Reference no: EM132187108
Ethics Sustainability and CSR, MBA
Course Assignment
Please write an essay of about 2000 words discussing any one of the dilemmas outlined below.
Your essays are to be submitted on Moodle.
1. Julia F is the chief legal officer of a large European pharmaceutical company with worldwide interests and a high reputation. She has been asked to investigate rumours of corruption and malpractice surrounding certain of the firm's contracts. This is important because the company's supervisory board is particularly concerned to preserve the company's good reputation for conducting business in a legal
manner and with integrity. Trust is vital in pharmaceuticals.
A comprehensive investigation of practices in Europe throws up nothing out of order but in the course of informal conversations one of the contacts she interviewed has suggested that if she really wants to find something of concern she should look to the Libyan contracts of the company rather than at Europe.
The company's Libyan contract involves delivering medical supplies to areas of Libya where there are numerous victims of the civil war there. An NGO is the principal purchaser of the medical supplies and the contract is not particularly profitable for the firm and is undertaken partly from a humanitarian motivation in line with the company's policy of maintaining a high reputation. But another reason for the small profit margin as Julia F discovers upon digging a bit deeper is that the medical supplies are initially sent to a Tunisian transporter who then delivers on behalf of the NGO in the various war torn regions. The charge made by this Tunisian firm seems extremely high for the transportation involved. It is a full five times higher than what delivery of the same supplies over a similar distance would cost in Europe.
Initially suspecting a classical corruption scam Julia goes to Libya to interview the local NGO Operations Director about the transportation charges; and being an NGO she feels that she can ask the manager directly if there is perhaps corruption involved.
The NGO Operations manager's answer is at least frank: "Yes and No". He explains that he personally gets nothing whatever as a kickback and that the high charge is explicable as follows. When the medicines leave Tunisia, inside the boxes of medical gloves in the consignments large amounts of hard cash are also placed. As the lorries pass through the various war zones controlled by different militias, in order to pass the road checkpoints set up by these militias some hard cash payments will have to be paid to the "border guards" of each zone. If bribes are not paid the lorries will be confiscated and the drivers probably summarily executed. It's a ruthless lawless war!
Discuss what you think Julia should do about this situation (if anything). Give a clear indication of the normative positions on which
you are basing your answer.
2. Franz F is the Human Resources (HR) and Personnel manager of the British subsidiary of a medium size German multinational company. He is Austrian and has been with the company for 20 years, first as a graduate trainee at the Hamburg headquarters, then as a permanent employee in the HR department in Hamburg and ten years ago he was posted as the HR manager in the British branch of the company. Being Austrian in a German company he has been imbued with the German tradition of high respect and fair treatment of all employees; and he is proud of the fact that in his 20 years at the company he has never had to fire any employee. He has always found constructive ways to deal with any HR problems that have arisen on his watch.
He has enjoyed working in Britain and has made some good friendships with his colleagues there some of whom he meets regularly outside of work to attend football matches or to play golf. The company has just now been taken over after an aggressive hostile acquisition process by a large American multinational that is in turn controlled (through majority share ownership) by an American venture capital firm. The American multinational has become well known for its ruthless pursuit of financial return especially since it has passed under the control of the venture capital shareholders some years ago; and essentially the American multinational's ultimate goal is now to return maximum profits to its shareholders. In pursuit of this goal it has been decided in the American headquarters that profit margins are to be increased in the European operations by a rigorous cost-cutting drive which is to include the dismissal of employees not deemed to be strictly necessary for a minimum service. Under British labour law it is very much easier to fire people with minimal notice and without giving any justification than it is in Germany (where permanent employment contracts at least are strongly protected against such firing). As a result it has been decided that the bulk of the downsizing in terms of personnel (i.e. of dismissals) of the company in Europe should occur in the British subsidiary.
And so Franz F is told that he is to achieve a 15% reduction of labour costs within 6 months in the British branch of which he is HR manager. Franz quickly realises that the easiest way to achieve such economies will be to lay off (dismiss) some of his more senior colleagues who command higher salaries and related social insurance costs. Yet among these senior employees are not only some people who have served the company loyally and effectively over decades; quite a number of them have also become good personal friends of Franz through football and golf outings. It will be much easier at a personal level to dismiss a larger number of young junior employees; but that will seriously stretch the productive potential of the company and will also store up problems for the future when the necessarily older workforce so generated (by wholescale dismissal of junior employees today) comes to retirement age over the coming decade.
What should Franz do in this situation? What would you do if faced with such a situation? Give a clear indication of the normative positions on which you are basing your answer.
3. You are CEO of a medium-sized company and you are considering retirement; and this has left you in a situation where you need to think about succession and recommending a successor to your Supervisory Board (who are very likely to follow your suggestions given the very good working relationship you have developed with them over the years). You have in mind John; a loyal highly effective colleague who has served both as HR manager and currently as chief financial officer. John's commitment to the company and willingness "to go the extra kilometre" are undoubted and he is intelligent, well qualified and also well liked among colleagues. He seems like a perfect choice. However you realise that John has also taken regular long holiday breaks over the years but entirely within his holiday entitlements. He has never said anything to anybody about his activities during such breaks and of course that is his prerogative: some people prefer to keep their private lives entirely private!
One of your junior employees, Brian, who is working with your recently founded Big Data Analytics department has yesterday asked for a confidential meeting with you which you grant him today. In a state of some agitation and rather hesitantly he tells you that entirely by chance in churning through data being generated through the company's computing, internet and wi-fi system he has discovered that John is almost certainly suffering from a serious heart condition which means that he could have a heart attack and drop dead without warning at any moment. Brian says that some of this health data on which he stumbled by chance and was able to identify as specifically John's through application of sophisticated analytics is being generated by an Apple watch that John always wears. Brian felt that given how senior a position John occupies, you as CEO should at least be informed (just in case you did not already know it).
After the meeting with Brian would you decide to go ahead and recommend John as next CEO or would you have second thoughts? What would you say to Brian at the end of the meeting? Give a clear indication of the normative positions on which you are basing your
answer.