 8 brothers and sisters and never living farther than 16 miles from the city he was born in. He was also raised by parents who lived by the Bible. Perhaps thats why his categorical imperative is reminiscent of the phrase, "Do unto other as you would have them do unto you".

This idea is nothing new. It just has the seasoning of an adult sitting down for 11 years to really think it through.

I know some of you might be openly dismissive of this guy. We've been living in the grip of Keyensian philosophy since the 1930's. Based on that philosophy we are the biggest debtor nation in the world and Social Security is the proverbial hairball that we can't seem to cough up.

Does Kantiansim work. Well every philosphy by its nature is extreme. However, from my own personnel experience, when I do things with a specific "what's in it for me attitude" versus just acting because its "the right things to do" I found less unforeseen good things come my way.

I haven't finished reading Chapter 2 yet but I have done some digging into Kant himself. Kant was the first to take Newtons work and theorize about nebula and galaxies. He did this when he was in his Twenties. He locked himself away for 11 years before publishing his master piece Critique of Pure Reason, now widely regarded as one of the greatest works in the history of philosophy.

For more info check out the wiki on Kant
http://en.wikipedia.org/wiki/Immanuel_Kant