Business Ethics Case Study

Question 1:

Imagine that you’re the CEO of a small manufacturing company. An employee has dumped toxic waste in a nearby stream. Who would you call into your office and what would you want to know? Develop a short-term and, long-term action plan for dealing with the crisis. Who would you communicate with and why?

1.0 Who would be called in and what would be got.

1.1 What need to know.

As the CEO of this company, the most important issue for us to know is the knowledge about the toxic waste. On the basis of the study from Rissanen (2012), toxic wastes are defined to be these poisonous byproducts produced from many industry aspects including the manufacturing industry, agricultural industry, construction industry, automobile industry, hospitals and other kinds of pollution sources. And these toxic wastes may own various forms including the liquid form, solid, and gas. And sometimes, even the wastes from a ordinary family may be treated as toxic waste if they contain some material resulting in heavy pollution to the environment. for example, in some developed countries, more than 15% or so family waste may be classified into toxic waste category and about 85% of these toxic wastes are be disposed in proper manners.

Therefore, if the toxic wastes are disposed improperly, it may contribute to heavy pollution. These toxic elements inside the waste may seep into underground water and result in the contaminated underground water source, which may not only bring heavy attack to the health of human beings but also pollute the living environment for these plants and animals (Rissanen 2012).

1.2 The necessary persons and related information

Besides the knowledge about toxic waste, it is also necessary to develop the knowledge about these key person and their attitudes, suggestions, or perspectives towards this improper disposal of the toxic waste case.

1.2.1 The employee

The employee is the first person should be called into the CEO’s office, because he is the direct person who has experience the whole thing. We may also get this important information from him such as whether this kind of action belongs to private behavior or he just follows the order of someone else, or he isn’t the only person who practised such kind of action. And then we’d like to point out the reason to call in this employee first. Besides he may offer us the most detailed and actual information about this case. First called in him may also avoid these improper behaviors of some people such as threatening the employee to shut up with some truth and hinder us to get the most detailed and true situation about this case and then put forward with the most correct and reasonable solution.

1.2.2 The direct boss of this employee

The second person, we’ll call into is the direct boss of this employee. The reason for this is that this direct boss may be the person besides the employee who has got the detailed information about the whole case of disposal the toxic waste. In the meantime, this direct boss for this employee may stand higher than the employee himself due to its position and he or she may have such kind of experience to face this kind of problem or have his or her specific and reasonable perspectives to deal with this problem, which may support us to put forward with better solution to both deal with this employee and other stakeholders.

1.2.3 The human resource manager

The third choice for us is to call in the human resource manager to discuss the manner of dealing with the employee’s misbehavior and at the same time give warnings to other employees in our organization about the terrible consequences of such kind of misbehaviors. As the most skillful person in an organization to deal with the human resource related issue, the advices from the human resource manager may be the most comprehensive and effective ones compared to others (Cascio 2010). Of course, we should also show our concerns and suggestions to this manager about this case and then the final proposal for dealing with this issue may be more objective and suitable.

1.2.4 The boss of the public relationship department

The fourth person to call in is the boss of the public relationship department. The same important as the means to calm down the inside problem, as a responsible organization, we should also put forward with suitable means to deal with the doubts and complaints or even anger from the public towards this case. Therefore, the boss of the public relationship department may own the initial right to speak.

The first issue for us to call in this boss of the public relationship department is to calm down the complaints or anger from the public towards the improper disposal toxic wastes. And the second issue is to support this manager to find out the most effective ways to regain the reputation after calming down the public.

1.2.5 The manager in the financial department

The reason to call in the manager of the financial department is to put forward with the acceptable budget to support each department to deal with this problem. Although we have to admit some monetary sacrifice has to be faced by us when dealing with this problem, as a profitable organization the cost effective way to deal with this problem will be the most preferable (Welch & Welch 2010).

Therefore, under the assistance of the manager in the financial department, every proposal to deal with this problem can be evaluated from the financial aspect, which is helpful for us to finally put forward with the most acceptable and effective way (Welch & Welch 2010).

2.0 The short term and long term action plan as well as the people to communicate with

Herbane (2010) pointed out the purpose of short term action plan is to deal with the present crisis. For our organization, out present crisis is to deal with the case of improper disposal of toxic waste into the nearby river. And these key persons necessary to assist us to deal with the current crisis is the persons we mention above including the employee, his direct boss, the human resource manager, the boss in the financial department and the manager from the public relationship department, as well, who is the most the direct and suitable group to both offer the most practical and effective suggestions to deal with this current problem. Therefore, we suggest the following short term action plan on the basis of their support.

2.1 Short term action plan

First and foremost, the reasonable and acceptable punishments for these people involved in this case. Therefore, depending on the degree of the negative consequences and the level of involvement, we should give different people different kinds of punishment to warn other people in our company to avoid the occurrence of the same problems in the future.

Secondly, we will also make an apology to the public to state out mistakes and show our determination to well managing the waste problem in the future. Therefore, the press conference will be our choice to show our apology and determination on environment protection. In addition, some philanthropy activity will be the right choice to show our sincerity.

All in all, the final aim of our short term action plan is to alleviate the pressure and hostility of the public toward our company and give the warnings to these employees to avoid the same problems in the future.

2.2 Long term action plan

The aim of implementing the long term action plan is to give assistance to our company to develop a right attitude and way to deal with the issue of toxic waste. And then good image as an ethical organization should also be built and maintained for our company depending on the long term action plan.

In the first place, the culture to support ethical behaviors in our company will be fostered and maintained. The suitable organizational culture can work as a sharp sword to cut out these improper spirit or mood worn by employees and support them to develop positive, healthy and correct attitudes towards their jobs and company to behave them in the future (Alvesson & Mats 2002).

In the second place, proper education programs for employees in our company to assist the influence of our organizational culture in order to strengthen the position of positive and healthy working attitudes and importance for ethical behaviors in the mind of employees will be encouraged in the future as well (Stone 2011).

In the third place, positive promotion activities to strengthen the healthy image of our company are required such as cooperation with these charitable organizations including environment protection, giving assistance to the poor, disabled and those who need help may be the focus of our image building strategy in the future as well (Stone 2011).

All in all, the final aim of our long term plan will assist us to develop the positive ad healthy organization culture and image for our company in the future.

Question 2

With reference to the CSR pyramid, what are the implications of stopping at a particular pyramid level? For example, would it be all right if a company took its sole responsibility to be financial responsibility to its shareholders? financial responsibility and legal responsibility? Do you agree that CSR is best represented by a pyramid? Why or why not? Can you think of a better way to graphically represent a company’s social responsibility?

1.0 CSR pyramid and implications for stopping

1.1 CSR

First and foremost, corporate social responsibility (CSR) is defined as the method by which business or companies integrate the economic responsibilities, legal responsibilities, ethical responsibilities and philanthropic responsibilities into the corporate value and management practices with a more transparent way ( see chart 1).

Chart 1 CSR pyramid


In the first place, in the perspective of economy, companies had better act economy responsibly to its stakeholders such as their shareholders, employees and business partners. It is their responsibility to meet the economic needs of these groups. Or else, the business or company may meet resistance from these kinds of people such as strike from the employees, low working morale and revoking the cooperation from business partners. That’s why we believe the economic responsibility in the CSR is significant for a business to carry out, because without the support and assistance from these employees, shareholders and business partners, this business is nothing.

In the second place, the legal responsibility inside the corporate social responsibility is the basic. Simply speaking, if any business offends the dignity of the law, it has to pay a cost. Therefore, it is a must and responsibility for any business to be legal responsibility as well.

In the third place, ethical responsibilities are also significant for a business. There are so many issues or business practices beyond the requirements of legal and regulatory perspective, which are the ethical responsibilities for a business to engage in including the production of quality products, the process of manufacturing to ensure the environment protection issue or the contributions to the local communities or the society.

In the last place, the significance of philanthropic responsibilities for a business can’t be ignored either. In the modern time, the purchase decisions made by customers are impacted by many factors including not only the price or quality elements inside a product but also the image of the company. Simply speaking, sometimes when two different brand products with the similar quality, customers may prefer to purchase the brand with a good image rather than any other factor. At most of the time, some brand which is in the shortage of healthy and positive image may lack the final charm to promote the purchase decision made by customers (Valor 2008). Take a simple case for example, there are two brands of mineral water product for you to choose, with the same price and similar taste, one of it promises to donate 1 cent of the money earning from one bottle of its mineral water product to the poor while the other has no such kind of philanthropic behaviors. Which of the two will you purchase? Maybe most of us will purchase the more philanthropic one. Therefore, the philanthropic responsibilities for a business are significant, because maybe one day it may become the most shinning point to attract the customers’ eyes and support (Carroll & Shabana 2010).

1.2 Conflicts of these responsibilities

In the most ideal situation, it is so nice for the business to carry out and meet the demand of the four responsibilities in the corporate social responsibilities. While in the reality, there are often conflicts between among these responsibilities. Whether there are implications for the business to make a stop at a particular pyramid level of the CSR.

First of all, we may point out that there is no excuse for any business to give up the responsibility of the legal responsibilities, which should be carried out as the basic responsibility, because if any business fails to meet the legal responsibility, it will suffer the penalty from the law (Schutter 2008). Therefore, we may point out that there is no stop for made by any business at any circumstance to meet the requirement of legal responsibilities.

And then, depending on different situation and circumstance, there may be a stop for a business to make referring to the three remaining responsibilities. For example, when the economic responsibility of a business can be well meet, this business may not own the redundant time or capital to engage into implementation of other responsibilities such as donating money, assistance or other kinds of help to others (Jackson 2004). In another word, we may more advocate the strategy for a business to meet the legal and economic responsibilities first and then to meet the other two responsibilities.

2.0 Sole financial responsibility & financial responsibility plus legal responsibility

Above, we discuss the four responsibilities inside in the corporate social responsibilities and the stopping line for a business to take into account. We’ll further discuss the importance of legal responsibility and financial responsibility and the conflicts between the two.

Just now, we advocate the significance and basic function of the legal responsibilities for a business and its unique position. Therefore, when there is a choice for a business to make between the legal responsibilities and financial responsibilities, we will always advocate to fulfill the legal responsibilities first and then the financial responsibilities and then the following.

In the first place, only taking the sole financial responsibilities isn’t responsible. Carroll (2008) proposed a business which doesn’t want to make money isn’t a qualified business, which advocates one major aim of a business is to make money and improve its financial capacity. Therefore, we may not doubt the decision of any business to put the financial responsibility in a significant position. Meanwhile, the ways and means used by this business to make money should also be in a reasonable and legal scope.

For example, it may be an inevitable situation sometimes for a business to face a dilemma when there is a conflict between the legal responsibilities and financial responsibilities such as the conflicts for the business to pay for the real tax from its profits and the executing of tax evasion to get more money (Bhattacharya & Sen 2004). Frankly speaking, company can make more if they play some tactics in account making for the government, which is obvious against the legal responsibility of a business.

However, Bhattacharya and Sen (2004) pointed out the ignorance of legal responsibility but only focusing on the economy responsibility may only contribute to a tragedy for the business either to be faced with severe legal punishment or even be put into prison. Therefore, in our view point, we advocate all of the business to emphasize the accomplishment of the legal responsibilities and financial responsibilities together. Money is a nice thing nobody can refuse its charm, while we should own the destiny to spend it. For a business, only making profit from the legal measures, it can avoid the risks of legal punishment. Therefore, we advocate that a company should take both financial responsibility and legal responsibility to its shareholders rather than only sole responsibilities.

3.0 CSR and the pyramid

In the pyramid of CSR, the four responsibilities for a company such the economic responsibility taking up the largest weight, and then following the legal responsibilities, ethical responsibilities and the philanthropic responsibility at last are built up on the basis of many real situation for a company. For instance, if a company even can’t make the enough money to afford the lives of its shareholders, how can we expect it to continue its operation? And if the operation of a company even goes against the legal regulations, how dare it to say it will give its stakeholders the most satisfactory assistance? Therefore, we advocate the CSR pyramid can best represent the corporate social responsibilities for a company depending on the real situation in the business world. (Carroll 2008)

Meanwhile, there is also some exception when a company has done better in one field rather than other fields. Therefore, the real order in the CSR pyramid of a company should be according to the actual situation this business is engaged in. Additionally, the legal and economic responsibilities should be emphasized all the time as well.

Question 3:

Given that all automobiles are unsafe to some degree, where do you draw the line on product safety? How safe is safe enough – and who decides?

1.0 Product safety for automobiles

Marucheck et al. (2011) advocated that product safety is this kind of ability for a product or service which has the acceptable safety level to be used by customers as expected. Choi and Spier (2010) also pointed out product safety issue is also a certain kind of standard related to product design and manufacturing in order to ensure their safety level for customers to use. And in different countries, there is safety standard setting to meet the safety needs of consumers. For example, in the USA, the commission of consumer product safety is endowed with the right to supervise the product safety for consumer products in the region of the United States.

Primarily speaking, there are so many factors to influence the safety level of automobile products. For example, automobile manufacturers are able to produce different kinds of features’ combination which may have different level of impact on the safety of the automobiles for customers. These safety features including three general categories. The first feature is named the feature of crash avoidance, which is designed to assist car users to avoid being in the car crash. Such kind of feature often includes electronic stability control system, anti-lock braking system and other kinds of safety features (Neil et al. 2010). The second feature is called the feature of crash protection, which is to assist car users to protect themselves when involved in a car crash. These safety features include airbags and seat belts and so on (Neil et al. 2010). The third one is the feature to ensure the safety for divers, which is to add the safety level for divers to ease the difficulty of driving and improve the comfortable level of driving as well (Neil et al. 2010).

Therefore, we may point out that the safety level of a car may largely depend on the structure of a car.

2.0 Factors influence product safety

For so many factors may influence the safety level of an automobile vehicle, we may advocate the statement that there is some certain degree of unsafe for most of the automobiles for car users to confront. While as a responsible automobile maker, we believe it is the responsibility for every automobile maker to take care of the product safety of their products.

However, the bound to determine the safety level of automobile may depend on two kinds of factors.

2.1 Economy and technique factors

The first factor is the real situation in the region in which the automobile maker runs its business. The factor often refers to the economy environment and technical environment of this region or country, which may have great influence on the safety standard of the automobile product safety (Xu 2007). In the research of Xu (2007), there are two kinds of product safety standards in the world such as the CFR from America and the ECE from the Europe, which have great influence on the formulation of product safety standard for these automobiles in other countries. However, because of the economic and technical gap between these developed regions such as the EU region, America and other western countries and these developing countries such as China, North Korea and so on, the safety standard in these developed countries may be not so complete and perfect to cover every small aspect.

China, for example, till 2008, its automobile standard was set up based on the ECE R13 standard, which even can’t catch up with the requirement on the development of modern automobile manufacturer technologies at that time, which resulted in the big gap between the competitiveness of its domestic automobile manufacturing industry and the international automobile manufacturing industry (Xu 2007). Although China has made some modification in the next few years to touch up its product safety standard on the automobile manufacture, till now there are still some gaps between the Chinese standard and the advanced standard in the international market on automobile safety (Xu 2007).

Consequently, we may first summarize the line on product safety may be decided by the economy and technique environment of a region or a country. For example, the standard in more developed regions or countries for automobile product safety may be higher than that of the less developed regions or countries.

2.2 The ethical factor

In addition to these relatively objective factors such as economy factor and technique factor, we may also point out the influence of ethics on automobile makers when they are manufacturing the automobiles. One step further, although there are clear standards to regulate the product safety for these automobiles in different regions or countries, the actual level of the product safety may be influenced by whether this automobile maker sticks to the business ethics or not. For this honest and ethical automobile maker, even without the restriction from these standards or regulations, they may also try their best to produce the high quality automobile products. While for these unethical automobile makers, even there are strict regulations or standards to regulate their production process, they may also exploit an advantage to practise some unethical behaviors on automobile production in order to make more profit.

All in all, we also regard the ethics as the other determinant for automobile makers to ensure the product safety, as well.


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