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Module 1: Case Study Assignment

Natalie Mandujano

Organizational leadership and Project Management, Arizona State University

OGL 345: Organizational Ethics

William Erwin

August 25, 2022

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Module 1: Case Study Assignment

Section 1: What is Ethics?
Ethics is our ability to make choices and determine whether or not we think those choices

are morally correct using our personal beliefs and understanding of right from wrong. Reading

the article, “What is ethics?” gave me insight into ethics and how it is our human right to have

the freedom to decide what an ethical choice is. I was able to learn that “Ethics is only possible

because we can act against our nature, based on our conscience. It stops us from simply

describing what is likely to happen and allows us to make judgments about what should happen”

(The Ethics Centre,2020). Our standpoint determines our view of ethics and comes from our

ability to look inside ourselves and apply our knowledge on how situations in the outside world

should be managed. I like this particular definition and elaboration of ethics because it describes

the idea that ethics is only able to be conducted. We can go against our beliefs while being fully

knowledgeable that we acted against our internal instinct. When committing to an act we all have

the capabilities in us to distinguish what we know we will do versus what we feel we should do.

Often, we must choose to be true to ourselves or the cause at hand.

Section 2: What is your Chosen Profession?

My chosen profession is project management as having a role in this field allows me to

explore a variety of situations and work to create a solution that accurately assesses the problem

while having to do so efficiently and promptly. I have always loved planning and organizing

events and finding that there is an area in which I would be able to utilize those skills has always

piqued my interest. Hoping to one day be an event planner and coordinator for conferences, I

would like to first explore the business side by working as a project manager. To gain a better set

of skills and experience, for this reason, I looked into business ethics for my case studies.

Section 3: Case Study 1

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The first case study I chose to assess was, “The case of the performance appraisal.” This

case focused on Frank who was a chief financial officer and a member of the executive

committee of a family-owned business. He was sought out by the CEO to help him downsize the

company due to rapid business changes. Frank worked closely to determine how to downsize

ethically as the CEO put trust in him to get rid of people who are not performing at his desired

rate. Frank quickly saw that three employees were not given an employee evaluation score by

their departments. Frank saw that their score was not located due to them being founding

employees. Frank was receiving backlash from other members of the council questioning why

the CEO took a chance on him as an outsider. When bringing up the issue with the CEO, his

superior stated he was happy to let go of those employees because they are old and

underperforming, “When Frank raised this issue with the CEO, he responded, "Oh, I know. I

haven't evaluated them in a long time, but it's time for them to retire anyway. They just aren't

performing the way they used to” (Shanks,1997). Frank questioned whether or not the employees

knew that they were no longer high-performing as they were not evaluated or talked to about

their role for the past six years. Frank knew that in the CEO's eyes they were already labeled as

disposable, making room for the company to grow. Frank did not agree with the CEO's decision

to cut off the old employees without rigorously evaluating them or having a meeting with them

about their work performance.

This is an ethical dilemma because Frank knows that some individuals need to be let go

but wants to do so in an ethical manner by thoroughly testing and evaluating the employees.

Meanwhile his superior wants to simply let them go although they are founding members and

have been a part of the company for many years. The result of these decisions left Frank with a

need to choose between becoming part of the executive committee and making the CEO happy
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or standing up for the three employees who are going to be cut without a proper examination,

“I’m glad you talked with me today about these three employees. You got it right: This is a

company that cares for its employees--as long as it can and as long as they're producing. Always

has, always will."--Frank left the CEO's office with the vague feeling that he had some moral

choices to make” (Shanks,1997). The decisions that Frank had to make were classified as ethical

dilemmas because he needed to see whether or not he wanted to benefit himself and his role in

the company or maintain the family-oriented environment by first communicating with the

employees and making a decision that benefits the company.

I chose this ethical dilemma case study because it showed an employee who was given a

chance as an outsider but was given a position to advance himself or choose between the

company’s best interest. I feel understanding this ethical dilemma in my industry and profession

is necessary for leadership development because even with both sides being justified it comes

down to Frank’s gain or the company's loss. I believe that he should have gone with his gut and

communicated with the three employees before just laying them off due to old age. Short-term

satisfaction of the CEO does not always mean long-term solutions and especially for the

environment where he was hired, having a strong company culture that revolves around family.

Section 4: Case Study 2

The second case I chose to assess regarding ethics in my field was “The Case of the

Million-Dollar Decision.” Michael Hackworth spoke about his model and ethical leadership in

his role as CEO of a chip manufacturer cirrus logic, giving the proposition of how their company

is planning to expand into a country where bribe taking is considered a normal part of doing

business. He explained how in every situation they ask what the boss wants and not always what

is the correct ethical decision. In the case study, Pegasus International Inc.’s CEO Oswald was
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seeking information to expand his software specialty market for communication in mass storage

and wanted to expand due to changes and emerging growth in other markets including hardware

and software solutions. Although the company’s wireless businesses were excelling in the United

States, Japan, and Europe they were eager to grow their business in another country where

potential is newly expanding.

Seeking to bring their market to China, they felt it would be highly beneficial due to

wireless communication being their only choice for communication cables. To get proper

licenses payoff is usually required especially due to connections being required to hold business

in the country. Learning about information Oswald asked how other companies were getting

around the licensing issues and the managers responded by hiring representatives in the country

and allowing them to do whatever means necessary to get the licenses. They then would have

companies sign disclosure statements saying they have no idea that bribes were placed to open

business. One of the major points brought up in the case study is paying someone else to do a

crime is the same as doing the crime yourself. Although there is not a majority loss that can

potentially be taken by not choosing to expand to China, having a questionable business is not

included in the company's desired culture. Oswald does not feel comfortable going against his

ethical leadership and infringing upon his corporate culture as the company has success due to its

integrity, honesty, teamwork, and respect for its individual. Even with Oswald’s hesitation his

managers continuously pushed expansion as they saw no big issue in bribery, “When you

consider all that, we have a lot to gain. What will we really lose if our local contractors are

forced to make payoffs every now and then?"(Hackworth and Shanks,1998). Throughout the

case study, the company motto emphasizes ethics being the priority of the company. I believe

expansion in China is not necessary as they are not failing in the countries, they are currently
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providing wireless business. Working in China goes against the ethical morality code. The result

of these decisions could have led to a change in the company environment as well as culture and

employee morale. It was the right choice to not open a China division and maintain a moral code.

I chose this ethical dilemma case study because it showed the possibility for success and

expansion for a company but also showed the dark side of what growth could have been for them

and how it could have changed their already successful company, “Oswald wants his company to

succeed, he wants to maximize shareholder value, he wants to keep his job, and he wants to

model ethical leadership. He has made an effort to build a corporate culture characterized not

only by aggressive R&D and growth but also by integrity, honesty, teamwork, and respect for the

individual” (Hackworth and Shanks,1998). Even though they would have gained more profits I

believe that overall, it would have been an unwise decision, especially with the company's CEO

being uncomfortable with bribing representatives in other countries to get licenses for them. I

feel understanding this dilemma in my industry and profession is necessary for my leadership

development because it shows that sometimes bigger isn’t always better and it is important to

stand your ground and do expansions that not only make the company better but confident in the

decision that is made.

Section 5: Case Study 3

The third case that I chose to review for applied ethics was, “The Case of the Plant

Relocation.” This case study focused on the idea of relocation to save money on lower labor and

production cost. The example the case study asked to put yourself in the position of chief

executive at Electro Corp an electric company that makes computer components for automobiles.

The case stated that production plants are all located in the United States however profits are

declining, and the cost of production is rising due to a variety of factors. A major factor consisted
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of a union placed by workers who wanted an increase in salary and benefits, the second was

safety regulations that were being implemented as well as environmental regulations. With all of

these regulations being placed on the plants they were no longer producing the same amount of

money and shareholders were complaining about the declining profit. Competitors choosing to

move their operations to less developed countries to regain profit was also influencing the

company.

The case study presented information asking whether or not Electro Corp should decide

to relocate its plant's underdeveloped countries. Electric Corp is one of the major employers for

U.S. cities and closing down would mean a major loss of jobs in the communities, “Electro Corp

is a major employer in each of the U.S. cities where it is located, and you know that a plant

closure will cause economic dislocation in these communities. You know that the employees

who will be laid off because of plant closures will have difficulty finding equivalent positions

and that increased unemployment, with its attendant social costs, will result” (Musalo,2001).

There are three potential countries where there is a major decline in the operating cost needed to

run the plants as well as fewer requirements for employee conditions. They explored what

operations could look like in Mexico, the Philippines, and South Africa through the help of

consultant Martha Smith. Martha stated that Mexico would have cheap production labor

conditions for the workers who would be paid about three dollars per day although they would

receive bad publicity along with the news of toxic waste causing birth defects in the country.

Martha also stated in the Philippines it would be cheaper and although the same health issues

would occur wages go about one dollar a day and young workers under the age of sixteen could

be paid less along with no public complaints or opposition. Finally, South Africa will be in the
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same boat as the United States because they have similar labor laws, but it would be cheaper,

running about $10 a day.

The options came down to continuing to keep the company in America where there is a

major revenue loss due to the exceptional amount of money that is needed to be paid to the

workers and ensure the safety of health along with livable wages or moving to an

underdeveloped country but potentially creating major job loss for the cities where Electro Corp

is located. I chose this ethical dilemma case because it is one that I feel there will never be a full

right or wrong ethical answer. The major pullback is the loss of jobs in the cities where the

company is located but major gain and profit due to relocation. If the case study were to ask

which country, they should move their company to, I would pick the Philippines because it has

the least amount of negative factors. Choosing whether to move the company to the Philippines

or remain in the United States but having to produce ways to make more money is an ongoing

issue that we face today and have never found the best solution to. I want to understand this

ethical dilemma would help when it comes to making tough decisions when either side has an

equal amount of correct and incorrect influences.

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References

Santa Clara University. (1997, July 1). The Case of the Performance Appraisal. Markkula Center

for Applied Ethics. Retrieved August 21, 2022, from https://www.scu.edu/ethics/focus-

areas/business-ethics/resources/the-case-of-the-performance-appraisal/

Santa Clara University. (1998, April 1). The Case of the Million-Dollar Decision. Markkula

Center for Applied Ethics. Retrieved August 21, 2022, from

https://www.scu.edu/ethics/focus-areas/business-ethics/resources/the-case-of-the-million-

dollar-decision/

Santa Clara University. (2001, January 1). The Case of Plant Relocation. Markkula Center for

Applied Ethics. Retrieved August 21, 2022, from https://www.scu.edu/ethics/focus-

areas/business-ethics/resources/the-case-of-plant-relocation/

The Ethics Centre. (2020, April 28). What is ethics? We have the answer. Retrieved August 21,

2022, from https://ethics.org.au/about/what-is-ethics/