Name:

Emmi
eD.Cast
il
lo

Sect
ion:
BAOM301

Pr
ofessor
:Cedi
eBr
ingi
no

CASESTUDY

CASEQUESTI
ONS:

1) Di
scusst
hemaj
oret
hical
probl
em Emmaencount
eredi
nhernewwor
kpl
ace.Whatcoul
dbe
doneinor dertopreventsuchadi
l
emmafrom occur
ri
nginthefi
rstpl
ace?Whatmain
premisesmi ghthavecontri
but
edtot
hedevel
opmentofunethi
caldeci
sionmaki
ngat
EastJet?

Themaj oret hicalproblem Emmaencount eredwasEast JetCFO, alongwi thot herpar ties
i
nv olveddeci dedt ocutcor ner stosavemoneyandav oidpay ingt axesoncr ewmeal s.The
wayt heychoset oav oidpay i
nga30per centt axpenal t
yoncr ewmeal swaswhenEast Jet
andSkyCat eri
ngagr eedt omakeasepar ateinv oicef orcrewmeal s,andt heywr oteitof fas
additionalpassengermeal st oavoidthetaxes.Emmaf oundal lthisinformat i
onaf t
ershe
becamecur i
ouswhent hecr ewmember suni onandmanagementf ai
ledt ocomeupwi th
newt ermsi ntheircont ractconcer ningcrewmeal s.East Jetwant edtor educet heamount
theyspentonmeal sandwant edtomeetcur rentl awsonmeal sandbr eaksf ori t
scr ew
member s,whicht heyf ail
edt ocomet oanewagr eement .Mov i
ngf orwar d,Emmadeci dedt o
doherr esearchwhi l
econcl udingaftercounsel thatt hecompany 'sappr oachwasunet hical
.
Thiswhol esituationcoul dhav ebeenav oided, i
fEast Jetwoul dhav ehadabet tercont act
writtenwi t
hi tscrewmember sunioninregardst ocrewmeal sf orwhenandi ftheyst arted
facinghar dshipmeal swi llber educedtowhatt hel awcur rentl
yst ates.Becauseoft hepoor
cont ractnegot iat
ions,itledt hecompanyt ot aket her outei tdidandbr eakingt helaw.They
shoul dbehappyt ohav eanempl oyeeli
keEmma, whohasexcel l
entet hicalstandar dsand
whocar esaboutt hecompany .Shecouldhav eeasi l
ygoneal ongwi ththegame, butshe
caresf orherj obandt hecompanyt hatshewant edtomakei tright.

2) Whatpar
ti
esar
einv
olv
edi
nthesi
tuat
iondescr
ibed?I
sunet
hical
deci
sionmaki
ngsi
l
ent
ly
supportedonl
ybyEast
Jetemploy
ees?Anal
yzepossi
bleeconomic,
legal
,andethi
cal
consequencesoft
heunethi
cal
decisi
onmaki
ngforal
ltheparti
esandcentral
charact
ers
i
nvolved.
 Thepar tiesi nvolvedaret heChi efFi nanci al Offi
cer,Di r
ect orofCust omerSer viceJul ian
Wood, Chi efAccount antRebeccaAdams, Pr evi
ousSer viceManager ,andSkyCat ering
Financi al Dir
ect orBobSt ark.Thi sgr oupcameupwi thav er
bal agr eementt owr i
teasepar at
e
i
nv oicet oav oi
dt hepay mentoft axesf orcr ewmeal s.Ibel i
ev ethi sunet hical deci sionwas
theempl oyeesi nvolvedbecauset heywant edt osav et hecompanyf rom losi ngmoney .I
don’tt hinkt hiswoul dbeacompanyv aluet odoi ngsomet hingwr ong, knowi ngt hati t’
s
againstt helaw.TheChi efFi nanci alOf f
icershoul dhav enev eral lowedsuchat hingt ooccur ,
butt heCFOal lowedempl oy eest oempl oyanymet hodst ohel pt hecompanyr ecov eri swhat
l
edempl oyeest odounet hicalthings.Mr .Woods, Mr s.Adams, andt hepr ev iousSer vice
Managershoul dhav ecomeupwi thabet terwayt ohel psav emoneyi nsteadofbr eaki ngthe
l
aw.If eel li
keMr s.Adamspl ay edt hegameandsi ncer el
ywant edt omaket hingsbet terby
openi ngupt oEmmaandt ell
ingherwhatt heyagr eed.Mr .Woodshadt heoppor tuni tyt o
comecl eanwi thEmma, butIt hinkhef eltlikehehaddonet her ightthingf orthecompany
andwant edEmmat oleav eitalone.Mr .St arkknowi ngt hatt hesepar ateinv oicef orcr ew
meal sandt heunder standingoft hev erbal agreementMr .St arkcoul dhav eav oidedt he
whol esi tuationbynotpl ayingt hegame.Ibel i
eveEast Jetbei ngt heirnumberonecust omer;
hef elthewasdoi ngthem af avorbysav i
ngt hem from pay i
ngaddi t
ional taxes.

3) Di
scusst
het
hreest
epsout
li
nedi
nthe“
Resol
uti
onofEt
hical
Conf
li
ct”sect
i heI
onoft MA
Stat
ementofEt
hicalProf
essi
onalPract
ice.Di
dEmmaf oll
owt hesesteps?Whatother
acti
onscoul
dorshouldshehavetakentosuccessf
ull
yresol
vet heet
hicalconf
li
ct?

Emma’ sat tempttodot heri

ghtt hingdrovehert ogetexper ti
seadv ised,whichwast heri
ght
thi
ngt odo.Ther easonbeingi sthatshecar esal otaboutherj ob,andshehasi ntegri
tyi
nall
thatshedoes.Gi ventheadv i
cesher eceiv
edcamewi thanexcel lentwayt ost ayunani mous
andnotcausehercar eer.Otherthant heopt ionssher eceived,shecoul dhav ereachedoutt o
herCFOandpossi blyhissuperiors,butthel i
kelihoodoft hem takingwel lwouldper haps
causeherj obsinceshewasnew.Ont heot herhand, ifhissuperiorswer eappr eciati
veofher,
bri
ngingitupt othem, t
heycanwor ktogethert ocomeupwi t
hbet tersoluti
onst oconserving
cash.Ibelievethestepsoffedbyt heexpert,though, werethebestcour seofact ionsince
shewasv erynewt othecompanyanddi dnotwantt oj eopardizeherj ob.

4) Di
dSusangi
vegoodpr
ofessi
onal
adv
icet
oEmma?Why
?Ify
ouwer
eEmma,
whatst
eps
woul
dyout
akei
nthesi
tuat
iondescr
ibed?Why
?

Ibeli
eveSusangav eEmmaagoodprofessi
onaladv
icebecauseshedoesn’
twanthertofal
l
underalegaldi
spute.I
fIwasEmma,Iwouldtryt
omaket hi
ngsrightbymaki
ngsurei
twas
repor
tedandat t
empttofi
xthei
ssuewit
hinthecompanywhileatthesamenotal
lowthis
badbehaviorconti
nue
5) W hatar
ethef
ourpr
inci
plesout
li heI
nedbyt MASt
atement
?Di
scusshowt
hesepr
inci
ples
promot eet hi
cal di
scipli
neinthewor kplace.Whyi sethical behaviorimportantfora
company ’
sempl oyees?Isethi
calbehav iorimportantforasust ai
nablebusinesspr acti
ce?
Ibelieveagoodpr acticeofethi
calbehav i
orisessentialforallempl oyeesandbusi ness
owner sbecausei t
’sthefoundati
onf orensur i
ngempl oyeesal waysdot her i
ghtthi
ng
whet hersomeonei slookingornot.Beingt heownerr equirestoleadbyexampl e,whilethe
empl oyeesf ol
lowet hicalst
andards.Ifaf oundati
oni snotset ,thenempl oyeeswi l
ldo
what everittakes,suchaswi thwhathappenedwi thEast Jet,andt hebusinesswillsufferby
pay i
ngf i
neswhi l
ealsohav i
ngabadr eputati
on.Thi siswhyi tisv i
taltopracti
cegoodet hi
cal
valuestohel py ourbusinessgrow.

6) Whatar
ethepossi
bleout
comesi
nthi
scase?Di
scusst
hepot
ent
ial
consequencesofeach
outcome.Whatcanbedonet opreventsi
milarpr
obl
emsinthef
utur
e?Proposeapl
anof
changestoimplementatEast
Jetandanalyzewhatobst
acl
escanoccurwhenimpl
ement
ing
thesechanges.

Thepossi bleout comesf orthiscasewoul dbet hecompanywoul dhav et opayfinesand

possiblybackpayt axesf orthecr ewmeal s.Furthermore,allpartiesi nvolvedwoul deither
resi
gnorbef iredf rom theirpositionbecauset heyarenol ongert rusted.Anotherout come
wouldbet hecompanyt orenegot iatewi ththeuni onforthemeal sandmakei taffor
dabl eto
wheret hecompanyi snotbr eaki
ngt helaw.Addi ti
onall
y,thepar tiesinv olv
edwoul dbef i
red
from thei
rposi tion.Givent hesituation,therecoul dbemanyout comes, butIfeelthef ir
st
exampl ewi l
lbet hemostl ikelytooccur .Topr ev entasimilarsit
uat i
onf rom happening, t
he
companyshoul dhav eabet t
ercont ractwi t
hitscr ewmember st oav oidanotherface
fi
nancialsituation.Att hesamet ime, hav i
ngfrequentaudi tswi l
lpr eventempl oyeesf rom
makingi ncorrectchoi ceswher eitputst hecompanyi nanunf ortunat epositi
on.

Asprev i
ousl
yment ioned,thecompanyshouldhav eaplanwher ei
treplacesit sfinancing
departmentwhilekeepingEmmaandpr ov
idetr
aini
ngtoitsnewempl oyeeswhi l
ebui l
ding
them upwiththeircorevalues.Furt
hermore,
thecompanyshoul drenegot i
ateitscont ract
witht
hecr ewmember ’
sunionwhi l
eatthesamet i
mer enegoti
atethecat er
ingcont ractto
savemoney .Thebi ggestobstacl
etomypani stherenegoti
ati
onoft hecont racts,butifthey
cansettl
einthemi ddle,i
tcanhel pthecompanysurvi
vewhi l
eatthesamet imeav oidi
ngt o
makeunet hi
caldeci si
ons.