Profit versus Loss

The Cause and Effect

of Unethical Business Strategies
Kevin P. McGee

Business success depends on maximizing profits and minimizing losses.

Global business strategies are formed based on this principle. Successful
enterprises strive to serve their customers and protect their employees. Safe and
ethical work environments support this focus and enhance an enterprises
profitability. When employers neglect safe work practices, permit or tolerate
unethical behavior, or seek to cover it up, profits are lost and all too often, people
die.
Unethical choice is a human weakness. Employees of companies worldwide
face decisions effecting a companys progress, security, integrity and subsequent
survivability. Choices made to sidestep ethics compromise profits and subsequent
success. The list of business failures due to unethical choices is substantial. A few
massive and famous examples indicate the negative cause and effect pattern in
business ethics. For example, consider the dishonesty of
Enrons CEO Kenneth Lay and COO/CEO Jeffrey Skilling who
destroyed the financial security of more than a million
families worldwide and the company itself (Berman, 2012);
When the Titanics owners arrogance sank the Titanic, the shipping line
collapsed; When Bernie Madoffs Ponzi scheme brought shame and failure to
investment bankers business and family Madoff found himself in prison (OneFile,

2012); And when the DeLorian Motor Companys

owner John DeLorian was caught on tape in 1983
saying this cocaine is as good as gold (he was
referring to a suitcase full of drugs valued at $24 million dollars), he became a
pariah in the investment world. Less than 9,000 DeLorians were built (DREA,
2009).
Human error is not always the cause of local or global business failure.
Sometimes several causes of business problems cannot be expressed terms that
establish single causation. When analysis discovers several factors influencing an
effect in the business world, it can be difficult to apply responsibility. The collapse
of one of the worlds largest cranes illustrates clearly that cause and effect can
oft times be complicated.
On July 14, 1999 the Milwaukee Brewers baseball stadium, Miller Park,
was under construction. Dozens of Ironworkers were assembling a retractable roof
that would provide shelter for players during the winter months and allow players
sunshine when the weather permitted. During the assembly process the massive
crane and a 450 ton roof section crashed to the ground. One of the worlds largest
cranes called Big Blue was brought in to pick up and put into place the largest
and heaviest pieces of the structure. Various causes are credited for Big Blues

collapse. Each cause had a direct effect on the collapse of

the crane. Some were related to ethical misconduct and
some were related to natural causes. Excessive winds, an
accelerated schedule, a lack of understanding of the
cranes capacity, and a willful disregard for project safety
are clear, recognizable contributors to this tragic event.
Three Ironworkers fell to their death during this collapse. The following link
captures this tragic event. Video taken by a safety inspector capture this
unnecessary event in detail. This video may be alarming. (Exclusive, 1999).
One effect of the collapse was large fines issued by the Occupational Safety
and Health Administration (OSHA). Three companies shared responsibility for the
massive accident. OSHA issued penalties for willful and serious violations against
Mitsubishi Heavy Industries, Lampson International Ltd., and Danny's
Construction Company Inc. These fines were in excess of $500,000. The estimated
cost of the project exceeded 400 million dollars. When the fines that were assessed
by OSHA are compared to the cost of the ballpark itself many business
professional might see these as an acceptable losses. However, when the families
of the three victims sued, a Milwalke court ordered Mitsubishi Heavy Industries to
pay punitive damages in excess of $93 million dollars. The courts assessment in
this light represents one quarter of the job cost. The effect of the Mitsubishis

unethical choices resulted in dramatic corporate loss. But it also resulted in an

unusual benefit to the broken lives of the Ironworkers families (Exclusive, 1999).
When employers establish ethical policies, practices and programs, loss
incidents are reduced. When employees are more confident in their workplace, loss
incidents are minimized. Business profitability is strengthened when employers
can maximize profits and minimize losses. Employers and employees benefit when
a sound ethical balance is established between safety and productivity.

And

business profitability depends on this historical formula. When businesses chose to

include this simple cost saving practice, real profits are maximized and real losses
are minimized.

Works Cited
Berman, D. (2012). "5 of History's Brazen Crooks Who Defrauded Markets." . Advisor One.
Retrieved from "5 of History's Brazen Crooks Who Defrauded Markets." Advisor One 11
July 2012. General OneFile. Web. 28 Aug. 2012.
Dana, R. (2012, June 18). "Sins of the Father.". Newsweek, p. 13.
DREA. (2009, January 14). The 25 Worst Business Failures in History. Retrieved from Business
Pundit: http://www.businesspundit.com/the-25-worst-business-failures-in-history/
Exclusive, I. (1999). Construction Disasters-The Big Blue Crane Collapse. Retrieved from
Insider Exclusive: http://www.insiderexclusive.com/show-content/259-constructiondisasters--the-big-blue-crane-collapse.html
OneFile, G. (2012, February 13). "Trustee Sues Koch Industries.". Business Law Daily.
Wonders, F. (2012). Akashi Kaikyo Suspension Bridge. Retrieved from Famous Wonders:
http://famouswonders.com/akashi-kaikyo-suspension-bridge/
Wonders, F. (2012). Akashi Kaikyo Suspension Bridge. Retrieved from Famous Wonders:
http://famouswonders.com/akashi-kaikyo-suspension-bridge/