PepsiCo.: Racist Mountain Dew Commercial (2013)

Controversy

PepsiCo. logo

Mountain Dew is one of PepsiCo’s main products. It was created in Tennessee for men to mix with their whiskey (Pepsi). The creators of Mountain Dew offer their idea to Coca-Cola but they were declined (Pepsi). Mountain Dew became very popular and in 1964 it was picked up by the Pepsi-Cola Company (Pepsi). Mountain Dew became increasing demanded in the action sports world. This caused a lot of actions sports stars and musicians to do ads with them. People such as Paul Rodriguez and Lil Wayne have been seen on many ads promoting Mountain Dew. Famous rapper, Tyler the Creator, did a series of ads with Mountain Dew. These ads were a three part story depicting the story of a goat called Felicia. These were web-ads they were meant to play on websites such as YouTube and not meant to be played on the television. These ads were stripped from the internet in May of 2013. They sparked the controversy of racial stereotypes and violence of women. Two days later PepsiCo removed the ads from all internet sources displaying them.
In the first of three ads displays the goat, Felicia, assaulting a waitress in the attempt to get more Mountain Dew. In the ads Felicia almost seems to be drunk off the Mountain Dew. In the next ad, Felicia appearing to be drunk of Mountain Dew is pulled over in by a police car. The goat’s vision appears to be blurry from the Mountain Dew and when the officer opens the trunk is it filled to the top with Mountain Dew. The officer says the goat “has a clear case of Dew-U-I”. Finally in the last ad stirring the most controversy is a lineup of all African-American men and Felicia as the batter waitress in crutches has to pick out who did this to her. All of the men in the lineup are wearing baggy clothing and do-rags.

Stakeholders

Mountain Dew,
product made by PepsiCo.

Stakeholders are people who affect or are affected by a company’s actions. In this particular case is it the people directly affected by the web ads. Some of the stakeholders include anybody who viewed the ads. To go into more depth, specifically African-Americans because the way they are portrayed in the web ads. Doctor Boyce Watkins is an author/ analyst from Syracuse University. He explains that this is the most racist ad in history. All the men in the lineup are African- American and he would describe them as “mean mugging” and “gangsta” (Yourblackworld). The company as a whole is directly affected because they will face repercussions as to people who boycott their products to the inappropriate ads. This will then hurt their sales/ profits.

Individualism
Individualism theory is to maximize your company’s profits while staying within the law. During this time no laws were broken by Mountain Dew. Although no laws were broken they left all their customers unhappy by viewing this racist ad. This in then creates angry customers who will want to boycott the company. Boycotting products ultimately will cause a decline in sales revenue hurting the company in the long run. There was no evidence of increased profit during the time of these web ads. These web ads created angry customers who want to boycott their products ultimately hurting the company’s revenue this is unethical under the Individualism theory.

Utilitarianism According to utilitarian ethics, happiness or pleasure are the only things of intrinsic value (Salazar). People who are enraged by this ad will boycott PepsiCo’s products and will eventually end up with PepsiCo’s revenue declining. Even though everyone doesn’t view the ad as offensive it doesn’t make perfect sense to keep the ad on the web if stakeholders are enraged by what they are viewing. By removing the ad they are showing their customers they are a socially responsible business. By showing they are a socially responsible business this will attract more customers to invest in PepsiCo’s products. In this case the cost-benefit analysis can be seen. Once the public uproar from the consumers happened the only benefit that can happen to pull the ad and immediately releasing a public statement admitting that the ad was wrong. This process is less expensive and more profitable. After the backlash from the online ads, PepsiCo immediately removed the ads. A representative from PepsiCo addressed/ apologized to the stakeholders saying “Pepsi understands how the ad is offensive” (Billboard). This is the best move that PepsiCo could of have made. Based off Utilitarian ethics, Mountain Dew was unethical by creating unhappy consumers because of the racist ad.

Kantianism

A photo of the Mountain Dew commercial deemed racist

Kantianism focuses on act rationally and to respect other people (Salazar). Acting rationally can be defined as helping yourself make rational decisions and helping others making rationally decisions (Salazar). In this case the rational decision was to remove the ads from the internet. PepsiCo removed the ads in a timely manner to help the consumers get what they want and also respect them at the same time. The consumers said that they viewed these ads as offensive and racist. Acting out of good will is to remove the ads because it is the right thing to do in this situation. Another principle of Kantian ethics is the Formula of Humanity (Salazar). The Formula of Humanity is described as “Acting 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” (Salazar). This broken up into three separate ideas; humanity, ends, means (Salazar). Acting out of rationally is to remove the ads because it is the right thing to do. Acting out of the end is to accept what you did is unacceptable and the company needed to own up to it. Acting out of means is to value the consumers will and remove it because they view it as racist and offensive. Being rightly motivated is a main principle of Kantian ethics (Salazar). There are three maxims for Kantian Shopkeeper (Salazar). The first is to be honest with your customers needing to gain trust and have repeat customers (Salazar). Taking the ad down will help gain trust with the consumers and will attract repeat customers. The second is to be honest with your customers because you like them (Salazar). Admitting that PepsiCo saw the how the ad was offensive is being honest with the consumers. Lastly PepsiCo needs to be honest with their customers because it is the right thing to do (Salazar). Removing the ad was in the end the right thing to do because it sparked an uproar by the public. Looking at this through the Kantianism perspective it is viewed as unethical.

Virtue Theory
Virtue Theory is based off four main character traits; courage, honesty, temperance, and justice (Salazar). These main principles address the whole picture of the situation. Courage is defined as “risking taking and willingness to take a stand for the right ideas and actions” (Salazar). PepsiCo succeed in taking a risk with the series of web ads by Tyler the Creator. When the ad backfired they succeeded in doing what was right and removing the ad and accepted that they did wrong. Honesty is defined as “Honesty in agreements, hiring and treatment of employees, customers and other companies” (Salazar). PepsiCo failed to treat the customers fair by displaying the offensive and racist ad. They made up for their wrong doing by removing the ad. Temperance is defined as “reasonable expectations and desires” (Salazar). The desire was to have a funny ad but in the end they failed to meet expectations and created an ad that needed to be stripped from the internet. Justice is defined as “hard work, quality products, good ideas, and fair practices” (Salazar). PepsiCo created quality products but when people didn’t like the ad people could not believe what they were watching and their “good idea” needed to be taken down. The Virtue Theory verifies that Mountain Dew is unethical.

References

"Pepsi Store - History of the Birthplace of Pepsi." Pepsi Store - History of the Birthplace of Pepsi. Web. 21 Oct. 2014.
"Tyler, the Creator Talks Mountain Dew Controversy: 'It's Not Gonna Change My Art in Any Way'" Billboard. Web. 21 Oct. 2014.
"Mountain Dew Releases Arguably the Most Racist Commercial in History." Your Black World.. Web. 21 Oct. 2014.
DesJardins, Joseph R. An Introduction to Business Ethics. New York, NY: McGraw-Hill Higher Education, 2009. Print.
Class PowerPoints/ Lectures / Case Manual. Professor Salazar

Hyundai: Peeling Car Paint (2016)

Case Controversy

Hyundai is a well known company that produces automobiles. They recently ran into a public problem with the paint jobs on some of their best selling cars. They had the cars painted with something called a “self-healing” paint. This meaning the paint was a special paint that helped to protect the car from scratches. Hyundai was advertising the paint as “state-of-the-art” and based on my research results that is not the case. What Hyundai thought was protecting the paint on their cars was what was actually ruining them. The “Scratch Recovery Clear” was causing early cracking in the paint which also lead to rust and corrosion. The following models produced by Hyundai were being sold with this defective paint starting in 2006 up to 2016: Santa Fe, Sonata, and the Elantra. The issue people were having with this situation was that Hyundai was aware of the defective paint and continued to sell it to customers.

Stakeholders

When thinking of a stakeholder in business ethics terms the definition is different then most would assume. While reading The Case Manual by Heather Salazar she explains that a stakeholder is, in business terms, where a company or business only focuses on the interest groups in their area. The people in these areas are the ones that are affect the most by the actions of the business.  For Hyundai, their stakeholders are the customers, car dealerships, and the salesmen of the dealerships. Based on the actions of Hyundai and their assembly lines all of their stakeholders were affected.

Many of the dealerships that sell Hyundai’s were getting a lot of complaints from their customers that had already purchased a Hyundai vehicle. Many people were on the same page of action when the dealerships were starting to not respond to their complaints. Most decided to take it to the next level and reach out to Hyundai themselves. When that didn’t work out the next step unhappy customers took was to file a lawsuit against either Hyundai or the dealership they purchases their vehicle from. The customers should not have been falsely informed about the quality of the paint on these vehicles.

Individualism

Referring back to The Case Manual individualism is when the primary values of the business is themselves, the owner’s choices and the profit of the business. The ethical rule the follows individualism is that business actions should maximize business profits for the owners, but do so within the law. Where Hyundai messed up was their advertising. When their vehicles were being sold they wanted it to be mentioned that they had state of the art paint. If they had done so before 2006 there would have been no problem at all. In 2006 was when the first complaint about the peeling paint took place. That means that Hyundai was aware of the faulty pain but continued to sell their cars with no adjustment to the situation.

There are many regulations that must be followed when selling, and manufacturing vehicles. One is that the customer must be provided with a certain amount of information about the vehicle they are purchasing. When dealerships and their salesmen don’t mention the fact that they have had some paint issues in the past is where the actions become illegal. They are not providing the customer with all the information they were supposed to. Knowing that mentioning the past problems with peeling paint would negatively impact sales they decided to leave that information out.

Utilitarianism

Looking again at The Case Manual utilitarianism has the primary values of happiness of all conscious beings, often interpreted hedonistically as pleasure and the absence of pain, but also sometimes interpreted as the satisfaction of desires. As far as the ethical rules for a utilitarian business actions should aim to maximize the happiness in the long run for all conscious beings that are affected by the business actions. Everything that Hyundai did goes against utilitarianism. They were not working towards the happiness of their customers. As long as they were bringing in a satisfying amount for profit they had no regards to the constant complaints. Instead of trying to figure something out that could help both the company as a whole and the customers dealing with the peeling paint they just decided to sit back and let the problem play out. A utilitarian would be very disappointed in Hyundai’s actions.

Kantianism

In The Case Manual kantianism is known to have the primary values of rational decision making, autonomy of individuals, and honesty and freedom. The ethical rule for kantianism is to always act in ways that respect and honor individuals and their choices. Kantianism also has two main focuses that go hand and hand with something called the formula of humanity. The formula of humanity basically says to treat people like people and not like objects. Looking at what Hyundai has done from a Kantian point of view they are completely in the wrong. Though peeling paint may not physically harm a customer it takes its toll financially. When it comes to fixing paint jobs on cars the prices can get very expensive. During my research I found that many people had to pay hundreds to a couple of thousands of dollars to fix their paint. “My 2009 white Santa Fe is peeling on the hood and roof. It is very extensive. Costs to fix exceed 7000.” Hyundai was clearly not concerned about this factor of their actions outcomes. As long as they made profit from the sales of their cars they did not care about what happened to the customers after their purchase and because of that a Kantian would not agree with the actions of Hyundai.

Virtue Theory

Also found in The Case Manual is the values and rules of virtue theory. The primary values of virtue theory are the character traits that promote wellness or flourishing of individuals within a society. The ethical rule for virtue theory is to act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits. With Hyundai having known about their faulty paint for years and choosing not to change anything about it goes against the virtue theory. They had a lack in courage after finding out that their “state-of-the-art” paint was not a good as they were making it seem. According to the virtue theory courage along with honesty, temperance and justice are key characteristics to the theory. They were also not being honest when it came to the customers that purchased more of their vehicles after the first peeling paint problem. Hyundai’s actions would be considered unethical based on the virtue theory.

References

https://topclassactions.com/lawsuit-settlements/lawsuit-news/331756-hyundai-class-action-filed-over-peeling-auto-paint/

https://www.classaction.org/hyundai-paint-lawsuit

 https://www.law360.com/articles/778534/hyundai-kia-drivers-sue-in-calif-over-peeling-paint

 http://www.hyundaiforum.com/forum/hyundai-sonata-19/paint-quality-issues-13288/

 https://www.youtube.com/watch?v=imgxu6s3IZE

https://www.cargurus.com/Cars/Discussion-t33892_ds633033

FIFA: Corruption Involving 2018 & 2022 World Cup (2010-2015)

FIFA World Cup
Trophy

FIFA: Corruption Involving 2018 & 2022 World Cups (2010-2015)

Background

              The Féderation Internationale de Football Association (FIFA) was founded in 1904 in Paris, France by an assembly of secretaries from major football associations in Europe. Robert Guérin, secretary of the football department in France, was the first to take the initiative to officially start playing international games games, while they were being stalled by the English Football Association. By 1930, the association had expanded, including most of the European teams as well as a team from Africa and America, and was able to hold the first FIFA World Cup. Jules Rimet, FIFA's third president, was the one that made the World Cup and reality. By 1974, the presidency had been taken over by a Brazilian, Dr. João Havelange. Havelange set the standard for what FIFA was going to become in the future. Havelange continued expansion in the league from 16 to 24 teams creating more competition and the FIFA offices became "the hub of sporting diplomacy" (Fifa). In 1998, Joseph S. Blatter took over as the successor to Havelange and continued to expand the league. Today FIFA is made up of 211 associations under 6 confederations making it the largest sports federation in the world. Every four years, one team will be crowned the best team in the world and get to hoist the FIFA World Cup Trophy.

Joseph S. Blatter
President of FIFA Under Controversy

Case Controversy

        Over the past 5 years FIFA has found themselves to be trapped in corruption and bribery scandals. In 2010, skepticism arose after Russia, and more importantly Qatar, were granted hosts of the 2018 and 2022 World Cups respectively. Since Qatar offers some of the worst football conditions to play with in the summer, the United States FBI launched an investigation to determine how Russia and Qatar were awarded hosts. FBI agents Jared Randall and Michael Gaeta were put in charge and suspected this had something to do with bribery based on the amount of money FIFA was bringing in and the amount FIFA executive committee members were being paid. Something did not add up. Randall and Gaeta eventually got a hold of Chuck Blazer, former president of the United States Soccer Federation who later became one of the more corrupt FIFA officials. Before getting in contact with Randall and Gaeta, Blazer was fed up with his business partner, the president of the Confederation of North, Central America and Caribbean Association Football, Jack Warner. Warner went behind Blazers back by inviting FIFA's vice president, Mohamed bin Hammam, to a meeting involving bribes. The Qatari billionaire gave the 31 delegates that were in attendance $40,000 each to get their vote for presidency since Hammam was going to try to beat Blatter. Blazer was furious about the meeting because he did not like Qatar and in return snitched on Warner for corruptness. Blazer put himself at risk because Warner snitched right back on him. Eventually the FBI would get a hold of a beaten down Chuck Blazer and put him undercover to get more FIFA officials for bribery scandals. Following the information Blazer provided, President Joseph S. Blatter was suspended for 90 days and later resigned unexpectedly after 14 other FIFA officials were arrested and indicted for their involvement in accepting bribes for the 2018 and 2022 World Cup campaigns. Months after Blatter had resigned, he spoke out and said that the United States was supposed to get to host the 2022 World Cup. French President Nicolas Sarkozy had other plans and invited the prince and ruler of Qatar, Sheikh Hamad bin Khalifa Al-Thani. After he had visited, Sarkozy informed Blatter that Qatar was good to go for 2022 World Cup. Another Qatar bid employee, Phaedra Almajid, informed the FBI that she was present when Qatar's bid organization paid $1.5 million to three African executive committee members in return for their vote for Qatar. Randall and Gaeta uncovered what no one else could, FIFA's leaders sold their power (ESPN). 

Stakeholders

          FIFA's stakeholders have been put in a predicament following the bribery scandal. Football fans across the world have now lost trust in FIFA for deceiving its fans with corruption. With the revenue they generate through TV viewership and merchandise sales, FIFA needs to patch up their relationship with its fans. FIFA's stockholder relationship with its sponsors following the scandal has been put at risk. Sponsors such as Adidas, McDonalds, and Coca-Cola do not feel comfortable being a sponsor and strongly urged FIFA to ensure independent oversight of all reforms (NY Times). FIFA also needs to gain back the trust of the players. With so much corruption, it could be possible that actually games are being fixed in some way. FIFA's priority should be to funnel out the corruption, find new leadership, and regain the trust of stakeholders.

Individualism

       Individualists encourage people to be selfish and do whatever is in their best interest for themselves. Famous economist and individualist Milton Friedman stated that the only purpose of  individualism is to maximize profits for owners and stakeholders of a business as long as it abides by the law (Salazar, 17). Even though FIFA's executives acted selfishly in their best interesting by accepting bribes and individualist would view this case as unethical. The executives selfishness and corruption caused FIFA to lose roughly $200 million in just one year from 2014 to 2015. This significant loss of profit makes FIFA and its executives unethical in the acts that they committed. 

Russian & Qatari Flag

Utilitarianism

        Utilitarianism strives to keep all conscious beings that are affected by a business action happy. FIFA and its officials allowed for bribes to be made in favor of Qatar and Russia while not taking into account the feelings of the other countries who had also applied to host the World Cup. FIFA did not care about the other nine countries that had made a bid for the World Cup. Utilitarianism wants what is best for the greater good and in this case the nine countries that were snubbed make up more than Qatar, Russia, and corrupt officials. Once these countries found out about the bribes they certainly were not happy. For instance, England invested 21million in an attempt to host the world cup. Their bid and everyone else bid was worthless since the winners had already been chosen before a vote. FIFA was essentially stealing from each one of these countries since none of them were able to get their bid back. This would have been ethical if FIFA had help a fair vote where everyone was on the same playing field. Unfortunately, FIFA chose to be corrupt and accept bribes making this unethical in the eyes of a utilitarian. 

Kantianism

      Immanuel Kant, an eighteenth century philosopher, created his own ethical theory aimed to encourage people to make decisions based on what Kant referred to as "good will". "Only people with autonomy, freedom, rational agency, or the ability to reason, think, and act on their reasons can have good will" (Salazar, 21). To abide by Kantianism, people must not steal, cheat, lie, or use people as a mere means which goes against the formulation of humanity. The FIFA officials in this case used anyone as a mere means to get what they want. They lied, cheated, and stole from their stockholders. Chuck Blazer and Jack Warner used each other as a means to become  prominent figures in the football community. FIFA stole from every country that placed a bid for either the 2018 or 2022 World Cup, excluding Qatar and Russia. FIFA looks the most unethical under kantianism. The decisions FIFA made from 1998-2015 goes against everything kantianism preached. 

Where Vices Took FIFA Officials

Virtue Theory

          Virtue theory advises people to act with accordance to virtues instead of falling victim to vices. Vices such as greed and dishonesty “can land people in jail due to fraudulent schemes and deceptive practices” (Salazar, 23). Members of FIFA's executive committee fell temptation to their vices and in turn, put them behind bars. As an executive, it can be easier to pursue vices especially when the man in charge, Joseph S. Blatter, lives by his vices. His lack of leadership and ethics set the tone for what would become a decade full of corruption. Had the FIFA organization followed their virtues instead of vices, they would not be in the situation they are in today. FIFA failed to be courageous, failed to be honest, failed to have insight and intelligence and because of this FIFA is viewed as unethical under virtue theory. 

Action Plan

       FIFA has a lot of ground work to be done in repairing their image. After a decade long of suspected corruption and multiple bribery scandals, FIFA needs a fresh start to earn the trust back of its stakeholders. First things first, a term limit needs to be put in place for presidents and high ranking officials associated with FIFA. Having power for too long only leads to madness and that is what happened with Blatter. He got careless and and greedy by the end of his term. With the lack of ethics that FIFA displayed with Blatter at the helm and corrupt officials around him, FIFA should establish an ethics committee to watch over the organization and make sure they do not repeat the past. The ethics committee should also have some power so a checks and balances system can be put in place. No one should have too much power. A new system should be put in place to vote for countries to host the World Cup. FIFA should have a new group of voters for every World Cup that takes place. FIFA should also get voters from all around the world so there is no bias and everyone has a fair shot to win the bid. FIFA has a long way to go to gain the trust and respect from its stockholders, but with new leadership in place and corruption being flushed out of the organization, FIFA has the potential to regain that trust quickly. The World Cup is also back next year so hopefully that brings the energy and spirit back to the Federation Internationale de Football Association. 

References

FIFA.com. "History of FIFA." FIFA.com. N.p., n.d. Web. 13 Apr. 2017.

FIFA.com. "Fédération Internationale De Football Association (FIFA)." FIFA.com. N.p., n.d. Web. 13 Apr. 2017.

Buncombe, Andrew. "FIFA Corruption Scandal: FBI Probe How 2018 and 2022 World Cups Were Awarded to Russia and Qatar, Says Report." The Independent. Independent Digital News and Media, 03 June 2015. Web. 13 Apr. 2017.

Riach, James. "Sepp Blatter: Russia Was Chosen as 2018 World Cup Host before Vote." The Guardian. Guardian News and Media, 28 Oct. 2015. Web. 13 Apr. 2017.

Rebecca R. Ruiz, Matt Apuzzo and Sam Borden. "FIFA Corruption: Top Officials Arrested in Pre-Dawn Raid at Zurich Hotel." The New York Times. The New York Times, 03 Dec. 2015. Web. 13 Apr. 2017.

Menezes, Jack De. "Fifa Corruption: Qatar and Russia World Cup Bids under FBI Investigation following Chuck Blazer's Bribery Confession." The Independent. Independent Digital News and Media, 04 June 2015. Web. 13 Apr. 2017.

From The Mag: The FBI vs. FIFA." ESPN. ESPN Internet Ventures, n.d. Web. 13 Apr. 2017.

"Fifa Corruption Inquiries: Officials Arrested in Zurich." BBC News. BBC, 27