Methodist Le Bonheur Healthcare (2018)

Methodist Le Bonheur Healthcare Background


Located in Memphis, TN, the Methodist Le Bonheur Healthcare hospital has been a very successful hospital in their 100 year history. They operate four different hospitals in the Memphis area, the Methodist University Hospital, Methodist North Hospital, Methodist South Hospital and Methodist Le Bonheur Germantown Hospital. They are by far the most expansive healthcare provider in the Memphis area, and they have been known to do excellent work. According to their official website, Methodist Le Bonheur is looking to grow as a healthcare provider and their long term goal is to be "nationally recognized for excellence in clinical quality, patient safety, and compassionate care to improve every life we touch." 

Case Controversy

From 2014 to 2018, the Methodist Le Bonheur Healthcare has been suing patients for unpaid medical bills from past visits to the hospital, and they're suing them for far more money than they have. Studies show that the hospital has since filed upwards of 8,300 lawsuits and the vast majority of them to low-income patients of the area. On top of the suing, the hospital is also adding on interest and several types of fees on top of the already outstanding debt, making it almost impossible for these low-income patients to pay them off. The most famous case involves Mrs. Carrie Barrett, a woman who stayed at the hospital for two nights in 2007, racking up a $12,000 bill. After being released, she claimed the hospital never made it clear how much she owed and how she should pay it, until she heard from them in 2010. They informed her that they were suing her for her unpaid bills and with the interest and attorney fees, they were suing her for $33,000, almost double of what she makes in a year. Clearly, Le Bonheur has landed themselves in murky water as the community around them is mostly low-income people, so is suing these people the right answer? Different ethical theories each have an answer. 

Stakeholders

Dr. Michael Ogueke

The Stakeholders in this situation are the employees of the hospital, including CEO & President Dr. Michael Ugueke, the collection agency that collects the money from people being sued, the courts that the cases are settled in, and the patients themselves that are getting sued. Dr. Ogueke is the main stakeholder because, after all, he has the final say on what happens with the hospital, so he knew exactly what was going on with the suing of these low-income people. Also, the patients are the ones who invested their time and trust into the hospital, only to be sued into the ground with bills they'll never be able to afford. 

Individualism

An individualist is someone who looks to strictly maximize business profits, as long its legal. This view on ethics comes from economist Milton Friedman, " “Friedman held that it is the aim and responsibility of businesses to maximize their profits” (Salazar, 17). According to this theory, Methodist Le Bonheur Healthcare did aim to maximize their profits, as did Dr. Ogueke. At the end of the day what they did was indeed legal, and it turned out to give them the most in profits that they could. Although what they did wasn't necessarily kind of them because the people they were suing were poor, they still did what they did inside the law and through the court system. 

Utilitarianism

Under this ethical theory, what the hospital did was quite unethical. Utilitarians "Measure happiness as the only thing of value and they count happiness as pleasure and freedom from pain.” (Salazar 20). A Utilitarian would see a situation like this and think about all the other outcomes that could of played out, and then decide which one of those outcomes would secure maximum happiness for the parties involved. In this case, suing the less fortunate people of Memphis for almost double of their yearly salary is clearly not something that would guarantee happiness for everyone involved, it would only create happiness for the hospital as they were the ones making money.

Kantianism

Kantianism is an ethical theory that believes in any situation that involves lying, cheating, manipulating or exploiting people for any reason is unethical. Kantians believe that people make good decisions based on "good will", and that it is synonymous will just having good intentions. For an act to be ethical under Kantianism, it must the Categorical Imperative test. If the action passes the test, it is deemed permissible and ethical, but if it fails, it is unethical. In this case with Methodist Le Bonheur Healthcare, they would have failed the Categorical Imperative test. They manipulated the people of Memphis and utterly exploited them for years on top years, and then they dropped a massive bill on top of them, knowing that they would never be able to pay it off. 

Virtue Theory

The virtue theory assesses a persons character and the four main virtues; honesty, courage, temperance, and justice, or to "act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits" (Salazar, 17). They also believe in three detrimental virtues, which are dishonesty, greed, and selfishness. Again, the hospital would be found unethical in this case because they were dishonest with the patients about their debts, they were greedy to want to take the money from such impoverished people, and they were extremely selfish because these people barely have enough money to live their lives, and the hospital itself makes millions of dollars each year.

Justified Ethics Evaluation

I believe that the Methodist Le Bonheur Healthcare unit acted unethically in this case, as the Utilitarian, Kantian, and the Virtue Theory explain. The hospital exploited the people of their own community, just so they could make even more money than they were already making. They knew the area they were working in, and they knew that dishing out $30,000+ lawsuits would be almost impossible for the people to pay, but they did it anyway. Since this report came out, starting this year in 2019, the hospital will (1) No longer pursue legal action against any patient making up to 250% of the federal poverty guideline — regardless of that patient’s insurance status, and (2) No longer accept court-ordered interest on medical debt nor collect court-allowed attorney fees and court costs from any patient. So, I guess over time they realized their unethical ways and they are starting to make a stride to recover their once-respected name. 

Matt Newton

Thomas, Wendi C. “Millionaire CEO of Nonprofit Hospital That Sues the Poor Promises Review of Policies.” ProPublica, 1 July 2019, www.propublica.org/article/methodist-le-bonheur-healthcare-ceo-promises-review-of-policies.

Castagno, Peter. “US Hospital Suing Its Own Employees And Low Income Patients Who Can't Afford Bills.” Citizen Truth, 30 July 2019, citizentruth.org/us-hospital-suing-its-own-employees-and-low-income-patients-who-cant-afford-bills/.

Ellison, Ayla. “Methodist Le Bonheur Suspends Debt Collection Suits amid Backlash: Memphis, Tenn.-Based Methodist Le Bonheur Healthcare Has Suspended Debt Collection Lawsuits over Unpaid Medical Bills.” Becker's Hospital Review, www.beckershospitalreview.com/finance/methodist-le-bonheur-suspends-debt-collection-suits-amid-backlash.html.

The Case Manual, Heather Salazar

Hahn, Heather. “Hospital Changes Debt-Collection Policies.” United Methodist News Service, 31 July 2019, www.umnews.org/en/news/hospital-changes-debt-collection-policies.

Kamoto Copper Company: mine in Congo collapses and kills 19

A mine owned by Glencore had collapsed in the Democratic Republic of Congo this past month on, June 27th, 2019, and killed at least 19 people. These 19 people were also mining illegally stated by the London-listed company. In parts of Africa and India illegal mining has become an issue. Miners are working illegally throughout the country and continue to see fatality take its toll on the people. 

In the ethical case on the situation what Glencore had done was unethical to the illegal miners.  In the Wall Street Journal written by Allistair MacDonald, “Kamoto Copper Company has observed a growing presence of illegal artisanal miners throughout its industrial mining concession in the Kolwezi area. This has led to daily intrusions onto its concession by an average of 2,000 illegal miners per day” (MacDonald 1). Knowing that 2,000 miners are illegally working every day is making the company lose money. It is also affected when it involves illegal miners dying.

However, this issue here is also with the government. The government has been not classifying the mining fatalities in the government statistics.  South Africa’s Department of Mineral Resources had said that there were a record-low 73 casualties through the mining industry. The Mines Rescue service, a local organization, has helped freed trapped miners and have also found an additional 18 people who were died illegally in the South Africa mines that year. In the news article Bloomberg, it states, “The deaths highlight the growing problem of illegal mining. Congo and other countries face a constant struggle to stop their impoverished citizens from breaking into mines and extracting ore by hand” (Thomas Biesheuval and William Clowes). With more miners breaking and stealing ores this problem is going to continue and the death total could go up more. Stopping people from illegally mining will not be easy but it is something that needs to be done before more lives are lost. Edward Sterck, analyst at BMO Capital Markets, believes, “Preventative action will likely be needed, and it could impact Golencore’s social license to operate. This event is related to illegal mining activity, then the impact to production may be relatively short term” (Bloomberg). The point Edward is making is how the miners entered without permission and mined what they wanted. In the act of this it led to them losing their life. By adding the security to the property, it could lead to short term problems with illegal people working in the mines. Thus, helping the issue of people continuously break into the mines on their own.

Due to this event the shares of Glencore had suddenly dropped in the London trading. It the course of one incident it caused the stocks to drop 4.9%. Even with the drastic drop the company came back with none of their production or operations were affected in the area. Knowing that Glencore did not even get affected by this is unbelievable. Any other company after an epidemic like this could fall flat on their face. Glencore on the other hand can recover quickly and get back to operations within the next day. This goes to show how powerful Glencore is. Congo is home to the richest cobalt and copper and people want to sell it. Acquiring the product is what needs to change for the better of the people. However, the people who are near these mines are also the poorest of people. Thus, making people desperate and doing desperate things to help the living situation for themselves and for their families. It tragic that a company like Glencore can do what they can to maximize profit even though the safety of others is at jeopardy. It is a constant struggle between the impoverished people from breaking into the mines and extracting the ore. The mines these people go in are miles long which makes them difficult to travel through for anyone. 

In the case with the 19 deaths in Congo the stockholders affected by this incident is Glencore, shareholders, Congo, and the citizens near the mine. Glencore and Congo government are responsible for not keeping the area safe from others. The shareholders who put money into the stocks of Glencore are affected for the fact the company lost 4.9% stocks in a day due to the incident. The shareholders would not be happy knowing that they have invested money into the company for it to be lost on something that could have been prevented.

From an individual’s point of view on the situation people would be upset for what is going on. Explained in The Case Manual, “Individualism is business actions should maximize profits for the owners of a business but do so within the law” (Salazar 17). The miners who are go into the mines and stealing the ores is making the company lose profit. It is all about making as much money as possible as an individualist. If people are break in and going into the mines stealing the ore the company is losing that profit. The people who were killed from the accident were others who were stealing from the company. Also, with the people who were killed had the mine come down which also caused more money to be spent to open the mine up again or for another place to be started. Money either way is being lost in the section of the mine making the stolen and lost money unavailable to the company.

In the eyes of an utliltarian this situation would be viewed in a different way. Utilitarianism is, “Business actions that should aim to maximize the happiness in the long run that are affected by the business action” (Salazar 17). With what happened with the 19 people who had lost their lives in Congo, utilitarians would be devastated. Trying to keep people happy is a difficult thing for a business to do on a consistent basis. When it comes to the mining industry someone will be left unhappy. The country Congo is home to one of Glencore’s operation facilities. With the mines taking so much land it leaves people poor and homeless for most. This makes people unhappy with the living situation and cannot financial be stabled. By having the mine so close it leads people to do stupid things such as go in the mine and stela the ore for themselves.

For a Kantianism the case with Glencore and the 19 illegal miners being killed can be looked at in an interesting way. In The Case Manual, Kantianism is viewed as, “An act in ways that respect and honor individuals and their choices. There should be no lying, cheating, manipulating or harm others to get your way. Use informed and rational consent from all parties” (Salazar 17). Glencore’s mining area was not safe for anyone outside of the property. People could easily come in and grab what they needed in order to survive. In some ways you can look at the 19 illegal miners and respect and honor what the illegal miners were trying to do. The miners sadly lost their life, but they were doing it for a reason. Those illegal miners were trying to gather ore bare handed in order to make money for their family. They were willing to risk their own lives if it meant making the one’s the love happy. By breaking in and doing this it shows that no matter how bad things are it is worth fighting for something.

Virtue Theory is about, “acting so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits” (Salazar 17). With the situation at hand with the illegal miners being killed no one was acting out of good character. Glencore has a history of doing things that are not looked at in a great way. It seems as if Glencore likes to take shortcuts or better themselves with false information to help the company in the long run. Good character is built on the people who run the industry and it trickles down into other management and workers based on how they are being treated. If illegal miners can get in mine shafts and dig their own ore out, that goes to show that Glencore has a bad character and bad traits that put others in harm’s way.

Evaluating the situation through an ethical standpoint what Glencore did was unethical. The company allowed for this to happen. With the way they acted towards the people around them it shows that people are desperate to do anything. By breaking laws for satisfaction, losing lives for ore, it all shows why this is not a good environment. Between individualism, utilitarianism, Kantianism, and virtue theory, there is no right way that Glencore is going about their business. Things the company does is not looking good and it will only get worse for them and the people of Congo.

References

Bloomberg.com, Bloomberg, www.bloomberg.com/news/articles/2019-06-27/glencore-says-19-illegal-miners-killed-in-congo-mine-collapse.

Bell, Terence. “Glencore International Production of Metals and Energy.” The Balance, The Balance, 14 Mar. 2019, www.thebalance.com/company-profile-glencore-international-ag-2340298.

“Glencore.” Wikipedia, Wikimedia Foundation, 30 May 2019, en.wikipedia.org/wiki/Glencore.

MacDonald, Alistair. “Congo Mine Collapse Kills at Least 19, Glencore Says.” The Wall Street Journal, Dow Jones & Company, 27 June 2019, www.wsj.com/articles/congo-mine-collapse-kills-at-least-19-glencore-says-11561652380.

Salazar , Heather. The Business Ethics Case Manual.

“Subscribe to the FT to Read: Financial Times Glencore Shares Fall after DRC Mine Collapse.” Financial Times, Financial Times, www.ft.com/content/542c9768-98ec-11e9-8cfb-30c211dcd229

Amazon Prime Day Protests

On July 15^th and 16^th Amazon had its annual Prime Day, a day dedicated to giving Amazon prime members access to deals on the Amazon store page. Prime day has been one of Amazons biggest sales dates, as they have done four billion in sales the previous prime day.

This year, activists and employees used the day to protest Amazon and bring attention to their causes. Although there were a multitude of reasons for the protesting, the primary reason for the protesting was due to the conditions that the fulfillment center workers are subjected to. Employees have attested that working at Amazon has caused them to develop physical maladies, and that the current environment that Amazon has fostered is a culture that forces employees to skip bathroom breaks so as to not be penalized by the oversight system, which is a computer algorithm that monitors employee’s performance. Aside from the consistently detrimental environment, the employees believe that the current pay system is unjust even with a recent pay raise to $15 hour, as it eliminated their ability to increase earnings with incentive-based earnings and stock options.

The stakeholders in this case is Amazon shareholders who benefit from Amazon reducing costs and increasing efficiency, employees subjected to the work environment, and the consumer who benefits from the reduced prices and quick service.

From an individualism perspective the actions of Amazon are permissible. As it stands, the actions have not been ruled illegal so therefore their actions are not unethical. They are simply attempting to reduce their labor costs, and provide efficient service to consumers which is a hallmark of the Amazon company.

A Utilitarianism standpoint would find that their actions are unethical because it results in the unhappiness of its employees. Utilitarianism is hedonistic, in the sense that it values the happiness of all stakeholders at the result of the action above all else. So, if the employees are unhappy than the actions cannot be ethical.

Kantism would view the actions of Amazon as unethical, as it treats is employees as a mere means to an end, rather than an end in themselves. Since Amazon sees is employees as something that can be monitored and, in a sense, programmed through its algorithm so they work to the standards that they require. This ideology means that the employee is a cog it its machine, and not important independently of what it can do for the company.

Virtue theory would determine that Amazon has acted unethically as well. Virtue theory looks at decision makers character instead of their actions, and Amazon through their actions have indicated that they have acted with poor character.  They have acted greedy, cowardly, deceitful and unj

ust in their treatment of their employees, lying to the public about their treatment of the employees, and continuing to act unjust in their treatment due to their greed and unwillingness to make a change. These four-character traits are the antithesis of the four pillars of ethical characteristics outlined by Aristotle; courage, honesty, temperance and justice.

To rectify their unethical actions Amazon should institute better monitoring practices in their warehouses. This would involve loosening the strictness of their algorithms and also hiring safety monitors to the warehouses so that all harsh aspects of the work environment are alleviated. They also should reinstitute their incentive-based wages and stock options. Although this will affect their bottom line it will improve their relations with employees and consumers.

Charles J



References

 Amazon Diaries | US news. (n.d.). Retrieved from https://www.theguardian.com/us-news/series/amazon-diaries

DesJardins, Joseph. An Introduction to Business Ethics. New York City: The McGraw-Hill Companies Inc, 2014.

Lecher, C. (2019, April 25). How Amazon automatically tracks and fires warehouse workers for 'productivity'. Retrieved from https://www.theverge.com/2019/4/25/18516004/amazon-warehouse-fulfillment-centers-productivity-firing-terminations

Peterson, H. (2019, July 16). Defiant Amazon says only 15 workers went on strike during Prime Day and shares video of warehouse employees celebrating the shopping frenzy. Retrieved from https://www.businessinsider.com/amazon-says-15-workers-strike-on-prime-day-2019-7

Plante, S. G. (2019, July 17). Despite boycotts and protests, Amazon Prime Day was bigger than ever. Retrieved from https://www.vox.com/the-goods/2019/7/17/20698328/amazon-prime-day-2019-boycotts-protests-aftermath

Salazar, Heather. The Business Ethics Case Manual. n.d

Salazar, Heather. Kantian Business Ethics. n.d

Salazar, Class PowerPoints

Weise, K. (2018, October 09). Why Some Amazon Workers Are Fuming About Their Raise. Retrieved from https://www.nytimes.com/2018/10/09/technology/amazon-workers-pay-raise.html

35 employees harassed into committing suicide! (2008-2009)* - France Telecom

France Telecom was a state owned company until 1998. However, in the years after it privatized and shed around 40,000 jobs to become more competitive and efficient. In 2006, another major restructuring was done by then chairman and CEO, Mr. Lombard. The aim was to cut 22,000 more jobs by 2008 and retrain at least 10,000 of its more than 100,000 workers. This job cutting was not very easy in France as in France, it’s standard for employees to have an unlimited permanent work contract—contrat à durée indéterminée (CDI) in French. Under standard CDI terms, any dismissal requires a long, drawn-out process, and layoffs of more than one employee must be referred to local government officials, Ulf Schäfer and Konstantin Korotov of business school ESMT Berlin wrote in a case study. Lombard decided to take a side turn from these legal bounds and attempted to reduce staff by other morale-killing means: harassing the employees, reassigning and relocating workers again and again, sidelining unwanted employees into menial jobs, bullying workers into resignations, according to Schäfer and Korotov’s report. According to court documents, he reportedly told the senior managers in 2007: “I’ll get them out one way or another, through the window or through the door.” This resulted in an alarming pattern of suicides in the following years among the French Telecom employees. Reportedly 35 people have committed suicide so far (the number is double according to some of the employees but has not been reported till date). France was shocked by the suicides, and the government set up an emergency meeting between Labor Minister Xavier Darcos and Lombard in September 2009. In February 2010, government inspectors said France Telecom had ignored warnings from doctors about the mental health of some of its employees. Lombard stepped down as CEO of the company in March 2010 after fierce criticism. The case was filed in court where according to media reports, Lombard said: “The transformations a business has to go through aren’t pleasant, that’s just the way it is.” (Fortune).


Stakeholders:

The major stakeholders in this controversy are: the former CEO and chairman Mr. Lombard, the current CEO Stephane Richard, the senior management, the former and current employees of France Telecom (now renamed to ORANGE), the families of the people who committed suicide, the French Labor Board and the French society.

Individualism:

Milton Friedman created an ethical theory which is more widely accepted to be more of an economic theory and is the only one “that is specific to the business context. It is sometimes referred to as the economic model because it is based on an economic view.” (The Case Manual 18).  The theory states that: “Business actions should maximize profits for the owners of a business, but do so within the law.” (The Case Manual 17). The main aim of a business should be to provide maximum benefits to its owners and work towards business profits however, the acceptability of means of making profits is defined by the rules and laws of the society. It is thus, seen that France Telecom was staying in the bounds of law when it decided to reassign, relocate the workers, and assign them different tasks etc. However, when it started to harass the employees into resigning and deliberately caused a strain on their mental health even after warnings, then their actions became unethical according to Individualism. The business should focus on making profits without providing extra for the workers or the society but its actions should stay between the bounds of law and when France Telecom decided to mentally harass its workers, it broke the provisions of Labor Board.


Utilitarianism:

Utilitarianism is an ethical theory put forward by John Stewart Mill that states that: “Business actions should aim to maximize the happiness in the long run for all conscious beings that are affected by the business action.” (The Case Manual 19). The basic framework in Utilitarianism aims towards analyzing the costs and benefits of a reaction and then comparing to achieve that reaction which produced the most happiness for the most number of people. It is one of the few theories that employs the ‘stakeholder’ approach rather than the ‘stockholder’ approach. “To apply utilitarianism to business decisions or to evaluate business actions, compare the business action with other possible actions and determine which of the possible actions would maximize happiness in all affected parties in the long-term.” (The Case Manual 20). In this case the happiness of thousands of employees and their families was brutally sacrificed to feed the happiness of few of the upper management people. The restructuring of the company may have provided benefits to the employees if they were treated with respect in the long run. However, the current actions of the management and CEO caused utter despair so much so that the employees committed suicide in order to break free of the chains of mental corporate slavery. The action was completely unethical in the eyes of a utilitarian.

Kantianism:

Kantianism is the rule which states: “Always act in ways that respect and honor individuals and their
choices. Don’t lie, cheat, manipulate or harm others to get your way. Rather, use informed and
rational consent from all parties” (The Case Manual 20). Kantianism is a form of “Principle-based
Ethics” introduced by Immanuel Kant in the late 18 th century. Kantianism is mainly concerned with
the intentions behind the actions no matter what the consequences. An action is considered right if
it comes from Good Will, and Good Will is the purity of intentions behind the action and is
synonymous with “having good intentions” (The Case Manual 21). It can be evaluated by asking
whether it is the right action or not and whether in willing it, you have the right motivation. The
Formulation of Humanity which 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” (Kant, MM 429). And this means that humans are not a means to achieve an end, rather
they should be treated as individuals who are ends in themselves. This imperative goes against the
order of merely using the humans to achieve something. The actions of the management at France
Telecom were not taken in consideration of Good Will, they were harassed and forced to do
something they did not want to do to achieve the company goal of not going through the long
process of law and taking a shortcut to getting rid of employees. This action by the management
proved that they were using the employees mainly as means to achieve their ends of profitability and
hence is against the principle of humanity. Their motivation was the opposite of having good
intentions and so was against the principle of Good Will too, therefore, making the actions as
completely unethical according to Kantian ethics.

Virtue Theory:

The Virtue Theory values “Character Traits that Promote Wellness or Flourishing of Individuals
within a Society.” And it says to “Act so as to embody a variety of virtuous or good character traits
and so as to avoid vicious or bad character traits.” (The Case Manual 22). The four virtues in
business ethics are: 1) Courage: risk-taking and willingness to take a stand for the right ideas and
actions. 2) Honesty: in agreements, hiring and treatment of employees, customers and other
companies. 3) Temperance: “reasonable expectations and desires” (Soloman 34). 4) Justice: hard
work, quality products, good ideas, fair practices. If we analyze the actions of the CEO according to
these traits, we see that he lacked courage, as he did not stand up to take the right action if he
wanted to downsize and restructure the company, he chose the easier way to manipulate employees
into resigning rather than going through the proper channel and retiring these employees. Honesty
was also missing as the employees were not told why they were being assigned menial tasks and
constantly reassigned, they were kept in the dark so that they may give up on their own. The CEO
lacked temperance and justice as well, his expectations and desires were not reasonable and he did
not perform fair practices to serve justice to his company. Therefore, lacking all 4 basic virtues, his
actions were unethical in the light of virtue ethics.

Ethical Evaluation:

After looking at the case from the angles of four different theories, all of which admonish the
actions of CEO, Lombard to be highly unethical in nature, we can conclude that he was acting
extremely selfishly in the pursuit of achieving new heights of the company. His actions ended up in
immense losses of lives of the innocent along with causing bad publicity to the business, hence
costing it its profit.

Written by: R. Aloufi

*The suicides started in 2008 and spread across 2009.

References:

Burke, Jason. “France Telecom Halts Restructuring Blamed for Suicides.” The Guardian, Guardian News and Media, 20 Oct.
2009, www.theguardian.com/business/2009/oct/20/france-telecom-suicides.

Dobush, Grace. “France Asks a Devastating Question: What Role Did Telecom Executives Play in 35 Employee Suicides?” 
Fortune, Fortune, 8 May 2019, fortune.com/2019/05/08/french-telecom-orange-trial-suicide/.

“France Telecom Investigated over Spate of Staff Suicides.” Reuters, Thomson Reuters,
6 July 2012, www.reuters.com/article/us-france-francetelecom/france-telecom-investigated-over-spate-of-staff-suicides-idUSBRE8650XB20120706.

“France Telecom Suicides: Prosecutor Calls for Bullying Trial.” BBC News, BBC, 7 July 2016,
www.bbc.com/news/world-europe-36733572.

Nossiter, Adam. “35 Employees Committed Suicide. Will Their Bosses Go to Jail?” The New York Times,
The New York Times, 9 July 2019, www.nytimes.com/2019/07/09/world/europe/france-telecom-trial.html.

British Airways: Data Breach (2018)

British Airways: Data Breach (2018)

Who is British Airways?
British Airways is an airline company created in 1974 after its board was established by the British government. Originally British Airways were four different airline companies and later merged into one. It is the second-largest flag carrier airline of the United Kingdom behind EasyJet. British Airways began merging with holding companies in 2011 to obtain an international appearance. As the company is growing so is its technological advancements. This is great for a company that is expanding, but as they are continuing to grow and advance they do not seem to be taking the correct precautions when it comes to their security protocols. There have been occasions where British Airways have been under cyber attacks. Although they follow protocols for the aftermath of the attack they need to develop something that will eliminate or diminish the attacks.

Ethics Case Controversy
In the British Airway data breach details of passengers’ credit cards were stolen. In the summer of 2018, cyber criminals stole payment card details from approximately 500,000 passengers who bought flights on the British Airway website, app or through Avios. “The personal data comprised the passengers’ name, travel plans, billing address, email address, and payment card details, and the three-digit security code from the back of the card” (Calder).  A code was injected on the British Airways website and app and for three weeks information was being stolen. 
With British Airways being one of the largest airlines in the United Kingdom for them to experience a data breach means that millions of their customers are at the risk of having vital information stolen. It is reported that the British Airways are intended to pay a fine nearly $230 million for the data breach that occurred last year (Satariano). Under the European data protection law, this is the largest penalty against a company for privacy lapses. “Frustrated that businesses were not doing enough to protect people’s online information, European policymakers last year adopted a new law, the General Data Protection Regulation (GDPR)” (Satariano). Regulators are cracking down on companies like British Airways because these companies are not under standing the importance of keep their data protected. British Airways has had numerous incidence with data breaches, but they were not as big as the one they faced last year. 

Stakeholders
The main stakeholders in this controversy case are the 500,000 customers that got their information stolen through the hack. Out of those 500,000 some has to deal with financial burdens that the hack brought upon them. Even beyond the customers that had their information stolen are investors that are involved with British Airways. Even though this company is rapidly growing investors have to consider whether they want to keep investing in a company that is prone to cyber attacks. 

Individualism
An individualism theory looks to maximize a businesses profits. “Friedman held that it is the aim and responsibility of businesses to maximize their profits” (Salazar, 17).  British Airways was responsible for maximizing their profits according to the individualism theory and although it is hard for a company to prevent a hack the company should have tried harder in doing so. Since British Airways did not act accordingly to prevent the attack they were acting unethically because the data breach resulted in a huge loss in profit, and it jeopardizes the relationship British Airways had with their stakeholders. Once a company has their information hacked civilians or other companies can obtain it and ultimately use it to their advantage. Their advantage could be numerous things such as using their information to get a competitive edge. What ever the use is this can be another way the company can loose money. 

Utilitarianism
This theory analyzes a way to maximize happiness. This theory takes the side of the stakeholder and considers their overall happiness with the decisions that were made. In the British Airline case, their overall happiness it due to the lack of decision being made. This theory would view the British Airways case as unethical due to their lack of awareness in protecting their customers' information. “Utilitarianism tells us that we can determine the ethical significance of any action by looking to the consequences of that act” (Dejardins 29).  The company’s attention should have been on maximizing pleasure and minimizing pain for the stakeholders. They not only caused pain for their customers, but they also are facing consequences by paying a 230 million dollar fine. Even though they were not the ones who orchestrated the cyber attack they are still to blame because they did not take the necessary protocols to avoid it. 

Kantianism
The Kant theory states, "...it is wrong to manipulate, exploit, or use people to their own advantage" (Salazar, 21). Not only is this an important part of the theory, but the types of motivations that drives a decision is also a key aspect of this theory. There are three motivations this theory expresses and the one that British Airways does not follow is "the moral law or duty". British Airways had a duty to protect their customers’ information and they neglected to do so. Not everyone knows the risks of booking a flight online so the British Airline should have informed their customers that there is a chance that their information might be exposed to hackers. They would have lost many customers, but putting that information out there would allow customers to choose which would show that the company had good intentions. 

Virtue Theory
The Virtue theory asks about a person’s character and assesses whether the person is virtuous. "act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits" (Salazar, 17). British Airways lacked in some of the character traits, but there were many traits that the airline company displayed that proved they acted ethically according to this theory. . Honesty, compassion, and care are some of the virtues this theory looks for when analyzing whether a person or company has a good character and this company exhibited those virtues. After the cyber-attack British Airways issued a statement stating that they were shocked that this happened. They had the option to hide this from the public as many companies in the past have done, but they chose to inform the public instead. They also provided financial support to customers who faced any financial burdens. 

Justified Ethics Evaluation
In my opinion, I would say that the actions in this case was dealt with reasonably, and I would follow the virtue theory and state that British Airways acted ethically. What they did after the attack shows me if they valued their customers and was truly apologetic about what had happened. First, with the statement they issued about the cyber-attack. It was in a timely manner so people could be informed sooner rather than later. Second, they though to provide help to those who suffered from the cyber-attack. This was a well-played character move instead of a business move. If they thought solely about the business they would not feel the need to issue a statement informing their stakeholders about what happened, and they certainly would not pay their stakeholders for their loss. Taking their aftermath plan into consideration I would stand behind this company. It is hard to avoid an attack, but how a company deals with it can determine the company's success or failure. 


Denise Azor


Reference

Calder, Simon. “Everything You Need to Know about the British Airways Data Breach.” The

    Independent, Independent Digital News and Media, 8 July 2019,

    www.independent.co.uk/travel/news-and-advice/british-airways-data-breach-privacy-details-

    leak-iag-cathay-pacific-information-commissioner-a8993331.html.

DesJardins, Joseph. An Introduction to Business Ethics. New York City: The McGraw-Hill   

    Companies Inc, 2014.

Salazar, Heather. The Business Ethics Case Manual. n.d.

Satariano, Adam. “After a Data Breach, British Airways Faces a Record Fine.” The New York

     Times, The New York Times, 8 July 2019, www.nytimes.com/2019/07/08/business/british-

    airways-data-breach-fine.html.

Hello Kitty Says Hello to Unethical Business (2017)

Hello Kitty Says Hello to Unethical Business (2017)

Ethics case Controversy

In 2017 European Union authorities launched their investigation on Sanrio’s illegal practices. In this investigation they discovered Sanrio has been breaking the European Union’s competition rules for 11 years. Sanrio required retailers that sell their licensed Hello Kitty merchandise to avoid selling them across the EU’s internal borders. Sanrio has the rights to characters such as Hello Kitty, My Melody, Chococat and Keroppi. This company had broken the rules through their terms set in licensing agreements. The company’s terms with these retailers didn’t allow them to sell licensed products in a different country. This caused consumers to not have many options for places to purchase Senrio’s products resulting in them not getting the best deals and potentially higher prices. This was against the EU authority’s antitrust rules. Sanrio was found guilty and were given a $7,000,000 fine for breaking the European Union’s competition rules. Sanrio had been very cooperative throughout the investigation and willingly took the punishment.

Stakeholders

The stakeholders for this case are all affected negatively from the actions of Sanrio. The main stakeholders are the retail companies in Europe that the terms with set with. As well as the consumers who were forced to buy higher priced Hello Kitty products.

Individualism

An individualistic view on this case would find Sanrio’s actions impermissible. Sanrio made the decision to create these terms for retailers in order to increase profits for themselves. If customers had little options for places to purchase their products, then they are more likely to buy it at a higher price than usual. Sanrio was hoping to please the owners of the company by doing what they did which is an individualistic action. But Sanrio was breaking the European Union’s competition rules by doing these things. This results in an individualist finding this case unethical because Sanrio has broken the rules and now are receiving a large fine for punishment.

Utilitarianism

Sanrio’s actions were made to help benefit only themselves as a company. The retailers that were restricted from selling their products over borders were affected by the terms set by Sanrio. Since the retailers couldn’t expand where they were selling the products, they could not make as many sales. Retailers were unable to change the language on the merchandise so that prevented consumers from purchasing their products. Consumers are also left unhappy from the terms that were set by Sanrio. The consumers were unable to find better deals from retailers beyond their borders. Consumers were forced to choose higher priced retailers due to the lack of options they had. In utilitarianism everyone must feel happy when decisions are made but there are many parties left unhappy due to Sanrio’s actions. Therefore utilitarians would find this case unethical.

Kantianism

Kantian theorist would find the actions from Sanrio unethical. This is due to the intentions they had before making their decision to create these illegal terms for retailers.  Sanrio knew before making the decision to set these rules that they would be the only ones benefiting. Sanrio’s actions were found to be morally wrong because of this. Sanrio’s motivation was to gain profit for themselves by forcing consumers to have to pay higher prices. Sanrio didn’t take into consideration of all parties that would be affected by having sales in respected borders only. Sanrio’s actions go against the kantian theory due to their motivation for their actions. Sanrio was only looking to benefit for themselves and they created inconveniences for the consumers and retailers. Therefore, Sanrio’s illegal terms set for the retailers is found to be unethical by the kantian theory.

Virtue Theory

Sanrio had done a poor job of helping others succeed by denying sales across borders and their unwillingness to change the language on their product. The Sanrio company only looked to help themselves and not others. This is found unethical by the virtue theory. Although Sanrio had done this, they made up for it when they were being investigated. Sanrio was fully cooperative when the European Union went undergo with the investigation. Sanrio had come to terms that what they were doing was morally wrong, so they took full responsibility for their actions. Sanrio cooperated so well with authorities that the fine they received was reduced over a million dollars. Their willingness to comply with the European Union showed that they have good character despite the actions they have made. The virtue theory would find the Sanrio unethical to the terms they set, but their response to the investigation would be considered ethical due to their cooperativeness and understanding that what they had done was wrong. 

Justificatied Ethics Evaluation

After evaluating this case I have found Sanrio's actions to be impermissible. Sanrio had gone against the competition rules by setting the illegal terms with the retailers. After examining the terms set I came to the conclusion that it was unfair for the consumers and the retailers. The retailers were unable to gain more profit because they were unable to sell across borders. This also affected the consumers because they were unable to purchase cheaper options beyond the border they live in. In conclusion, Sanrio's decisions made in this case were entirely unethical because they had broken the law and they didn't consider other parties involved.

Tanner Small

References

Abdul, Geneva. “Hello Kitty's Parent Company Fined $6.9 Million by E.U.” The New York Times, The New York Times, 10 July 2019, www.nytimes.com/2019/07/10/business/hello-kitty-sanrio-european-union-antitrust.html.

Associated Press. “EU Fines Hello Kitty Owner $7 Million for Breaking Antitrust Laws.” MarketWatch, 10 July 2019, www.marketwatch.com/story/hello-kitty-owner-fined-7-million-for-antitrust-violations-2019-07-10.

“EU Fines Hello Kitty Owner $7 Million in Antitrust Ruling.” Rapid City Journal Media Group, 10 July 2019, rapidcityjournal.com/entertainment/eu-fines-hello-kitty-owner-million-in-antitrust-ruling/article_871f57d2-e390-599f-9f56-c1c3824d753d.html.

Press, The Associated. “EU Fines Hello Kitty Owner $7 Million in Antitrust Ruling.” KMTR, KMTR, 9 July 2019, nbc16.com/news/entertainment/eu-fines-hello-kitty-owner-7-million-in-antitrust-ruling-07-09-2019-153032798.

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

Taylor, Simon. “EU Fines Hello Kitty Owner $7 Million in Antitrust Ruling.” LegalWeek, 9 July 2019, www.law.com/legal-week/2019/07/09/eu-fines-hello-kitty-owner-7-million-in-antitrust-ruling/?slreturn=20190630162710.