UNIVERSITY OF TECHNOLOGY, JAMAICA

SCHOOL OF BUSINESS ADMINISTRATION

COURSE: BUSINESS ETHICS (HUM4001) DURATION: ONE HOUR 30 MINUTES

DATE: MARCH 31, 2021 GROUP: WEDNESDAY

INSTRUCTIONS: Answer all questions in Section A and B and one fom Section C.

SECTION A – Multiple Choice (30 Marks)

Use the following to answer questions 1 - 5

Carla Dennis is a first-class Welder Fabricator with MLM Fabrication & Construction Ltd.,
Women in any skilled craft job are a rarity in the largely men’s world of construction and
fabrication. MLM records show that between 2014 to 2020 less than 10% of fabrication workers
were female, and no woman had ever held a supervisory or executive position at the company.
Starting out as a third-class welder in 2010, Carla had steadily increased her skill so that she was
the equal of any male welder fabricator. Still, she never quite fit in at MLM, as women were
seen and treated as sex objects; she could not be accepted as a good welder.

None of Dennis’ coworkers or supervisors had offered her any benefit for her sexual
favours or threatened to retaliate if she refused. She was occasionally ridiculed, as when one
coworker passed around a picture of a nude woman with braids and a whip. Because she has
braids and uses a welding tool known as a whip, she thought that the picture was being displayed
to humiliate her. However, it was not these incidents that infuriated her; it was the presence of
calendars, magazines, pictures, graffiti, and other visual displays of nude women that she found
intolerable.

Pictures of nude women from magazines or other sources were displayed with the full
knowledge of management, from the president of MLM down. Although crude sexual jokes
were sometimes told in her presence, she was often warned sarcastically to “take cover” or leave
so that the men could exchange jokes out of her hearing.

After complaining to management about the visual displays, the pictures became more
numerous and more graphic and the number of sexually suggestive comments to her and the
other women increased. One supervisor suggested that Dennis is too thin skinned and needs to
focus on her job, and let boys be boys.

On January 6, 2020, a news story broke about working conditions at MLM Fabrication &
Construction, and the Ministry of Labour also received an anonymous complaint regarding
 MLM. The story and complaint cited the pervasive harassment of female staff, presence of
sexually explicit pictures, and the sexually suggestive comments, and humiliating conditions
under which female workers must work.

(Based on case from Ethics and the Conduct of Business – John Boatright)

1. How would you classify the type of sexual harassment being experienced by Carla?

a. quid pro quo

b. hostile work environment
c. female bias harassment
d. none of the above

Carla Dennis is facing a hostile work environment due to the presence of sexually explicit pictures,
sexually suggestive comments, and humiliating conditions in her workplace, which have created an
offensive and hostile atmosphere for her and other female workers.
2. If the behaviour is allowed to continue at MLM which of the following risks is the
organization exposing itself to?

a. reputational and brand damage

b. legal action
c. cash settlement
d. all of the above are potential risks to MLM

a. Reputational and brand damage: The presence of pervasive harassment, sexually explicit
materials, and sexually suggestive comments can severely damage MLM's reputation and brand
image. This can lead to a loss of trust among customers, partners, and the public, which can have
long-term negative consequences for the company.

b. Legal action: The behavior described in the case, including the presence of sexually explicit
materials and harassment, could result in legal action against MLM. Carla Dennis, as well as other
female employees, may have grounds to file harassment or discrimination lawsuits against the
company. This can lead to costly legal battles, fines, and penalties.

c. Cash settlement: If legal action is pursued and found in favor of the complainants, MLM may be
required to pay cash settlements to compensate the victims for damages suffered due to the
harassment and hostile work environment. These settlements can be substantial and add financial
strain to the organization.

So, allowing the behavior to continue exposes MLM to reputational damage, legal action, and the
potential for cash settlements, making option (d) the correct choice.

3. In advising MLM, which of the following would be an incorrect statement to make about
sexual harassment?

a. Sexual harassment is not limited to physical contact. It can occur any time that an
individual is uncomfortable with another person’s approaches, comments or
 discussions.
b. Sexual harassment is limited to physical contact, and explicit requests for sexual favours.
c. Sexual harassment is limited to physical contact. It can occur any time that an individual
is uncomfortable with another person’s approaches, comments or discussions.
d. Sexual harassment is not limited to physical contact, but refers only to behaviour that
occurs at the workplace between colleagues

This statement would be incorrect. Sexual harassment is not limited to physical contact or
explicit requests for sexual favors. It can include a wide range of behaviors, including verbal
harassment, visual displays, and comments that create a hostile or uncomfortable work
environment. Statements (a) and (c) accurately reflect that sexual harassment can occur
through approaches, comments, or discussions, and it is not limited to physical contact.

4. The person who reported the misconduct at MLM Fabrication & Construction is referred to as
a

a. snitch
b. whistleblower
c. loyalist
d. informer

5. In an attempt to change the culture at MLM, which of the following would you recommend?

a. conduct a financial audit

 b. conduct an ethics audit
c. have staff sign a non-disclosure agreement
d. fire the male welders

Conducting an ethics audit would involve a comprehensive review of the company's policies,
procedures, and workplace culture to identify areas where ethical issues are prevalent. This
audit would assess the extent of the harassment, sexually explicit displays, and other unethical
behaviors, and it would help the company identify systemic issues that need to be addressed.
An ethics audit can provide insights into the root causes of the problem and help develop
strategies to create a more inclusive and respectful workplace environment.

While financial audits (option a) are important for assessing the company's financial health, they
may not directly address the cultural issues and ethical misconduct. Non-disclosure agreements
(option c) are typically used to protect company information and may not be directly related to
addressing the culture of harassment. Firing male welders (option d) is not a recommended
approach because it does not address the root causes of the problem and may lead to potential legal
issues. It's essential to address the culture and behavior through a systematic ethical evaluation and
subsequent actions.

6. William sent an E-mail message to an employee recently assigned to his team complimenting
her on her dress. Later she was reprimanded for poor performance. She responded that this must
have been caused by her refusal to become involved with William. William is stunned and
denies doing or saying anything that could be construed as sexual harassment. What advice
would you offer William?

a. Quit and find another job.

b. Don't worry, its your word against hers
c. Cooperate fully in the investigation.
d. Hire a good lawyer.

William should take the complaint seriously and cooperate with the investigation into the matter.
It's important to address the issue professionally and provide any relevant information or evidence
that can help determine the truth of the situation. This approach allows for a fair and objective
assessment of the allegations and can lead to a resolution of the matter. It's essential to handle such
accusations with care and follow the company's policies and procedures for addressing harassment
complaints.

7. In regards to whistle-blowing, the chain of command rule requires employees to

a. think about the right course of action

b. take their concern of wrongdoing to an external source
c. verify the information with a colleague
d. report the wrong doing to their immediate supervisor
 8. Which of the following conditions would not morally justify external whistleblowing?
a. considerable harm will be caused to the public
b. internal reporting procedures are effective-
c. the whistleblower has verifiable proof
d. all of above would morally justify whistleblowing

All the conditions mentioned in the options (a, b, and c) can morally justify external
whistleblowing. If considerable harm will be caused to the public (a), if internal reporting
procedures are not effective (b), and if the whistleblower has verifiable proof (c), these are all
legitimate reasons for someone to engage in external whistleblowing to expose wrongdoing or
unethical behavior within an organization. In the case provided, the pervasive harassment and
inappropriate working conditions at MLM Fabrication & Construction, as well as the failure of
management to address the issue after internal complaints, would morally justify external
whistleblowing.

9. Which of the following is not discriminatory

a. the decision is derived from racial or sexual prejudice
b. the decision has a harmful impact on the interest of employees
c. the decision is based on merit
d. all of the above are discriminatory
In the context of discrimination, a decision based on merit is not considered discriminatory.
Discrimination typically involves treating individuals unfairly or differently based on factors such
as race, sex, or other protected characteristics, rather than assessing and making decisions based on
their qualifications, skills, and performance (i.e., merit). Options (a) and (b) describe
discriminatory practices, while option (d) includes all three possibilities, two of which are
discriminatory.

10. Discrimination is widely considered unethical primarily because it is .

a. unjust
b. illegal
c. harmful
d. merited
 11. The right of persons to determine what, to whom, and how much information about
themselves will be disclosed to other parties. This is the right to

a. privacy
b. freedom of choice
c. conscience
d. fairness

12. An author who unethically intends to make the audience believe what he knows to be false by
means of an intentional act or utterance. This refers to

a. criticisms of social contract view

b. problems with contract theory
c. criticisms of social costs view
d. requirements of deceptive advertising
In the given scenario, the author is describing deceptive practices within a company, particularly
the presence of sexually explicit pictures and harassment of female staff. This aligns with the
concept of deceptive advertising, where an author or entity intentionally tries to make the audience
believe something false through their actions or communications.
13. In marketing, truthful labelling is essential to the concept of

a. well-being
b. fairness
c. freedom
d. health

14. Which of the following statements about compliance is true

a. Compliance concerns establishing organizational standards of conduct
b. Compliance concerns taking corrective action when employees are not behaving ethically
c. Compliance is about changing personal beliefs
d. In regards to compliance a & b are correct-
Compliance generally involves ensuring that employees adhere to established organizational
standards of conduct and taking corrective action when they do not behave ethically or violate
those standards. It is about ensuring that employees follow the rules and regulations set by the
organization to maintain ethical behavior and legal standards.
 15. A customer has approached you with an offer to pay for your stay at an all-inclusive hotel
on the condition that you provide them with information in regards to a tender that your
organization will be putting out shortly. This would be an example of

a. extortion
b. bribery
c. opportunistic interests
d. a business transaction

Bribery involves offering or receiving something of value in exchange for influence or actions that
benefit one party at the expense of others. In this case, the customer is offering something of value
(the hotel stay) in exchange for confidential information, which constitute
 16. With reference to question 15, this situation would be an example of

a. a potential conflict of interest-

b. an actual conflict of interest
c. partial conflict of interest
d. the cost of doing business

An actual conflict of interest arises when there is a conflict between the interests of an individual or
group and their duty or responsibility to act in the best interest of another party. In this case, the
management of MLM Fabrication & Construction is aware of the pervasive harassment and
sexually explicit materials present in the workplace, yet they have not taken adequate steps to
address and rectify the situation, potentially prioritizing their interests or the interests of the male
employees over the well-being and rights of the female workers.

17. Business must provide a product that actually lives up to the express claims that they make
about it. This statement refers to the businesses’ duty to
a. comply
b. disclose
c. not misrepresent the facts
d. not to use duress

In other words, businesses have an ethical duty not to make false or deceptive claims about their
products or services and to ensure that their products or services meet the claims they make. This is
part of maintaining honesty and integrity in business practices.

18. Since a contract cannot bind where both parties do not have full knowledge, the seller also
has a duty to
a. comply
b. disclose
c. not misrepresent the facts
d. not to use duress

In the context of contracts and ethical considerations, the seller (or any party entering into a
contract) has a duty to b. disclose information that is relevant to the contract. This duty includes
providing accurate and complete information to the other party so that they can make an informed
decision. Withholding important information or misrepresenting facts can be considered unethical
and could potentially invalidate the contract if the other party did not have full knowledge of the
relevant details.

19. Because consumers must rely on the expertise of the manufacturer, they have a duty to
a. design a product that conforms to the objectives of the organization
b. provide information on the production process
c. deliver a product that lives up to the express and implied claims they make about the
product
d. use material that would allow the organization to provide a lower priced product
Consumers have a right to expect that the products they purchase will meet the claims and
promises made by the manufacturer, both explicitly and implicitly. This includes the product's
quality, safety, and functionality, among other factors. Therefore, manufacturers have a duty to
provide products that align with these claims and expectations.

20. Your friend, Joy, has been asked to develop an ethics training program for the organization.
Advise Joy: She should.

a. Ensure that all employees receive the same training content.

b. Focus on new employees only; the other employees already know this stuff.
c. Provide separate training depending on the needs of different groups of employees.
d. Bring in outside consultants to conduct the training.

Given the specific challenges and issues highlighted in the case, it would be beneficial to tailor the
ethics training to address the unique needs and concerns of different groups of employees,
especially those who have experienced or witnessed harassment and discrimination. This approach
would ensure that the training is more effective and relevant for all employees, taking into
consideration their roles and experiences within the organization.

21. Conflicts of interest arise when employees must choose whether to

a. advance their own personal interests, over those of the organization

b. report an unethical act
c. carry out an assignment they perceive to be unethical
 d. purchase a product from the competitor

Conflicts of interest typically arise when employees have a personal interest or gain that may
conflict with the best interests of the organization they work for. This can lead to situations where
individuals must choose whether to prioritize their own personal interests over those of the
organization, which can be ethically problematic.

22. The concept “employment at will” means that an employer can release an employee at any
time. The notion of due process can be used to argue against employment at will because

a. employees should own the products of their labour

b. of the arbitrary nature of employment at will
c. property rights are most fundamental
d. due process requires a written contract

Due process in the context of employment means that employees should have certain protections
and procedures in place before they can be terminated, especially if it's for reasons other than just
cause. It involves providing employees with notice, an opportunity to be heard, or a fair and
justifiable reason for termination. Employment at will allows for arbitrary terminations, which can
be seen as unfair and lacking due process protections for employees.

23. Although Electric Tech Inc. (ETI) has a code of ethics for its subcontractors, it has
experienced issues with its government contracts. Several subcontractors have been embroiled in
scandals involving unethical conduct. Most recently, a subcontractor falsified thousands of
dollars in work orders. ETI wants to show the government that it is serious about preventing
unethical conduct. Advise ETI.

a. ETI should educate its subcontractors about its expectations and monitor them for
compliance
b. ETI should emphasize to the relevant Government Department that it bears little
responsibility for the subcontractor's behavior because the subcontractor is not an
employee by law
c. ETI should warn its subcontractors about the perils of getting caught
d. ETI should send a copy of its code of ethics to the relevant Government Department to
show that ETI prohibits unethical conduct
a. ETI should educate its subcontractors about its expectations and monitor them for
compliance.

This option reflects a proactive approach to addressing unethical conduct within its
subcontractors. By educating subcontractors about ETI's expectations and monitoring them for
compliance, ETI can help ensure that its subcontractors adhere to ethical standards. This
approach demonstrates a commitment to ethical conduct and can help prevent future unethical
behavior, thereby improving ETI's reputation with the relevant government department.

Options b, c, and d are not recommended:

b. Emphasizing that ETI bears little responsibility for subcontractor behavior is not a
responsible approach, as ETI is ultimately responsible for the subcontractors it chooses to work
with. Attempting to shift blame to subcontractors is not a sound ethical strategy.

c. Warning subcontractors about the perils of getting caught may not be effective in preventing
unethical conduct and does not demonstrate a commitment to ethical behavior.

d. Sending a copy of its code of ethics to the relevant government department is a passive
approach and may not effectively prevent unethical behavior by subcontractors. It's better to
actively engage with subcontractors through education and monitoring to ensure compliance

24. An ethical culture is maintained through alignment between

a. Formal and informal systems

b. Heroes and rituals
c. Structure and stakeholders
d. External and internal environment

An ethical culture is maintained through alignment between formal systems (such as company
policies, codes of conduct, and rules) and informal systems (such as organizational culture, values,
and norms). It's essential that both the formal and informal aspects of an organization support and
reinforce ethical behavior to create and maintain an ethical culture. In the case described, the
company's formal systems and informal norms were not aligned, leading to a hostile and unethical
work environment for female workers like Carla Dennis.
25. Which of the following would not be investigated as part of an ethics audit?

a. cultural issues
b. compliance issues
c. systems issues
d. environmental issues

An ethics audit typically focuses on examining the ethical and moral aspects of an organization's
behavior and practices. This includes assessing cultural issues, compliance with ethical standards
and regulations, and the systems in place to promote ethical behavior. Environmental issues, while
important, are usually a separate area of concern and typically fall under environmental audits or
assessments rather than ethics audits.

26. In order to implement a successful, business ethics training programme it must

a. focus on personal opinions of employees

b. be limited to senior management and executives
 c. educate employees on formal ethical framework and models of ethical decision making
d. promote the use of emotions in making ethical decisions
To implement a successful business ethics training program, it is essential to educate employees on
formal ethical frameworks and models of ethical decision-making. This helps employees
understand the principles and guidelines for making ethical decisions in the workplace. Focusing
on personal opinions alone (option a) may not provide a consistent and well-defined ethical
foundation for the organization. Limiting the training to senior management and executives (option
b) is insufficient because ethics should be ingrained at all levels of the organization. Promoting the
use of emotions in making ethical decisions (option d) is not a common approach in business ethics
training and may lead to subjective and inconsistent outcomes. Therefore, option c is the most
appropriate choice for implementing an effective business ethics training program.
27. The relativist view on confronting different systems of business ethics says that .

a. the same ethics should be practiced in other countries as at home

b. ethical systems do not vary greatly between countries
c. one should follow whatever practices are accepted in a certain place
d. no one knows what the ethically correct way of doing business is

Relativism in ethics suggests that ethical standards are culturally or contextually determined, and
therefore, one should adapt their ethical behavior to align with the prevailing practices and norms
of the specific place or culture in which they are operating.

28. Which of the following is not one of the primary considerations for a strong
organizational compliance program?
a. a written code of conduct
b. an ethics officer
c. significant financial expenditures
d. a formal ethics training programme

Significant financial expenditures are not one of the primary considerations for a strong
organizational compliance program. While financial resources may be required to support the
implementation and maintenance of a compliance program, it is not considered one of the core
components. The primary considerations for a strong organizational compliance program typically
include:
a. a written code of conduct: A clear and comprehensive code of conduct that outlines the ethical
expectations and standards for employees within the organization.
b. an ethics officer: The presence of an ethics officer or a designated individual responsible for
overseeing and managing the organization's ethics and compliance program.
d. a formal ethics training program: Providing employees with formal ethics training and education
to ensure they understand the organization's ethical standards and know how to navigate ethical
dilemmas.
These elements are essential for promoting a culture of ethics and compliance within an
organization, while financial expenditures may vary depending on the organization's size and
specific needs.

29. Which of the following is not a criticism of multinational corporations (MNC)

a. they transfer jobs overseas, wheruj

b. e rates are lower
c. they pay high taxes everywhere-
d. they exploit the labour market of the host countries
e. all of the above are criticisms against MNCs

The criticism often levied against multinational corporations (MNCs) includes transferring jobs
overseas to lower-wage countries (a) and exploiting the labor market of host countries (c).
However, the statement in option b is not typically a criticism of MNCs. In fact, some critics argue
that MNCs use various strategies to minimize their tax payments in host countries, which can lead
to concerns about tax avoidance rather than paying high taxes everywhere.

30. In the international arena, ethical issues are likely to arise when

a. environmental regulations in host nations are different to those in the home nation
b. environmental conditions are similar in both host and home nations
c. the host country is rich
d. there are no regulations in the home country

The difference in environmental regulations between the host country and the home country can
lead to ethical dilemmas for multinational corporations. This is because companies may be faced
with choices regarding whether to comply with weaker environmental regulations in the host nation
or maintain the higher standards of their home nation. Balancing economic interests with
environmental responsibilities can be a significant ethical challenge in such situations.
SECTION B – Scenario (20 marks)

Read the following and answer the questions that follows. Answer all the questions

Your company is a bottler of natural spring water, and the advertising department has recently
launched a campaign that emphasizes the purity of your product. The industry is highly
competitive, and your organization has been badly hurt by a lengthy strike of unionized
 employees. The strike seriously disrupted production and distribution, causing your company to
lose significant revenues and market share. Now the strike is over, your company will have to
struggle to recoup lost customers and will have to pay for the increased wages and benefits called
for in the new union contract. The company’s financial situation is precarious to say the least.

You and the entire senior management team have high hopes for the new ad campaign, and initial
consumer response has been positive. You are therefore shocked, when your head of operations
reports to you that an angry worker has sabotaged one of your bottling plants. The worker
introduced a chemical into one of the machines, which in turn contaminated 120,000 bottles of
spring water. Fortunately, the chemical is present in small amounts, and the belief is that no
consumer could possibly suffer harm unless he or she drank in excess of 5 gallons of the water
per day over a long period of time. Since the machine has already been sterilized, any risk of
long-term exposure has been virtually eliminated. But of course, the claims made by your new
ad campaign is now being questioned. The decision has been taken to continue with the
advertisements.

Peter James, a senior member of the sales team is aware of the situation, and shares his concern
with his manager, who in turn tells him that if research and development says it’s okay, then it’s
okay. Peter mentions the situation to a close friend who suggests that he should blow the
whistle.

Questions

1. Identify at least two ethical issues and explain why these issues raise ethical concerns. (10
marks)

Ethical Issues:
a) Sabotage and Contamination: The act of sabotage by the angry worker, which resulted in
the contamination of 120,000 bottles of spring water, raises ethical concerns. This act can be
considered unethical as it potentially endangered the health and safety of consumers. The
worker's actions not only violated company rules and integrity but also put the reputation and
well-being of the consumers at risk. Ethical issues arise here due to the deliberate harm
caused to innocent parties.

b) Misleading Advertising: The decision to continue with the advertising campaign despite
knowing that the claims made in the campaign are now being questioned due to the
contamination incident raises ethical concerns. If the advertising campaign falsely portrays
the product as pure and safe when there is a known contamination incident, it can be seen as
deceptive and unethical. This creates a situation where the company may be misleading
consumers, which is a breach of trust and can damage the company's reputation.
 2. Fully explain what is meant by blowing the whistle. Do you agree that he should blow the
whistle? Support your answer (10 marks)

Whistleblowing:
Blowing the whistle refers to the act of reporting unethical or illegal activities within an
organization to the relevant authorities or the public. It is typically done when an individual
becomes aware of wrongdoing within their organization and feels a moral or ethical
obligation to expose it, even if it may lead to negative consequences for the individual or the
organization.

Whether Peter James should blow the whistle in this scenario depends on several factors:

a) Severity of the Situation: The act of sabotage and contamination, while serious, did not
result in immediate harm to consumers. The contaminated water is believed to pose a risk
only if consumed in excess over a long period. This might influence Peter's decision, as the
harm caused is not immediate and life-threatening.

b) Company's Response: If the company takes immediate and appropriate action to address
the contamination, including informing affected customers and implementing measures to
prevent future incidents, Peter might consider whether whistleblowing is necessary. If the
company is actively working to rectify the situation, it may be seen as less urgent to blow the
whistle.

c) Ethical Responsibility: Peter should evaluate his own ethical responsibility. If he

genuinely believes that the company's decision to continue with the advertising campaign,
knowing it might be misleading to consumers, is fundamentally unethical and harmful, he
may consider blowing the whistle to protect consumers' interests and uphold ethical values.

d) Legal Protections: Peter should also consider legal protections and potential consequences
for whistleblowing. Some jurisdictions have laws that protect whistleblowers from
retaliation, while others do not. Understanding the legal context is crucial in making this
decision.
 SECTION C -Essays (30 marks)

Answer ONE Question

QUESTION 1

a. With reference to the due care theory or the contract view of business duties, explain how
business decision makers can apply these theories to improve decisions in regards to
consumer protection.

Title: Ethical Considerations in Business Decision-Making and Marketing

Introduction

In the realm of business ethics, two prominent theories guide decision-makers in making ethically
sound choices: the due care theory and the contract view of business duties. These theories offer
frameworks to enhance decision-making processes, especially concerning consumer protection.
Additionally, the ethical issue of freedom holds significant importance in marketing, as it directly
impacts consumer choices and their overall well-being. This essay explores how business decision-
makers can apply the due care theory and the contract view to improve consumer protection
decisions and examines the ethical concerns surrounding consumer freedom in marketing.

Part A: Applying Due Care Theory and the Contract View to Consumer Protection

The Due Care Theory:

The due care theory emphasizes the importance of acting responsibly and prudently to prevent
harm to others. In the context of consumer protection, business decision-makers can apply this
theory by prioritizing the safety and well-being of their customers. This involves conducting
thorough research and testing of products and services to ensure they meet safety standards and do
not pose any potential harm. Furthermore, businesses should be transparent about the risks
associated with their offerings, providing consumers with the information they need to make
informed choices.

For example, pharmaceutical companies must rigorously test drugs for potential side effects and
dangers before releasing them to the market. By adhering to the due care theory, these companies
can minimize the risk of harm to consumers and ensure that their products are safe and effective.

The Contract View of Business Duties:

The contract view of business duties posits that ethical obligations in business arise from
contractual agreements between parties. In consumer protection, businesses can apply this theory
by upholding the terms and conditions of contracts with their customers. This includes providing
products or services that meet the agreed-upon specifications and offering customer support and
warranties as promised.

E-commerce platforms, for instance, should ensure that they deliver the exact products customers
ordered and provide a hassle-free return process if the product does not meet the agreed-upon
specifications. By doing so, businesses honor their contractual obligations and build trust with
consumers.
 b. Why is freedom an important ethical issue in marketing? Describe how the
consumer’s freedom may be transgressed by marketing.
Part B: The Importance of Freedom in Marketing

Consumer Freedom as an Ethical Issue:

Freedom is a crucial ethical issue in marketing because it directly impacts consumers'
autonomy and ability to make choices that align with their values and interests. Ethical
marketing practices should respect and promote the freedom of consumers to make informed
decisions about the products and services they purchase. When consumers feel manipulated or
coerced into making choices they would not have otherwise made, their freedom is
compromised.

Transgressions on Consumer Freedom:

Consumer freedom can be transgressed by marketing practices that employ deceptive
advertising, emotional manipulation, or undue influence. Deceptive advertising involves
providing false or misleading information about a product, which can lead consumers to make
choices they would not have made if they had accurate information. Emotional manipulation
exploits consumers' emotions to persuade them to buy products, often by appealing to their
fears, insecurities, or desires. Undue influence occurs when marketing tactics pressure
consumers into making purchases they might regret later, such as limited-time offers that
create a sense of urgency.

Consider the example of fast-food advertising that uses enticing images and slogans to
encourage unhealthy eating habits. Such marketing strategies can compromise consumer
freedom by influencing individuals to make dietary choices they may not have made if not for
the persuasive tactics employed.

Conclusion

In conclusion, business decision-makers can enhance consumer protection by applying the due
care theory and the contract view of business duties. These ethical frameworks promote
responsible conduct, transparency, and the fulfillment of contractual obligations to ensure the
well-being and satisfaction of consumers. Additionally, the ethical issue of freedom in
marketing underscores the importance of respecting consumers' autonomy and protecting them
from manipulative or coercive marketing tactics. It is essential for businesses to uphold ethical
standards and prioritize consumer welfare to maintain trust and sustainability in the
marketplace.
QUESTION 2

Organizations face many ethical issues which if not properly managed will negatively affect the
organization.

a. With reference to the principles of ethics, provide a detailed explanation on one of the
following: (15 marks)
i. Sexual harassment
ii. Deceptive Advertising
iii. Product Safety
Title: Ethical Issues in Organizations: A Comprehensive Examination of Product Safety

Introduction:

Ethical issues are an inherent part of the modern corporate landscape, and their effective
management is essential for the well-being and sustainability of organizations. In this
essay, we will delve into one of the prominent ethical dilemmas faced by organizations –
Product Safety. We will explore the principles of ethics underlying this issue and discuss
its profound impacts on individuals, organizations, and society.

I. Product Safety and Ethical Principles:

Product Safety is a critical ethical concern for organizations. It revolves around the
responsibility of companies to ensure that the products they offer do not pose undue risks
to consumers' health and well-being. Several ethical principles are relevant to
understanding and addressing this issue:

a. Duty-Based Ethics: Organizations have a moral duty to provide safe and reliable products to
consumers. This principle asserts that it is ethically imperative for companies to act in a
manner that does not harm others. Neglecting product safety would be a breach of this
duty.

b. Utilitarianism: From a utilitarian perspective, organizations should strive to maximize

overall happiness and minimize harm. Neglecting product safety could lead to consumer
harm, causing dissatisfaction and suffering. Ethical decision-making involves considering
the utility and consequences of product safety practices.

c. Justice and Fairness: Ensuring product safety aligns with the principle of justice. It implies
that organizations should distribute the benefits and burdens of their products fairly among
society. Neglecting safety measures could lead to an unjust distribution of harm, affecting
vulnerable populations disproportionately.

c. Transparency and Honesty: Ethical organizations prioritize transparency and honesty in

their dealings with consumers. Deceptive practices in product safety, such as hiding
potential risks or providing false information, violate these principles.
 b. Discuss the impact of these issues on the individual, organization and society (15 marks)

II. Impact of Product Safety Issues:

a. Individual Impact:

i. Consumer Safety: When organizations fail to ensure product safety, consumers are put at risk of
injury or harm. This can lead to physical, emotional, and financial consequences for individuals.
For example, contaminated food products can cause severe health problems.

ii. Loss of Trust: Product safety breaches erode consumer trust in the company. Once trust is lost, it
can be challenging to regain, impacting the brand's reputation and bottom line.

b. Organizational Impact:

i. Legal Consequences: Negligence in product safety can result in legal actions, including lawsuits
and regulatory fines. These legal battles can drain resources and damage the organization's
finances.

ii. Reputation Damage: Public awareness of unsafe products can lead to a tarnished reputation. A
damaged reputation not only affects current sales but can also impact future business opportunities
and partnerships.

c. Societal Impact:

i. Public Health: Widespread product safety issues can have significant public health implications,
affecting a large number of people. For instance, unsafe pharmaceuticals can harm countless
individuals.

ii. Regulatory Changes: Societal backlash may lead to stricter regulations and oversight, which can
increase compliance costs for organizations across the industry.

iii. Economic Consequences: Product safety crises can lead to economic downturns in affected
regions, affecting job security and overall economic stability.

Conclusion:

In conclusion, the ethical issue of Product Safety is of paramount importance to organizations,

individuals, and society as a whole. Understanding and upholding ethical principles such as duty-
based ethics, utilitarianism, justice, and transparency are essential for organizations to manage this
issue effectively. The impact of product safety issues extends beyond financial repercussions,
affecting the well-being of consumers, organizational reputation, and broader societal aspects.
Ethical decision-making and a commitment to product safety are crucial for organizations to
navigate these challenges and uphold their responsibility to society.
 QUESTION 3

a. Based on the impact of ethical misconduct in and by organizations, discuss how

an ethics programme can be used to manage and promote ethical conduct in
organizations. (15 marks)

Title: Managing and Promoting Ethical Conduct in Organizations through Ethics Programs
and Employee Obligations

Introduction

Ethical misconduct in organizations has far-reaching consequences, affecting not only the
reputation and financial stability of the organization but also the well-being of its employees
and stakeholders. This essay explores the significance of ethics programs in managing and
promoting ethical conduct within organizations, and it also delves into the obligations of
employees toward their organizations, along with the ways in which employees may fall short
of meeting these duties.

A. The Role of Ethics Programs in Managing and Promoting Ethical Conduct

Ethics programs are instrumental in instilling and maintaining a culture of ethical conduct
within organizations. They serve as a framework for defining, communicating, and enforcing
ethical standards and guidelines. The impact of ethical misconduct within organizations can be
profound, encompassing legal repercussions, damage to reputation, and financial losses.
Therefore, ethics programs play a pivotal role in mitigating these risks and fostering an
environment of integrity.

Setting Ethical Standards:

Ethics programs establish clear and comprehensive ethical standards, outlining acceptable
behaviors and practices. These standards act as a guide for employees, helping them
understand what is expected of them in terms of ethical conduct.
Communication and Training:
Organizations utilize ethics programs to communicate their ethical values and expectations to
all employees. Regular training sessions and communication initiatives help employees
become familiar with the ethical principles and guidelines, making it easier for them to
integrate these values into their daily work.
Reporting Mechanisms:
Effective ethics programs include mechanisms for employees to report ethical concerns or
violations confidentially. This encourages employees to come forward with ethical issues
without fear of retaliation, allowing organizations to address problems promptly.
Enforcement and Accountability:
Ethical programs also establish consequences for ethical misconduct, ensuring that individuals
who breach ethical standards are held accountable. This reinforces the importance of ethical
behavior and deters potential wrongdoers.
Continuous Improvement:
Ethical programs are not static; they are dynamic and evolve over time. Organizations use
feedback and assessment mechanisms to continuously improve their ethics programs, adapting
to changing ethical challenges and industry norms.

b. Describe the employees’ obligations to the organization? In what ways might

an employee fail to live up to the duties identified. (15 marks)
 B. Employee Obligations to the Organization

Employees hold certain obligations to their organizations, primarily rooted in their contractual
agreements and the broader professional and ethical expectations associated with their
roles. Failing to meet these obligations can have detrimental consequences for both
employees and their organizations.

Performance and Commitment:

Employees are obligated to perform their job responsibilities to the best of their abilities and
demonstrate commitment to the organization's goals. Failing to do so can lead to subpar
performance, affecting productivity and organizational success.
Confidentiality and Data Security:
Many roles within organizations involve access to sensitive information. Employees have an
obligation to maintain confidentiality and ensure the security of data. Breaches in
confidentiality can result in data leaks, legal consequences, and damaged trust.
Ethical Conduct:
Employees are expected to adhere to the ethical standards and guidelines set forth by their
organizations. This includes refraining from unethical behaviors such as fraud,
discrimination, harassment, or conflicts of interest. Failure to comply can harm the
organization's reputation and lead to disciplinary actions.
Compliance with Policies and Procedures:
Employees are obliged to follow organizational policies and procedures, which can vary
widely depending on the nature of the business. Non-compliance can lead to inefficiencies,
legal issues, and a breakdown of internal controls.
Loyalty and Avoidance of Conflicts of Interest:
Employees owe a duty of loyalty to their organizations, which includes avoiding conflicts of
interest that could compromise their impartiality or commitment. Engaging in activities
that benefit a competitor or personal interest at the expense of the organization is a breach
of this duty.
Conclusion

Ethics programs are vital tools for organizations to manage and promote ethical conduct,
safeguarding their reputation and reducing the risks associated with ethical misconduct.
Simultaneously, employees have a range of obligations to their organizations, encompassing
performance, ethical behavior, loyalty, and compliance. It is crucial for organizations and their
employees to collaborate in upholding ethical standards to create a work environment that is
conducive to success and integrity. By doing so, organizations can cultivate trust among
stakeholders, enhance their long-term sustainability, and contribute positively to society as a whole.