BUAD840

Microsoft

2008-05-15T11:11:00.001-07:00

I agree with Professor Silver’s view that Microsoft should not be involved in social issues unless the benefit is for the company. There were two interesting points that Professor Sliver made in this case:
1. It is the duty of citizens to organize themselves to protect values.
2. The interests of those shareholders and other stakeholders who disagree with Microsoft’s position must be considered.

To elaborate on the first point, I agree that the citizens of Washington State should rally behind legislation they believe in to ensure that it is passed. We cannot always rely on the corporation to do everything for us. There are many times when the corporations’ interests are held above our own. Why would we want to give them more power? I commend Microsoft for making a stand on an important topic like gay rights but I do not believe it is their place to get involved in the legislative process.

The second point regarding the shareholders is something to be considered. Maybe the stockholders do not agree with this policy and would prefer money not spent towards this legislation. This case is against Friedman’s view of stockholder theory. He would not approve of this measure because it does not provide a financial benefit for the company.

Microsoft's Wavering Stance

2008-05-15T08:27:00.001-07:00

Regarding the article mentioning Microsoft’s corporate and social responsibilities, I believe their first mistake was not remaining neutral on the idea of publicly announcing their support of gay civil rights. Whatever Microsoft’s stance on this issue may be, it did not need to be made public and in the manner that transgressed. It is one thing to support a policy but it is very different to openly publicize a company’s stance. Additionally, the company should not only remain neutral on this subject, they need to maintain a consistent stance. Its apparent that Microsoft first supported the bill, then stepped back, and then was all for it again – all this flip flopping does is frustrate employees, civilians, shareholders, etc. and provide an unstable picture of what Microsoft is all about.

Microsoft addressed the concern about not receiving the best recruits if the company did not support this legislation. That may be true, however; there is also the possibility of Microsoft not receiving the best recruits if they do support this law. While I agree with non-discrimination acts, I believe Microsoft’s reasoning is faulty and insubstantial.

I also think the author makes a very important point about how individual citizens should have the responsibility to decide the social policies, not corporations. While I realize businesses have a lot of influence in this country, there needs to be boundaries drawn as to how much power corporations have. Democracy involves social issues and individuals should have the right to vote on this type of legislation, not corporations on their behalf.

Unfortunately, this social issue is a topic that is extremely controversial and regardless of the action that companies take, people will be against the overall decision – it cannot please everyone.

House Bill 1515

2008-05-13T20:21:00.000-07:00

Microsoft's stand in this case seems unclear to me. Well it is clear that they are pro-gay it is not clear what the business angle to it is. Assuming that there was no business oriented motive to it it is even more vague as to why they backed out of the legislation.

The threat of a Pastor of a church could not have been the only reason for their withdrawal. Cause it is hard to imagine that a company whose software literally rides every PC save the niche market PC's like MAC and the occasional Linux would back down because it felt threatened!

Although i see value in the point that the write up raises about companies not getting involved in common legislation that we as a community should unite to make real, it contradicts with some other systems that we practice as a society. In the days of CSR, corporate governance is a major proponent of several social policies like the movement against apartheid. It was the involvement of corporations that help end the practice. That being the case, why can't corporations take the natural step ahead and voice their stand in the issue legally? How different is that from discrimination on the basis of sexuality?

Microsoft Errs

2008-05-13T14:25:00.000-07:00

The error was done before the minister's threat. This is a public legislative bill that has nothing to do with employment, work practices, or MS profits. They were right to pull out their support but unfortunately it came as a consequence of having crossed over their responsibility. This will set up most companies to back out too if the legislative bill is unrelated to the workforce, performance and profitability. If this were something that is a threat to its workforce, then there is reason for involvement.

Research does not support that gays and lesbians have a choice. This is who they are. To live otherwise is to live a life masqueraded. I have known plenty of folks within the gay community, some of them close friends, and know through them that, if it weren’t for their hormones or other chemical attractors, they would gladly be heterosexual. It just is. I think the data on gays is more like 6-9% of the population.

MS's benefit policy for partners is a loud enough statement as is other corporations who provide partnership benefits. So is their company policy that discourages discrimination or prejudice. This is the area where they are most responsible.

Another tactic that MS can take and other companies who seek to impact public perception is to use their CSR grants to provide funding to groups that protect civil rights or to help provide education and information that wards against unfair stereotyping or other forms of discrimination.

Should Corporations be involved in social issues & policies?

2008-05-13T14:18:00.001-07:00

I really think Microsoft and all corporations should stay away from all social issues unless there are no other options. I think Microsoft will be better off not taking a stand on this issue from the start and maintain a neutral position on the bill. Furthermore, I do not think that recruiting will be affected by not taking a side against or in favor of Gay rights.

I do believe everyone should have equal rights, especially when it comes to issues related to essential rights such as housing and education. But, corporation should not make decisions people make decisions. Corporations are generally more powerful than individuals when it comes to politics and policy-making and by interfering; they are only taking power from the people and the democratic process. The people with equal votes should make these moral and social decisions.
Microsoft’s shifting stand on this issue has only created controversy and distrust. Now, Microsoft’s employees will never know if their employer is supporting or is against the issue. More importantly, by shifting sides, customers that support or do not support gay right will be aggravated by the fact that Microsoft once was against their beliefs.

Microsoft

2008-05-13T10:37:00.000-07:00

My view of the Microsoft article is that the company handled the situation in the best way possible given the circumstances. Had the Microsoft representatives who attended the church not been threatened by the pastor, I believe they would have stood their ground, as did the many other prestigious companies listed in this article and who supported this legislation on a national level.

I think there is something wrong (I'm not certain if I would say ethically, but certainly morally) when a pastor threatens a major corporation into changing its views on a political subject, simply because his or her views of gay people are different than for heterosexuals. Many of us believe in freedom of religion, but does it give us the right to condemn other people because they do not believe in or practice their faith in the same way as I do?

From a moral perspective, I have never fully understood gay or lesbianism, therefore I do not have the power nor desire to condone or condemn it. Whether or not individuals believe it to be a form of discrimination, I would have to challenge that.

People who are regularly discriminated against, on the basis of age, race, gender, physical or mental condition, etc, normally don't have a choice in who they are and how they became who they are. However, I would argue that gay and lesbian individuals have a choice. So I have never considered the behavior of individuals who fit into this category as people who should be considered under the laws of discrimination.

I believe that if I were the head of a company like Microsoft, I would also be somewhat apprehensive and not fully embracing this legislation as quickly as I would on the national level , after all, it is much easier to embrace something when you are not a member of every community (nationally), it's a different story when the place is your headquarters. I think Microsoft demonstrated excellent judgement when it sided more for the care and concern of its employees. Milton Friedman would be so proud.

After all, Microsoft has demonstrated that it is fully aware of the role of one of its major stakeholders. For without the employees, Microsoft would not be Microsoft and other stakeholders and shareholders wouldn't exist.

However, the members of Microsoft are always free to choose a new church.

Stupid Microsoft

2008-05-13T10:11:00.000-07:00

My stance is that Microsoft should never have been involved in this type of politics to begin with– if they stayed out of it, no one on either side of the issue would have complained.

But they got involved, and some claim that they took the wrong side by staying neutral??? If staying neutral isn’t safe…look out Switzerland!

Why did Microsoft let one lone pastor at a church threaten them and bully them into changing from their Pro stance? Maybe they saw it like this:
1.51% of the population is gay, lesbian, bi, or transgender. 76.5% of the population is Christian. The math seems pretty clear to me. If there were a group to appeal to, it would be the Christians. This vote took place right after President Bush was re-elected in 2004 where it was understood that the Right Religious Groups voted heavily and unified together. If they were to stage a national boycott against Microsoft it would definitely hurt the company and as we know, their obligation is to make money for their stakeholders.
Let’s look at another case: Boy Scouts of America (BSOA). In 2004, the Boy Scouts made a policy (upheld by the Supreme Court) that Gays were not allowed to be troop leaders. There was an intense outcry charging that the decision was an example of bigotry and protests all over the country ensued. Again, this is during the same time period as the Microsoft case. The total membership for BSOA in 2003 (before the new policy) was 997,398. In 2006 (after the new policy) the membership had quadrupled to 3,998,914. Clearly being labeled as “anti-gay” may not be that bad for business.

Microsoft and gay civil rights

2008-05-13T07:01:00.000-07:00

The issue that happened in Microsoft makes me think about how to apply the stakeholder theory and how to reconsider Milton Friedman’s argument about business.

In this case, Microsoft tried to consider the effects of its employee policy at different levels, from different people’s angles. This is a good application of stakeholder theory. However, when satisfying every stakeholder is not possible, (like in this case), Microsoft has to draw a bottom line about priority of stakeholder and not to harm anyone. Microsoft’s stand about gay’s right is a great support and respect for employee diversity, in my understanding. It prioritized what should be considered first (the diversity respect)), and I don’t think their policy would harm anyone.

In Milton Friedman’s view, the social responsibility of business is to increase its profits, which seems to catch the situation here. Some people would argue, why Microsoft bothers to announce the policy about gay rights? Is it their business at all? At first glance, it does seem quite “obvious” that there is no need of Microsoft to get involved in this hot-debated social issue. However, I think the point that Microsoft makes and the attitude it holds from the policy suggests its moral standards, makes it distinguished from other companies. I think it sets a good example for others about respect people as means but not as ends.

Microsoft and CSR

2008-05-12T22:34:00.000-07:00

Microsoft was rather indecisive in their stand on “outlawing many forms of discrimination against gays.” Initially, Microsoft was supportive of the legislation in the State of Washington. Then, based upon a local pastor’s influence and threats of boycotting, Microsoft was swayed to relinquish support of the gay rights legislation. Finally, Microsoft decided that supporting “diversity in the workplace” would include backing legislation that would “take a stand on social issues.” If I were employed by Microsoft in Washington, I would be utterly confused and concerned by the company’s wishy-washy attitude. For a company that prided itself on being “gay-friendly” and was not tolerant of employment discrimination, how could a few people derail the company’s legislative agenda? Who was Microsoft acting on behalf of the shareholders, the community, the local pastor, the consumers or the Board of Directors?

If Microsoft wants to be known in the business world for it’s corporate social responsibility, then it should have stood by the initial decision to endorse the legislation. This would have demonstrated that the company’s interest in advocating for the social interest of company employees. Understanding that many other technology and financial corporations supported the stakeholder’s social expectations, it may have negatively affected how consumers and other businesses viewed Microsoft by changing their stand.

Blood Bananas

2008-05-12T20:43:00.000-07:00

Sunday evening’s 60 Minutes provided an interesting example of business ethics. It seems that Chiquita has banana growing operations in Columbia. Columbia has struggled with civil war and terrorism in the last couple of decades. Chiquita responded by paying protection money to whomever was in power in the region they had their operations (first the leftists then the rightists). Apparently these terrorists were quite brutal; several incidents were described including the murder of children in plain sight during the daytime as intimidation.

Chiquita defended its decision to pay the protection. Not only was their operation profitable, but they felt like they were making the payments for their employee’s protection. They employed upwards of 3,500 people in the region in question. Without Chiquita’s support, they felt like the employees would be at risk for exploitation. A counter view of the situation might accuse Chiquita of actually financing the terrorists. Chiquita responds by saying they were the victim, not the perpetrator of the violence.

In 2001 the US gov’t labeled the rightist groups as terrorists. This meant that any payments made to them were illegal under US law. Chiquita continued to make the payments for another 2 years because they said they didn’t know the terrorists had been labeled as such.
Ultimately Chiquita had a management change, sold their Columbian operations, and self reported their transgressions to the gov’t. The company pled guilty to a felony and paid a $20MM fine. (I wonder if they still buy Columbian bananas under contract). Many of the rebel terrorists have now disbanded and the central government has reestablished control in the region where Chiquita had its operations.

I acknowledge Chiquita’s coming clean of their crimes, but what took so long? What is a company’s responsibility when its main raw material is tainted (blood bananas like blood diamonds)? I think Chiquita could have done more and they seem to agree (somewhat) which I acknowledge. It seems like Chiquita is using a Utilitarian argument to defend their actions. We've seen the problems with Utilitarianism (although it can work for some things) and in this case a more Kantian approach is needed.

Pharmaceutical sales ethics

2008-05-11T11:43:00.001-07:00

When it comes to pharmaceutical sales ethics, the pendulum has swung between very lax and very strict over the years. For many years, the pharmaceutical companies have been accused of using its sales force to ‘bribe’the doctors to prescribe their drugs. Its been said that with the latest ethics and compliance programs, pharmaceutical sales reps are once again working in a stricter ethical environment. Or are they? There's been plenty of publicity about how sales reps are toeing the ethical line with respect to accessing physicians and promoting pharmaceuticals, but still there are claims that some companies are evading the guidelines with an eye to securing profits.

In recent years, it isn’t uncommon to see doctors being treated to many sorts of royal treatment. The belief among the sales force reps being that without being able to offer prime seats to a baseball game or some other gift or perk, getting a physician's ear can be difficult. Many of the tactics used to lure physicians into prescribing medications are coming under fire. Incentives ranging from pricey vacations, front row ballpark tickets to outright financial rewards are increasingly viewed as unethical.

I have been interning with a pharmaceutical company and the message our company is sending to its reps can be viewed as very ethical. The sales reps are asked to put new emphasis on relationship building. One way in which some sales reps are working to create and strengthen ties with doctors is by positioning themselves as educational resources. The pharmaceutical companies used to invite physicians to attend lectures, which were followed by some special event such as a ball game or golf outing. But now, these dinner meetings feature a modest meal and a lecture by a guest speaker. While many pharmaceutical companies appear to be making adjustments to follow the new ethics, it is still believed that some are skirting the issue with secret strategies such as off-label marketing, the marketing of drugs for purposes other than those approved by the FDA.

The rep is not supposed to go out there and tell a doctor to use a drug for off-label purposes. The doctor is supposed to make the initial inquiry, but it doesn't always happen that way. Drug companies may be cutting back on the actual overt payments and golf trips, but reps are paying doctors to prescribe drugs for off-label purposes just to boost sales and with no proof of the drug's efficacy for that off-label purpose. Big names such as Pfizer, Merck and Astra Zeneca have recently been warned by FDA for off-label usage on their blockbuster drugs.
But with FDA approval process taking longer and getting tougher, companies are trying to find ways for doctors to prescribe more. In this situation, is it really possible to follow the ethical routes or will pharma companies continues to bribe doctors and use avenues of off-label usage to meet its bottom line?

Is Your Kid Covered?

2008-05-10T16:05:00.000-07:00

http://www.businessweek.com/magazine/content/08_20/b4084041498815.htm?chan=top+news_top+news+index_top+story

In fall 2006, Ralph Giunta Sr. decided to buy his son Ralph Jr. a practical birthday gift: health insurance. The Lake Worth (Fla.) school recommended a policy provided by MEGA Life and Health Insurance, whose student business was acquired in late 2006 by giant UnitedHealthcare. Giunta wrote a check for $1,044 for one year. "They assured me he was well covered," he says.
Ralph Giunta Jr. knew something was wrong in March, 2007, when the photography major and avid skateboarder felt pain in his legs and feet. Then 19, he lost all feeling in his lower extremities and was rushed to the hospital. The diagnosis: Guillain-Barré's syndrome, a rare disease of the nervous system that typically causes temporary paralysis. His father's anxiety was compounded upon learning more about the insurance he had purchased. Even with "major medical" coverage, the plan reimbursed only $22,800 of the $206,325 bill for 19 days of intensive care.

Six out of 10 colleges and universities now recommend specific health insurance plans for their students, and three of 10 require them. But as the Giuntas discovered, many of the policies turn out to be scanty at best, and inferior to comparably priced alternatives.

Schools often arrange for a standard student plan, and some even bill for it automatically unless students or their families opt out. But the administrators negotiating multimillion-dollar insurance packages frequently aren't sophisticated or diligent enough to obtain the best deals in the marketplace, says Mark Rukavina, executive director of the Access Project.

IN WHOSE INTEREST?
In some cases, universities have comfortable relationships with carriers that reimburse the schools a small percentage of student premiums to cover administrative expenses. This raises questions about whether schools ought to serve as what amounts to a broker. I think it is OK for university to take small percentage of student premiums. The point is if the university really try their best to get the best deal for its students? If university gives up students’ interest to get the reimbursement, the university’s action is unethical.

An Ethical Drug Plan?

2008-05-10T10:48:00.000-07:00

Medicare Part D brought about numerous changes within the pharmaceutical industry. The members of the previous Medicare plans were told to choose from literally thousands of Part D plans in a short period of time in order to have any sort of drug coverage. It resulted in a lot of members enrolling in plans which may not have been best suited to their needs and basically created total chaos. Even after few years in running, the members are still trying to understand the plan details and its so-called advantages over the previous Medicare plan.

I would agree with the professor that advantages clearly lie with the pharmaceutical companies rather than the enrollees of the Part D plans. These companies clearly gain from not having to offer best/lowest government prices to Part D plans anymore. Historically, the pharmaceutical industry has always been one of the top performing sectors and this only adds to the higher profit margins. These companies also gain as they no longer have to reserve for additional rebates, charge backs that used to be generated from charges submitted by older Medicare plans (decrease in % reserve would add to the bottom line). One could argue that these profit margins are needed to invest more in R&D to create better drugs. Additionally, with many of the blockbusters drugs recently or ready to go generic, the companies need these advantages to offset the losses. But with the pharmaceutical companies already charging premium pricing for their drugs, is this necessary? Aren’t the annual price (and sometimes two or three) increases of 5-10% enough?

It also seems unjustified that the members of these plans are banned from buying cheaper drugs from foreign countries even when they are in the ‘donut hole.’ These members, mostly retired Americans, depend on their retired income and social security to survive and these bans put further financial pressure on them in midst of rising cost of living. But then again, in support of the pharmaceuticals, one could argue that American pharmaceutical companies guarantee top level products as they have passed tough FDA standards where as the imports don’t carry any known standards; you could simply be buying a placebo.

It seems like the Part D plan is here to stay although there may be changes made after the presidential election later this year. In the mean time, it is only fair that the members are clearly explained the pros and cons of each plan so that they are better able to choose a plan which may cover specific drugs that they are prescribed to. Till this is done, it is hard not to classify these plans as unethical?

Due Diligence of U.S Based Companies

2008-05-07T09:26:00.001-07:00

Author T.A. Frank’s, Confession’s of a Sweatshop Inspector, sheds light on a subject thus far I have been relatively unfamiliar with. The idea that United States based corporations, which outsource international suppliers, should be more accountable and involved with the problems that sweatshops face, I believe is vital to creating awareness and promoting positive ethical business relationships. Of course I have an aversion to the very concept and reality of sweatshops, but like most consumers, I do not research company’s suppliers when I go to make a purchase at Wal-mart or buy a pair of Nike running shoes. American’s just do not have time; I believe American based businesses need to make conscious efforts to act on behalf of their customers and manage their companies in a way which takes into account what is best for society. For example, I agree with Frank’s statement of the importance of researching ethically operating suppliers and publicly recognizing them on their websites.

The U.S. based corporations cannot directly control sweatshops but they can set a good example by not engaging in business with suppliers that act unethically with regard to their employees and their well-being. Companies should only be contracting with suppliers that provide adequate working conditions and proper labor standards. This in turn will force suppliers to adhere to specific standards if they want a share of the business.

Companies have numerous options for outsourcing, including cheap labor. There is not a need to go after the cheapest labor possible – those sweatshops that provide horrific and almost unbearable working conditions. The United States needs to set standards and do due diligence when selecting suppliers. It is obvious that we cannot control globalization, but companies can make genuine efforts to promote the importance of ethical business practices by not engaging with sweatshops.

Governor’s Daughter Awarded MBA Degree Without Actually Having Done the Work

2008-05-06T12:50:00.000-07:00

//Please see link to article below//

The Governor of West Virginia’s daughter has been awarded an Executive MBA from the University of West Virginia without having actually completing the course work. A university panel met in October where it was decided to add courses and grades to Heather Bresch's transcript, then retroactively award her a 1998 executive MBA degree.

In the wake of the scandal, the West Virginia Faculty Senate has called for the University’s President (Mike Garrison) to resign so that the University could move on to the healing process by putting the problems that the scandal has caused behind them. President Garrison refuses to resign saying that he played no role in awarding the MBA.

Whether the President played a role in the degree being awarded or not isn’t the issue to me. To me the issue is that anybody be awarded a degree without it being properly earned. It makes me wonder just how many academic degree’s are out there that have been given as gifts of favor due to elitist relationships. It illustrates concerns relating to Rawls regarding everybody getting a fair opportunity.

This situation is not unique. This value-chain of elitism helps to perpetuate many of the scandals that we have been dealing with all semester. Part of the value-chain are the relationships of influence in which these individuals – and groups – leverage their relationships toward favorable business and financial outcomes. This also includes the political outcomes that lead to huge long-term financial opportunities for all parties involved. It is the revolving door that has these individuals in influential positions giving favors that are repaid in kind.

As for me, I’m too busy trying to earn my MBA the old-fashioned way to really ponder this much more.

http://ap.google.com/article/ALeqM5jwqss6WG9C4W0n957xhvFsvDqGKwD90G85MG0

Beware of The Nursing Home Scandals

2008-05-06T10:24:00.001-07:00

I thought I would blog this because, though personal, it might serve as an informative experience that perhaps maybe helpful to you should you ever have to endure a similar situation.

The question is: When does CYA (Covering Your backside) become more important than protecting a life?

Background:

My family and I are currently dealing with a long-term medical care situation involving a nursing home facility located in Delaware.

My younger sister is very ill and confined to a nursing home in Delaware. I will not mention the name of the nursing home but suffice it to say, it is one of the worst I have seen in a long time. Anyway, as a result of the lack of care they were giving my sister, I called a meeting back on March 6, 2008 of all of the top administrative and nursing staff. This included the head of the facility, the director of nursing, the head nurse, the primary care physician for my sister and the administrator of social services for the facility. We all gathered around the table, along with other members of my family to discuss my sister's care.

What transpired at the meeting isn't important, except that it was pointed out to the administrators that we (my family and I) are very disappointed and very much aware of the negligent practices of the facility and that we believed that the facility was not a good place for our loved one's continued care. That same evening, my sister was rushed to the emergency room of Christiana Hospital where she subsequently underwent three surgical procedures to correct the actual problem.

The problem, by the way, is one that was persistent and that should have been identified by the nursing home medical staff, where she lived. It gets even better.

After my sister's condition stabilized and she began to get better, I receive word from the hospital that the nursing home had been contacting the hospital on a daily basis, expressing that they were holding a bed for my sister's return, against our wishes. More importantly, the hospital is obligated to release her back to this facility because the facility has volunteered to keep a bed open for her. Whereas, due to the extensiveness of her care, and the new medical challenges she faces, other nursing home facilities are not equipped to or unable to take her.

My problem with all of this is that out of all of the facilities that were identified as having the ability to take her, they are all listed on a Medical Watch List for facilities having failed repeatedly to pass survey tests in key areas of care. Surprisingly enough, the facility that has given my sister the very worst care -- ISN'T EVEN LISTED AS HAVING ANY ISSUES!

There is an answer to this however. When my sister was admitted to the hospital, the very thing that is causing her the worst medical problems, was conveniently omitted from her medical report. In other words, the nursing home failed to indicate that she had a problem. They NEVER documented that she had the problem. By doing so, they do not claim any responsibility for the problem and the hospital nor any of us, can do anything about it.

Now, they are coming back to us as the glorious savior for my sister by being the only facility that will take her with the conditions she now exhibits. Of course, you may offer to say: "Why don't you hire a lawyer?" or "Why aren't you looking to place her in other facilities?" And the answer to this would be: "We are."

However, there are only a half dozen facilities available in Delaware that support extensive long-term care - and all of them are on this list of DANGEROUS FACILITIES for care except the one she is currently assigned to.

So now what do I do?

The Supreme Court - What's the Problem?

2008-05-06T10:24:00.000-07:00

In the article, "Supreme Court Inc.", I did not see an ethical issue. I may be naive to the point of the article but what I got from the article is that the Supreme Court is hearing more and more business related cases; "up from around 30 percent in recent years." However, I do not see the ethical issue with the Supreme Court hearing these cases. The author assumes that because the court is hearing more corporate cases that the Supreme Court is helping out corporations with their decisions. I think that is ludicrous.

The Supreme Court is made up of great people who are the final say in our legal system. They always try to make the right decision. Maybe, the legal system in corporate America is so screwed up these days because the Supreme Court failed to get involved in years past. I think it is a great thing for them to get involved more and more with corporate cases.

Stella Liebeck versus McDonalds

2008-05-06T08:05:00.000-07:00

Not that well known, is the infamous case of an 81 year old woman named Stella Liebeck who successfully sued McDonalds, when she spilt hot coffee on herself. The reason behind the judge favoring her claim is 'the vendor did not particularly notify/warn the customer about the hottness of the beverage'. This was seen as an unethical call by many critics because the lady had ordered hot coffee and should expect a hot coffee, just because the vendor did not specify that when he handed the drink to her, it doesn't mean that the fault is on the vendor's side.
Inspired by this case, there were similar such lawsuits filed by individuals against big companies concluding in an unethical judgement favoring the plaintiff. Few of which are :
Kathleen Robertson of Austin, Texas, was awarded $780,000 by a jury of her peers after breaking her ankle tripping over a toddler who was running inside a furniture store. The owners of the store were understandably surprised at the verdict, considering the misbehaving little toddler was Ms. Robertson's son.
A Philadelphia restaurant was ordered to pay Amber Carson of Lancaster, Pennsylvania, $113,500 after she slipped on a soft drink and broke her coccyx (tailbone). The beverage was on the floor because Ms.Carson had thrown it at her boyfriend 30 seconds earlier during an argument.
Kara Walton of Claymont, Delaware, successfully sued the owner of a nightclub in a neighbouring city when she fell from the bathroom window to the floor and knocked out her two front teeth. This occurred while Ms.Walton was trying to sneak through the window in the ladies room to avoid paying the $3.50 cover charge. She was awarded $12,000 and dental expenses.
Mrs. Marv Grazinski of Oklahoma City, Oklahoma. Mrs. Grazinski purchased a brand new 32-foot Winnebago motor home. On her first trip home, having driven onto the freeway, she set the cruisecontrol at 70 mph and calmly left the drivers seat to go into the back and make herself a sandwich. Not surprisingly, the RV left the freeway, crashed,
and overturned. Mrs.Grazinski sued Winnebago for not advising her in the owner's manual
that she couldn't actually do this. The jury awarded her $1,750,000 plus a new motor home. The company actually changed their manuals on the basis of this suit, just in case there were any other such foolish complaints.
These cases bring out the fragility and the vulnerability of the law system in the US and the lack of concern it has for following common business ethics.

From Confessions of a Sweatshop Inspector

2008-05-06T07:29:00.000-07:00

From the article entitled Confessions of a Sweatshop Inspector, I stopped on the following line: “ I suspect, however, that the fault lay with Wal-Mart as much as with the inspectors. I say this because there's a broader point here: Monitoring by itself is meaningless. It only works when the company that's commissioning it has a sincere interest in improving the situation.” It almost seems to have brought the semester back full circle to the Kantian argument that noble intentions are not enough if they are not performed for the right reason. If Wal-Mart is hiring compliance regulators to find labor violations, it must be with the intent of doing real human rights work. If it is simply due diligence to keep the press unaware of such activities, then it is no longer a moral action. This will tie in to my discussion of Title IX enforcement and how it must be followed in spirit and with truly universal good intentions, not just to make a gesture of compliance for the community.

I further the support that the author makes about the flagrant immorality that stems for the bad behavior of a supplier sullying the good name of an otherwise compliant company with regards to working standards. This is the new challenge of globalization and as the United States continues to rely on imports during a lagging domestic production cycle, it is more important than ever to be aware of the conditions of the workers even if they are not within our borders.

Free Trade

2008-05-06T07:22:00.000-07:00

Is It Time for a Free Trade Agreement with Columbia? Only if we want a strong economy.

The key to an individual’s economic success is being able to sell what you have to others, whether it’s products or your time. And being able to buy what you need at the best available price. That’s also the key to a country’s economic success. So why do so many Democrats oppose what’s known as free trade agreements with other countries, especially Columbia? Columbians pay tariffs, or taxes, on about 8 percent of what they sell to the United States. Americans, by contrast, pay tariffs of up to 37 percent on nearly all of the products we sell to Columbia. Those tariffs make U.S. products more expensive and harder to sell. A free trade agreement would end that disparity. Taxing U.S. products doesn’t punish other countries; we’re only punishing ourselves.

Sweatshop

2008-05-05T19:04:00.000-07:00

After reading the article “Confessions of a Sweatshop Inspector”, I have several thoughts as follows:

1) In China, The New Labor Contract Law, taking effect on Jan. 1, 2008, entitles employees of at least 10 years' standing to sign contracts that protect them from dismissed without cause. The law also requires employers to contribute to employees' social security accounts and sets wage standards for employees on probation and working overtime. This law was hot-debated, a lot of companies reacted strongly to this. However, I personally think it’s a great beginning to protect and offer welfare to these people. In my understanding, without them, there is no prosperous China in today.

2) How sweatshop develops? I think, to certain extent, sweatshop is the direct product of pursuing profit by companies in developed countries and companies and/or government in developing countries. Nike or Walmart, they didn’t open the sweatshop, but the way they run the business lead the emergence and popularity of sweatshops around the world. Why factories in China want to do bad to their employers? They argue that the pay from American corps is too low. Every powerful one involved has its own voice and points; we need the real voice from the workers. The union could be a great way.

3) As the article states in the end, everyone should be concerned about and pay attention to these people. It’s not one or two people or organizations’ duties or issues in the global village.

ref:http://en.ec.com.cn/article/entrade/eclaw/enlrothers/200801/536674_1.html

Patenting a Thousand year old product

2008-05-05T11:46:00.000-07:00

As globalization continues to bring all the remote corners of this world closer together, there will be more “new” discoveries of ancient products. This was the case with the article in the textbook titled “W.R. Grace & Co. and the Neemix Patent”. At the core of this article, a product that has been used for centuries, neem, by Indians, Africans and Middle Eastern cultures was patented by a U.S. company in 1992. Without getting too much into the specifics, neem is used for various purposes; ranging from preventing tooth and gum disease to a potential contraceptive as a spermicide. However, it is predominately used as a natural, effective pesticide by Indian farmers for generations. Unfortunately, the problem was that the active ingredient was not stable enough to use in a product formulation. This was not a concern for Indian farmers as they prepared the pesticide as needed to treat their crops.

What W.R.Grace was able to do was to stabilize neem so it could be sold as a commercial product. According to the US Patent laws, an invention must meet 3 conditions in order to receive protection: 1) it has to be novel to a “prior art” (something different as defined by someone possessing ordinary skills in the art at time of invention), 2) invention cannot have been known or used in the US, or patented or described in a printed publication in the US or elsewhere prior to its invention; nor can the invention have been descried in print in the US or elsewhere more than a year prior to the application, 3) cannot patent a naturally occurring substance unless it has been modified in some way.

In 1995, the Foundation on Economic Trends (FET) claimed that the patent should not have been granted for many reasons; primarily, it was not novel, numerous articles were written about neem’s pesticide benefits in India (as early as 1928) and that any “modification” made by Grace was trivial. Furthermore, the reason why Indian farmers or entrepreneurs could not file patents in India was because of the “pragmatic and legal constraints against it”. Additionally, under the agreements of the World Trade Organization, India, as a member nation, would have to move to align its patent requirements with the West. Therefore, these farmers would now have to pay Grace for using something they’ve been using for generations.

Grace responded back by stating that FET’s accusations were incorrect and without merit. They acknowledged that their neem stabilization modification was “nothing Buck Rogers”, but it spent $10 MM on R&D and came up with a solution. Also, they said the patent would not prevent or limit Indian farmers from using it and that Grace did business with many Indian firms (harvesting, processing, shipping, etc) to produce this product.

What I found really interesting about this case is that this occurs often; especially when you think about all the “new” discoveries that are made from the Amazon Rain Forrest or from ancient Chinese remedies. How can companies that invest time and money in bringing these “hidden” treasures to the masses be compensated for their efforts? How do you give credit (specifically, royalties) to a Nation or a group of indigenous, remote people? How can two countries with different patent laws co-exist in ethical business transactions without claims of “copy-right violation (i.e.- Ironman on DVD)” or “piracy of their heritage”?

My reflection on Sweatshop Article.

2008-05-05T07:40:00.000-07:00

I found the article “Confessions of a sweatshop inspector” really interesting and I could relate to it through different topics we discussed in the course so far : K-Pan, Labor standards in the era of globalization, Wal-mart case from the book. I absolutely agree with Frank when he concludes saying that being accountable to something that happens within your own regime is not the correct way to operate in a global economy. One has to use the best judgment to identify if the standards used in other nations for manufacturing its own products are ethical enough or not! Definitely, what occurs on papers or is inspected in a two-day’s period often represents a partial real picture. It is more of a responsibility of the customer (individual or firm) to make sure that the contract goes into ethical hands and people are not exploited for the same.

I also mentioned in my mid-term exam, sweatshop is bad due to the kind of working conditions, poor pay that prevails there. But are they not the feasible means of employment for those who do not have enough skills to get employed in a better firm? The benefit here is that the sweatshop is able to provide employment to a large number of people and so leave them in a better situation than having no job at all. While the problem here is that the workers do not have options, but to continue to work in poor conditions, knowing that they are being exploited. I think that Ian Maitland might suggest that more than one sweatshop should exist so that people are not exploited by a monopolized company and can move to a different employment at their own will if the conditions are not supportive. I also appreciate the information that Frank had mentioned in his article about Nike’s and Mattel’s approach towards selecting their suppliers. Pre-screening the firms that might work with them and making the information public is definitely a means to let others judge how ethical they are and their intentions about not hiding anything suggests that they are trying their best to keep up the standards even across the national boundaries.

CEO's Compensation Requires Accountability

2008-05-05T05:41:00.000-07:00

To piggyback on Roxy’s topic for her presentation last week on the absorbent compensations of CEO’s, I found an interesting article that did focus on the immense salaries, but more on those CEO’s that were not deserving of multi-million dollar contracts. While I do agree that for the most part, CEO pay is somewhat unjustifiable, I do think a large salary for a person in such a visible role who carries huge responsibilities does deserve to be compensated greatly. However, my issue with the salary’s of CEO’s has more to do with those CEO’s that perform poorly and as a result the company and shareholders falter.

In an article posted today on Forbes.com, several CEO’s are highlighted as the top paid CEO’s that perform the worst. Among them, Gary Forsee the CEO of Sprint, basically negotiated a fail proof compensation package that would leave him with millions whether he helped or hurt the company. The only notable action he did with Sprint was led the catastrophic merge of Nextel which dropped the stock price from $25.00 to $7.40. When he was finally asked to leave, he left well taken care of; Sprint gave him $40 million over the course of 2 years which included his salary, bonuses, stock options, and a pension for life. How is it possible for a person to get paid more than the average person when not only are they not even working, but their performance was horrific?

I’m going to have to push some blame on the hiring practices of these huge corporations that allow for this type of thing to happen. First off, for the most part, I can’t imagine this highest paid “worst CEO’s” have a background of extraordinary performance that validates them being capable to run these massive organizations let alone justifies them having this much negotiation power. Just like the average employee, CEO’s need to be held accountability for goals and the growth of the business – after all, that’s why they get paid the big bucks, right?

Chapter 7: Corporate Ethics and Politics

2008-05-04T18:46:00.000-07:00

In this a presidential and gubernatorial election year (for Delaware residents), I believe corporate ethics plays a critical role in the upcoming elections and the political system as a whole. Some people question whether corporations should have a role in politics and the extent of the role. I agree with Professor Silver’s viewpoint that “if they (corporations) respect some critical moral boundaries” and they follow the letter of the law, then political participation should be granted. Corporations add value to the political process and have a vested interest in the outcome of elections. The means and the extent of political participation by corporations should be controlled, to ensure the spirit of the law is followed. Corporations influence the political system by utilizing lobbyists, regulatory capture and campaign contributions. Corporations have skirted the spirit of the law by influencing board members and company employees to contribute to and vote for specific political candidates. Once candidates are in office, corporations expect additional access that average citizens would not be granted. I believe that Freidman’s stockholder theory would support political involvement by corporations, if it positively impacted the bottom-line of a corporation. There are limitations on this theory, such as the corporation abiding by CSR rules and following the political involvement rules to ensure the corporation stays above the law.

Is Ethanol Getting a Bum Rap?

2008-05-04T14:46:00.000-07:00

http://www.businessweek.com/magazine/content/08_19/b4083060454256.htm?chan=top+news_top+news+index_news+%2B+analysis

Ethanol is taking a tumble. Once hyped as a magic brew for reducing both oil addiction and global warming, alcohol made from corn kernels is now being accused both of triggering a global food crisis and doing more ecological harm than good.

Ethanol critics, ranging from environmental groups to pig farmers facing high feed prices say “What started as an energy policy is leading to spreading hunger and political instability around the world.”

The global food crisis has brought on riots in about a dozen countries and left many panicked world leaders scrambling for answers. food prices globally have climbed 83% in the past 36 months and are expected to stay high through 2015, according to the World Bank. "This is hitting everyone, but it's hitting hardest people who live on less than $1 a day,"

Is it an unthical thing to produce oil from corn while so many hungers and malnutritions in the world?

some arguments which mention that the global food shortage could lead to lower trade barriers and innovation that may raise farm productivity. Also they say that high prices will lead these countries to produce more of their own food. So the food shortage is a good thing.

Thinking of those poor Moms who have hungry babies to feed or those children who are eager to food, I really can’t agree with above arguments. I think it is the entire people’s resposiblity to get rid of food shortage.

As for the Ethanol ,if we can shift to other crops, there would be not conflict between Ethanol and food shortage.

2008-05-04T14:21:00.000-07:00

I read the second article Dr. Silver sent, called "Confessions of a Sweatshop Inspector". I thought the insight provided by the author was very interesting and brought a different perspective to the sweatshop discussion. As the author explained the details of his job and how he would have to deal with interviewing employees of sweatshops who would just provide streams of lies regarding working conditions, and how he would find numerous labor violations, I tried to put myself in his shoes. After seeing so many instances of terrible worker treatment and conditions over and over again, I feel like I would lose faith in corporations, altogether, and believe that “ethical sourcing” is just a myth and a fancy tagline.

I thought that the author closed with good points regarding how monitoring and enforcement of labor standards of foreign countries are two things that must be focused upon now, in our era of globalization. In the past, it may have been possible to overlook certain labor violations in those oh-so-faraway countries, but in our increasingly small world, those foreign labor standards are coming back to affect our domestic workers.

Ethics of awards

2008-05-03T23:16:00.000-07:00

Many a times, even popular and well-respected awards like Oscars and Pulitzers have to go through the criticism grind for their choice of winners. And many a times, awards which are meant to recognize people in the corporate sector by a magazine which lives on advertisements from this sector just gets away with it. Tacky but true!

Back in my home country, there is a magazine that awards prominent people of the corporate sector. By corporate sector prominence, I mean CEOs, Managing Directors, Finance Heads, Marketing Heads, Human Resource Heads and so on of comparatively large companies. The same magazine also awards young achievers from various sectors- art, business, music, politics, education and so on. The way they recognize these young achievers, though not justified, is less controversial due to the fact that most seem to be rising in their fields. However, the choice of the corporate winner should raise an eyebrow or two!

First, this magazine purely survives in the advertisements from these companies. Since it is primarily a business journal, it is supposed to write about corporate sector. Most corporate entities agree that its competitor does a much better job at delivering key issues of the corporate sector and provides a deeper knowledge-base. However, the glamour part of the magazine is what keeps it alive and ahead.

Is it ethical that a magazine concentrates more on these cheap gimmicks to increase circulation and advertisements rather than concentrate on a better content? Is it ethical on the part of the magazine which literally runs on the advertisements placed by these corporations to award people of the same corporations? I believe that the award itself loses its prestige when being given away by anyone who has an ulterior motive in giving away that award.

Ethics of Withholding Medical Records

2008-05-01T09:52:00.000-07:00

USA Today published an article mentioning the ethics of medical records being wrongfully withheld from patient’s family in emergency and fatal situations. There were several hospitals mentioned in the article who faced these accusations that respectively denied they had been involved in any misconduct. The general complaint from patient’s families is that in terminal situations, these families struggle with finding the truth when something goes wrong with their loved ones. Federal law recognizes that these representatives have the authority to see the patient’s records; however, the pressing issue in this situation is not only the timing of providing the records, but also a reoccurrence of missing or false records. The article mentions several specific cases where medical professionals have easy access to these records but when the patient’s families request them to make their own diagnoses or assumptions, the process seems to take substantially longer or certain bits of information are somehow missing.

The Health Information Portability and Accountability Act allows health care providers to withhold records in certain situations; however, in this case the hospital would not provide the reasoning. In a specific case, the records were withheld for too long of a period of time and the “victim” passed her statute of limitations timeframe to file a civil lawsuit.

It seems highly unethical, and oftentimes emotionally corrupt to not provide the patient’s family’s and representatives the proper medical documentation in a timely matter, especially when urgent decisions need to be made. I believe many medical professionals and institutions are concerned with malpractice suits and in some situations I do not think it is far fetched to believe that there is intent involved from delaying the release of information. I think this is also a case of accountability – if there are problems or complications with patient, a family has the right to know the truth and that everything possible was done to save their loved ones.

Steriods and the Spirit of the Law

2008-04-30T12:15:00.000-07:00

Professor’s Silver evaluation of the steroid scandal in sports in Chapter Five, highlighted some recent cases. Steroids are harmful and the results they produce can be quite addictive. His conclusion that these athletes were not following the spirit of the law is a true depiction of the situation. You can not tell me that these athletes were unaware that what they were doing what skirting the system. Sport leagues have created these rules in order to create a fair playing field and to protect their assets. The athletes should take this more seriously.

I agree with the creation of stricter and more clearly defined rules to prevent these situations. With this said, I have never understood why Congress felt it was necessary to get involved in this scandal. I believe that this is something that should have been handled by the league. Perhaps the government should focus on preventing the corporate scandals that actually impact our financial lives.

Corporations have and will continue to bend the rules as long as our government allows it. Especially when the government allows deferred prosecution agreements in the place of a conviction. This creates a culture that is almost encouraged to bend to rules and test the limits.

The Parable of the Sadhu

2008-04-29T13:45:00.000-07:00

This was an interesting article (page 287 in the textbook) that discussed how a group trekking up the Himalayan Mountains encountered an “ethical dilemma” and how their decisions are similar to corporate ethics. Briefly, a group of multi-national individuals embarked on a trip of a life-time up the mountain (presumably Mt. Everest). Along their journey up, another group’s member comes down the mountain and “dumps” a partially naked and hurt Sadhu (Holy man) at their feet. This individual angrily states “I’ve done what I can and you care for him” as he heads back up the mountain to continue his journey. Now this group is faced with an ethical dilemma. Provide minimal support (clothes, food and water) and continue up the mountain or turn around and return back to base camp and provide the sadhu with the proper care. One individual decides that this journey (an experience to achieve personal satisfaction) was more important that the well-being of the stranger. Another individual (who was suffering from the elements himself) attempted to help the Sadhu as best as he could. When these two individuals meet up, he asks his companion “how do you feel about contributing to the death of a fellow man?” Nobody knows for sure if the Sadhu is dead or alive. No one was willing to accept the total responsibility for the Sadhu, but did what they could as long as it was convenient and “passed the buck”.

This story illustrated to me what I believe is so pervasive in our corporate culture; that many individuals, when in a stressful environment, often make decisions that will damage (affect) them the least, regardless if it was the ethical decision to make. This is especially true in a group dynamic. If the group needs to make a difficult choice, it is hard to find that individual who is willing to risk everything (career, goals, bonus, etc.) to do the right thing. What usually happens is that each individual does their share to “get by” and hope that some else will make the ethical decision for them. In light of all the corporate scandals, it seems that many people turn a blind eye or believe that someone else will do the right thing, but in the mean-time, many people’s lives will be impacted.

What would you do if you were in this group? Would you go to the “top of the world” or help a stranger in need?

Hoop Dreams...

2008-04-29T13:41:00.000-07:00

In a recent discussion that I had with a University President, we talked sportsmanship. He said that in a basketball game, if a ball is clearly out of bounds by your own team, but the players on your team are pointing to the other team in hopes of influencing the referee’s perception, there is a problem. Is this view of ethics too stringent?

If you think that this is not too stringent a view, what does it then say about politician’s level of accountability for the unfounded finger pointing that they engage in during election campaigns? We’ve been talking about the ethical behavior of for profit firms in this class. What about the ethical accountability of each of us in our daily lives…in our daily interactions with all those around us? Isn’t looking at the ethical behavior of companies like KBR or Enron like looking at the symptoms’ instead of the cause.

We’ve talked about the revolving door of government and corporate America in the context of public officials selling out the interests of Americans for their personal interests. But what are we doing about it at the individual level? It may be appropriate to talk about Machiavelli and his work suggesting that what is right is dictated by who is in the position of power (idea that might makes right). The idea of a tyranny of the majority (JSM) would seem to be all but impossible in a society in which big money, special interests, and politicians seem to control the playing field? It seems to be lies upon lies told by these groups in their efforts to control the game? Is it really possible that they really believe that what they’re doing is truthful? Has truth lost relevance?

What would you do if a player from your favorite team walked over to the ref on the deciding point of the game and argued that the ball was actually out on him and that the other team should get the ball? How would you honestly react? Does it even matter?

Agents- The face of an Airline?

2008-04-29T13:27:00.000-07:00

I came across an article in CNN.com titled “Confessions of an airline agent” in which a anonymous former airline agent relates some of his/her experiences as an agent and traveler and some of the things the airlines allow to happen in order to cut costs. For example, they are limiting training to new agents, “leaving inexperienced agents on the front line to deal with passenger complaints”. Now, I understand why is it so hard to reason with agents in case of delays. Usually, the agent is the last person informed of what is going on, which is the reason most travelers are left in the dark when there are schedule changes.

The airlines need to refocus their strategies to make room for customer satisfaction. Some of the things they need to work on are updating their systems, improving their luggage handling methods, and adding Internet connectivity at the gate to have the agents better informed. I think it is unfair that the airlines are leaving the agent helpless to face screaming disgruntled travelers. The number one responsibility of the airline is service, which includes customer service and that can only be achieved by training their employees & by giving them the necessary tools to assure the customers expectation are met. Also, travelers need to learn that the agents are also human beings that are not entirely responsible of malfunction of the airline.
Source: http://www.cnn.com/2008/TRAVEL/04/28/airline.agent.confessions/index.html

Is the earth getting warmer?

2008-04-29T13:09:00.000-07:00

Apparently not last winter.

Americans living in the Midwest who had seen several waves of ice and snow last winter could be forgiven for wondering whether global warming is real.

And they might be right. University of Oklahoma geophysicist David Deming points out that in 2007:

Snow fell in Buenos Aries for the first time since 1918;
Snow fell in Baghdad, Iraq for the first time since 1908;
Johannesburg, South Africa, had its first significant snowfall in 26 years;
Closer to home, an April freeze killed 95 percent of South Carolina’s peach crop;
Denver, Charlotte, North Carolina, Meacham, Oregon, and St. Cloud, Minnesota, all set record lows last winter;
And the Canadian government claims it had the coldest winter in 15 years.

Maybe that’s why Al Gore released his global warming film “An Inconvenient Truth” . . . in the summer.

Chapters 5 & 6

2008-04-29T13:00:00.000-07:00

This weeks reading was based on corporations not following the ‘spirit of the law’ when it comes to taxes. Just a couple quick points I thought I would share.
First of all, I agree with the overall problem of corporations “cheating” when it comes to taxes. I would accept this practice if they were public about it and brought to the attention of Congress how our tax laws are flawed. Also, If we expect companies to adhere to the ‘spirit of the law’ then we must also adhere to it, or at most, make our politicians do it. Especially the ones making the laws. An example is Ted Kennedy and the Kennedy family.

Ted Kennedy is one of the strongest promoters of the estate tax law. He says, “The estate tax is the most progressive of all federal taxes” and “It would be terribly unfair to tax work while giving inherited wealth a free ride” -- June 8, 2006. The Kennedy family has long been part of American politics yet they “avoid the heavy burden of estate taxes by creating numerous trust funds” – New York Times. The facts are through a web of trust funds, the Kennedy family paid only $135K of estate taxes on a $300 million estate which is only 0.04 of the nearly 50% average estate tax rate. So how could we expect corporations to lead by example when our lawmakers don’t?

Another point of the book is how companies should pay their fair share of taxes. But what is this fair share? The Government has certain fiscal policies and responsibilities for which they need to tax people to cover the budget – granted. What if the government is corrupt and has no sense of duty in regards to NOT spending? Why should we pay for this irresponsible spending? This year, July 23 (according to the Adam Smith Institute) is ‘Tax Freedom Day’ for the US. This is the day at which point all Americans and corporations on average have earned enough money to pay their share of taxes. That means for the first 204 days of work this year, all the income has gone to the government. I think corporations and we have a duty to bring to the attention of our government the unfair tax laws. The only way to do it is by circumventing the existing laws so the government sees that the public does not accept the current ones. A bill was introduced in Congress back in 2003 called the “Fair Tax Bill”. It’s been 5 years and it hasn’t even been voted on yet. This is a democracy but if nobody listens to the people, how can we change the unfair laws?

Hospitals Turning Patients Away

2008-04-29T11:47:00.000-07:00

Yesterday, The Wall Street Journal contained an article entitled, “Cash Before Chemo: Hospitals Get Tough.” The genesis of the article is that non-profit hospitals are requiring patients to pay up front before services are rendered, from chemotherapy to surgeries, due to the large amount of outstanding debt from patients. The patients impacted are primarily those currently uninsured and underinsured. The prepayment amounts per patient were staggering, ranging from $75,000 to $300,000. Most non-profit hospitals have missions that center around serving the indigent population, thereby making this new business practice a complete contradiction to their guiding principles. In addition, this practice aids is the hospitals bottom lines, by ensuring a positive cash flow. According to the article, “Federal law requires hospitals to treat emergencies, such as heart attacks or injuries from accidents. But the law doesn’t cover conditions that aren’t immediately life-threatening.” This gives hospitals a loop-hole to deny services to people fighting cancer and needing other non-emergency surgeries.

While I understand that hospitals, even non-profit hospitals, need to be compensated for the services provided, there needs to be a compromise between paying $100,000 up front for services to not receiving the services at all. I should add that my father has spent the past two weeks in the hospital; therefore my opinion may be jaded. He was admitted by the paramedics and in my mother’s attempt to hurry; she left her health insurance card at home. My father received services under the Federal requirement and later it was determined that the hospital had his insurance card on file. I am appalled that hospitals have adopted this practice. I find it completely unethical and bad business.

http://online.wsj.com/public/article/SB120934207044648511.html?mod=2_1566_topbox

Despite record level gas prices, Shell and BP post big profits

2008-04-29T11:34:00.000-07:00

I was quite annoyed when I saw the article titled “BP and Shell post big profits in era of record oil prices” on the usatoday.com website.

I reside in Newark and work in Philadelphia and am sometimes required to make the commute by car. A round trip is approximately 100 miles, potentially resulting in a gas bill of over $350 per month. Judging from the amount of traffic I see on the roads each day, I am only one of many hundreds of thousands (or rather millions) of commuters that are subjected to these high prices.

While it is perfectly understandable that the additional cost associated with the high oil prices should be passed on to the consumer, it does seem as though companies like BP and Shell have increased their profit margins on their products. This seem very unethical given the current economic conditions.

The current high gas prices have been blamed for slowing the economy. In order to counter the slowing economy, the federal government has gone as far as to issue a $168 billion stimulus plan in the form of tax rebates. People like senators McCain and Clinton have gone as far as to call for a tax break on gasoline for the summer.

Never the less, the 'economy' is pretty good at BP and Shell. In spite of millions of Americans feeling the pinch of the increased gas prices and the slowing economy, companies like BP and Shell are free to exploit the situation and record huge profits.

I cannot help but wonder if the driving force behind the anti bio-fuel movement aren't the big oil companies. The ability to make huge profits even in a bearish economy is not something that any company would want to relinquish.

http://www.usatoday.com/money/companies/earnings/2008-04-29-oil-earnings_N.htm?loc=interstitialskip

Penalties of the Moral Rationales for Following the Law

2008-04-29T10:41:00.000-07:00

Dr. Silver,

In your book, the first sentence of chapter 5 states:

“Corporations are not required to follow the law when it requires them to do deeply immoral things, such as to participate in genocide.”

I want to raise the question of the penalty a company must pay if they do not follow the immoral laws. I will argue that the more immoral the law, the higher the penalty.

For example, if you run a cruise ship company and the law states that you are not permitted to feed your guests dinner on Tuesday’s, this is a minor immoral law that a government would probably just slap a small fine on you.

But what if the law was more severe, the penalty would be more severe.

For example, in 1939, the St. Louis cruise ship was faced with a morale and ethical dilemma. This ship housed about 1000 Jews who were escaping Germany to go to Cuba. Cuba officials and law makers decided not to allow the entrants of the Jews even though all of the Jews had the proper papers and a ticket which they paid for. After being rejected in Cuba, the captain sailed for Miami where the US Coast Guard also said no to the entrants. The captain, faced with the dilemma of should he break the US law and enter the territory or just sail back to Germany. If the captain broke the US law and entered the US territory, he would probably have had his boat sunk and all killed or a German Nazi official on the boat would have had him killed. The penalty for not following this immoral law was death.

So in the end, the St. Louis sailed back to Germany where about half of the Jews were killed during the Holocaust. Everyone should watch the movie Voyage of the Damned.

So my question is, at what price does human thought become simply a matter of survival during immoral law times? My answer would be that sometimes it is not realistic for companies or business people to act ethically when the immoral law is so extreme that it interferes with your survival.

EPB vs Comcast

2008-04-29T07:58:00.001-07:00

It was in the news last week that there is a court suit being filed in Chattanooga, Tennessee by the Comcast Cable Corporation that claims an unfair advantage is being exploited by a local power company, Electric Power Board or EPB, as it is transitioning to the communications sector. EPB plans to lay fiber-optic cable lines making access to the high speed internet easier for everyone in the area in addition to the electric utility services they already provide. They plan to use a loan from their utility division to promote the communications division. Comcast feels that this low-cost loan will provide an unfair commercial advantage which will violate Tennessee state law.

Local concerns focus on the possibility that a failed project on the part of EPB could cause rates to rise in the future to cover possible losses. Comcast is already well established and provides decent service to its customers, but many feel that arbitrary rate hikes make a new provider with faster service desirable.

Does Comcast have a legitimate case or is this using the law, rather than the spirit of the law, to serve its own financial advantage? Certainly there are legitimate concerns about the welfare of the community if the EPB communications division does not have a realistic picture of the kind of investment and operating expenses necessary to run a large scale operation. If Comcast is acting benevolently to protect the fledgling company from overextending itself, than perhaps the act can be considered moral in its kind intention. But if this is an attempt to use the law to choke out a competitor for strictly financial gain, then the issue must be reexamined with a different lens. Out-competing is a fine way to do business, but if your services are not sufficient and new services are requested, it seems immoral to look for legal roadblocks to do the dirty work of stopping a new competitor from entering the market.

Is it right for EPB to exploit the opportunity for a low-rate loan within a public utility company if it is in apparent violation of the Tennessee Cable Act? The goal is to provide the citizens of Chattanooga with better opportunities and lower service rates, but if the program fails there could be more damage done than good. The utilitarian ideal of desiring the greatest good seems moral, but what if EPB is only concerned with its own profit margin and not with the potential pitfalls of a failed project. If the communications wing flounders, they can still make their revenue by increasing electricity rates. Without more details it is hard to see who has the moral high ground, but we can see that once again, the media and communications industries are very difficult to control with the letter of the law.

The story of Lamborghini

2008-04-28T21:24:00.000-07:00

In the year of 1963, Ferruccio Lamborghini was earning big bucks from selling his tractors that he decided to pep up his garage with a Ferrari 250 GT, so he went and purchased this superior sports car. While maxing out its performance on the lush Italian roads he noticed a problem with the clutch system. Being the gentleman that he is, he personally confronted Enzo Ferrari with the issue, Enzo ignored his request and sent him away telling him to rather drive his own tractors. Infuriated, Ferruccio went back and tried to fix the problem himself. He then discovered that the clutch system was manufactured by the same company who provides the clutches for his tractors. So, he installed a more efficient clutch from his tractor warehouse and fixed the problem.
After this incident, Ferruccio lost respect for the Ferrari brand and decided that he could build more powerful and effective sports cars with his skills and expertise. With the help of an ex-Ferrari engineer he designed a sports car with a V12 engine and sleek design now popularly known as the Lamborghini.
This example shows the amount of inspiration and self motivation a particular unethical behavior can influence a person's perceptions and actions.

Textualism and the Supreme Court

2008-04-28T19:12:00.000-07:00

Dr. Silver’s discussion of the spirit of the law in Chapter 5 reminded me of a case decision that was announced today (Monday) by the US Supreme Court. Although it is not really business related, the topic of the spirit of the law seems very evident. In the case Democrats and related groups argued that a new Indiana law was unconstitutional because it denied suffrage to people who are poor, old, or members of minority groups. It did this by requiring that any potential voter provide explicit photo identification prior to voting. Since members of these groups may find it harder to obtain the ID, it effectively denies them the right to vote. The Democratic Party argued that the very intent of the law (i.e. the “spirit”) was to reduce the number of potential voters of these groups, who typically vote democratic.

The Supreme Court voted to uphold the law. Justice Stevens (who frequently votes on the liberal side of the court) was in the majority and noted that the justifications for the law “should not be disregarded simply because partisan interests may have provided one motivation for the votes of individual legislators.” Assume for a moment that the motivation (spirit) of the law was in fact to simply remove potential democratic voters. I would argue that this is morally unacceptable because it denies the nature of our liberal democracy (universal suffrage). However, what Justice Stevens is saying is that even if this were true, the law is still acceptable even if it’s original spirit is corrupt because it serves another useful purpose, which is to prevent voter fraud. Steven’s interpretation would seem to be an example of the textualism that Dr. Silver describes in the book. (This also seems to be an example of utilitarianism.)

This case would seem to have implications for business lobbyists and the laws they promote. Say a pharmaceutical company has a domestic factory for producing an expensive drug. A competing drug is introduced by a second company where a portion of it is manufactured it in a poor country that lacks a strong regulatory structure. It passes all the FDA tests, and is even perhaps formulated and quality tested domestically, but the first pharam company influences a law to be passed that restricts the sale of drugs with components that originate in countries with poor regulatory structures. Even if it were proven that that the first company only acted to protect its business interest, and was not even concerned with protecting the consumer, the basis for this case might allow this law to be considered acceptable. The spirit and motivation for the law is immaterial; the fact that it plausibly protects consumers from substandard drugs is what makes it acceptable.

I’m usually a conservative person who would not have a big problem with presenting an ID when I vote. I do express some unease, however, if the INTENT of a law in immoral even if it serves a useful purpose. I believe in justice and I think that there is some room for understanding intent as well as outcome.

Global Equilibrium Out of Balance

2008-04-28T17:46:00.001-07:00

A recent study of ice cores over a hundred thousand years old has negative indications about our atmosphere. According to scientists, a natural balance exists between carbon dioxide emissions and the planet’s ability to absorb them. Earth is no longer capable of maintaining this balance. The imbalance is caused by excess carbon emission into the atmosphere. This may be considered as a cause of the climate change in recent years. This study of ice cores has attracted much attention to criticism based around global warming.
The natural balance is a finely tuned process that has evolved over thousands of years. Human activities now produce carbon dioxide somewhere around 14,000 times faster than nature. This pace began during the industrial revolution and has increased ever since. Leading causes of carbon dioxide emission include the burning of gas, fuel and coal. The planet and atmosphere will naturally absorb all of the excess carbon dioxide produced, but it may take hundreds of thousands of years to do so.

Unethical Office Pools

2008-04-28T10:51:00.000-07:00

Every year lots of men and women across the country find out if they won money in their office Super Bowl pool. Those who lose have a chance to recoup their cash in pools for the NCAA March Madness, Academy Awards, the World Series, and perhaps even the Presidential election. For every season, there is a chance to bet and win at the office, and the winnings can be as high as five figures. Office pools involving cash are common, exciting, and potentially lucrative. But they can violate corporate policies and the law. So the question arises, are these office pools ethical?

It has often been debated that office pools do encourage office morale resulting in greater productivity. The supporters of these office pools feel it’s all just harmless fun. Office pools build morale and camaraderie. For example, at the beginning of football season, we kick in a few dollars, then follow our team over the coming weeks and months. Most of us lose. A few of us win. What's the harm in that? Even if there happens to be no legal or policy issues at stake, the harm has to do with how stakeholders would view the business if on-the-job gambling activities were revealed. For example, if the stakes are high, the result of the pool could create disharmony in the workplace, and the problems could escalate.

But the fact is that is unethical to be part of any betting pools at the work place. The office simply isn't an appropriate place for gambling. It's called a workplace for a reason: It's the place where we're supposed to work. Things that interfere with doing our job should be done before or after work. If even a small percentage of fellow employees, board members, and shareholders is likely to be troubled by the practice of on-site betting, that alone is sufficient cause for concern. Some stakeholders may have religious objections to it. Others might be concerned that employees will not give their full attention to their work. A third group may simply view gambling on the job as unseemly. Whatever the objections are, they deserve to be taken seriously.

Office pools are also unethical due to the lost productivity at the work place. As a result, during the time of March Madness, some companies block ability to stream videos. Companies don’t want its employees sitting at their desk watching games. Moreover, streaming videos uses up a lot of computer network resources and eats up bandwidth, hurting business operations. It is estimated that $1.7 billion is lost in wasted work time over the 16 business days of the tournament if workers spend just 10 minutes a day on March Madness activity. Also, up to 37.3 million workers participate in office betting pools. This year, for the first time, every single game of the NCAA March Madness was streamed online. Additionally, the little red "boss button" on the NCAA Sports.com streaming video site came in handy to many. Many NCAA basketball fans were toggling between the game and the fake business charts that the site kindly provided, just a click away in case the boss walked by.Another argument that office pools are unethical has to do around the taxes involved with the cash winnings. For example, we are legally required to file a federal tax return each year where all your income needs to be reported. A very small percentage of the employees involved in these pools report their winnings as part of the taxes. The FBI estimated that $2 billion (mostly not reported in taxes) changes hands in just office-run March Madness pools each year.

The workplace has no room for March Madness or any other betting pools. But the reason has nothing to do with productivity or computer use. All these are considered office pools. And office pools are, by definition, gambling.

Who and How to Survive?

2008-04-26T15:06:00.000-07:00

After reading, I was reminded of Charles Darwin’s words, “It is not the strongest of the species that survives nor the most intelligent, but those most adaptive to change”. In addition, I think the survivors should follow the spirit of the games. Several thoughts came up to my mind.

1) As we discussed in the last class, people see the problems and realize both government and corporation need to work on them. However, questions such as who/how/when should initiate the change still puzzle me. I assume the peak and bottom points in the chart over the blackboard were very critical in the history where changes were the must. Should we always wait to that point? How patient we are supposed to be?

2) After reading Chapter 5, I was asking if it is possible when every company follow the spirit of law, people need not change the laws, increase the cost for implementing and management. Is that Utopia? In another word, does that really exist?

3) To some extent, I could understand the profit-motivated company’s dilemma. On one hand, they should put profit first, earning hard for their shareholders. On the other hand, they should be able to see long-term picture, respond to the whole society where they are rooted. Sometimes, following the spirit of the law would bring lower profit. It seems to me that if all people, not just the corporation, can see the situation well and appreciate more, the problem could be easier.

4) Is there any example companies that put profits second came in first? Is that true behind every successful company, there is a dark story?

Wal-Mart

2008-04-24T11:53:00.000-07:00

The case of Wal-Mart was interesting given that they went over the ruling of the council and requested a citizen’s opinion. I am not sure that I agree with Professor Silver’s evaluation that this was wrong. Obviously, Wal-Mart felt this ruling was unjust and wanted the citizens to decide. As discussed in class many times, not all laws are right and there needs to be a significant change in order to improve the laws. Generally, this comes given a crisis but this was enough of a crisis for Wal-Mart to initiate the vote.

In my opinion, there cannot be a better way to fairly decide an issue than letting the citizens decide. Often times our representatives can be easily influenced and lose sight of what their citizens want. I understand that Wal-Mart’s PR power far out-weighed that of the private citizen groups; but if there is an issue that people do not want then it does not matter how much money Wal-Mart has the measure will not pass.

I agree with Professor Silver that it is impossible for citizens to be aware of all policy matters. But I do, however, feel that it is the responsibility of every citizen to be aware of the issues for which they vote. If your vote is not based on information, then in my opinion there is no point in voting. The severity of this issue should be understood by all citizens.

Housing Bailouts and Taxpayers Obligations

2008-04-24T08:49:00.000-07:00

An article in Fortune presented a relevant and very concerning proposal that Congress is currently reviewing. Based on our discussions in class this week and also in coordination with Professor Silver’s literature, I thought the topic of housing bailouts and taxpayers obligations would be appropriate for a Blog. In this article dated April 23rd, a growing concern of many American’s is whether Congress will pass legislation requiring taxpayers to bailout suffering mortgage borrowers. This angers me for numerous reasons, most importantly, the fact that I have the credit and funds to effectively pay my mortgage knowing full well from the beginning that buying a house is a big commitment and that I would be solely responsible for paying back my debt. Why should homeowners, such as myself, be penalized and made to support those borrowers who should not have been able to purchase in the first place?

Sure, I realize that banks are also tangled in the root of the overall problem and should have more strict standards on who to lend money too, but I do not think they should be entirely held accountable for individual decisions.

I think this type of intervention will only encourage people, who may have less than average credit and funds capable to handle a mortgage, to take unwarranted risks in the belief that the government will bail them out or rescue them if they end up getting in way over their heads.

Additionally, the article mentions the importance of a free market and letting the economy run its course without interference of the government. Although the economy is struggling, I think minimal obstruction of the government is key – constant government meddling only sets a precedence that rewards bad behavior. I would agree that the market needs to sort these issues out gradually and that the less government interaction, the better.

To stand for what you are

2008-04-22T17:53:00.000-07:00

I intend to make my presentation on a few organizations in my country which are doing a good job at value creation for their shareholders, customers, employees and overall society but are not doing what they are expected to do. The very nature of these organizations called “co-operatives” is to serve a particular sector.
A co-operative is defined as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. A cooperative is a legal entity owned and democratically controlled equally by its members. The defining point in a cooperative is that the members have a close association with the cooperative as producers or consumers of its products or services, or as its employees. Cooperatives are based on the values of self-help, self-responsibility, democracy and equality. Membership is open, meaning that anyone who satisfies certain non-discriminatory conditions may join.
In Nepal, many co-operatives are behaving more and more like any other financial institution (banks and finance companies). Loans are decided before memberships and there is no feeling of community for which co-operatives stand. Although some co-operative may claim to be established to develop a particular sector, say agriculture, less than 1% of their customers might be from this sector. There is a concern about their sustainability if they act as they are typically expected to by the governing body- the Central Bank.
Are these co-operatives doing a greater good to their stakeholders by behaving more like a financial institution and less like a co-operative? May be a Utilitarian would agree, but what about standing for what you are? That, we will discuss during the presentation, I hope!

Reference:

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

Tax Shelters, Free Riders, and Treason?

2008-04-22T14:24:00.000-07:00

The readings from the manuscript leave me contemplating the American preoccupation with finding a good “tax shelter” in a new light. It also invites me to look at companies like Halliburton and KBR, as well as Tyco - and many others using off-shoring - from a critical perspective in which we must consider their actions in relation to the purpose of our country's tax laws. Why do we pay taxes?

Some of the basic examples of the purpose of taxes include the security and defense of the nation, the enforcement of law and public order, protection of property, economic infrastructure, public works, and the operation of government itself. Taxes are also used toward funding of public services which include education, health care systems, social security benefits, unemployment benefits, and public transportation. Other public infrastructure needs funded by taxes include energy, water and waste management systems.

It is an easy argument to claim that the elimination of just a few of these basic government functions would leave the people of the U.S., and all those firms for which the U.S. is home, in a situation of vulnerability.

While the cases presented in the manuscript, and those we discuss in the class, are the more extreme examples of egregious profit mongering, I think it would be fair to look at even less egregious “tax sheltering” behavior - those in which corporation’s (and their agents) behavior are for the purpose of sheltering profits to enhance their bottom line – as examples of free-rider practices in which these firms gain all the benefits of a stable liberal economy, while clearly acting directly to avoid paying their fair share. One may even go so far as saying that these behaviors – in that they damage the ability of the U.S. government over the long-term to provide and create the very conditions that the nation requires to remain safe both in terms of its economy and its national security – are acts of treason.

The “agents” of these companies include all those (individuals, groups, and corporations) who willingly aid in a corporation’s purpose to avoid paying their fair share. These entities take advantage of their unequal access to decision-makers to bias the laws - of the very national economy which allowed their prosperity – in a manor that not only inflicts damage on their nation, but cheats the nation and its people from payment for the privilege of these benefits.

French Vacation Leaseback

2008-04-22T13:04:00.000-07:00

I found the ethics discussion on the leaseback schemes to be interesting. I had read an article recently on a related topic. In the UK it is common for people to have self-invested personal pensions (similar to the proposal put forth by George Bush a couple of years ago during the social security “crises”). These Sipps as they are called allow individuals to make personal investments that provide tax rebates in return for limited ability to access the money until an age limit is met. Very similar to a 401k.

It is not permissible to make investments in personal property with the Sipp. Only commercial property is allowed. However a loophole has been found around this restriction. In France and Spain there is a government supported method for a legal leaseback. This method encourages people to purchase property that is intended to be used as a hotel or rental unit in order to increase tourism. Besides the rental income the buy makes, he also does not have to pay the French VAT tax, with is currently 20%.

So a buyer in the UK purchases the French vacation villa with his SIPP, receives the UK SIPP contribution tax benefit, receives the UK rental income SIPP tax exemption, receives the UK capital gains SIPP tax exemption (if the property is sold), receives the French VAT relief, and in 20 years has a nice vacation home. Considering that he only has to make a down payment to make the purchase and can finance the rest, this provides a really nice way to make a good investment.

Ethically speaking I am not sure the leaseback is really a problem here since the French law is specifically intended to increase investments in vacation properties. The buyer is using it for its intended purpose. From the SIPP standpoint, the article I read implied that the SIPP is not intended to allow investments in personal property, but in effect this is what is being allowed though the loophole. The property is commercial for a while but is really personal property which can be enjoyed as such after it is paid off.

Professor Silver's Book Readings

2008-04-22T12:29:00.001-07:00

Wow! Way to go Professor Silver! I just completed reading the last page of Chapter 4 and couldn't have been more surprised at the contents of the readings, let alone the shenanigans hoisted on the American taxpayer and voter by corporations as the have now jumped completely in bed with our government.

If I've learned anything from these readings as well as from my studies in the MBA program, it is that I will be much more astute at reading the financial pages of the Wall Street Journal and other papers that focus on business and enterprise in America and globally.

Though each of the cases were enlightening, I could not have been more alarmed by the role that major accounting firms and the practice of accounting in general plays on how skilled (or not so skilled when caught) these corporations have become in getting around the legislative and tax systems of this country. You would think that with all of the billions of dollars these corporations are making, paying a fair share of taxes or allowing the average worker, customer, employee, etc., their fair share of justice and/or earnings would be a 'drop in the bucket'. However, Professor Silver's writings have demonstrated that the fact of the mater is that corporate and government greed is incestuous, widespread, and dangerously disruptive to the entire American economy if we are not careful.

Take for example, the legislation outlined in Chapter Three on: Influencing the Law. Professor Silver makes a clear argument when he points out the fact that many pieces of this legislation was implemented, not for the protection of Americans but for the protection of large corporations. In an attempt to lock in their political gains in order to withstand future democratically-based efforts to regulate corporations, these same corporations are manipulating law by way of the relationships they have built between companies and government to secure windfall profits for years to come. I was deeply troubled by the case presented on the Medicare Prescription Drug Act of 2003.

I vividly recall visiting Canada in 2003 and seeing for myself that the same prescription drugs I had to pay upwards of $500 in the US, could be purchased in Canada for less than 1/5 the cost. No wonder drug companies closed that loophole. They used propaganda advertisement to state that it was done to secure safety in drugs. How can they say that when our own FDA is so overworked and over-loaded with cases, they don't have the time or manpower to inspect our own food and drugs or those coming to us from other overseas nations such as China?

I could go on and on about how revealing the cases were about the U.S. corporate culture and how little we know, or pay attention to, in the ways and to the extents corporations will go to secure profits. It raises more questions than answers.

Are Murdoch's Actions Ethical or just Good Business

2008-04-22T12:15:00.000-07:00

In an article I recently read in FORTUNE, Marcus Brauchli, managing editor for the Wall Street Journal has resigned and questions are being raised as to why?

http://money.cnn.com/2008/04/22/news/newsmakers/wsj_managing_editor_shuffle.fortune/index.htm?postversion=2008042214

Brauchli is considered the best in the editorial business but when Murdoch purchased Dow Jones & Co which owns the Wall Street Journal, he also established his own regime. It is not clear as to whether Brauchli was asked to resigned or did so on his own accord. But, looking at his career and credentials, this was the perfect job for him and a tough job to get elsewhere.

Murdoch is rich. Simply, he is considered one of the most shrewed and savvy business men of our time. The ethical dilemma raised by this occurrence is how Murdoch (or any takeover) moves into a company, takes over, and transforms or layoff. Personally, I think it is all part of business. Murdoch plans to buy Newsday from the Tribune Co. News Corporation plans to combine the operations of Newsday and its New York Post. So, Murdoch probably didn't think Brauchli was suitable for a transitioning job. I am sure Murdoch has plans to merge the Wall Street Journal with something else in his portfolio under New Corporation.

So I ask you, is this an ethical case? I think not, but public perception sees the pushing out of established employees as morally wrong. Business correct, morally wrong.

Dr. Silver, are you more familiar with the Murdoch deals with News Corp? This is a tough company to track the inside happenings.

questions after reading the tax cases...

2008-04-22T11:47:00.000-07:00

Indeed, corporations must accept the taxing and regulatory authority of the governments in which it actually conducts business. If they don't, in the short run, corporation might gain profit from saving state tax. But in the long run, state government won't have sufficient resource to continuously develop the place, which will eventually result a bad consequence for these corporations.
However, since this kind of tax incentive system has been in US for a while, and no obvious economic harm related to this system. I wonder if there is also some good consequence balanced the bad effect of it. One possibility is that corporations spent the profit they save on the tax on the expansion investment in the state where they really conduct their businesses. The extra investment could encourage the economic development of the place, and offset the negative impact of tax income loss.
I understand it is a pure assumption. And my underlying question is how the world can improve if the corporation stop doing that? If we don't have the answer, it is very difficult to stop corporation from keeping avoid tax as much as possible!
Other more practical question, did we consider ourselves unethical when we tried to save some money from the tax? Should we have to change ourselves after we realize that we should not only follow the tax law but also its spirit?

Unethical engineering

2008-04-22T11:43:00.000-07:00

Dozens of consumers worldwide are injured, or merely surprised, when their cell phones explode, the result of counterfeit batteries that short-circuit and suddenly overheat.

On July 1, 2006, it became illegal in the European Union to sell electronics that contain more than a very small amount of lead, mercury, cadmium, and a few other hazardous chemicals. These new Reduction of Hazardous Substances (RoHS) regulations present a golden opportunity for electronics counterfeiters to re-label and re-package lead-containing electronics to look like they meet the RoHS requirements.

What is electronics counterfeiting? It is kind of counterfeiting, where someone makes a cheap imitation of an expensive product and name it same. This can be also seen at crowded street market in New York City .According to the estimates these practice are responsible for up to $100 billion a year in revenue.

Counterfeit electronics is case of unethical engineering. Someone with technical expertise to know what parts are in demand and how to fake them is profiting illegally and immorally from counterfeiting of this kind. Counterfeiting happens all over the world, including the United States, but the huge chunk of all electronics manufacturing is done in Asian countries like China, India, Thailand etc. http://www.spectrum.ieee.org/may06/3423.

United we stand

2008-04-22T08:28:00.000-07:00

Reading the case about the pension default done by United Airlines reminds me of one instance when American Airlines tried and saved $40,000 in 1987 by eliminating just one olive from each salad served in first class. This is just a very minute amount of extra savings they experienced that year, as compared to the volume of the pension default, but it specifically highlights the fact that these airline companies take such extreme steps to perform cost cutting strategies by staying in the loop and making sure that their stealth techniques are unnoticeable. But this pension default incident by United, as according to me, can be considered as a serious offence. Exploiting the funds that are readily available, which do not solely belong to you, and trying to invest them in projects that have risk involved without acquiring permission from all the legal users is a very unethical move.
The main reason why United went forward in performing this task of exploiting the legal loop hole is because, when they invest if they fail (which they did) then they would not be held responsible for paying back the employees the money that they were supposed to receive, but could easily shift the weight of the problem to the Federal unit of PBGC who handles issues of pension default possibilities of to be bankrupt companies.

Thoughts on case readings.

2008-04-22T07:52:00.000-07:00

I am amazed how smartly the companies find options to go around the law, as I read from the chapters from Prof. Silver’s book. Although we did discuss about United Airlines and Sinclair in the first half of our semester, I found the case for Limited Brands Inc. really interesting. I observe how the links between the company, its subsidiaries and retail operations have been optimized in order to make the tax payments as minimum as possible. It sounds interesting that at step one, the parent company sells the intellectual property to its DE subsidiaries because the state has no income tax for corporate activities that relate to intangible assets of the company. At step two, the retail operations in other states pay back to these subsidiaries in the form of large royalties and end up making less income and hence paying fewer taxes. So eventually the company is able to get the maximum into its pockets while playing around the law in different states. And legally this sounds appropriate because the state laws, “as written” are still being obeyed. Not only this, the companies could go to an extent of shifting taxes through their international operations as in the case of a company that starts as a subsidiary in a low tax nation and later turns into a full fledged parent company owning all the related IPR. As Prof. Silver wrote, the company now would be under no pressure to abide by the U.S laws for taxes. I sometime fail to understand that why would these giant companies try to evade taxes if they are making a sizeable income which demands those taxes to be paid. I think if one intends to eat a larger piece of the pie, one should be able to pay for it..!!

2008-04-22T07:37:00.000-07:00

The case of the BUS vs Andrew Jackson, whereby Nicholas Biddle’s attempts to influence the media by “paying newspaper editors to run pro-Bank editorials giving his own views a widespread airing as well as the appearance of being endorsed by disinterested newspaper editors” strikes similarities to the Sinclair Broadcast case where Julian Sinclair Smith intended to alter political opinion through an immoral manipulation of the media prior to the 2004 Presidential election. This appears to show the prevailing temptation to control mass media through legal and financial manipulation of the system in the United States. Maybe the dissemination of unbiased new sources via the internet help prevent this type of injustice in future generations, or maybe internet journals and blog sites will only muddy the waters of true journalism.

We have the responsibility to control what television programs, newspapers, and magazines our families are watching and subscribing to, but there is a higher responsibility of major media outlets to protect the virtue of news without bias or misinformation. In the case of the BUS, a fair and balanced report in the newspaper supporting both Biddle's argument and President Jacksons would have clarified the issue rather than mislead readers. In 2005, CBS had a very public firing of a news crew that also provoked the resignation of Dan Rather, who served as the correspondent for the piece in question, from CBS News for airing potentially forged documents questioning George Bush’s service requirements in the Vietnam War era. While the actions of the CBS network in preserving journalistic integrity were necessary, was the story any worse than the anti-Kerry ads that the Sinclair group was promoting? Perhaps this story would have been accepted as a counterargument to the Swift Boat ads if the documentation could have been supported. If this were the case, the Sinclair group could have presented both segments on its stations to remain neutral. Bias is a natural tendency and doesn't seem to be very immoral, but there is a problem when biased people have a disproportionate control over media outlets and refuse to share the spotlight for debate.

Providing fair and balanced information is a moral responsibility of any company or individual with the capacity to communicate with a very large audience. By virtue, it must be treated with the utmost respect in order to preserve a government that is to be run by the people. “[The First] Amendment rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public”. This quote from chapter 4 of the text is a great summation of the spirit of the law in providing open and unrestricted access of information for all people. Maybe we will see a truly open media with the future of internet media, but I have my doubts. American history shows us what enterprising individuals can achieve when submitting only to the legalistic view of the laws.

Junk-Food Ads

2008-04-22T06:49:00.000-07:00

The discussion in last class reminded me of the topic about banning junk food advertisement for kids. Research shows that nine in ten food ads aimed at kids sell high-fat, high-salt, high sugar, or low-nutrient foods. This finding actually came from a study of 27.5 hours of children’s programs that ran on a single Saturday morning in Washington, D.C.

(http://www.cbsnews.com/stories/2008/04/01/health/webmd/main3987942.shtml?source=RSSattr=Health_3987942)

This concern is not new to people. In 2007, CCFC (campaign for a commercial-free childhood) and CSPI (Center for Science in the Public Interest), together with Kellogg agreed upon nutrition standards for foods advertised on media. In addition, Kellogg agreed not to advertise to children under 12 in schools and preschools. http://www.shapingyouth.org/blog/?p=489

As we all can tell, these changes in marketing are not easy for companies in the food industry, but very important for the society. I was thinking in a free market economy, is it ok (or necessary) to regulate the ads? Should we wait for the changes from the companies themselves? (However, maybe at that time everyone has obesity) The ethical issues in a profit-driven company or environment are hard to solve to certain extent. If “I am” the only one in the market considering ethics, “I” probably would be the first one to leave the industry.

Meanwhile, ads are ads only. They don’t reach out our pockets for money to buy the products. People probably should develop more control and more appreciation of the quality life themselves at the same time, although I know it’s hard.

Two items-in brief

2008-04-21T21:43:00.000-07:00

1. The discussions in last class about using 'overly thin' women in advertisements and how it escalates the issue of eating related disorders like anorexia etc. It made me think of how women are used in advertisements no matter what the product an immaterial of the products use for women. Example: The Axe deodorant ad (You wear axe; women see you (semi)naked and vice versa!)

Ethical question, why are under dressed women flaunted in these ads? Advertisements were once used to inform customers about the product and create awareness. Not anymore. Sexuality by itself is not a bad thing, but when its trivialized and women are stereotyped it makes me wonder how much have we evolved as a business and what progress have we made from the days of objectifying women.

2. It is common knowledge that pharmaceutical companies jump hoops to get drugs approved by the FDA. They are under the closest possible scrutiny by the FDA before their drugs move into the market after the 10 years they spend in the pipeline. Most of the time is devoted in testing for safety and effectiveness of the drug besides side effects of the drug. Hence two things that go on in this rigmarole fail to convince me on an ethical level. Why are the studies/research for side effects and safety funded by the company itself? Why are pharmaceutical companies allowed to release the findings of studies/research as late as 2 years after the drug hits the market, even if the findings suggest negative side effects?

2008-04-21T12:00:00.000-07:00

The other week I watched Charlie Rose interview George Soros. He’s a successful billionaire through investing and speculation but also commits to philanthropy and his own philosophy. He was there to promote his new book, The New Paradigm for Financial Markets, the Credit Crisis of 2008.

He spoke against the “market fundamentalism”, promoted by the Thatcher/Reagan era of decreased taxation and limitation of government regulation of business. This is the driving argument of Milton Friedman. Expecting the market to “self-regulate” or “self-correct” is simply irrational, he said. He criticized Greenspan who addressed the market at times as “irrational exuberance” but then did nothing to address this forthcoming recession.

He believes government is responsible for fiduciary oversight. They have to step in as an ethical platform to stop businesses from this irrationality. For him, the consequences of or “market fundamentalism” are both the IT and subprime mortgage bubble. He doesn’t support Bernake’s estimate that it will get better next year and predicted that both the UK and US are in for further trouble ahead followed by the Euro-dollar and the China market collapse because of its heavy dependence on exports. He predicted an emerging new world economic order with the dollar likely to lose its standard as the international currency.

Obviously, he paints a discouraging future but one that seems realistic and likely to continue. Professor Silver provides a historical and coherent picture of several events that influenced this current state of affairs. I would like believe that the pendulum is about to swing toward building stronger communities for education and a long term commitment “of the people, by the people, for the people” (Abe Lincoln) but we’re all too busy not paying attention.

Walmar case in reading

2008-04-21T10:06:00.000-07:00

In our reading of Chapters 3 & 4, there was a discussion on Wal-mart and whether they acted ethically in the Inglewood case. I argue they did. In question was the way Wal-mart sponsored an initiative to circumvent local regulations. Also in question was the fact that it over funded a campaign to allow Wal-mart to build in that area.
On the first charge, Wal-mart had no choice but to use all possible routes to build given that there existed a bias within the city council in refusing the permit. The bias comes from people believing that Wal-mart does not treat their employees well or pay high enough wages. Also, there may have been some union influence in the city council that brought them to the decision. The truth is Wal-Mart's average wage is around $10 an hour; nearly double the federal minimum wage ($5.85 according to the Department of Labor). If Wal-Mart weren't an attractive place to work, they wouldn't find themselves with thousands of applications for the hundreds of jobs created with a new store. Wal-mart used an existing law to put an issue on a ballot for the public to vote on and I see nothing unethical about that.
On the second charge, they spent so much more money than their opposition; I argue that, although true it does not show the whole picture. Most of the money was spent on advertising in some way or another. The opposing groups held rallies with community leaders, including Jesse Jackson whose influence and the amount of press he receives goes well beyond the spending of dollars. Jesse Jackson abused his influence on the majority black population in Inglewood, using figures such as Martin Luther King and Cesar Chavez to thwart Wal-mart.
Wal-marts defense in the situation was “It looked like an opportunity for Wal-Mart to redevelop an area that doesn't have a lot of jobs. Today, there is nothing there that is creating economic value. There are no jobs there. There are no better prices. There is no better assortment. The only thing that was created was a safety zone for people to charge higher prices and to take advantage of the very people who can't afford to be taken advantage of.”
Seems to me that it is irresponsible for the government to ban Wal-mart from the area. I say let them build and if the people in the community do not like the lower prices and the addition jobs, let them shop elsewhere. If no one shopped there, they would have to close and no harm done. However, I do not believe that would be the case, I’m sure they would thrive just like in any other community because it is a good business. I wish people would just say they hate Wal-mart because they are too difficult to compete with instead of creating other reasons.

Comments on working around the "spirit of the law"

2008-04-20T07:15:00.000-07:00

Of the many points discussed in this class, the ones that get to me the most are those involving corporations going around “the spirit of the law”. In Silver’s Chapter 4, entitled Violating the Spirit of the Law, he provided many cases including ones we’d talked about in class several weeks ago (i.e. United Airlines pension default, the Sinclair Broadcast Group issue, tax shifting). Although we had talked about these before, I read them again this weekend and recalled just how frustrated I was to hear about these originally.

It is upsetting that corporations can take part in large-scale activities to act in their own interests and neglect other parties (employees, shareholders, etc.), usually in the name of profits. I am not sure when or how these activities will ever stop. I do agree that companies should really use the U.S. legal system to push through changes that (they believe) need to be made, as the system intended, but I just have a hard time seeing how that will happen anytime soon, when the government itself is so intertwined with those very companies.

I know that voting is a mechanism that the American public has to elect officials that they believe will make the right choices for the good of the public, as in handling corporate activities, but I feel like even if citizens vote for the “right” people for office, it won’t make a difference in the end; it seems that the lobbyists and other pressures internal to the government will end up swinging regulations in favor of corporations anyway.

Ethical issues in online gambling

2008-04-19T14:54:00.000-07:00

In recent years there has been an explosive growth of gambling opportunity and activity on the Internet stirring controversies around the ethics of internet gambling. Internet gambling differs from other forms of gambling in that there are few if any regulations to assure the fairness of games or establish the responsibility of game operators, most of whom operate from servers located outside the United States. Unlike gambling activities that are subject to state and federal regulation, there is no control on the hours of availability, age of participants or type of games offered. An unscrupulous operator can merely close down a site or move its base to another country if challenged. Hackers can potentially interfere with the process by manipulating the online games, as well as stealing funds by accessing the credit card numbers used in the gambling. In addition, Internet gambling, unlike many other types of gambling activity, is a solitary activity, which makes it even more dangerous: people can gamble uninterrupted and undetected for unlimited periods of time. Regular or heavy users of the Internet have been found more likely to participate in Internet gambling than other users.

There are many kinds of online gambling which are easy for anyone to access. The selection varies from online casinos, to sports books to even electronic stock trading. Although all these websites are enjoyed and even abused by many people, there are also several controversies on the issue. One being the issue of the government earning 0% tax money on all online gambling. The other problem is the groups who think it should be illegal because of moral reasons. A major concern is with regulation of the age of gamblers. It's often impossible for webmasters to know the ages of people visiting their site, potentially allowing underage kids to be exposed to the gambling websites. Another issue that concerns regulators is addiction. This is more of a concern with online gambling because of the quickness and ease of the gambling.

Fraud is another big reason why regulators question ethics around internet gambling. Internet gamblers can't be assured the games they play are legitimate and they can't be guarenteed a payoff. Some websites just take people's credit card numbers, and some don't have proper machinery. Another loss results from the decrease in revenue in the solid casinos in the state borders, causing not only the state to lose even more tax income, but also devastating the actual casinos and it's employees. Online gambling also opens a giant can of worms, in that it gives gambling access to millions of people who otherwise would not have access. One of the logical conclusions of having more gamblers is having more gambling addicts.

Finally, online gambling promotes fraud and cheating. Critics claim that online gambling sites have already become a haven for hackers and con men. Most internet gamblers purchase credit online through the use of their credit cards. Skilled hackers would have mountains of credit card numbers to illegally charge to. Another dilemma to online gambling is that it makes cheating easier. While cheating obviously constitutes a breach in ethics, it also can cost casinos millions. Casinos have thousands of cameras to monitor cheating onsite, however it is almost impossible to monitor a player as he bets out of his home.

Let’s banish the water advertisements!

2008-04-16T11:54:00.000-07:00

After the last class some nagging questions were still bothering me. To me, it seems very dangerous to start to think about the idea of prohibit commercials, websites and other sources of information, just because we don’t agree with them.
Anorexia as well as overweight can kill, but do you know that water can kill too? As well as the advertisements with very thin people can influence the other (special kids), the water companies strategy to advertise to kids can also be dangerous, seeing that they don’t say that the excessive consume of water can be fatal.

http://www.sciam.com/article.cfm?id=strange-but-true-drinking-too-much-water-can-kill

http://www.aquapod.com/?CID=BAC-DPAPcomBanner-sPromo06&sz=sPromo&brand=DP

To me it seems to be the same, why people don’t complain about the water companies too?
As other examples to prove my point of view I am listing two website easy to find (just Google the right words) that I don’t incentive you to look. The fist one teach how to committee suicide and the second one how to build a bomb.

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

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

What I am trying to illustrate with my post, is that we can not use dictator methods against the freedom of opinion.
I am not going to build and detonate a bomb because I saw how I could do it, as well as the suicide methods, which will not incentive me to kill my self. If you say that they can be useful to someone who has these ideas I agree. But to me the problem is TO HAVE THE IDEA. My family taught me what is good and what is bad and is not because I don’t like or agree with something that I can not learn about it.
If you agree that extremes body dimensions ( I don’t remember the exact name used in class) could be a bad influence to your kids, or could influence them to do the same, why don’t you talk with them first? Why don’t you try to show way this could be bad? Why don’t you create another site showing your point of view (ex: http://www.suicide.org/)? Instead of trying to banned the things that you don’t agree with.
We can not (and should not) deprive people of having access of information but we can (and should) teach what we thing is the correct and the best. The person chooses are based on their character and on the way they have been educated and not because of the information that they have access.

Pilots

2008-04-16T06:58:00.000-07:00

An article in the New York Times entitled “Delta and Northwest in $3 Billion Deal” details the events that occurred in the merger of these two large companies. This merger has created the largest airline company in the world. Of course, this act alone is not enough to be considered an ethical issue. It’s when the details are deluged that the ethical implications are apparent.
According to the article, “The Delta-Northwest agreement came despite failed efforts to get pilots at both airlines to agree on how to combine their own ranks, an issue that could lead to labor unrest and disruptions to flight operations in the coming years. Northwest pilots immediately said they would oppose the deal.” And in fact they have opposed the deal and were left out of the negotiations. The issues of turmoil are the pay rate and agreement of who should have which seniority level.

I would think even given the merger situation that the companies would be fair in negotiations. I don’t think that it is ethical that the Northwest pilots are going to receive less compensation than an equivalent Delta pilot. This just creates unrest and disputes among employees. Of course, the employment at will factors into this situation. So if the pilots don’t like it then they can go somewhere else. But I still think it would be ethical to create a standard for which all pilots are subject to.

Reference: http://www.nytimes.com/2008/04/15/business/15air.html?_r=1&ref=business&oref=slogin

2008-04-15T14:34:00.000-07:00

Everyone is blogging these days. At least, everyone in our Ethics class is blogging these days. I recently read an article about a stay-at-home mother who made big bucks by turning into a blogger mom. Heather Armstrong has become one of the most influential bloggers with her blog Dooce.com standing at No. 59 amongst the Web’s Top 100 blogs. Even her husband quit his job to managing advertising for the site. Together the couple generates an estimated $40,000 a month in revenue from huge companies like BMW and Verizon. Clearly, blogging has become a full time job for some.
When all corporate and entrepreneurial companies need to adhere to some degree of ethics, I think even bloggers have to conduct in an ethical way. I wondered if blogging is same as being a journalist and if bloggers have the right of bias. I came across some literatures that claim that blogging can be used as a means of journalism but it is not journalism. Does that mean a blogger do not have be constraint herself or himself in any way whatsoever? A blogger and also a doctoral fellow at University of North Carolina, raises several ongoing debates on the blogging issue. He calls his project C.O.B.E. (Code of Blogging Ethics) and has listed a few ethical guidelines for bloggers (professional and otherwise). Hopefully, his outlines will be helpful for our team of bloggers at BUAD840!

References and links:
1. “The blogger mom, in your face”, Work & Family by Sue Shellenbarger, Wall Street Journal
2. Blogging Ethics by Martin http://blogethics2004.blogspot.com/
3. Is blogging journalism? Posted by Dana Blankenhorn
http://mooreslore.corante.com/archives/2005/04/29/is_blogging_journalism.php
4. Blogging as a form of journalism http://www.ojr.org/ojr/workplace/1017958873.php

Delta/Northwest Merger

2008-04-15T14:19:00.000-07:00

After much anticipation, Delta & Northwest airlines have agreed to a merger deal that would unite the Nation’s number 3 and 5 airlines. This is potentially dangerous for the passenger’s pockets since they will have more control over industry prices. Should the government restrict the deal? I think not. Considering that the greater good of the industry is at stake, the government should try to find and help these two carriers achieve a deal that will make the profits sustainable without raising prices.
I think these two carriers can find synergies that will make the operations more efficient by using their combined knowledge and targeting more markets. They currently operate in two different regions, therefore, they will not be able to raise prices in either region if the merge. The problem will be if the have to lay off employees or change labor cost. The different articles that mention this subject argue that the merge will cause pilot salaries to change and that Northwest pilots will not be able to agree with the proposed salaries. The deal will not be fair for the pilots of Northwest that have more seniority. It seems like there is some discrimination happening against the more senior pilots. If they can resolve this issue and find a suitable deal for both work forces, I think the deal should go through and enable these companies to try to become profitable. It will be better to have one bigger company than having two companies that could possibly go out of business.

The Absurdity of “Alternative Fuels”

2008-04-15T13:30:00.000-07:00

Last week, congressman Markey of Massachusetts was asked “these oil executives, they’re enjoying record profits while we’re paying record prices. You and a lot of Americans say that’s wrong… What can you possibly say or what can happen at these (congressional) hearings that will change things?”

Markey’s reply: “these unjustifiable profits are reflected in how little some of these companies put into renewable energy resources to find an alternative to oil, and the incredible profits which the companies report and it’s time for them to come to explain to the Congress, but more importantly to the American people, what they plan on doing on alleviating this enormous attach upon consumers and upon the American economy, which oil prices represent.”

First off, this business about taking their profits and putting it into renewable energy resources is what is happening in the private sector. There are all kinds of people trying to come up with alternative fuels and ways of creating and using energy. Big Oil is doing it. Last year, Government gave hundreds of billions of dollars in grants to people to find this stuff out. But the point is there isn’t one. We are nowhere near finding something to replace oil. So now everybody hates oil, oil is evil, it’s dirty, it’s destroying the planet and creates obscene profits for these fat cat oil execs…but there isn’t anything else.

As long as there is a free market, we will find the alternative, but lets say for example that today Exxon or some XYZ widget company puts out a press release, “We have developed an alternative source of energy. We have come up with an oil substitute. It really works, really great, it’s going to initially cost $25 a gallon” What? Do you think if somebody announces an alternative to oil today it’s going to be cheaper than oil? Where is the thinking on that? What about all the R&D costs, and testing costs. We will never be able to, in our lifetime, come up with a replacement for oil, in the quantity that we currently use oil. Think of what the process is going to be to manufacture that much. Where are the factories going to be? Where are the warehouses going to be? Do you realize how much oil this planet creates and continues to create? And we’re going to wave a magic wand and come up with something that replaces it? We are going to be able to manufacture billions of barrels a week? What if the process to manufacture this stuff creates pollution or takes more energy to produce? To think that it’s just-around-the-corner possible, and that it somehow is going to be more plentiful and that it is going to be cheaper and cleaner and have no pollution characteristics. There is no utopia. I think it is irresponsible for a member of Congress to sit there and discuss the concept of replacing oil as though it is possible, imminent, and these guys at Big Oil are not doing their share to find it.

The guys at Big Oil don’t set the price. They buy the oil at (as of April 2008) $2.66 per gallon. Refinery and distributions cost $0.18, profit is $0.28 and Taxes are $0.65. The government makes more than twice the profit on a gallon of gas than the oil company. And they don’t do anything to earn it! It’s free money. If you want lower gas prices, ask for lower taxes. Ask for more refineries to be built in the US, more drilling of our own oil reserves to make us less dependant on foreign oil. Big Oil is not the problem; it’s the Government (mostly one side J)

The Democratic Presidential Campaign

2008-04-15T12:33:00.000-07:00

I have been watching this presidential race since it's beginning and have had great concern about the treatment of the candidates by the media, before the people have an opportunity to vote in the primary. We are all aware that ratings matter in a race as close as this and that television personalities will keep anything going just to get us to watch -- that's acceptable.

What I find to be ironic and unacceptable is how reporters, in general, are appearing to excuse Hillary Clinton's behavior much more than Barack Obama and Senator McCain's throughout this race. I don't think that anyone watching the political shenanigans of Hillary and Bill Clinton have to go very far to find lucrative examples. No wonder independents think that Democrats are such a divided and awkward bunch.

Before her character was exposed, I truly admired her. Not because she was an excellent example of strong woman, a senator, a mother, and a faithful wife, but because she had style, class, intelligence and was very independent. That was before the lies, exaggerations, false accusations, name calling, finger-pointing, etc., and all of the other attitudes displayed by her that are very similar to those displayed by a child when he or she does not get his or her way.

In every face-to-face, in every media blitz, in every state where the races have been won, and in every media blitz AFTER the voters have spoken, the media has no choice but to be fair and give props to the candidate that has won the most votes. Clearly when we look at the methods used to win votes by both Hillary Clinton and Barack Obama, we see demonstrated completely opposite approaches. Barack's message has been consistent, clear, and loated with facts from day one -- yet he is painted as the inexperienced candidate. Hillary Clinton's rhetoric has been filled with eloquent word-smithing, euphamisms, charming anecdotle and lofty goals -- once she becomes president, but very little substance.

Yet, Hillary's actions are being dubbed as excusable while anything Barack Obama is accused of (whether he did it or not), is blasted across the newspapers and other media for weeks on end as if he acted that same as she and no one blinks an eye.

A prime example, the Saturday before I left for my business trip, it had just been revealed that Hillary and Bill Clinton's fortune was revealed in their tax returns and was upwards of $109 million dollars. Yet, the week I return, she is touting herself as being ' the candidate for the blue-collar working class' while calling Barack Obama an 'elitist.' Correct me if I'm wrong, but when was the last time Hillary visited a blue-collar town where the average Joe had $109 million dollars in his or her bank account? Was it when she was a little girl growing up in Scranton, PA? Meanwhile, though Barack's tax returns reveal far less, she calls him an 'elitist?' Also, did we hear anything at all about all of this money in the following week? I should think not.

It doesn't matter to me which of the candidates wins the race -- all's fair in love and war, right? I just don't understand how Hillary and Bill Clinton are getting away with tearing up the character of the entire Democratic party by dividing it from within, while the REAL fight (between the Democratic nominee and the Republican nominee) hasn't even begun.

She should have an opportunity to continue through her campaign in Pennsylvania. But after that, I hope that she can resume her class, style and a sense of dignity by stepping aside. If she wins with the character she portrays, what does that say about Americans?

To Patent or Not to Patent?

2008-04-15T12:05:00.000-07:00

According to Wiki, a patent is a set of exclusive rights granted by a state to an inventor or his assignee for a fixed period of time in exchange for a disclosure of an invention. The profit from patent could promote innovation in my understanding. Companies spend lots of money and energy to develop new products and new technologies. Patent protection is a reward to all the effort. Once the patent expires (such as in pharmaceutical industry), this advantage will go away.

Another popular case is Microsoft. It’s long debated that Microsoft should (or should not) disclose its source code of its software. It’s obvious that once released to anyone (such as government), it would possibly be open to its competitors.

Ethic questions are raised here. Firstly, is it really beneficial to the overall technology development in the society, when patent is introduced? Utilitarian view would probably disagree with that, while shareholder theory believers would support patent which could bring in more profit to investors. If the patented information is open to everyone, some advanced technique or cheaper drugs could be available for consumers. Some companies try to defend its patent seriously so as to defeat other products in the market and earn as much as it could during the patent protection period. Customers have to pay for that.

On the other hand, companies, especially R&D intensive ones, such as pharmaceutical companies, do need patent to reward their expense. It’s kind of a dilemma in my understanding. If something could be done about patent law, who can make and how to make the change is another issue.

Competitive Behavior and Game Theory

2008-04-15T11:49:00.000-07:00

I recently read an article in this month’s Scientific American magazine that seemed to touch upon some aspects of the issues that Dr. Sliver discusses in the into to his book. Specifically Dr. Silver made some analogies between the corruption in sports cheating (using hormones, etc) and business ethics. The article also touched up the sports problems and discussed them in the framework of game theory and why people do the things they do. Game theory mathematically analyzes the behavior in the interactions between two or more people (or companies). It’s a very important theory in many fields, especially economics.

It’s not possible here to go into a detailed breakdown of game theory and how it might applied to competitive behavior between companies, consumers, and the government (nor am I qualified to do this). Suffice it to say that the concept of escalating competitive behavior between two or more parties is almost a fact of nature rather than something special to the business environment. The dilemmas and types of choices made here are equivalent to choices made in many competitive situations. In my opinion it shouldn’t should it be surprising that companies would ramp up their competitive behavior. Hire a lobbyist? Who wouldn’t in order to get an advantage? Hire 10 more? Again – who wouldn’t? Why is this surprising? It’s the same reason why the US and Russia had 10’s of thousands of nuclear warheads aimed at each other.

The only conclusion that the author of the SciAm article came to was to install very harsh penalties in order to influence people’s behavior in regards to illegal drug use. One confirmed use of a steroid is grounds for dismissal from the sport – forever. And penalize his or her team harshly too. However installing these types of regulations for US companies is a political non-starter and moreover it’s probably not wise given the nature of the global economy. With these thoughts in mind it seems like we will always live with some kind of environment where competition and ethical behavior are always in discussion. It’s a fact of nature.

The Spine as Profit Center

2008-04-15T11:28:00.000-07:00

Spinal-fusion surgery is an extremely expensive surgery, but become more popular in recent years. An estimated half-million Americans had this surgery in 2006. The ethical issue is whether doctors could invest in medical device company and use their product at the same time.

“Federal regulators have voiced concerns about growing popularity of the investment arrangements, which would potentially violate antikickback laws if doctors receive stock or are otherwise compensated to use or recommend certain devices.” From my understanding, it is allowed that doctors invest in the companies which supply doctors’ devices because they didn’t receive stock for free. However, this kind of relationship is easy to influence doctors’ judgment. The more surgery they do, the more profit the company they invest make. Eventually, the doctors can get a large dividend by increasing usage of the devices.

Most medical device companies are private, which mean they do not disclose their investors. It is hard to find out whether your doctors have personal interest in the surgery and the treatment or device they insist to install is just for your own benefit. Even though some hospitals insist their doctors have to disclose this kind of information to their patients. If I am a patient and my doctor told me that he/she has invested in the device he/she is going to use, my only choice will become to accept it or switch to another doctor. I will never ask doctor to use another brand of device. Things happen during the surgery and you might never know why. However, it is still better to know more. At least, we could have one more choice.

My final project will focus on the relationship between doctors and drug or medical device industry. Any suggestion or opinion is welcome. Thanks all in advance.

some other cases relatived to environment pollution

2008-04-15T08:26:00.000-07:00

case one:

Woburn is ten miles north of Boston and was originally settled by the Massachusetts Bay Colony in 1640.Today Woburn has approximately 36,000 residents and an economic base founded on its long history of chemical manufacturing and leather tanning.

In contemporary history, Woburn was the scene of a high profile water contamination crisis. During the mid to late 1970's, the local community became concerned over the high incidence of childhood leukemia and other illnesses, particularly in the Pine Street area of east Woburn. After high levels of chemical contamination were found in City of Woburn’s Wells G & H in 1979, some members of the local community suspected that the unusually high incidence of leukemia, cancer and a wide variety of other health problems were linked to the possible exposure to volatile organic chemicals in the groundwater pumped from Wells G & H.

In May, 1982, a number of citizens whose children had either developed or died from leukemia filed a civil lawsuit against two corporations, W. R. Grace and Company and Beatrice Foods. Grace's subsidiary Cryovac and Beatrice were suspected of contaminating the groundwater by improperly disposing of trichloroethylene (TCE), perchloroethylene (Perc) and other industrial solvents at their facilities in Woburn near Wells G & H. In April, 1985, the same citizen's group brought a civil lawsuit against a third company, Unifirst Corporation. In a controversial decision with Judge Walter Jay Skinner presiding over what many considered a bungled trial (the judge ruled the jurors should answer questions which the jurors and many others considered confusing) Beatrice was acquitted and Grace only paid 6.6 million, most of which went to the lawyers and lawyer fees.

case two:

The DuPage County Board chastised a company with a local presence Tuesday, condemning a decision by BP North America to increase harmful chemicals discharged into Lake Michigan.As part of a $3 billion expansion of its Whiting, Ind., refinery, BP won permission to release more ammonia and suspended solids into the lake. But this could require additional water treatment in a county where 750,000 residents obtain drinking water from the lake, said board member Jeff Redick.

Environment pollution problem has become the world’s problem. Companies have social responsibility to adopt environmentally behavior.

source

http://en.wikipedia.org/wiki/Woburn,_Massachusetts
http://www.chicagotribune.com/news/local/chi-greenhouse_12feb12,1,4526757.story

The Ethics of Leaking

2008-04-15T08:15:00.000-07:00

In today's society, we are always hearing new stories about companies that are doing things wrong or government doing things illegally. How does the public find out about this information? The answer is leaks. In reading about recent insider leaks, I came accross this article:
http://www.scu.edu/ethics/publications/ethicalperspectives/leaks.html

I found it very interesting that this author questions the ethics of the person who is leaking the information. The question he poses is: Is it ever ethical to leak information and is it sometimes an obligation?

This is a great question and the answer is, like many topics on business ethics, it depends. The leaking of information of the government agents who breached the passports of Obama and Rice a few months back was not ethical. For example, here is an excerpt:

"All three stories generated huge quantities of news coverage and babble on talk radio. Lost in the heat was an examination of the ethics of leaks and leakers. Was the leaker of Foley's e-mail exchange guilty of serious ethical breaches, especially because the messages dealt with sexuality? Did the leak of part of the NIE enlighten all of us or only the terrorists? Did George Keyworth, a longtime member of HP's board violate confidences and his fiduciary duty by talking to reporters about company business?"

I feel that leaking information has become part of America's DNA. It goes back to the question of whether the person leaking the information understands the basic human principles of what is right versus wrong. It is a tough question to answer holistically and would love to discuss this in class because it is a hot issue in American business right now and a major producer of all relevant scandals. Let's discuss in class if we have time.

Find Something Better to Do...

2008-04-15T08:10:00.000-07:00

When it comes to most choices between supporting big business or supporting the average voting public, I almost always take sides with the public. But when I read about the protesters marching into the lobby of the Stearns New York building, I have to say that I was on the other side of the line. The protesters are reacting to the bailout help offered by the federal government to preserve the stability of Wall Street giant Bear Stearns while failing to help out the struggling homeowners during the mortgage meltdown. The protesters have lumped JP Morgan and Bear Stearns together as culprits in the current housing crisis and planned to teach the children of the corporate workers how awful and ashamed they should be of their parents.

"We will go to their neighborhood, we will educate their children on what their parents do. They should be ashamed," NACA founder Bruce Marks said of employees at both banks.

May free speech be preserved forever, but please let us turn the volume down on the screaming protestors who so myopically focus on their own problems that can’t be fixed right now. A collapsed Wall Street will cripple everybody, not just the ARM holders. To keep things in perspective, there are riots all over the world because people can’t afford basic food staples for their families. I’m certain there are plenty of better things that we Americans can do to save the world besides dress up in yellow and storm a bank lobby asking for handouts.

Coca Cola and Rocks..!!

2008-04-15T06:23:00.000-07:00

As I am working on my final paper on Coca Cola and related ethical issues in India, I am getting to read various controversies that Coca Cola has been responsible for in India. Recently I came across a news article which said that Coca Cola has been alleged of painting the 45 million years old rocks in a northern state of the country in order to advertise for its company at a really low cost..!! The environmentalists of the country argued that such harm to the ecological balance was irreparable because the company’s next step was to try to get rid of the paint using gallons of thinner (a chemical) which eventually would seep into the soil thus adding harmful chemical to the water table. On the other hand the company was not ready to shoulder the blame or the allegation and shrugged it off to the local distributors and advertisers. Now the questions that come to my mind while studying for the case analysis are that is Coca Cola the first and the only company that did such an environmental hazardous advertising in India? And if not then why didn’t the authorities ever bother about such a practice earlier? Further is it ethical on the part of a “big renowned multinational company" to avoid the costs that it could have incurred by a sensible promotion? However, the court did a good job in getting to penalize the company in less than a month by convicting the guilty and ordering restoration work. But it really seems unethical for Coca Cola to exploit the national heritage of a host country by escaping costs. In simple terms, even a four year old realizes that scribbling on the walls would deface them…I wonder why Coca Cola could not understand this when it operates an international level.

Buying Prescription Drugs or Paying a Mortgage???

2008-04-14T21:16:00.000-07:00

The New York Times contained a thought-provoking article entitled “Co-Pays Soaring for Drugs with High Prices.” Instead of the traditional $10, $20 or $30 prescription co-pay system, insurance companies have changed their structure to include a Tier 4 classification for certain prescriptions. The insurance companies are charging consumers “20 to 33 percent of the cost of certain high priced drugs.” Tier 4 drugs address very serious medical issues, including cancer, Hepatitis C, anemia, multiple sclerosis and rheumatoid arthritis. The trend started with Medicare and spread to the private insurance market as a tool to contain costs. While the majority of consumers may appreciate lower monthly insurance premiums and co-pays, this industry change has severely affected a limited portion of the population with potentially fatal health issues. For some, the payments structure change has increased prescription costs from $20 to “spend(ing) more for a drug than they pay for their mortgages.” Some of the population impacted by this change is on a fixed or low income, which makes this jump in prices more challenging to handle.

I understand insurance companies are passing on the cost of these premium drugs to increase their own profitability. However, this change is unethical. Some consumers may have to make a decision between what is best for their own personal health versus what can be realistically afforded. I believe this change goes against the mission of the insurance companies. While increasing profits is key in the private sector, it is also important to consider CSR. If the insurance companies considered CSR, would Tier 4 be structured as it is today?

http://www.nytimes.com/2008/04/14/us/14drug.html?em&ex=1208318400&en=04074b3f0144b543&ei=5070

Mood swings of ethical behavior - a personal experience

2008-04-14T20:10:00.000-07:00

How does a person's ethical perspective change with the sequence of events that occur regarding a particular issue? This question was clearly answered few months back when I was purchasing a camera for my sister. It was a day before Black Friday and I was skimming through all the store brochures to find the best deal for a digital camera with the latest technology. I finally concurred upon a Nikon S51 and the best offer was @ Circuit City for $210. So, we, my uncle and I, went at around 4 in the morning to Circuit City, stood in the line outside the store at freezing conditions until they opened the store at 5am. We rushed in at 5 to the camera line and then stood there for another 2 hours to finally get the chance to buy a camera, and the only option we had at that point was a pink Nikon. So, we purchased it and just headed out to the mall for a more simpler and casual shopping.
While we were window shopping at the mall we just happened to enter this camera store called Ritz Camera. In that store the same camera in an attractive chocolate brown color was available for a surprising $99 only. We were shocked by this offer, initially, but then later we got excited about it and then, thanks to the return policy of all stores in the US, we bought it using my uncle's credit card. At first, we thought only that particular salesman was misled and was selling it at such a low price, but we did confirm with others that he had been selling the cameras at the same price to others since morning. But later when we got back home, we did feel a bit guilty about buying it at such a lower price and actually were thinking about calling the store owner and reporting this issue. Surprisingly, the store owner calls up my uncle and tells him that she will directly charge the extra $150 and doesn't even attempt to apologize for their mistake. This move actually got my uncle very aggravated and he retaliated by directly contacting his credit card company and commanding them to block this new transaction. My uncle felt that what the store owner did was so unethical, that he ended up changing his mind from returning the camera to fighting with them and keeping the camera.

2008-04-14T17:08:00.000-07:00

Corporate Social responsibility usually thought of in terms of 'unethical/socially irresponsible/environmentally irresponsible companies' includes an important quotient. The government. In developing economies particularly, Governments play an enormous role in all forms of decision making from business to agriculture. It is also a given that developing nations leave a lot wanting in the area of the ethics of civil servants. Simply put bribery and corruption run rampant in the Government. In 2005 India was ranked in the low 80's (of 158) in the Transparency Index!

To relate this to a real world scenario, I'll narrate the story of Coke in India. The facts were these. Around 2003-06 Coke and Pepsi came under enormous scrutiny after a Delhi-based NGO Centre for Science and Environment (CSE), put out reports showing that the level of pesticides in the cola drinks were 24 times the permissible limit. They were also widely criticised for the use of water resources in India. The problem escalated to such an extent that almost a quarter of the 28 Indian states were considering a ban on the cola drinks and 7 states issued on the production and distribution of the product. This was in reaction to the widely led protests from several organization and the public. Coke and Pepsi were threatened immensely by this ban given their huge reliance on the Indian market and their investments.

Between Coke and Pepsi they held 98% of the cola market. In the past decade Coke had invested $1 Billion in India and proposed to invest another $250 million in the coming half of the decade. India with its struggling agricultural sector, high levels of unemployment etc thrives on Foreign Investment after years of economic isolation.

Coke tried playing the blame shifting card by arguing that their pesticide limits were far lesser compared to the pesticides found in common foods such as milk, eggs, meat etc. But the activists shunned this argument saying that they were shunting responsibility.

The upheaval slowly faded after Coke garnered the support of several celebrities and the government and manged to mitigate the claims. The bans were lifted leaving one to wonder the power exercised by the cola heavy-weights on the government. Indian political class has been accused of short sightedness in its economic policies endangering its long term sustainability as a global business entity. one example of this is the weak regulations that are in place and the corruption of its civil servants amidst mass globalization efforts rising CSR!

Ref:
http://www.transparency.org/
www.WSJ.com

Olympic Promises?

2008-04-14T15:16:00.001-07:00

The 2008 Olympic Games will be held in Beijing, China this summer. This is a pretty well-publicized fact of late due to protests held relating to Tibet, and the various situations that the torch relay is causing.

With all the controversy arising, I did a bit of research on how the games wound up in China to begin with. I found an old article about why the IOC awarded Beijing with the honor. It sounds like it was a pretty big gamble because Beijing's economic conditions at that time did not really justify its being selected. In 2001, the transportation and lodging infrastructure was inadequate, the city was heavily polluted and congested, and other aspects of the Beijing city life needed improvement. Apparently the representatives for Beijing's bid promised certain things would be done, in return for being able to host the Olympics.

I am wondering how the city is doing in meeting all of its promises to the IOC; the pollution part of it appears not to have been met although authorities are working hard to provide the clean atmosphere. There are even strong concerns that the "athletes may suffer from Beijing's noxious atmosphere."

If the conditions have not been met, there is a problem. I am concerned about the world-class athletes' health as they compete. It will be unfair if their performance is affected by Beijing pollution that should have been addressed already.

I am wondering if China truly thought it could prepare sufficiently for the Olympics (and perhaps it has?), or if they were unsure but bid anyway to make the country look better in the global arena...

http://www.iht.com/articles/2001/07/13/edsham.php?page=1
http://news.bbc.co.uk/2/hi/asia-pacific/7346305.stm

Mortgage Payments Worry Many

2008-04-14T13:13:00.000-07:00

I recently read an interesting article highlighting some disturbing statistics:

1. Almost one in seven mortgage holders fear that they will soon default on a monthly payment.
2. 60% of holders will not consider purchasing a new home within the next two years.
3. 30% of homeowners are worried about their homes declining in value during the next two years. I feel these statistics are demonstrative of the U.S. housing market decline.
4. 40% feel the prices will continue to decrease, while another 40% are confident prices will start to climb.
5. 43% of customers in the market for purchasing a home feel the value will decrease within the next two years.
6. 59% of potential customers feel that now is a good time to invest in a home
7. 2/3 of the survey felt that now is a harder time for first time homebuyers than two years ago.

Diversity creating an unsafe society?

2008-04-14T06:45:00.000-07:00

On March 26, Sean Conroy, the manager of a Center City Starbucks, died of an asthma attack after being randomly assault by a group of teens in the subway. This seemed to be a random attack by a group of young thugs. Common wisdom seems to indicate that these young hoodlums are the result of poor parenting, or more to the point, lack of parenting.

I was very aware of the attack as I to make use of the subway to commute. Could I be next the next victim delinquent parenting?

While reading the article, I could not help but wonder if society is actually to blame for this. We live in a society where diversity is drilled into us. A company dominated by males is just so wrong. Women are expected, by and large, to join the workforce and be ‘productive’ members at the workplace.

That is fine and dandy, but since women traditionally filled the role of stay-at-home parent, we have suddenly have a void in this role. The supervision of the stay at home moms are now replaced by arcades, malls, alley, street and a myriad of negative influences from the media, be it TV or internet. Are we really surprised that children have warped values and ideas?

Sadly, what happened to Sean Conroy is hardly unique. A search on youtube.com reveals a host of horrific and unsociable behavior from American teens. Behavior that was unheard of only a few decades ago.

I cannot help but wonder if the rejection of traditional values like gender roles is going to cost more than what we would like pay; our safety.

Women Doctors: Waste of Money?

2008-04-12T20:02:00.000-07:00

A post in BusinessWeek attracts my attention. This post focuses on one topic: “it is a waste of resources to train women who plan to take years off for childrearing, followed by part time light duty employement with no on-call responsibilities?”

Their argument bases on two assumptions. 1) women are more ecpected to reduce work hours to look after children until the children are older…2) The doctor shortage will get worse as baby boomers age.

I don’t agree with this argument. Actually I regard this as an discrimination. Suppose there is a doctor who had a child and now works part time. Can anybody say that her time in hospital is worthless? That the lives she possibly saved mean nothing? It is unethical action to decrease woman working opportunity just because they are female and need time to take care of their family.

Source http://www.businessweek.com/careers/workingparents/blog/archives/2008/04/women_doctors_w.html?chan=top+news_top+news+index_businessweek+exclusives

Is it ethical to issue such advertisment?

2008-04-11T21:19:00.000-07:00

Friday, I received my first US credit card bill. I was happy to find that except for the cash reward credit card company promised, there is also a "Thank-You Reward". The Thank-You reward is a separated notice from my bill but was put in the same envelope. It said that I have been issued a special opportunity as a Thank-You, and tell me that I could enjoy a saving of up to a certain amount of money. On the back of the notice, there are 9 different products for me to select. At the first, I thought it was another promotion from credit card company to "Thanks" its customers for applying its credit card and therefore provide free gifts to us. I was happy at the first time and ready to select my favorite item and send my information to the address on the notice. However, just before I enclosed my reply, I found a sentence in the bottom of the notice printed with small fonts that said ".....for each charged to your account." Wow, turn out it is not a reward but a pure advertisement. Once you select the product on the notice, they will charge the price to your credit card.
It was really a lesson to me, I should not believe any "unexpected reward". However, is it ethical for companies to use such vague description like "reward" on their advertisement which came along with some real reward (like credit card). Should companies avoid these kind of false implications, if they are not doing on purpose?

Intentional Neglect of Retail Giants?

2008-04-11T12:40:00.000-07:00

With the land of digital cable slowly overtaking traditional cable, manufacturers and retailers are now required to properly label and communicate to consumers the mandated switch to digital cable beginning next year. According to an article on Thursday April 10th on CNNMoney.com, several retailers are being fined millions of dollars for not disclosing this information to consumers in the fear that it will decrease sales on specific electronics not suited for digital cable.

It is obviously unethical from a business and marketing perspective to not openly provide customers with all the necessary information for making smart decisions. Many of the consumers that were not made aware of this future transition are going to be out tens or hundreds of dollars when they realize they must either buy new televisions or go out and purchase the converter boxes. Just like any product, any information that is necessary to the decision to purchase a product must be adequately disclosed or otherwise it can be considered false advertising or neglectful. Consumer’s go to these retailer’s, specifically electronic focused stores such as Best Buy, for advice and knowledge on what televisions to buy and all of the relevant information pertaining to each model. Many consumers, who have no knowledge on flat screens, plasmas, LCD’s, etc, rely on the selling associates to provide them with accurate information that is in the best interest of the customer.

Another issue that is concerning is that these retailers such as Best Buy and Wal-mart were given notice of this requirement last year. They had sufficient time to re-adjust their business plan and budgets to handle this forecasted shortfall. It appears that retails may have intentionally neglected to disclose this information to consumers or at least make mention of the switch to digital.

Corporate Deals Replace Trials

2008-04-09T12:20:00.000-07:00

I came across quite an interesting article in the New York Times entitled, “In Justice Shift, Corporate Deals Replace Trials.” This article began with the case of Monsanto, a chemical company, which provided a bribe to an Indonesian official. Monsanto was caught and required to pay a $1 million fine and agree to a monitoring program with the Justice Department. This was agreed upon in exchange for avoiding any type of criminal prosecution. Apparently according to the article, our Justice Department has avoided criminally prosecuting at least 50 companies in the last three years.

The companies that agree to this deferred prosecution agreement (DPA) are able to avoid public scrutiny, criminal prosecution, and bankruptcy. I see many problems with this change in policy. First is the company’s ability to as the article stated, “test the limits of corporate anti-fraud laws.” With companies knowing that the worse case scenario is a fine and monitoring they might view that the risk is worth the reward. I see potential for the amount of fraud in corporations to significantly increase. The second problem is the violation of our system of laws. The laws and punishments were created to protect and apply to everyone. It does not seem fair that Enron was federally prosecuted a few years ago but a company with a similar violation today could simply get a slap on the wrist. Where is the sense of justice? It is scary to think that our own justice system is allowing companies to get off easy.

Reference:
http://www.nytimes.com/2008/04/09/washington/09justice.html?_r=1&hp&oref=slogin

China's Pollution Revolution

2008-04-09T08:42:00.000-07:00

I am think about my final paper's topic. following is the a case which is relative to the environment pollution. (information web site: http://www.alternet.org/environment/72995/?page=1)

This is a real case happened in a northeast of China. The owner of the Hunan Jingtian Science and Technology Company had first considered setting up plant in a neighboring town. Though local government knew the emissions of this plant may hurt local environment, local government badly wanted to attract both the jobs and tax revenue. According to China Economic Times, it offered the owner of company generous financial incentives to open its plant there.

villagers found a troubling list of problems that had materialized since the factory opened. the problems is including stomach pains, migraine headaches,vomiting, cattle die and rice yields decline..

villagers visited the factory repeatedly to talk to the management, requesting that the emissions-control equipment be upgraded or the most polluting production lines be discontinued.The owner offered small payments to those who complained loudest which did not really solve the pollution problem.

Having exhausted peaceful channels, the villagers turned to force.more than a hundred residents marched onto factory grounds to disconnect its electricity. These villagers were send to jail..

then villagers turned to ask help from an organization of public-interest lawyers, the Center for Legal Assistance to Pollution Victims. They sued this factory. Now this law case is on the processing..

I am going to do my final paper based on this case. My opinion will focus on the environment pollution issue.

Desmond Tutu

2008-04-09T06:43:00.000-07:00

This past Sunday, I went to hear Desmond Tutu speak in Philadelphia. He is known for his leadership as chairman of South Africa’s Truth and Reconciliation Commission following the end of apartheid. I was struck by his short stature and a sense of humor with a robust laughter at himself and human foibles.

During his speech he spoke of anecdotal stories of human resilience when times would otherwise weaken one’s spirit to aspire toward goodness. I was struck by the couple of time that chills spread over the surface of my skin with some universal principle he addressed. I guess I was truly mesmerized by this gentle man’s presentation of himself. He later sat down in a chair behind him as if he were in his own living room.

One area that gave me cause to ponder came from an audience member’s question around how to deal with healing the wounds today in the black-white racism that still exist in this country even though those today were not part of the slavery system. His response opened me to what I know and have known but haven’t quite articulated. Descendants of slave owner continue to benefit from the accrual of what happened during slavery and its aftermath. Even those of us “white folk” who are not descendants accrued benefits from slavery. He pointed out that we are still interconnected.

His solution is to ask “What are the ways that I can help?”

This interconnectedness through time and through our expansion from intimate to global social circles to which we belong forms the base for ethical enquiries. I no longer think ethical questions are as easily avoided. We see this though satellite transmission as words, sounds, words, pictures and videos expose us to the broader picture of our small world. Jane

Voter intimidation

2008-04-08T14:46:00.000-07:00

I heard some disturbing news recently that Indiana’s Democratic chairman said his party is ready to challenge the votes of any lifelong Republicans who attempt to vote as Democrats in the May primary. He said “I am concerned Republicans may try to cast crossover votes to skew results in the close presidential primary between US Sen. Hillary Clinton and Barack Obama”. “I'm only talking about crossover with mischievous intent,” the chairman said of his party's plans to challenge suspicious voters. “
Nobody should be able to stop people from voting a “D” or an “R”. This is America! According to Elections Supervisors, party officials armed with voting records for the past 10 years can make challenges to voters. It goes like this; voters must declare their party affiliation in spring primary elections. Local party officials watching the polling locations then could check the names of voters against a list of all registered voters that shows past party declarations. Any voter whose party affiliation is challenged can either decline to vote for the party in question or sign an affidavit, swearing under oath that they voted in the last election for a majority of the regular nominees of the party. And a grand jury could investigate anyone who signs a false affidavit. It’s truly incredible and unethical.
The Democrats are always worried about who's being disenfranchised and not being allowed to vote, they're always claiming fraud. They're now the agents of fraud in Indiana by attempting to stop people from voting, intimidating them into not voting.
Now, what's interesting about this is the media is marveling at all of the late Republican registrations in the Democrat Party, and they're attributing it to the fact that Republicans are enamored with Obama, they love Obama so much, and some of them love Hillary so much, they are changing their party. Why can’t the Democrats in Indiana believe what the media is saying? But instead they are trying to intimidate people into not voting.

The ethics behind ‘Exaggeration’

2008-04-08T14:37:00.000-07:00

I read this article in the Wall Street Journal today about SAP AG being sued by Waste Management Inc. for $100 million plus punitive damages. Waste Management Inc. filed a complaint last month with a district court in Texas accusing SAP of selling its software using deceptive practices and failing to deliver an “out-of –the box integrated end-to end solution”. Waste Management Inc. needed to upgrade its software which it uses to manage its waste removal and recycling business. SAP claimed to have a “mature” and “proven” product. In demonstrations, SAP officials led Waste Management to believe that it had a finished product. The project started in 2005 was expected to complete in 18 months and isn’t complete as yet. Waste Management claims to have internal documents that prove that SAP knew it was misleading its customer. This is a typical example of how companies exaggerate what they have to sell their products and services.

There are many instances where a company would do anything to get people to get into a contract to buy or use their product and/ or services knowing that litigation are costly, time consuming and more often a waste of time for the customers. When a typical door-to-door salesman sells you a product that is an underperformer, most often, you question your own judgment and not the ethics of the seller. If you get tricked to buy something worth a dollar, you don’t really care but it is still a trick. There are instances when employees take the risk of exaggerating their qualifications in a resume as long as they land up with a job. All these things are escape our ethical radar. However, I believe we need to learn from exaggeration in a large scale like that done by SAP which reminds us that exaggeration is unethical.

Sources:

Wall Street Journal, April 8, 2008

http://www.bizjournals.com/philadelphia/stories/2008/03/24/daily34.html?ana=from_rss

“It is better to be a human being dissatisfied than a pig satisfied.” -JSM

2008-04-08T14:06:00.000-07:00

“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.”
-Milton Friedman

I think that the case of GloxoSmithKline could easily bring insightfully scathing criticism from the Kantian camp, as well as from the Utilitarianism (either Bentham of John Stuart Mill) and Stakeholder theory camp. But I think it most appropriate to look at this case - in which one of the worlds (Europe’s largest) largest drug maker withheld research from FDA regulators during the approval process for the diabetes pill Avandia, which would later be linked to increased risk of heart attack by up to 43% - through the ethics of Milton Friedman

I think Friedman is appropriate to judge this case most notably because he makes no apologies for his beliefs that corporations do not, and should not, have social responsibilities. “Only people can have responsibilities.” Yes, Kant would definitely suffice in the sense that GlaxoSmithKline violated their duty and acted with inappropriate motives. Kant would certainly be more eloquent. But to use Milton is far more poetic.

Milton allows corporation to run for themselves in their pursuit of profits. He is the unabashed legitimizer of a capitalist system, and for the ability and right of its players to pursue their self interest toward profit maximization. But for one little caveat, that GlaxoSmithKline would have been wise to have heeded: “…without deception or fraud.” For companies like GlaxoSmithKline, Enron, Halliburton, and the many others, and many others to come, the idea of Milton as the judge which drops the ax, is far more meaningful. Usually it’s only in the wild that we get to see animals eat their young.

Internet Drug Exporters Feel Pressure in Canada

2008-04-08T13:49:00.000-07:00

Online pharmacy began about 1999 by a young Manitoba pharmacist who started selling Nicorette chewing gum via e-Bay. Online pharmacy does not only seriously affect United States drug companies, but also bring on the dispute over prescription drug prices. The main ethical issue in this case is that some doctors countersign prescriptions without actually having a relationship with the patient. How could those doctors examine the patients properly? This kind of practicing medical is unethical and unprofessional.

This case incentive me lots of thoughts. First, I think it is a good thing that online pharmacy provides cheaper drug so that more people could get medicine they need. In the United States, I believe that there are still lots of people could not get medical care because they are unable to afford. Second, online pharmacy will damage the profit of drug companies in United States for sure. In the meantime, those drug companies have to cut down expenditure on operating costs, including research and development division. This will cause the appearance of new drug in the future.

I agree that this case has some unethical issues, but the government and whole society should think how to take a good care of those who are unable to afford basic medical care when they argue with this issue.

Reference: http://www.nytimes.com/2004/12/11/international/americas/11canada.html?pagewanted=2&sq=unethical%20com

Oil trader faces criminal charges

2008-04-08T11:26:00.000-07:00

In reading the CNN Business news this past week I came across an interesting article about this oil trading company, New York Mercantile Exchange (NYMEX). This company sounds as though they broke every ethical boundary they could and in doing so, the law. Seven traders at this company are charged with fraud and "cheating clients."

What they did was buy energy futures as the client requested but instead of distributing the contracts to the client, they would hold on to them and see if they would return as profitable. Imagine if you go to a bank and open a CD but when it was matured in let's say 5 years, you couldn't cash in because the bank kept it for itself because it was profitable.

What puzzles me even further is that big oil is not sorry for their huge profits and rising prices. We spoke in class about reparations and whatnot, do you think that big oil should simply admit they are cheating the American people and killing the American economy? Is an apology necessary to the people?

NYMEX is a small player in the big oil puzzle but if they are corrupt is it wrong to assume that the entire industry is also corrupt? This lends thought to the HALO effect. So in thought, am I wrong to link the oil trading industry with the big oil companies? I am very confused about this topic and would love some clarification if anyone can help. Anyway, here is the article:

http://money.cnn.com/2008/04/08/markets/nymex/index.htm?postversion=2008040813

Spring Break is over...boo.

Marketing that Encourages an Un-Healthy Lifestyle

2008-04-08T10:22:00.001-07:00

Is elective surgery the best solution for tackling the obesity epidemic that continues to grow in the United States? An interesting article, posted online in the Wall Street Journal – Weekly Ethics Review, titled “Industry Giants Push Obesity Surgery,” raises conflicting opinions about a new surgical procedure to help fight obesity called Gastric Banding. Similar to the idea of Gastric Bypass, Gastric Banding is a less invasive and less costly procedure with the same promising results. The procedure involves a silicone band that is surgically wrapped around the stomach to restrict the intake of food. Unlike Gastric Bypass, surgeons and doctors are heavily promoting this procedure and marketing the product as a great alternative. Additionally, Johnson and Johnson and Botox maker, Allergan, are both intensely advertising and fighting for market share of this new product. Gastric Bypass, which was once thought of a as a controversial weight loss procedure, is now back in the limelight but with the focus now on Gastric Banding.

The ethical dilemma in question is - should this product and procedure be heavily marketed or even marketed at all? If these types of procedures were considered the only method for curing obesity, then yes, I think marketing towards this type of product would be welcomed. However, we all know that under the typical scenario, a person elects to have this type of procedure because they do not care to take the alternative routes – exercising, dieting and maintaining a healthy lifestyle. These alternatives are simple, healthy and proven methods for effective weight-loss. Surgeons all across the country are hosting seminars and websites promoting Gastric Banding. I think it is unethical for doctors, surgeons and health professionals to promote this type of surgery when there are alternatives available that provide similar results with less risk. These professionals should be promoting a healthy life-style that involves right choices, balanced diets and exercise regimes, not advertising that they support a risky quick fix solution where the chances for harmful side effects is greater and the long term consequences may still be unknown.

Additionally, the article mentioned that the companies that make the actual band for Gastric Banding, are now looking to expand the usage of this product to younger patients and people that are not considered obese. This creates more of an ethical dilemma. If surgeons and health professionals are advocates of Gastric Banding and support alternative means for using the band, more and more people will take advantage of this procedure, even those people that are not at a superior health risk. Even insurance companies are starting to cover these types of procedures. All this movement does is promote the wrong message on the importance of healthy life-styles.

Foreclosures come to McMansion Country

2008-04-08T07:23:00.000-07:00

I recently read the article “Foreclosures come to McMansion Country” by Andy Sullivan. In this artile, Sullivan describes the increase in foreclosure rates associated with high end real estate.
Lower class citizens were not the only group of people in the U.S. to accept high risk loans. Wealthy individuals took out loans that were unaffordable. Many of these people were drawn in by many modern amenities which carry high price tags. Did the difference in social classes affect the way that Americans chose to undertake risky investments?
The term “McMansion” is used to describe luxurious homes which carry high price tags and square footage. But, these McMansions are frequently built together using similar sets of drawings. For many affluent buyers these homes were not affordable but found a way to purchase them. As adjustable rate mortgages matured, these buyers were faced with a monthly payment which quickly became anything but affordable.
Buyers who cannot afford to own and maintain McMansions are often forced to put their home on the market. However, this segment of residential real estate can be challenging to sell. The asking price for pre-owned McMansions is often equal to or more than new construction pricing.

Whom to trust amidst the media wars?

2008-04-07T19:42:00.000-07:00

The media, in the form of paper or television, try to manipulate the data that is only accessible to them and publish them elaborately in a way that would make their company more popular. This is a common strategy used by all the channels and newspapers worldwide, but it is usually taken a step forward in India, particularly in regional channels. They try to cook up facts supporting their story or emphasize on irrelevant data of that event. This was particularly demonstrated in the state called Tamil Nadu in South India, when the then Chief Minister Karunanidhi was arrested from his residence in the wee hours of morning convicted of making alleged losses in the State's infrastructure projects. Let me just paint an abstract picture of the political scene and influence in Tamil Nadu. It is usually either run by Karunanidhi's party or by Jayalalitha's party. The only regional news channels in the state are Sun News (owned by Karunanidhi) and Jaya News (owned by Jayalalitha). Karunanidhi was arrested in the year 2001, five years after Jayalalitha was arrested and released on bail for a similar conviction.
The common man in Tamil Nadu is restrictively allowed to view either the Sun News channel or the Jaya News channel. The Suns News, obviously, displayed this event as to be very insulting and extremely criticized this act. The Jaya News pretended to be very supportive of this move but at the same time, also criticized the steps taken during the process of the arrest. Apparently, when Jayalalitha was arrested, in 1996, it was a very aggressive one where they had forced her into the back of a police truck. But, for Karunanidhi, the arrest was comparatively milder as he was not forcibly woken up at night, and was escorted into an Ambassador (the Lincoln automobile of India) with minimum force. Jaya News highlighted this aspect of the event to a very high extent, which surely seemed unnecessary, and discarded the core concern of the issue and blamed the Government for displaying partiality during the two arrests. The television viewer would wind up with mixed opinions or a biased opinion depending on which channel is more influential on him. This is definitely an unethical behavior of the media, who exploit the viewer with their unquestionable power to lure them.

http://en.wikipedia.org/wiki/Karunanidhi_midnight_arrest
http://www.highbeam.com/doc/1P1-3204955.html

Big Tobacco Influences Lung Cancer Study

2008-04-07T11:14:00.001-07:00

Should Big Tobacco be funding research on lung cancer? Is Big Tobacco attempting to change its public image by appearing altruistic and funding research or is the involvement driven by the possibility of influencing results? Are research organizations and universities becoming hooked on funding from Big Tobacco?

On March 26th, The New York Times published an article on the medical research of Dr. Henschke of Cornell Medical College. Her study, which was printed in The New England Journal of Medicine (2006), concluded that “80 percent of lung cancer deaths could be prevented through widespread use of CT scans.” This study was revolutionary in cancer research. However her research was funded by the Foundation for Lung Cancer: Early Detection, Prevention and Treatment, a virtually unknown organization. The Foundation received multiple grants totaling $3.6 million from the Vector Group, the parent company of Liggett Group. The funding was not clearly disclosed to The New England Journal of Medicine or the readers. In the past few weeks, the funding source has come to light and put into question the validity of findings. The New England Journal of Medicine stated in the article that “we have never knowingly published anything supported” by tobacco companies. Even though tobacco funding is available and easily attainable, many universities have banned funding from tobacco companies. Other organizations have come to rely solely on these charitable gifts. From an ethical viewpoint, what should be the role of Big Tobacco in research?

http://www.nytimes.com/2008/03/26/health/research/26lung.html?ref=health

Airline Regulators Grapple With Engine-Shutdown Peril

2008-04-07T10:47:00.000-07:00

I read an article in the Wall Street Journal entitled, “Airline Regulators Grapple with Engine-Shutdown Peril” which explained the issue of engine failure while in flight due to icing. Apparently, there was a belief that the newer version of jet engines would not internally freeze. This turned out to be wrong. It is important to also note that when the engines have shutdown the pilots have been able to restart them. A dual engine failure has occurred 14 times and there have been many single failures since the mid 90s. A study in 2006 by Mr. Hookey of the NTSB, officially confirmed there was an icing problem.

GE and Rolls-Royce are manufacturers of these engines. Since the confirmation of the icing, these companies have approached the problem differently. GE sent out a bulletin that explained the issue and provided a software update. While Rolls-Royce, in my opinion, made a greater stride by actually modifying the engine and releasing information to pilots.

The ethical issues that appear in this case are: is it ethical to transport customers knowing there is a possibility of the engine dying and should GE do more to fix the problem? I personally feel that customer’s lives should not be put in danger. Even though, in the past engines have been recovered it only takes one incident to end lives. Also, I feel the engine manufacturers should do everything they can to ensure they are providing a safe product.

Reference:
http://online.wsj.com/article/SB120753185285993925.html?mod=todays_us_nonsub_page_one

Ikea fined for Sunday opening in France

2008-04-06T22:52:00.000-07:00

Ikea was ordered to pay more than $700,000 last week for staying open on Sundays in a Paris suburb

“Working on Sundays calls into question the very foundation of society," said lawyer Vincent Lecourt, who represents the Workers Force union. "It is a day when we try to consume less ... when we try to have values that are a little different."

The government of President Nicolas Sarkozy, encouraged by major companies, is trying to shed old restrictions as part of broader plans to loosen up the French economy.

On one hand, Ikea should obey to the local restrictions and stop opening at Sunday. At the other hand, opening at Sunday will bring in more profit and also contribute to local economic growth.
Ikea faces the challenge of cultural relativism. local workers in France believe Sunday is not for shopping. Form workers’ angle, Ikea opening at Sunday is not ethical. However, people in most of country will consider shopping at Sunday a very normal action. Form these people’s angle, Ikea do nothing unthcial in this case.

I would say in the cultural relativism, there is no the “objective and universal truth in ethics”. We can not say which culture is correct or incorrect. Also we can not say Ikea opening at Sunday ethical or unethcial. As a foreign company it is better for Ikea to get used to local culture and religion.

An consequence of global profit and compeition

2008-04-05T18:44:00.000-07:00

Last August, Mattel recalled 19 millions toys made in China because of lead paint and tiny magnets that could be swallowed. It was not a new event, the reason I bring it up is that I want to use it as the topic of my final project as an extensive discussion of global profit and global headache.
Having been in the manufacturing industry in Asia for years, honestly, I was not very surprised when I heard that news. Of course I blamed for these china manufactures who illegally use lead paint in toy productions; their actions was ethically not acceptable and have harmed the reputation of Asia manufacturing. But in the other hand, I also felt a little bid sympathy for these manufactures and thought it was another sad consequence of global profit and competition.

We understand that the biggest responsibility for a company is to maximize it profit. Therefore, it is understandable when Walmart tried to squeeze the profit of Mattel to maximize the profits of selling Mattel toys. Again it is also understandable when Mattel squeezes the profit from its China suppliers. However, we all understand it is not acceptable that some China suppliers used lead paint in the production, no matter they were in the know on the lead paint or not. (The un-lead paint cost 30% more than lead one.) They were unethical for sure. But is it ethical to ask them take the whole responsibility? China manufactures are in the sector which make less profit in the value chain, compare to Walmart and Mattel. Like Walmark and Mattel, these China manufactures just try to make more money. If they have other choices to ethically squeeze others' profits and make their own, just like Walmart and Mattel did, they probably wouldn't use any unethical method.

Is this kind of ethical issue just a matter of options? No one want to be the bad person, but one might don't have too much choices. So I can't help to wonder, do I have the right to judge others when I am not in their shoes? If not, how can I take an actively role to change something?

Lawyers are unethical!

2008-04-03T21:38:00.000-07:00

How could you classify a person which a job is to NOT follow the spirits of the laws? If you agree that the laws are not just be follow as its letter but also as its spirit, so you consequently agree that lawyers are unethical.
If the lacks in the laws as its different interpretation didn’t exist and each law had just one spirit that everyone followed, way would we need lawyers? This profession would not be a detach as it is.
Have you ever needed a lawyer or as asked one an advised? If yes, why? Maybe trying to find something in the law against its spirit? If you didn’t, would you? But isn’t this unethical?
More questions for the discussion: What is a law spirit? Who defines it? How it is defined? Should all the laws has it one and just one spirit, everybody follows it and the lawyers didn’t exist as they are now? Is there space for ethical lawyers is the criminal defense for example?
I don’t think that the laws have spirits, to me laws are done and they have to be follow as they were written. Should they be perfect? Sure they should. But they are not, so instead of blame the people because they are being following what the laws say, people should be more worried to ask the people who make law to perfect them, leaving less gaps between theirs suppose spirit and its actual situation.