Essay on "Ethical Issues in This Case"

Quoted Instructions for "Ethical Issues in This Case" Assignment:

FINAL CASE EXAMINATION

BA495E Please use Ethics and the Conduct of Business, 6th Edition by John Boatright, Prentice Hall for all sources.

Think about the questions within the context of studies of the philosophies and ethical decision making concepts.

Jacob Franklin, age 25, had graduated with a bachelor of science degree in engineering and had earned his MBA from an Ivy League university. He had taken a job with Richardson Drilling Equipment because of his fiancée, Margurete. Her family had affiliations with the oil industry in Texas and she wanted to be close to her parents. *****I was born a Texan and want my children to be Texan 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 been a quick learner. For example, he had learned that at Richardson it was all right to give goods and services to potential clients. When the company was doing business in Mexico, the rule was that 1 percent of the contract would go in an envelope to someone. Jacob had also learned that company policy forbade bribes to government officials. He had learned, too, that since the oil industry was a very competitive place, with many foreign rivals, normal U.S. standards sometimes did not apply. For example, in Brazil, equipment quality varied wildly. In one case, he had inspected some Richardson equipment and discovered that the drilling 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 had taken over the Latin American sales district, which included parts of the United States. He also finally found the time to go through some of the old files that the past sales reps had left. The files revealed that several U.S. clients that 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 the clients, Jacob learned about a number of accidents that had occurred almost seven years earlier as the direct result of a failed liner within several Richardson products. *****I told the sales rep about this 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.*****

When Jacob mentioned his discovery to Hillary, his boss, she said, *****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 or two years all the troublesome liners will be replaced. Besides, the old liner meets 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 of being fair but firm. Several days later Jacob found out that Margurete, 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 Margurete 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.*****

Margurete slumped into 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. I hated the Northwest when I was there, and 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 Margurete*****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 Margurete. 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 signing slipped Jose Ortiz several envelopes filled with five hundred crisp $100 bills. As Hillary toasted Ortiz and ARMCO, the celebration started in full force. While the music played, Hillary cornered Jacob 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 the bonus and a probable promotion down the line. We*****re proud of the work you*****re doing.*****

On Monday, when he checked his messages, he found one from the personnel manager of the company recruiting him. When Jacob returned the call, the conversation quickly focused upon 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 at 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 firms 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, and he inadvertently relayed some sensitive information.

When Jacob returned home, he started talking to Margurete about the *****extreme possibility***** of Seattle. Not that he was seriously thinking about it, but if something drastic happened at Richardson, this might be a fallback position, was his story. As the months went by, Margurete had 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 Margurete 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 bad accidents 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, and 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 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.

Questions:

1.) Identify the ethical issues in this case.

2.) Why are they ethical issues?

3.) Discuss the relevant Richardson*****s organizational culture and foreign cultural issues.

4.) Using either a teleological, deontological, or egalitarian perspective, what would you do if you were Jacob? Why?