ASEAN Master in Sustainability Management

Name : Zulfadila Hira Permana (Ira)

Student Number/Class : 486821/78 SM
Course : Business Ethics

Summary and Reflection : Ethics of Job Discrimination

In the pursuit of sustainable business management, one of the most crucial aspect to consider
is the wellbeing of the firm’s employees. Workers should be treated equally regardless of their
socio-cultural background; hence job discrimination is a practice that is legally and ethically
frowned upon. According to Velasquez (2017), employment discrimination entails
distinguishing employees who belong to certain group/class on the basis of unjustified
prejudice instead of personal merit and imposing decisions or policies that create harmful
impacts to them and it is not morally neutral. He then categorizes discrimination act by
analysing its intentionality (conscious or unconscious) and whether it is done by individuals
(isolated) or institutional (systemic).

I believe this categorization is important despite the difficulty to draw the line whether an
individual is intentionally discriminated or not. It allows us to recognize that more of often
than not, we make unintentional stereotypical negative associations related to certain age
group, race, ethnicity, or other social group (Velasquez 2017). For instance, the Baby
Boomers are known to be devoted to their work and loyal to their company, while the
Millennials are suffered from being labelled as ‘lazy’ for having short-term mindedness and
tends to be ‘job hoppers’(Falk 2019; BBC n.d.). This unconscious bias would lead us to
reduce the merit of certain group.

To determine whether particular social groups are experiencing discrimination or not,

Velasquez (2017) suggested to examine the prima facie (‘at first view’) indicators which are:
the comparative average benefits that they received as well as their proportion at the lowest
and highest economic levels. He then argued based on these indicators that racial and gender-
based discrimination is still present and being institutionalized in the U.S. society. Various
studies show that women and minorities have comparatively lower income, are more prone to
poverty, and too few of them managed to break the glass ceiling and being promoted to the
top-paying executive positions compare to male and the whites (Velasquez 2017).

In terms of pay gap, Indonesia also faces similar issue. The Indonesian Labour Force Survey
in February 2020 concluded that on average women earn 23% less than man, only a quarter
high paying managerial and supervisory positions are filled by women and education alone is
not enough to close the gap as university graduate women on average are still paid less than
the college (D1-D3) graduate men (The International Labour Organization 2020). However,
an interesting finding came from a study by the Atma Jaya University academia that this gap
is actually diminishing for 30 years old and older women and men with the same age as well
as professional and educational background (Karnadi 2019). The study also outlined that,
unfortunately, many women stop climbing the career ladder before that level to take care of
the children; only 18,5% of senior management position is filled by women in Indonesia.

The patriarchy culture still strongly dictates Indonesian society, that is men are the
breadwinners, while women are in charge of domestic chores such as taking care of household
and children (Rachmawati n.d.). This belief then being internalized and lead the society,
including the women themselves, to think that there is only a certain job that socially
appropriate for women. I have personally encountered this where my mother once advised me
 ASEAN Master in Sustainability Management

to work as civil servant or government official (Pegawai Negeri Sipil, or PNS in Bahasa
Indonesia). She is one herself and, in her experience, it is less demanding and would allow for
flexible hour that is necessary for woman to still be able to take care of household and family.
I have no problem in someone advocating a certain job and with one taking that job or refuse
to pursue for another because of the need to attend for family; it would violate the ethics of
care. However, the idea that there is such a thing as ‘male’ or ‘female’ job would create a
mental block especially for women that they do not have as many options as men and this
would further the systemic job discrimination.

Velasquez (2017) asserted that the morality of discrimination could also be assessed through
the three ethical principles: utilitarian, rights, and justice. From utilitarian perspective,
discrimination is unethical because jobs are not assigned based on work-related competency
and would result in human resources inefficiency and reduction of productivity. However,
critics argued that the utilitarianism view should also accommodate instances where public
welfare would be maximized by instead assigning jobs based on nonwork-related factor (need)
such as race and gender. Discrimination is also unethical from rights point of view because it
violates basic human rights by placing the minorities and the underprivileged social groups in
inferior position; undermining their dignity and their positive rights to be treated as equals. On
top of that, no one would want to be discriminated for something unrelated to their work
performance; hence, it violates the moral universality of Kant’s first categorical imperative.
Lastly, discrimination in the workplace is unethical because it violates the defining principle
of justice that is treating all equally in respect to the relevant aspects (job performance) even
they are dissimilar in other non-relevant aspects (race, gender, class, etc.). Discrimination is
also unfair, following John Rawls argument, because it doesn’t distribute the wealth and
burdens properly as well as not giving the same opportunities for the minorities to access the
higher or more desirable position.

Discrimination might have happened in the past, but the impacts can last systemically for a
long time. Therefore, many institutions have been implementing affirmative action
strategy/program by exercising some preferential treatments to minorities and marginal social
groups (Velasquez 2017). It could range from having a women and minority special quota in
recruitment and hiring process, a special train wagon only for women, to a parliament quota
for women. It is supported by law in many countries, including the early adopter such as the
U.S. and Indonesia as stated in the 1945 Constitution (The Constitutional Court of The
Republic of Indonesia 2015) article 28H verse (2): “Every person is entitled to receive ease
and special treatment in order to obtain the same opportunity and benefit in order to achieve
equality and justice.”

Despite of its legal support, affirmative action is controversial and is deemed as an act of
reverse discrimination towards the majority. From ethical standpoint, Velasquez (2017)
summarized that (1) affirmative action could be morally justified as a way to compensate for
the past systemic discrimination, (2) it might increases utility and social welfare when special
treatments where given to the underprivileged as it would reduces their need, lastly (3) its
ultimate goal is to achieve an equal justice through correcting the distributive justice of
benefits and burdens (creating a more equal opportunity) to neutralize bias and competitive
disadvantages.
 ASEAN Master in Sustainability Management

A. Case Study: Jenson v. Eveleth Taconite Co.

Jenson v. Eveleth Taconite Co. was the first class-action sexual harassment lawsuit in the US
filed in 1988 on behalf of Lois Jenson and other women workers of the Eveleth Taconite Co.
According to Hart (2003) in her literature review, Eveleth was one of many mining
companies in northern Minnesota and offered one of the highest-paying blue-collar jobs.
Initially, there were only men in the mines. However, in 1974 the Equal Employment
Opportunity Commission (EEOC) released a consent decree that mandated 20% of new jobs
in the mines is reserved for women and racial minorities; a form of affirmative action. Jenson
was one of few women hired by Eveleth and unfortunately, they were welcomed by an intense
resistance from the formerly all-male workers and sexual harassment conducts, involving
pornography graffiti placed throughout the workplace, constant and graphic conversation
about sex, and expression of hostility towards female workers (Hart 2003).

Hart (2003) also described in her review that prior to the lawsuit, several sexual harassment
reports have been filed, yet little or no responses were given by the union representing the
mine's hourly employees or from management. In October 1984, Jenson brought the case to
the Minnesota Human Rights Commission (MHRC), filing a charge of sex discrimination.
MHCR’s conciliation effort led Eveleth to establish a very basic sexual harassment policy
with unclear person-in-charge to monitor this policy. The firm also rejected the education or
training as well as MHRC's request to pay compensatory fund to Jenson for the physical and
psychological damages caused by the sexual harassment. Until 1988, the official class-action
lawsuit was filed against the Eveleth for “its work discrimination practices against its female
workers because the company had ‘created and condoned’ a hostile work environment and
had discriminated against women in hiring and promotions” (Hart 2003).

B. Case Analysis

- Describe the ethical dilemma in this case? If there is any, at what level does the ethical
dilemma occur?

The most apparent and problematic ethical issues were happening at the corporate
level. By deliberately ignoring the prolong sexual harassment and discrimination,
Eveleth has violated their female employees’ basic human rights to a safe working
environment and taking away their dignity as human beings, not some objects where
the male workers can project their unsolicited and illicit sexual desires to. Their
company policy or lack thereof to discriminate female workers in hiring and
promotions violated the justice ethical principle as they unfairly review the female
workers based on non-work-related indicators. They did not provide equal opportunity
and support to all employees. Their rejection to pay compensatory fund as requested
by MHRC as well as not taking discrimination policy seriously were clear signs that
not only discrimination is institutionalized, but also arguably intentional within the
company. At the individual level, the male workers who harassed the female workers
also immorally violated the human rights and dignity of their female colleagues.
 ASEAN Master in Sustainability Management

- What are the central moral issues demanded by women workers at Eveleth?

The moral action demanded by the Eveleth women workers were centralized in the
issue of providing equal and fair opportunity as their male colleagues to have a safe
working environment and to have same shot in getting promotion. It is unethical for
Eveleth to have discriminative policy just because they are women. It is also morally
irresponsible of Eveleth to ignore the hostile working environment experienced by the
female workers that would result not only in reduced productivity (justifying them not
getting promoted) but also mental trauma that might last a long time; jeopardizing their
well-being.

• - Is Jenson's lawsuit reasonable and can be considered a class action? Or is it just an

individual case, since each individual may have different? Explain your argument.

It has been six years, yet VW is still struggling with worldwide lawsuit and rebuilding
consumer’s trust. Being under the global scrutiny, hopefully this could create a deterrent
effect for other firms within the industry as well as incentive to readjust their business
strategies and operations to be more environmentally conscious.

As for the auto industry, this scandal might bring harm to some and opportunities for the
others. A study published in the National Bureau of Economic Research revealed that other
German automakers, such as BMW and Mercedes, experienced decline in sales following the
VW’s misconduct that painted a bad reputation for the nation’s car manufacturers (Bachmann
et al. 2019). On the other hand, this might open a window of opportunity for the U.S.’s
automakers like Tesla to expand their market and increase the sale of electric cars as the
scandal has brought to people’s attention the impact of auto industry on the environment
(Michaels 2015). As for the diesel market specifically, the scandal only further deteriorates
the already slowing sales of diesel vehicles (for US’s case, only 1% new car sales is diesel)
(Hotten 2015).

References

Bachmann, Ruediger, Gabriel Ehrlich, Ying Fan, Dimitrije Ruzic, Benjamin Leard, and
Jenkins Nanovic Hall. 2019. “Firms and Collective Reputation: A Study of The
Volkswagen Emissions Scandal.” 26117. Massachusetts.
http://www.nber.org/papers/w26117.

BBC. n.d. “Millennials, Baby Boomers or Gen Z: Which One Are You And What Does It
Mean? - BBC Bitesize.” BBC. Accessed November 10, 2021.
https://www.bbc.co.uk/bitesize/articles/zf8j92p.

Falk, NJ. 2019. “How To Overcome Generational Stereotypes To Succeed.” Forbes,

December 5, 2019. https://www.forbes.com/sites/njgoldston/2019/12/05/how-to-
overcome-generational-stereotypes-to-succeed/?sh=3b85455f240a.

Hart, Melissa. 2003. “Litigation Narratives: Why Jensen v. Ellerth Didn’t Change Sexual
 ASEAN Master in Sustainability Management

Harassment Law, but Still Has a Story Worth Telling.” Berkeley Women’s Law Journal
282. http://scholar.law.colorado.edu/articles/524/.

Hotten, Russell. 2015. “Volkswagen: The Scandal Explained.” BBC News. December 10,
2015. https://www.bbc.com/news/business-34324772.

Kapoor, Amit, and Bibek Debroy. 2019. “GDP Is Not a Measure of Human Well-Being.”
Harvard Business Review. October 4, 2019. https://hbr.org/2019/10/gdp-is-not-a-
measure-of-human-well-being.

Karnadi, Erwin Bramana. 2019. “Research: Gender Pay Gap Exists in Indonesia, Especially
for Women Under 30.” The Conversation. December 23, 2019.
https://theconversation.com/research-gender-pay-gap-exists-in-indonesia-especially-for-
women-under-30-128904.

Kaufmann, Dirk. 2021. “German Dieselgate Trial Begins Without Ex-VW Boss Martin
Winterkorn.” Deutsche Welle (DW), September 16, 2021.
https://www.dw.com/en/german-dieselgate-trial-begins-without-ex-vw-boss-martin-
winterkorn/a-59193263.

Michaels, Raymond. 2015. “VW Emission Scandal and The Global Car Industry.”
International Banker. November 18, 2015. https://internationalbanker.com/brokerage/vw-
emission-scandal-and-the-global-car-industry/.

Oxford Poverty and Human Development Initiative (OPHI). n.d. “Bhutan’s Gross National
Happiness Index .” Accessed October 27, 2021. https://ophi.org.uk/policy/gross-national-
happiness-index/.

Rachmawati, Ira. n.d. “Indonesian Culture Causes Many Gender Pay Gaps.” Wage Indicator.
Accessed November 10, 2021. https://wageindicator.org/wageindicator-15-
years/indonesian-culture-causes-many-gender-pay-gaps.

Sautner, Zacharias. 2021. “The Effects of Mandatory ESG Disclosure Around The World.”
Harvard Law School Forum on Corporate Governance. The Harvard Law School Forum
on Corporate Governance. May 10, 2021.
https://corpgov.law.harvard.edu/2021/05/10/the-effects-of-mandatory-esg-disclosure-
around-the-world/.

The Constitutional Court of The Republic of Indonesia. 2015. The 1945 Constitution of The
Republic of Indonesia. The Constitutional Court of The Republic of Indonesia.
www.mahkamahkonstitusi.go.id.

The International Labour Organization. 2020. “Gender Pay Gaps in Indonesia.”

https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---ilo-
jakarta/documents/publication/wcms_755543.pdf.

Velasquez, Manuel G. 2017. Business Ethics Concepts and Cases. Eitgh. Pearson.
 ASEAN Master in Sustainability Management

Zhou, Angie. 2016. “Analysis of The Volkswagen Scandal Possible Solutions for Recovery.”
University of California San Diego.