Synopsis of Dan Monahan
Summary by Joseph Zeidler
FutureFuel Corporation is involved in the biofuel industry along with chemical supplies. Founded in 2005, with headquarters in Batesville, Arkansas, this company was founded more than 30 years ago, known as Eastman SE. FutureFuel is a leader in the United States of America in the biofuel industry, meanwhile, they also specialize in chemical manufacturing. FutureFuel’s main goal is to become the leader in biofuel.
Biodiesel fuel is the main controversy for this company because biodiesel fuel has more dangers to the environment than crude oil. FutureFuel Corporation is currently trying to make biodiesel safer for the environment. Recently though, studies have shown that biodiesel fuel is much worse for the environment than what some may suggest. "The leaked study has shown that more greenhouse gases are created when the use of Indirect Land Use Change (ILUC) is used to create biodiesel. ILUC occurs to clear lands such as forests and wetlands to create space for the production of biodiesel" (Monahan 2). Biodiesel fuel currently has two ingredients that a harm to the environment more than fossil fuels, which are palm oil and soybeans. These two ingredients currently use 103g and 105g of carbon. Though this may seem harmful, some biodiesel fuels are less than what studies suggest. This is the use of 2G Biodiesel and 2G Ethanol, which have a carbon footprint of 9g. "In FutureFuel's 2012 annual report the company has reacted to the studies by only using biodiesel from feedstock with high levels of fatty acids. Such feedstock would be vegetable oils or animal fats. The company is staying away from the production of biodiesel that is harmful for the environment and using cleaner versions" (Monahan 4).
These studies are only in the development stages but this controversy brings in an ethical dilemma upon FutureFuel Corporation. This type of problem makes the thoughts about biodiesel fuel negative and shows that this may not be the best option for FutureFuel Corporation. With this controversy at the front door of the company, one may look at four ethical theories to learn about the company; individualism, utilitarianism, Kantian, and the virtue theory. For FutureFuel, three theories are involved in their work, utilitarianism, Kantian, and the virtue theory. Meanwhile, individualism is not one of the theories that FutureFuel follows.
Individualism is the practice of maximizing profits for the stakeholders which is the only obligation a company has. This theory was first created by Milton Friedman, where he said "The only goal of business is to make a profit" (Salazar 13). This theory means that the company, FutureFuel, is only to make a profit that helps the company.
For FutureFuel Corporation, Individualism is not using this theory in business ethics. The company has found that negative studies have and will be coming out against biofuel harming the environment and because of this; FutureFuel is changing the views and becoming more environmentally friendly. If profits were the main concept for FutureFuel, environment safety would not be a major concern. Instead, the company is changing the ways they produce the biofuel. This company has not maximized it profits, due to outside sources affected their profits. These outside sources are word of mouth, such as individuals bad mouthing the company and their work with biofuel. Another outside source, to prove that they are not maximizing their profits is that they are going against the grain and trying to change the way they produce biofuel, such as making it cleaner, which in turn takes away from profits due to being more expensive.
Though the company does not follow the Individualism theory, Utilitarianism is something that this company does indeed do. This company has created happiness through using acceptable ways to produce biodiesel fuel. Besides working on changing ways of producing biodiesel fuel, FutureFuel also has used the utilitarianism theory by creating a happy society by reducing dependence on foreign oil. This benefits the American society solely based on not having to depend on foreign oil. Inside of the utilitarianism are the stakeholders. The stakeholder of FutureFuel Corporation is the Earth. This company also affects people that live on the Earth.
The Kantian theory on the other hand is that an individual shall do what is right because that is the right thing to do. It also suggests that individuals shall be motivated by goodwill and doing selfless activities. This theory lets people choose rational decisions. Inside this theory there are three formulas that can be looked in to; the Universal Law, Humanity, and Autonomy.
With this definition, FutureFuel Corporation is clearly acting within the Kantian theory. This company is committing to the theory by creating a cleaner biodiesel fuel. This is simply for the better of the environment rather than for the company itself. This shows that rather than making a profit and selling millions gallons of gas, the company is gaining support from some that may not like the biodiesel fuel concept. The main formula that this company is using is the Formula of Humanity. This formula has humanity, which is rationality. For this, the company is acting rational by changing the ways that they produce biofuel. Next, is the end part of the formula, which is something valuable in itself, for its own sake. This agrees because they are giving up valuable profits to perfect the biofuel. Finally is means, which is something that is valuable as a way to get something else. For this, the company is they creating cleaner fuel while they hope to gain positive feedback from individuals that think biofuel is something negative.
The last theory that will be covered is the virtue theory. This theory consists of four major characteristics that are covered; courage, honesty, temperance and self control, and justice and fairness. FutureFuel Corporation corresponds with all of these theories. First, with courage, this company takes a stand against doing harmful things to the environment. This company has honesty due to the fact that they have made the problems known and that they are going to try and fix the problem at hand. As far as temperance, the company has a reasonable way to get a hold of the problem. Then, for justice and fairness, the company deals with fair practices. This means, that the company is going to solve the problems that the company faces and will do so respectfully to the environment.
FutureFuel Corporation has gained a large profit through biodiesel fuel, which has been under criticism for harming the environment. This company has done many ethical things since finding that the fuel harms the environment but they have taken many actions to finding ways to create cleaner fuel.
These facts and analyses are based on an original research paper by Dan Monahan “FutureFuel Corporation” (2012)
FutureFuel. (2012, March 15). FutureFuel Investor Relations. Retrieved from http://ir.futurefueldcorporation.com
Salazar, H (2012, January 22). Business Ethics and Economic's and Individualism 2011. Powerpoint Presented through Kodiak on wne.edu