Mitsubishi: Fraudulent Fuel Economy Tests (April 2016)

Mitsubishi Motors logo

Controversy

There has been a 25 year fuel economy scandal uncovered in this past April. Mitsubishi was caught lying on multiple occasions regarding how many miles to the gallon that their vehicles can maintain. In 1991 Japan placed new regulations, which further restricted how the country monitored the mpg of their country's vehicles. At the time of the proposals, they were only under investigation with two main models; the eK and the Dayz. Under new research, it is now confirmed that there are eight models under investigation, and they have since been raided by what would be the Japanese Transport Administration. Some of the major models that are being questioned are the Pajero, the RVR SUV, and the well known Outlander. Mitsubishi Motors is now being forced under federal law to cease all production of all eight models until proper numbers relating to fuel-economy can be released. The JTA quotes that "we want to thoroughly investigate the circumstances that led to this situation," and they found that all efficiency numbers were understated by 4.2%-8.8%. They also uncovered that Mitsubishi was only making estimates of their numbers based on old tests, and not physically running updated tests for recently produced vehicles.
The controversy arose when Nissan, a partner company, found out about the false numbers. Centering around the fact that Nissan works on multiple projects with the fraudulent company, and actually has them manufacture the Dayz model for them, they did not want to be linked to the charges. They cut off all ties with the company until they saw a business opportunity. As a result of the scandal, Mitsubishi Motors' market share tumbled along with their revenues. This meant that in order to stay in business, they needed an influx of investments. Nissan hopped on this chance, and purchased a controlling stake in the company for $2.2 Billion. This will hopefully create a large change for Mitsu, being under a new board. Nissan wasn't the only partner company effected by the false data though. Toyota also has ties to the company, and refuses to do business in the future. It will take years to come to bounce back from the scandal, and Mitsubishi's now resigned president stated he "was truly embarrassed."
Stakeholders

Unfortunately with any scandal, more than just one entity is effected. Their vehicles were sold worldwide, and many people took hits. Mitsubishi had to lay off several employees due to their cuts in revenue streams, so upper and lower level employees were stakeholders. Any partner companies like Toyota and Nissan who conducted business would also be effected from the halt in production. Joined by consumers in any country that sells any of the eight models with fraudulent data. If you purchased one of those vehicles, there was a very good chance the appealing fuel economy was one of the reasons you turned to it. Members of the Japanese Transport Authority are also included because they have to take time to investigate a large company as soon as possible. Lastly, the Japanese government becomes a stakeholder, because they now have to again create new legislation to prevent future events from occurring.

Dayz model by Nissan
produced by Mitsubishi

Individualism
Individualism focuses on the concept of making profits within the law. As Friedman explains, the only obligation that the business person has is to maximize profit for the owner or stockholders. The decision in 1991 to falsify data would, for the next twenty five years, make the company seem individualistic. The problem is that they directly went outside the law to make profits possible. Machan's individualistic approach follows the same concept, but explains that indirect goals must be met as well, those of which do not directly link to profits. Mitsubishi had indirect goals of meeting the standards of Nissan and Toyota, and doing so within Japan's Law. They were individualistic in the sense that the company put profits before all, but cannot be classified as this because of their unlawful decisions. If the company chose to place an irrational profit margin on their vehicles, this would still be unfair to their customers, but not illegal. A decision like this would fall in the lines of Individualism. Unfortunately, directly ignoring regulations was the choice former president Tetsuro Aikawa made for Mitsubishi. They felt that their numbers were not up to par to compete with the competitive market and they saw an opportunity to make more profits. Exactly what the stockholders want as investors, but the wrong means of doing so. Although they were happy, many stakeholders were affected as a result, and in the end Mitsubishi paid up for it by almost having to close their doors entirely. With a cost of $1.4 Billion in fines to counteract regulation violations, it will be tough to recover fiscally. Trust is needed for any company to succeed, and all trust is lost from consumers when lying about figures, especially fuel economy. Safety and efficiency are two areas where you must be honest, and Mitsubishi's desire for positive profits made them almost individualistic, but not quite.

eK model by Mitsubish

Utilitarianism

John Stuart Mill's idea of utilitarianism takes a stakeholder approach, and is focused on the consequences of the business action. This action's main goal should be to maximize happiness in the long-run for all conscious beings affected. He also touches on the idea that happiness is a valuable thing, and that there is no difference morally, between one beings happiness to another. There are two viewpoints to how Mitsubishi could be looked at from a utilitarian perspective. Many stakeholders, especially the consumers who bought vehicles like the eK and Dayz, were affected in a negative way but only after a twenty five year period. The line is drawn depending how you look at the term long-run. If you describe this within the confines of a twenty five year period, then you could almost consider their actions to be utilitarian. Happiness becomes the only thing matters, and for this extensive amount of time, every stakeholder in the picture was, in fact, happy. Even though the figures were falsified and outside the law, strong profits were being reported along with satisfied customers. The consumer believed they were purchasing a good reliable vehicle, and they essentially never had issues with their cars other than having to refill the gas tank slightly sooner. This changes if you determine that the "long-run" should be a hundred years, or even hundreds or years. This would make their unethical choices result in very unhappy consumers in a short period of time. Happiness is pleasure and freedom from pain and the consumers, along with many employees of the company, were not pleased when the news was reported. Once the Japanese Transport Administration raided the company, the idea of a utilitarian organization was kicked down along with the front door. The intrinsic value is completely centered on happiness, and because of this it makes is difficult to make a finite verdict on if the company acted in a utilitarian way. They did aim to keep everyone happy, and did for quite some time. If you asked around 1995, most people would agree that they were completely utilitarian, but fast forward to 2016, and there's an entirely different picture.

Tetsuro Aikawa, former President of Mitsubishi

Kantianism

Immanuel Kant centered Kantianism on rational decisions, and doing what is right. In his basic principles he states to not act inconsistently in your own actions or consider yourself exempt from the rules. He also mentions to be motivated by good will, which is seeking to do what is right, strictly because it is the right thing to do. Mitsubishi acted irrational in every aspect of the term when deciding to ignore new regulations back in 1991. They did not approve of the rules set in place, and considered themselves exempt from having to follow them. As a maxim they manipulated economy data in order to achieve a competitive market. They also lied to the government, in order to avoid being prosecuted. These actions were not rational, nor rightly motivated. Kant describes a rational decision as one that is morally permissible or morally required. Mitsubishi was morally required to change their practices with the new laws, and disrespected their government and customers alike when acting to disobey. The autonomy of many individuals was ignored by not giving the consumer a chance to make a rational decision themselves. The formula of humanity states to "act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means." In this situation an end in something valuable in itself, and doesn't need to be used in order to achieve some other benefit. The manipulated data was valuable to the company to achieve positive profits, but is not valuable as an end. They used it to achieve another goal, and one that did not respect humanity as a whole. A group of falsified data is not valuable unless used for a negative purpose, and this is where some of the basic principles of Kantianism are ignored. If Mitsubishi was acting with good will, they would have adapted to the laws back in 1991, and made a strive to make a quality product within the boundaries placed before them. A positive maxim for them to follow would be: We will produce accurate figures, because it is the right thing to do as a automobile manufacturer. Its simple to follow, and would have left them in a much better place than their sitting in now.

Virtue Theory

Virtue Theory touches on the ideas of rationality, and fulfilling a functional life. According to Aristotle to feel fulfilled, one must look at a person individually, and find the distinguishing characteristic which surrounds their function. He believes in order to be happy, one must fulfill their function, but also act rational in the process. If you look at former president Tetsuro, his function was to lead a multi-billion dollar company forward in a successful manner. He was on the border of virtuous, but did not make his choices around the doctrine of the mean. Aristotle sees the four main virtues as courage, honesty, temperance, and justice. These all fall between two extremes, and therefor make them "just right" for how to act in a given situation. Courage, for example falls between being cowardice, and being too rash. President Tetsuro was courageous in a sense, but acted for the wrong ideas. It takes courage to make any large decision in a company, but by going against Japanese laws that were set in place to better everyone, he stood for an outcome that was far from virtuous. His decisions also manipulated the customers of Mitsubishi, and because of this cannot be considered honest. The situation called for lies to be spread throughout the entire company. His general employees could not know, the consumer had to be hidden, and the government had to be given false data to pass economy tests. If every car company acted as Mitsubishi did, we would never know if anything was true about the car we're about to purchase. These choices were very dishonest to a number of stakeholders. Solomon describes temperance as "reasonable expectations and desires," and Aikawa's decisions fell just outside of this boundary. It would be reasonable of any president of a large company to desire positive profits that reflect growth and efficiency. His desire was to look good in the eyes of his stockholders, but did so with many vices. His expectations were not out of line, but how he came to achieve these lacks self-control as a president. A virtuous leader would have put the time into improving their product within the law, and never manipulated consumers in the process. The virtue of Justice results in fair practices, quality products, good ideas, and overall hard work. Very little of this was displayed by the actions of the company, they strayed far from fair practices, and hard work. Taking estimates was an easy way out compared to running physical tests, and it was a horrible idea to directly disobey new regulations. Based on Aristotle's concepts, Tetsuro and Mitsubishi did not show virtuous actions while conducting their business.

Justification Ethics Evaluation

Mitsubishi headquarters in  Minato, Tokyo, Japam

As much as I'm sure the upper level management wants their choices to be justified, I can't see any reason why they would be. The decisions were made strictly for profits, and to falsely compete in a market they weren't gaining ground in. Instead of putting some heads together and thinking of new marketing techniques, or actually creating a better product, they manipulated data. There's never justification for taking an easy route, and it harmed far more people than it benefited in the long-run. The world would be a better place without companies like Mitsubishi Motors, and there's enough car manufacturers to replace them in a heartbeat. I hope Nissan can change the image associated with them, and send them heading in the right direction.

Action Plan

Fortunately for Mitsubishi, with some effort towards re-branding themselves, and the recent buy-out from more reputable manufacturer Nissan, there's light at the end of the tunnel. The first thing I would recommend they do is come forward about every aspect of their unethical actions within the company. They need to get everything out on the table now if they expect to improve. It would be useless to try to recover, and then have more scandals arise deeper in the books. The next step they need to take is to release all the accurate data for the eight vehicles that are involved in the discussion. With proper numbers released to the public they will be able to move from there. I would also reimburse all customers that feel that they were lied to, and no longer want to drive their vehicles. It will most likely take a large financial tole, but is completely necessary to build trust within the automotive market. Next I would attempt to build back the relationships that were present with other large car manufacturers. It's never helpful to have enemies in the same market your fighting for, and will only help to regain friendships with huge producers like Toyota. Although not all of them will be interested, and may need proof of faithful business practices before they want to take part, it's definitely an important step. Finally, I would re-brand and focus on integrity. People are going to need time to adjust to the scandal and decide for themselves if Mitsubishi is a company they want to buy from or not. a re-branding could never hurt.
Some of the core values I would focus on if I were the new president of MM, would be consistency, of course integrity, and customer satisfaction. Consistency is going to be key going into the future in every aspect of the business. They are going to need to show the millions of consumers watching that they can produce a logical car to buy time and time again. Whether or not they will be able to keep selling the eight affected models will be up to the market. If they can build back trust, they have a chance at gaining market share again, at least in Japan. Integrity will be needed to keep the company productive, because they are on a short string with buyers and the government. One more slip up like the 25 year scandal present, and no one will touch them with a ten foot pole. If they want to be successful they will have to maintain ethical business practices all around. Last, customer satisfaction is going to be a high priority from here on out. As much as you can't let the consumer make every decision for themselves, Mitsubishi will need to hone in on what the buyer wants in the future, and how to bring it to them in a productive way. If these core values are followed, along with the steps outlined to regain trust, then they have a shot at regaining a customer balance.

References: 

Shiraki, M. (2016, September 2). Mitsubishi Motors raided after fuel-economy scandal widens. Retrieved November 19, 2016, from Automotive News: http://www.autonews.com/article/20160902/COPY01/309029967/mitsubishi-motors-raided-after-fuel-economy-scandal-widens

Tajitsu, N. (2016, August 30). Mitsubishi suffers sales ban after overstating fuel economy for 8 more models. Retrieved November 19, 2016, from Automotive News Europe: http://europe.autonews.com/article/20160830/ANE/160839995

Mullen, Jethro. CNN. 22 June 2016. 17 September 2016.

http://money.cnn.com/2016/06/22/news/mitsubishi-motors-fuel-tests-loss/

Newman, W Rocky. Fortune. 3 May 2016. 2016 September 2016.

                http://fortune.com/2016/05/03/mitsubishi-vw-takata-scandal/

Soble, Jonathan. The New York Times. 20 April 2016. Article. 24 September 2016

                http://www.nytimes.com/2016/04/21/business/mitsubishi-fuel-economy-tests.html?_r=0

Business Ethics PowerPoints- Utilitarianism, Kantianism, Virtues, and Individualism

Salazar, The Case Manual, Chapter 5: Abstract and Action Plans

UBER: Misleading Claims Lead to Lawsuit (2014)

Controversy
 The ethical controversy at hand is that Uber was being sued for numerous allegations for misdeeds including misrepresenting the quality of background checks it conducts on its drivers and illegally servicing airports, according to L.A. district attorney Jackie Lacey. George Gascón, the district attorney of San Francisco, and Jackie Lacey, his counterpart in the case, allege, amongst other issues that Uber mislead customers into believing they screen out drivers who have ever committed criminal offenses. However Uber and other companies say they perform regular background checks, but by law are not able to exclude them from being a driver if their felony was committed more than seven years ago. Technically these ex-criminals are allowed to be drivers but it is not ethically right to present to your customers that your company does not hire drivers who have not committed a crime when in actuality they do. Amongst other allegations, the district attorneys also accused Uber of being out of compliance with the inspection of taxi meters. Drivers were found using the app to calculate fares based on time and distance without obtaining approval of the technology from a California agency that can do so. Also, Uber drivers were unlawfully conducting commercial operations at California airports without obtaining authorizations from them, and fraudulently charging a $4.00 “Airport Fee Toll” to customers even when drivers weren’t paying the airport. The district attorneys also opposed Uber's claim for $1.00 "safe rides fee" and found this misleading to customers. Uber responded tot he lawsuit by claiming that the company is an "integral, safe, and established part of the transportation ecosystem"in California and will continue to hold discussions with the attorneys. According to uberlawsuit.com, the court declined a proposed settlement with Uber under which it would pay up to $100 million and make some significant changes in its policies. The court's main concern was largely with the settlements reduction in the massive potential penalties that could be recovered under the private Attorney General Act.

Stakeholders
Uber executives and employees would be stakeholders in this issue. This is because they are directly affected by the concerns the district attorneys have with their current policies. They are also in control of the business and its actions so it is up to them to make changes if need be. Other shareholders would be the district attorneys filing the suit and also the customers. The district attorneys have interest in the company because of its actions, potentially putting the customers in harm by not actually screening its drivers for potential ex-criminals.

Protestors against Uber's choices in employees

Individualism
Friedman's individualism, which is defined as "the only goal of business is to profit, so the only obligation that the business person has is to maximize profit for the owner or the stockholders"(Powerpoint Lecture, Slide 2). According to this idea, Uber is not ethically wrong for hiring criminals after their 7 year period is up. They are doing what is best for profits by hiring more drivers, thus expanding their workforce generating more revenue for the company. Also, by charging a $4.00 “Airport Fee Toll” to customers even when drivers weren’t paying the airport would not be ethically wrong in the eyes of an Individualistic person because they are maximizing profits for the company, which is the overall goal of company.

Utilitarianism
Utilitarianism is based off the idea that businesses should act in ways to maximize happiness in themselves and others.If a Utilitarian were to analyze the issue with Uber then they would not agree with the actions of the company. The actions of the company did not make everyone who was involved happy. The customers were told that the company did not hire criminals, however by law , Uber is able to hire drivers if their felony was committed more than 7 years ago. A utilitarian would also not agree with the unauthorized fees that Uber drivers have been charging customers.The main issue that a utilitarian would have with the company is that it is not maximizing the happiness in others. They are only looking out for themselves by not being honest with customers and charging them unjust fees.

Kantianism
Kantianism is the belief that one must make decisions based off what the honest and moral decision is in that case. A Kantian would not agree with Uber's actions to claim that they do not hire criminals. They should not tell their customers that they are screening out criminals because by law they can not screen out criminals that have committed a felony over 7 years ago. The right action, in this case, is to inform the public of this and not give false claims to the customer. Also, a Kantian would not agree with charging a $4.00 “Airport Fee Toll” to customers even when drivers weren’t paying the airport. This is not the moral thing to do. Furthermore, the use of the app to calculate fares based on time and distance without obtaining approval of the technology from a California agency that can do so is not the moral decision. The driver is only doing this for their benefit and knows that their action is not the honest one in this case.

Virtue Theory

UBER headquarters in San Francisco, CA

Virtue theory is "an approach to ethics that emphasizes an individual's character as the key element of ethical thinking, rather than rules about the acts themselves or their consequences"(Mastin). The four virtues in the business world are courage, honesty, temperance, and justice. Uber did not stand for the right actions and ideas in this case. They were also not completely honest with their customers. It is difficult to judge Uber's expectations in this case as they were not clear. Uber's justice is questioned in this case because they did not display fair practices and their good ideas were used not to benefit the customer but for the employers' benefit.

Justificated Ethics Evaluation
Uber's action in this case was far from justified. They misinformed their customers by saying that they do not hire criminals when in fact they do. It is not ethically right to tell your customers that you screen for criminals but you still hire them if their felony was committed more than 7 years ago. The company's actions that involved unauthorized fees are also not ethically justified. They should not have been receiving the fees from customers because they were not approved. It is ethically wrong to take money from customers that was not approved.

Action Plan
Uber must own up to their deception and properly inform the customers that they can in fact hire criminals if their felony was committed over 7 years ago. They should not make the claim that they screen them out of being a driver for the company. The company should get rid of this claim and be completely honest with their customers about what type of drivers they are hiring.
As for the unauthorized commercial operations at California airports, the company should immediately seek authorization or discontinue their services at the airports. The company needs to hold a public apology for operating without authorization from the airports and also charging customers unauthorized fees.
Uber claims to be integral, safe, and an established part of the transportation ecosystem in California. In order to maintain this claim they must reassure their customers that they will be honest with them about their screening process for drivers and also not charge them for unnecessary fees.

References
Mangalindan, JP. "Uber Slapped with Civil Suit by San Francisco and L.A." Fortune. N.p., 08 Dec. 2014. Web. 19 Nov. 
     2016.
Lawler, Ryan. "SF And LA District Attorneys File Civil Suit Against Uber For Making ‘False Or Misleading 
     Statements’." TechCrunch. N.p., 09 Dec. 2014. Web. 19 Nov. 2016.
"UBER DRIVERS." Uber Lawsuit Information. N.p., n.d. Web. 19 Nov. 2016.
Gannes, Liz. "Uber Sued by Los Angeles and San Francisco, While Lyft Settles for $500,000." Recode. N.p., 09 Dec. 
     2014. Web. 19 Nov. 2016.
MacMillan, Douglas. "Uber Is Sued by San Francisco, Los Angeles." WSJ. Wsj.com, 09 Dec. 2014. Web. 19 Nov. 2016.

Apple: Refusing to Help The FBI Due to Privacy Concerns (2015-2016)

Controversy

Tim Cook, CEO of Apple Inc. since 2011

In late 2015, Apple was instructed by the FBI to unlock an iPhone 5c belonging to Syed Farook (shown on the right), the man responsible, along with his wife, for a shooting in San Bernardino killing 14 and injuring an additional 22 people (Nakashima). Farook was found to be connected to an overseas terrorist organization, and the FBI believed that his iPhone could contain crucial information regarding the attack. This information is thought to include things such as his planning of the attack, who he was in contact with, and whether or not this attack in San Bernardino was connected to or aided by the terrorist organization overseas. However, each iPhone, including Farook's, has either a numerical or number/letter combination code required to unlock it. Both Farook and his wife were killed in a shootout with the police following the shooting, therefore rendering the FBI unable to unlock his iPhone, to gather what could be crucial information for the case. The FBI then went to Apple, the creator of the iPhone, requesting that they unlock the phone. Although the law states that Apple must comply, CEO Tim Cook politely refused the request, stating that:

“Up to this point, we have done everything that is both within our power and within the law to help them,” it continued. “But now the U.S. government has asked us for something we simply do not have, and something we consider too dangerous to create. They have asked us to build a backdoor to the iPhone” (Nakashima).

As Cook stated, Apple consider the creation of a "backdoor" into the iPhone too dangerous to create, because it would create a precedent to be mimicked, which could compromise the security of the iPhone. Apple intentionally created their security feature with the intention of only allowing the user, or whomever knows the pass-code, access and use of the phone.
The FBI, however, need this backdoor program to be created, because after just ten tries of entering an incorrect pass-code into an iPhone, all of its information is deleted. This prevents them from "brute-forcing" the task, by trying every combination of letters and numbers in order to eventually come across the pass-code of Farook's iPhone. It was suggested that this feature should be removed, but Apple are unable to do so. Even if it were to be removed, the it could take five or more years in order to crack a pass-code (Nakashima). This provokes a major controversy between government/protection and privacy.

Syed Farook, the man responsible for
the shooting in San Barnardino

Stakeholders
It is very important to note the stakeholders of this controversy. The stakeholders might include (but are not limited to) the following people or groups of people.
Perhaps the most important stakeholders of this controversy, iPhone users are at risk of their security and privacy being compromised. Although many people claim not to have any personal information on their phones, this can lead to the compromise of information such as a home address, or a credit card number. The general American population is also a stakeholder in this controversy. Information found on Farook's iPhone could be used to prevent future attacks on American people. For similar reasons, the overseas terrorist organization is also a stakeholder in this controversy. Obviously we would hope that they are eradicated or set back from the information found. Apple itself is a major stakeholder in this situation as well. Due to their refusal to comply with the FBI, they are under scrutiny and could be punished as a result. Alternatively, the FBI is also a stakeholder. Whether or not Apple comply will be the deciding factor as to whether or not they are able to find the pass-code into Farook's iPhone and perhaps find valuable information regarding the attack and the terrorist organization.

Individualism

Milton Friedman's theory of Individualism states that, "the only goal of business is to profit, so the only obligation that the business person has is to maximize profit for the owner or the stockholders" (Salazar, Power Point Presentations). From an individualist's point of view, Apple may or may not have to worry about the security of their users. If security is viewed purely as a separate feature of the iPhone, which would not affect the customer relationship or loyalty to the brand, Apple would not have to worry about the compromise of privacy, and would comply with the FBI. This is only if it is considered to not have an effect on how much profit the company is able to make. If the Individualist strongly values customer loyalty in the consideration of making profit, then the company would not be compliant to the FBI. Whichever way it is seen from the Individualist would determine how the company would react to this controversial situation; however they see they can make the most profit for the owner and stockholders in the company.

Photograph protesting the FBI getting into private phones

Utilitarianism
Utilitarianism is the concept of maximizing the happiness of all conscious beings involved in any business transactions ("The Case Manual" 17). In a more general sense, Utilitarianism is about “maximizing the overall good” and focusing on making the largest amount of people happy; pleasing the stakeholders (DesJardins 33). From the Utilitarian perspective, I believe that Apple should find a way to give the FBI easier access to Farook's phone without compromising their users' privacy and security. However, this is much easier said than done. In this case, Apple could perhaps help the FBI crack the hardware key, as mentioned in the Washington Post, which would then make it possible for them to find the pass-code of the phone, though running all of the numbers and letters (Nakashima). In doing this, Apple would be able to uphold the privacy of their millions of users, while helping the FBI prevent future attacks on American people. This, in my opinion, would be the best way from a Utilitarian perspective to maximize the happiness and overall good of the situation.

Kantianism
Kantianism focuses more on acting ethical, as opposed to creating ethical outcomes for stakeholders. "The Case Manual" describes Kantianism as being about rational decision making, autonomy, and freedom. It suggests that , instead of lying to get your way, one should tell the truth and gain rational consent from all parties ("The Case Manual" 17). A Kantian would likely want Apple to continue to refuse to help the FBI unlock Farook's phone. Although the phone could contain some vital information for that case, it may not prevent any attacks in the future. However, unlocking Farook's iPhone will undermine the security of the millions of iPhone users. Because Kantianism is focused on creating ethical outcomes primarily, refusal to help the FBI would give the best ethical outcome. In this case, the millions of iPhone users could continue to trust that their iPhone information will continue to be private and secure, and Apple can work autonomously to continue to uphold these ethical standards held by the public. Though this does not help the Farook case, the FBI are still able to gain the pass-codes, just far slower. This could in fact take the FBI multiple years to obtain the pass-code, unless they were to use a supercomputer, of which there are only a few in the world. Overall, this would be by far the safest route in terms of the most ethical outcome.

Virtue Theory

Apple Inc. logo

Virtue Theory is the concept of judging ethical situations based on character traits and values. Although Apple are sometimes seen as being the user-friendly, ethical company to the average consumer's eye, they have run into many ethical controversies during their uprising. In fact, someone who knows more in depth about the history of Apple and perhaps even Steve Jobs would argue that they are not the nice group of people they appear to have been. A Virtue Theorist might argue that some of Apple's "character traits" would consist of manipulative and overpowering. These traits come from their problems spanning from giving Chinese manufacturers terrible working conditions, causing some cases of suicide in that factory, to charging average families hundreds of dollars for the newest iPhone. Many see these kind of actions as an abuse of power. Based on this analysis, a Virtue Theorist would perhaps argue that Apple should in fact comply with the FBI to improve their perceived character traits. However, it is well known that Apple have a high value of security and privacy of the average iPhone user. If Apple were to stick to their values, it could be argued that they should continue not to comply.

Looking at the FBI, the average American would probably like to think that they uphold very good "character traits" and values. The FBI is in place to protect the American people, and surely value protection over privacy and security. Overall, I believe that in terms of values and character traits, the FBI takes priority over Apple. Although Apple has millions of users, the FBI also protects the entire population of the United States, 300+ million people. In this case, Apple should comply with the FBI and help them find the pass-code to Farook's iPhone.

Justified Ethics Evaluation

Apple's actions in this case are justified and perfectly understandable. Understanding that Apple has spent years perfecting its privacy and security features on its products for their users to be safe is enough reason to at very least dispute requests from the FBI to undermine them. This case has really been a question of whether Apple should put its users at risk, and ensure the closing of Farook's case, or whether to keep Apple's iPhone users safe, and possibly take as much as ten years in order to gain information on Farook's case, perhaps withholding vital information for the FBI to ensure the safety of American citizens. In that case I believe that it is justified that both the FBI and Apple would want the outcome to favor them. 

Company Action Plan

Ethically, I believe that this dispute should be settled by a compromise, which, in my opinion, has not been strongly enough considered. Though it has been suggested, I believe that a compromise is the only way to give both sides a decent outcome. As aforementioned, I believe that the best way to do this is for Apple to help the FBI crack the hardware code, which would soon allow the FBI the ability to "brute force" the actual iPhone pass-code. Though this may take a long time, I do not think it is worth the compromise of iPhone users' security. Perhaps a mission statement in this action plan should be, "To provide safety, privacy and security, to the best of our ability". This statement captures both the idea of keeping iPhone users' information private, but also keeping them safe as is the goal of the FBI. I believe that the three main components of the mission statement also serve as perfect values for the situation. This being because safety, privacy and security, though similar concepts, are what most Americans care about most, and should be given to the best of our ability.
Although it will be tough to avoid this situation again, due to the growing popularity of iPhones, and the disturbing amount of violence in our country in recent years, this action plan would best be served as a new protocol for any time this is to happen again. I do not believe that this action plan would require any replacement or changes in faculty, as long as everyone from both Apple and the FBI are willing to work together.
This will hopefully allow Apple to market themselves as being ethical, and promoting of the safety of American citizens. This marketing would perhaps be beneficial to them financially by earning the trust of new customers, who perhaps do not have that same trust for other cell phone/technology companies. This in turn would hopefully gain Apple even more revenue and sales for compromising with the FBI.

References

DesJardins, Joseph R. An Introduction to Business Ethics. 5th ed. New York: McGraw-Hill Higher Education, 2009. Print.

Lichtblau, Eric, and Katie Benner. "Apple Fights Order to Unlock San Bernardino Gunman’s IPhone." The New York 
     Times. The New York Times, 17 Feb. 2016. Web. 19 Nov. 2016.

Nakashima, Ellen. "Apple Vows to Resist FBI Demand to Crack IPhone Linked to San Bernardino Attacks." Washington 
     Post. The Washington Post, n.d. Web. 19 Nov. 2016.

Salazar, Heather. The Business Ethics Case Manual: The Authoritative Step-by-Step Guide to
     Understanding and Improving the Ethics of Any Business. Print.

Salazar, Heather. Power-Point Presentations.

General Electric Breaks Promises to Retirees (2015)

Controversy

General Electric logo

In 2015, General Electric saved $3.3 billion dollars by cutting their retiree benefits. The benefits that were cut included a Medigap plan that covered the retirees medicare plan. To “make up” for this cut, they are giving the retirees a flat $1,000 as a reimbursement, which will not cover the plans most of the retirees were on. Many of these retirees don't know how to choose a new coverage plan and will end up with less coverage than they need, leading to enormous bills. Gail Zorpette, a previous GE employee and GE enthusiast, expressed how surprised she was that this company would "wash their hands" of the retirees who had worked so hard for them (ctpost). The real controversy about the removal of these health care plans is that just a few years before, GE had promised that "[GE] expects and intends to continue offering these plans indefinitely..." (ctpost) A total of 65,000 people nationwide are being effected by this benefit cut. When GE made the benefit changes, they were not facing any economic hardships. It resulted in an increase of money for the stockholders of GE. Many of the people upset over this controversy pose the following question: "Which one of these groups [retirees or stockholders] is really responsible for GE's success over the years, and which really should be rewarded?" (LA Times)

Stakeholders

The main stakeholders in this case are the GE retirees. As previously mentioned, there are currently 65,000 retirees being effected by this change, and there will be more as other generations begin to work for GE. The current employees and prospective employees will be effected by this eventually, and may even choose not to stick with the company. The stakeholders with positive outcomes are the stockholders and the business itself which has just saved $3.3 billion dollars. Stockholders will be happy to own GE stock and may not care that the reason they are getting more money is unethical. To the left is an image of GE's chair holder and CEO, Jeffrey Immelt. He is a key decision maker in the company.

Jeffrey Immelt, CEO of General Electric

Individualism

The ethical theory of individualism would agree that General Electric cutting retiree benefits is the best option for the company because it will increase profits for the shareholders. Individualism is an "economic model" of ethics because the main focus is profit that goes directly to the owner or shareholders. This theory states that the company should not be spending money on "resources, employees, or donations" (Salazar, 18). This means that they are not worried about being a socially responsible business. This aligns very well with GE's situation. They are no longer worried about giving the retirees the money they worked so hard for, which means somewhere a decision was made that GE would no longer be socially responsible. The second piece of individualism is that everything must be done within the law. According to GE, the right to terminate these benefits is completely legal and they are not alone in this trend. According to Forbes, AT&T, IBM, and Time Warner are cutting retiree benefits as well. Despite their attempts to stay within the law, there are currently two lawsuits being filled against GE for illegal benefit changes. Nine GE unions have brought the issue to federal court and two retirees are filing a lawsuit as well (LA Times). Below is an image of GE Labor Union protesters in Schenectady, NY.

Utilitarianism

Protestors fighting for health benefits for retirees

The theory of utilitarianism focuses on achieving the maximum happiness for all stakeholders (Salazar, 20). Utilitarianism would not approve of the removal of health benefits for retirees. The retirees are not happy because they now need to spend more money and time to find a healthcare plan, and they feel betrayed by the company they had worked for. When balancing out the benefits of keeping retirees happy and the cost of paying them, the utilitarian perspective would say that the happiness of the retirees provides a greater benefit. This is because GE was not having financial troubles before the cut, therefor they would not be losing out by paying the retirees. The benefit would be that retirees would not spread a bad image of the company, they would not submit complaints and file lawsuits, and the current workers would not lose motivation to work hard because they will no longer fear they will lose their benefits. The maximum happiness of the retirees and current employees cannot be achieved when their promised benefits are revoked.

Kantianism

The Kantian perspective of ethics explains that a business should be always honest, respectful of all stakeholders, and not manipulate or harm others to get the company's way (Salazar, 20). A controversial part of this case is that GE is giving retirees a $1,000 annual reimbursement toward the medicare plan of their choice. They are manipulating the retirees to believe that they are still paying for their health plans, when in reality they will be paying much more than that $1,000 covers. GE is also lying to the former employees, ensuring them that they will be able to purchase equal medicare supplement plans for less money, which is untrue and leading many of these retirees to choose plans that are not enough for their medical needs. Retiree Gail Zorpette, pictured above, told the CT Post that GE had promised a "smooth and seamless" transition, which was not the case. She had a hard time reaching someone to help her, and when she did she was not given much clarification on the types of plans available to her. This shows that GE is manipulating the retirees to believe that they are still providing support by giving them $1,000 annually and promising help finding a new plan, however they are really just hurting the retirees and costing them much more money than they were expecting. According to the Kantian theory, the company cannot get credit for acting morally just for giving that $1,000 because there is bad intention in play since retirees are being hurt and manipulated.

Virtue Theory

A former General Electric worker protesting

the changes in health benefits

Virtue theory consists of four main virtues courage, honesty, temperance, and justice. According to these virtues, GE is violating virtue theory. They are not taking a stand for what is right for the retirees, rather they choosing profits, violating courage. They were not honest when they told the employees that they will not take away their benefits, and they were not honest when they told employees the $1,000 per year stipend will cover the cost of their medicare gap plan. They do not hold the value of temperance either because they are not providing fair outcomes to the retirees. Lastly, they are not providing justice to these retirees. A majority of these people have worked at GE for a good part of their life and contributed to the company. However, the company is more worried about raising the money given to share holders than they are about giving the well deserved retiree benefits. To follow virtue theory, GE needs to reevaluate the way they hold these main virtues. For example, they need to start by being honest with their retirees and let them know exactly what is going on with their retirement benefits and why they are doing that. They also need to give the retirees some justice by giving them the benefits that they were promised and that they deserve.

Justified Ethics Evaluation

This case cannot be considered ethical because according to the majority of the ethical perspectives, there are many components of this controversy that are not ethical. It is unethical to take away the promised benefits that the retirees believed they had a right to. Although they were trying to make it up to them by providing a yearly subsidy of $1,000, they are overall hurting those retirees that were depending on the medicare gap. This could have been avoided if GE cut retiree benefits for future retirees and not the ones who have been receiving it all along. These are the retirees that did not have a chance to plan what they would do without the benefits and have been depending on them since their retirement. GE also had no immediate need to save the money.
Cutting retiree benefits is becoming a trend in big businesses today because of the Affordable Care Act (2010). People are able to purchase health insurance on publicly run exchanges, therefor they have more options. The life expectancy has also increased, meaning GE will have to pay for these employees even longer than they expected when they made the promise (ctpost). These are valid reasons for GE to begin cutting retiree benefits, however, should not have taken it straight away from those who were depending on it. Even giving the retirees a few years notice could have avoided a lot of the upset individuals and possibly even the two major lawsuits GE is now facing.

Action Plan

General Electric workers 

accompanied by the CEO of the company

The mission statement representing GE from their website is now: "GE works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works." This really does not address employees at all, besides "the best people." To add to this mission statement, a new mission statement specifically about employees and the workplace should be added. This may include motivational language like "Our employees have our upmost respect and provide us with a successful business. We strive to employ happy and successful people, as an equal opportunity employer." This shows that the company is thankful for their employees and even retirees, which many may not have thought after this incident. It also shows new employees that they will be respected and that GE will make efforts to help them succeed.
There are many things that GE can do to undo the harm that they have caused many retirees and their families. The first thing they should do is publicly apologize to any retirees who are upset by the recent changes made to their benefits. Then, send letter to each individual retiree with information for their local GE health insurance specialists. Hiring these specialists would be cheaper than offering every retiree their original plans back. Since there are many areas where lots of GE employees reside, there would be many specialists available for consultations. These would be professionals that could actually sit down with these employees and help them to choose the insurance that is right for their needs. It would be someone they could easily access when they have any questions. This would replace the help-line system that is currently in place and has many complaints about. An increase of an extra $1,000 would be dispersed to retirees per year for the next two years while they figure out which insurance works with the budget they will be provided with after the two years. This would hopefully convince the retirees that GE is not trying to harm them like they think right now. They would also see that GE is making a real effort to help their well being, while still increasing the shareholder's income.




References

Bailey, Hugh. "Changes to GE Health Plans Leave Retirees Stunned." Connecticut
Post. N.p., n.d. Web. 22 Sept. 2016.

GE Retirees. (n.d.). Retrieved September 15, 2016, from http://www.ge.com/retirees/

Hiltzik, M. (2016, March 14). GE shows how to make shareholders richer and retirees
Poorer. Los Angeles Times.

Jaspen, Bruce. "GE's $3B Retiree Health Cut Escalates Employer Exodus."
Forbes. Forbes Magazine, n.d. Web. 22 Sept. 2016.

Passeri, James. "GE Saved Billions by Cutting Retirees' Benefits." The Fiscal Times.
N.p., n.d. Web. 25 Sept. 2016.

Mitsubishi Motors Falsifies Mileage Data (April, 2016)

Case Description

I came across an unethical article about Mitsubishi Motor Corporation, the article was “Mitsubishi Motors says manipulated fuel economy tests, shares tumble” (Tutt, 2016).  The article was about how Mitsubishi Motors confessed it had falsified fuel mileage and tire pressure information when doing tests on the vehicles.  The company admitted to producing 625,000 vehicles since mid-2013 that had this issue, which included their eK mini-wagon model as well as 468,000 Nissan Motor vehicles. This is not all that shocking due to the company, back in 2000, revealed that they were covering up their safety records and customer complaints. Then four years later they admitted to broader problems going back for a while. This was the worst recall scandal in Japan’s history. The article also brought up that the company would stop selling these types of cars and would set up an independent panel to investigate the issue. 

Stakeholders

From Mitsubishi’s unethical issue, many people, stakeholders, are affected by the actions. To start, the management of Mitsubishi Motors Corporation is affected by this because it gives them a bad label as an unethical company. They also can be seen as they really did not do much to fix this problem because they waited to stop making the product until they were caught and confessed of doing it. By being labeled as altering miles per gallon on cars, they make a bad name for themselves and could cause for a decrease in sales, which in turn could lead to people in management getting fired. Another stakeholder is the customer. This is because the customer purchased a vehicle that they were misled on. If the customer knew the truth about the vehicle that may have prevented them from buying it. Customers would also want to return the product as soon as they find out their vehicle might be tainted.  With people buying vehicles less from this manufacturer, the company’s stock is decreasing and the stockholders, in turn start to lose money. The company, if knowing of the situation, would be making the stockholders lose money.  The employees are effected as well. They may start losing jobs if the decrease in sales from unethical practices continues. 

Individualism

The definition of the ethical rule of Individualism is that decisions are made in order to maximize profits for both the owners and the company, staying within the law. Individualism in this case is saying that Mitsubishi would have to take actions that would maximize their profit as long as they keep it legal. What they were doing, altering the mileage, would help to maximize their profits but this action is illegal and has to change. Over time Mitsubishi has gotten the label of a good reliable vehicle, and was able to maintain profits throughout their past. But to take steps toward maximizing profits they should try to distribute vehicles that are impressive with its mileage. This would probably be the best option in order to give the company its greatest opportunity to receive as much profit as possible. If this can be done, Mitsubishi can improve their name and vehicle sales, along with maximizing their profit. 

Utilitarianism

The definition of the ethical rule of Utilitarianism is maximizing the happiness of others along with yourself.  The company should look to make everyone, affected in a decision, happy in the long run. There are the stakeholders that are affected by all business decisions. In the case of Mitsubishi, they were taking actions that were trying to increase their sales by making their cars look better than they actually are, mileage wise. This was an effort to make some people happy, which are management and employees, but only for short term. The management and employees were selling a lot of cars prior to the news breaking so everyone involved with the company was happy by making more money. This is both management and employees. They did not think of the stockholders happiness when they were taking these actions. This is because the stockholders lose money when something unethical happens in the company, with the stock dropping. Initially, they were making money when sales were better, but once the sale decreased they start to loose money. Also, the customers are unhappy in this case because they are purchasing cars that they are being lied to about.  Not only did this make customers unhappy, but also make them feel as though they are supporting a company that is unethical, no one wants to be associated with driving a vehicle that is looked down on for the company’s actions. Suppliers and manufacturers are both affected by this case because they no longer will be able to produce and sell an unethical vehicle. In closing, Mitsubishi should make vehicles with outstanding mileage in order to gain interest of customers. If this is done legally, everyone would be happy and there would be no issues within the company. 

Kantianism

The definition of the ethical rule of Kantianism is making decisions and taking actions that have consent from all parties included, honoring and respecting the people that are informed in the company. This ethical rule makes it so a person shouldn’t harm any other individual in any way. In Mitsubishi’s case, the company did not make decisions that was consented from all the parties. They did not act with the best in mind for all people involved in the company. They were only thinking about selling the most cars possible, not matter how it’s perceived by people. They wanted the consumers to think they were getting a vehicle with really good gas mileage but in reality the information was worse than it seemed. Mitsubishi was very unethical, because not only did they have information on their vehicles altered but they also withheld that information from the consumers. If the consumers knew of the alteration of the mileage, the thought of purchasing the vehicle may change for a lot of them. For Mitsubishi to change, they must fix their test data and must inform the public what is happening with the company and the vehicles. Mitsubishi should respect the people and the needs of each. They did not do this and acted unethically to make profit. Once the customers are informed, after the data is fixed, Mitsubishi is taking steps in the right direction to conform by the definition of Kantianism.

Virtue Theory

By definition, virtue theory is acting so that good character traits is portrayed and bad character traits are avoided in any way. Aristotle said, “we all have rational capacities and social capacities, so we all need to exercise our rationality in whatever talents we have and to relate to others in the world in a way that brings balance into our relationships” (Case Manual, Chapter 2). This philosophy was not followed by Mitsubishi. In virtue theory, there are four virtues in business, including courage, honesty, temperance and justice. Courage is having strength in the face of pain or grief for the right action. Mitsubishi did not follow this because they are not taking the right actions. The second virtue is honesty, which is selling vehicles that the consumer is informed correctly about. This again was not followed by Mitsubishi. They should tell their customers the truth in order to follow by this virtue, rather than lie to the customers on what they are buying. The third virtue is temperance, which is expectations and desires that are both reasonable, which was not followed by Mitsubishi. Mitsubishi was just making an action based on making money and not do it ethically. The last virtue is justice, which is making products with good quality and doing it through fair practices. Mitsubishi yet again, did not follow this virtue because they were selling tainted products, through unfair practices. This can be fixed by being honest with themselves and the consumers and selling products that are described correctly.

Sources 
Business Ethics Kodiak Powerpoints, Utilitarianism, Individualism, Kantianism, and Virture Theory
Mitsubishi Motors Homepage. http://www.mitsubishicars.com/
Soble, J. (2016, April 20). Mitsubishi Admits Cheating on Fuel-Economy Tests. From The New York Times. http://www.nytimes.com/2016/04/21/business/mitsubishi-fuel-economy-tests.html?_r=0
Tajitsu, N. (2016, April 20). Mitsubishi Motors admits manipulating fuel economy data shares tumble. From Ruters. http://www.reuters.com/article/us-mitsubishimotors-regulations-idUSKCN0XH0LG

Tajitsu, N. (2016, April 20). Mitsubishi Motors Admits Falsifying Fuel Economy Tests To Make Emissions Level Look More Favorable. From Huffington Post. http://www.huffingtonpost.com/entry/mitsubishi-motors-scandal_us_5717508ae4b0060ccda4e2d9

Tutt, P. (2016, April 20). Mitsubishi Motors says manipulated fuel economy tests, shares tumble. From CNBC. http://www.cnbc.com/2016/04/20/mitsubishi-motors-shares-tumble-company-to-brief-on-misconduct.html