Companies in crisis

Ethical questions / angles

• All is not well with (all) business.
• As managers some choices are ethical in
nature.
• Right/wrong choice can make difference
not merely ethical but also in terms of
brand equity even profits in the long run.
 Exxon Valdez.
Ethical angles
• Enhanced responsibility.
• Unqualified third mate. Irresponsible/
Intoxication
• Environmental responsibility.
• (What is lost when species is lost?)
• Poor / slow response.
 Johnson &Johnson
Tylenol
• Owning responsibility.
• Quick response.
• Brand value regained.
• The appropriate response can have
business results in the long run.
 Enron
• Financial fudging.
• Falsification of accounts.
• Unauthorised transfer of funds.
• Blind devotion to shareholder value.
• Poor corporate governance
 NIKE
• Transferring work to third world countries.
– Raw business sense ?
• Is third world life less valuable than
others?
• Human rights violations?
• Profits inordinate. (Premium products not
so premium practices)
• Image otherwise very glamorous.
(practices incongruous with image)
 Odwalla
• Poor initial response.
 BP
• Environmentally sensitive business.
• New face of capitalism and industrial
power.
• Nexus with dictators.
• Industrial - government complex.
 Ford Pinto
• Managerial decisions overriding technical
issues.
• Cost- Benefit applied in the wrong place.
• Can human life be neglected in cost-
benefit analysis.
• Can profits be primary and human lives
secondary?
• Eventual loss of goodwill / brand
 Challenger disaster
• Managerial decisions overriding Engineering
facts.
• Groupthink pressures on individuals.
• Powerlessness of individuals in organisations.
• Political compulsions overriding safety
considerations.
• Need for enforcement of right of individuals to
warn.
• Appropriate mechanisms for dissenting opinions
and upward communication.
 Shell
• Right of indigenous people to their land
and habitat.
• Military – Industrial – Government
complex.
• Use of industrial money power and
governmental powers against rebellion.
• When should a company say No!
• When should a company exit?
 Bhopal Gas tragedy
• Second rate technology for third world
countries.
• Are third world lives less costly than
others?
• Poor response. Shirking of responsibility.
• Location considerations.
• Right of workers to imminent danger.