Description
Answer the following questions in a four-page paper:
Identify two specific ethical issues in this case.
Explain why these issues are ethical issues.
For each ethical issue identified:
Discuss the relevant personal, organizational, and/or cultural environment in which the issue will be addressed;
Identify the stakeholders to be considered and explain why they are taken into account;
Describe your ethical perspective using either Kantian (dignity/duty) or Utilitarian (best consequences) ethical principles. Explain why you believe these principles should govern the determination of “the right thing to do” and explain why it is the best perspective; and
Using your concept of the employer’s ethical duty, recommend what Jacob should do to address each ethical issue.
Jacob Franklin, age 25, had graduated with both a Bachelor of Science degree in engineering and an MBA from an Ivy League university. After graduation, he took a job with Richardson Drilling Equipment for just two reasons: First, the family of his fiancée, Marguerite, had affiliations with the oil industry in Texas and, second, she wanted to be close to her parents. “I was born a Texan and want my children to be Texans as well,” she told him when they were dating. Jacob had grown up in Oregon and found the Amarillo, Texas, topography boring.
In his first year with Richardson Drilling, Jacob had learned that despite the company’s own policy, which forbade bribes to governments and contractors, many contracts did in fact involve bribes. These bribes were particularly prevalent in Latin American countries. For example, in the case of Mexico, the rule was that one percent of the contract would go in an envelope to someone. With competition so fierce in the oil industry, Richardson was forced to be duplicitous about what the company said in policy as opposed to what it did in practice. Jacob had also learned that since the oil industry was a fiercely competitive business, U.S. standards did not always apply. In one case, Jacob had inspected some Richardson equipment and discovered that the company had purchased replacement parts from some other supplier whose parts were substandard. When he warned the drilling foreman, the reply was, “Accidents happen; we pay by the week here.”
Six months ago, Jacob took over the Latin American sales district, which included parts of the United States. In his new role, he found the time to go through some of the old files that the past sales representatives had left. The files revealed that several U.S. clients, who had purchased substantial amounts of product years ago, had stopped doing so; yet, there were no explanatory notes from the old reps. By talking to those clients, Jacob learned about a number of accidents that had occurred almost seven years earlier as the direct result of a failed liner used in several Richardson products. “I told the sales rep about this problem years ago, and the president of your company came to our operations to check it out. There was no explanation offered or assurance that the problem would be fixed,” said one company’s engineer. “That’s why I haven’t been buying from you.”
Jacob mentioned his discovery to his boss, Hillary. She responded, “Jacob, thank you for letting me know, but my recommendation is that you remain silent until the seven-year statute of limitations has passed. We’re in the process of coming out with a new liner that will solve this problem, and in another one to two years all the troublesome liners will be replaced. Besides, the old liner meets U.S. federal standards. If this problem should be discovered by outside sources, and it had better not be, we can always discount the rest of our inventory to oil fields abroad – in Venezuela or Brazil – where regulations are less restrictive.” Jacob knew Hillary’s reputation: She was generally fair, but firm.
Several days later, Jacob found out that Marguerite, now his wife, was pregnant. Jacob was delighted, but also nervous. There would be only his income for a while as well as another person for whom he would be responsible. Around the same time another oil company had called him about a position in its research department. The personnel manager had said, “Jacob, we’ve heard good things about you. We want you to think about coming over to our company. We know that it would mean leaving Texas for our Seattle facilities, but we’re willing to offer you 25 percent more than what you’re getting, plus “perks.”
When Jacob told Marguerite about the offer, the plate she was drying slipped from her hand onto the floor. “Are you seriously thinking about the position?” she stammered. “Well, yes, I was,” he answered as he scooped up the broken pieces and put them in the trash. “It would be more money at a better company, with possibly better opportunities for advancement.”
Marguerite slumped onto the hard kitchen chair. With tears welling up, she said, “Jacob, you don’t understand. I need to be close to my parents. They’re getting older. I’m their only child. And, I hated the Northwest when I was there. I’ve been to Seattle with its constant rain; it nauseates me just to think about it. I told you before we were married that Texas was very important to me. You said that was fine. I didn’t lie to you about my feelings, and now you’re telling me that you want to move! If you want to move, I’ll go to Fort Worth, Abilene, Houston, even College Station. But, don’t ask me to move to Seattle.” With that, Marguerite’s face turned a sickly gray, and she rushed to the bathroom.
Later that week, Jacob flew down to Mexico City, still pondering the feelings that he had evoked in Marguerite. At first he thought that her reaction might be the result of the pregnancy, but the aura of that night’s discussion had lingered as the days passed.
In Mexico, Jacob was dealing with ARMCO, which had decided to purchase $50 million worth of equipment. Jacob was the lead person on the deal and, after the contract signing, he slipped Jose Ortiz several envelopes filled with five crisp hundred dollar bills. That night, as Hillary toasted Ortiz and ARMCO, the celebration started in full force. While the music played, Hillary cornered him and said, “Jacob, you’re in the big leagues now. Very few people at Richardson believed me that at 25 you could have handled a $50 million deal as complex as this. This contract will give us enough business to expand and hire 15 percent more permanent workers. There’ll be a bonus and a probable promotion for you down the line. We’re proud of the work you’re doing.”
On Monday, when he checked his messages, Jacob found one from the personnel manager of the company recruiting him. When Jacob returned the call, the conversation quickly focused on a job. “Jacob, congratulations on the ARMCO deal. We’ve been trying to land that account for years. You certainly have the magic touch, which brings me to why I’ve called you. We want you to come up and see Seattle for a few days – our treat. No strings attached, just take a look.”
On a scheduled trip for Richardson to the Northwest, Jacob decided to visit the other firm and, when he arrived, he found it better than he had imagined. He fell in love with the City, the job, and the people with whom he would be associating. One thing surprised him. In his conversations with the Seattle company the subject of cash payments to customers came up. The personnel manager stated: “Yes, that type of business does happen, especially in other countries. Luckily, most companies are avoiding the problem by a firm policy against such behavior – at least that’s our policy. We try to avoid that type of employee.” After this conversation, the talk revolved around a client that Jacob was courting for Richardson, and he inadvertently relayed some sensitive information.
When Jacob returned home, he started talking to Marguerite about the “extreme possibility” of relocating to Seattle. Jacob carefully positioned the opportunity: he was not seriously thinking about it but, if something drastic happened at Richardson, this might be a fallback position. As the months went by, Marguerite somewhat softened to the idea of Seattle.
Meanwhile, she had gone in for tests about the pregnancy, and the doctors had found that the baby had a high probability of some genetic disorders. Both Jacob and Marguerite were concerned about what this would mean if it were true. But, as the doctor explained, “We won’t know until the third trimester, which in this case may still be grounds for terminating the pregnancy if you so desire.” When Jacob was talking to the insurance carrier, he was told not to worry, that this particular condition would be covered. However, the agent added, “I must caution you that many insurance companies are not covering such conditions if you switch carriers before your baby is born.”
On Friday things came to a boil. There had been a bad accident in the United States caused by the old liners. Doing some calculations, Jacob realized that the old liners were becoming increasingly problematic, which meant a higher probability of danger. When he explained the new situation to Hillary, her response was, “Jacob, you’re on the fast track here. Why do you want to do something that is going to make waves? In one more year the new liners will be out. We’ll give them to our high-risk customers at cost, and the problem will be solved. I believe we’ve had this conversation once before. Remember, if something goes down on this, it will come out that you knew well in advance.”
Jacob’s next conversation was with the Seattle firm, which had wanted a decision by Monday as to whether he was going to take the offer. “We need you, Jacob; hopefully, you’ll bring some of your clients with you.” While reviewing the offer, he called the Seattle company’s insurance carrier about his unborn child and was told the potential problem would probably not be covered.
Finally, word had spread that a company named AXEON had put out feelers about a takeover bid for Richardson. It was well known that AXEON liked taking a chainsaw to management when it took over.