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| Bobby Kotick, Activision Blizzard's CEO |
Case Controversy
Activision Blizzard is one of the largest gaming creators in the world. They have produced many popular games played by millions of people all around the world. Some of the games worth mentioning are Call of Duty, World of Warcraft, and Candy Crush. The gaming industry itself prides itself on being very inclusive to all people from different backgrounds, religions, and genders. However, it would seem that is not the case for the companies that make the games individually. On July 20th, 2021, Activision Blizzard was hit with a lawsuit from the Department of Fair Employment and Housing (DFEH), which is a company in California that is predicated on making sure the people of California are protected from employers who try and violate their rights they are entitled too.
On July 20th, 2021, Activision Blizzard was hit with a lawsuit from the Department of Fair Employment and Housing (DFEH). The DFEH is a California-based company whose job is to make sure the people of California’s working rights are not violated (Workplace Rights). some examples would be fighting against gender discrimination and sexual harassment those of which Activision Blizzard is being accused. The accusations come from former employees who worked under Activision Blizzard who say the company does treat different gendered employees fairly and equally. As the lawsuit came out it spread throughout the whole industry. Initial accounts from employees came out confirming the controversies to be true. This led to a companywide walkout which occurred on July 27th-28th, 2021. During the walkout employees, past and current were interviewed based on how their experience at Activision Blizzard was. One account of this comes from an employee who worked in Activision Blizzard’s customer service department helping with glitches and other problems customers might face. She accounted that she was working with her ex-boyfriend at the time, and she was getting paid significantly less than what he was getting paid for the same job being done (New York Times).
Under federal law, it is illegal to pay employees different rates for the same job. This is protected under the Equal pay act of 1963. As well as the Title VII of the Civil Rights Act of 1964 which protects employees from discrimination against race, religion, sex, or national origin (California Discrimination Laws). This law would apply to the Activision lawsuit which under the law if the company had 15 or more employees the federal law applies any company who has less the state law would apply.
Response from the company came in the forms of emails sent internally to help address the “Frat Culture” the company was accused of having (IGN). After the release of statements by the company President J. Allen Brack was reported to step down and leave the company amid his roles in the allegations (IGN). In this report, the company had stated it was a mutual agreement for both parties to part ways after the years spent together.
After the lawsuit had been filed and gone public Activision Blizzard faced even more backlash this time it was from sponsors and stockholders who were furious at the company for not releasing information that they could have used in their decision making on what to do with the company. This resulted in many sponsors pulling their deals with the company some of the sponsors were Coca-Cola and State Farm.
Throughout the lawsuit, the company had released statements claiming they have fired multiple supervisors who were tied into the discrimination and sexual harassment reports. The number fell to 20 total employees the company had released from their positions (IGN).
Throughout the lawsuit, the company had also hired new employees who were brought in to help rebuild the trust and faith that employees should be able to into their supervisors. One of the new hires was a former Disney executive whose main goal was to liberate the company from its toxic workplace culture (IGN).
However, with the company trying to rebuild its relationship with its employees the company had come to terms with a settlement in the courtroom. The lawsuit had settled for an agreement to be paid 18 million dollars to the victims who were affected by the company’s negligence to assess the sexual harassment and discrimination reports. Now that the company has faced the legal battles and reached a settlement it does not mean that everything is to go back to the way it was before. The company has made its intentions clear now with a focus on rebuilding company trust with not only its employees but with its sponsors, stockholders, and customers throughout. The company faces a long road to rebuilding which can and only will take time to do.
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| Protesters fighting for equality |
Stakeholders
The stockholders in this specific case would be the employee's past and present, the customers, future shareholders, and finally the executives of the company. The employees both past and present were heavily affected by the handling of this case and allegations of Activision Blizzard. They had the most to lose since this case revolved around how they were mistreated and portrayed in the company. The customers had been affected because of this as well since Activision Blizzard is a large gaming company and gaming is a large sector of what people do for fun in their free time it affects their trust in the company who they spend a lot of of money on to do the right thing. Future shareholders may be inclined to invest in this company now and in the future after the company just had to pay a multimillions dollar settlement. The shareholders would not trust the company anymore to keep a transparent relationship with them since they did not in the past. Finally, the executives of the company cannot be too happy with the managerial process they currently have in the company since it led to them losing millions of dollars which affected them heavily.
Individualism
Individualism is described two different ways. Throughout the history of individualism there have been two people who have their own theory for individualism. Milton Friedman, an economist during the 90’s and early 2000’s says that businesses only goal is to profit and the only obligation for a person in business is to maximize profit for shareholders and other owners as long as they are within the law of the land. Tibor Machan was another person who spoke about individualism he agreed the only direct goal of a business is to profit. Also, he agreed that the primary obligation of a business person is to maximize profit while abiding by the law. Machan’s Individualism also adds that the direct goal of profiting may need to meet indirect goals that are not necessarily aimed at profiting. He also adds that business people may have separate goals and they may be prioritized over goals that involve profiting. In relation to this case, it is clear that we can see how individualism may be incorporated. One of the most significant things about this case that stood out was Activision’s CEO Bobby Kotick’s response to the allegations against his company. Natalie Clayton wrote an article for pcgamer.com talking about how he took a pay cut amid the lawsuits. This could be related to individualism because Kotick has a goal to profit for his company in the long run but for now, he needs to meet the indirect goal of fixing his company’s reputation which is not necessarily focused on profits. This would align with Machan’s view on individualism. Clayton says in her article, “Notably, in order to give the company "every available resource" to fix the company's cultural issues, Kotick announced a significant cut to his pay— and while he's taken salary cuts before, it seems this one pointedly includes his notoriously lofty bonuses, which have previously approached almost $200 million in value” (Clayton, 2021). It seems that right now Kotick’s long-term profit would be hindered if he did not fix this problem. His main goal right now is to fix his reputation by cutting his profit for the time being until he believes his business fixes their issues. CNN has an article about this case where they say “Kotick said the company will "continue to be vigilant" in stamping out harassment and discrimination. "We thank the EEOC for its constructive engagement as we work to fulfill our commitments to eradicate inappropriate conduct in the workplace,” His main goal right now is not aimed at profiting but they need to fulfill these goals in order to profit in the future so it could be accepted by Machan’s view on individualism.
Utilitarianism
A utilitarian would view the handling of the Activision Blizzard case by the company as unethical. Under utilitarianism, business actions should seek to maximize the happiness in themselves and others in the short-term as well as the long-term (Salazar 17). In the Activision Blizzard case, happiness was not maximized for the majority of the stakeholders which makes this unethical according to utilitarianism.
Employees (Past/Present): For the employees at Activision both current and past they were ultimately affected negatively while working at Activision Blizzard they were mistreated and subjected to discrimination and harassment in the workplace that could have ultimately been avoided if the people at the company were held to a higher standard. The one positive coming from the case is the 18-million-dollar settlement they will be receiving from the company to avoid more time and money on the lawsuit.
Customers: The customers who buy their games from Activision Blizzard were also affected negatively by the Activision Blizzard lawsuit since they are the ones who spend the money to play the games and invest in the company they were affected when the company decided to delay the release of new games. This ultimately did not make the customers happy who were waiting for the new releases for some time now.
Stockholders (Present/Future): When it comes to stockholders of the company they were affected by this lawsuit as well since they were the ones who originally put money into the company and the company had to settle for 18-million-dollars. This will lead to uncertainty when it comes to potential future stockholders and whether or not they invest in the company. They will ultimately go with a company they can trust that will not lose them money but instead maximize their profits which were not done in this case.
Executives: When it comes to the executives in the company, they were affected t0o in this case controversy. They are the owners of the company and look to maximize their profits while staying within the constraints of the law. Before the company got sued for wrongdoing in the workplace, they were happy because profits were being maximized. However, when the lawsuit went public, they were not happy anymore. The lawsuit ended up losing them money which none of them can be happy about now. They will now look into new management and improve from the old one which lost them money before, so it does not happen again.
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| Workers and activists protest to stop the workplace harassments |
Kantianism
A Kantian would view the initial actions of Blizzard to be unethical and impermissible. As executives attempt to address the situation, situations of sexual harassment got out. An example of this would be the one involving Emily Mitchell after the breastfeeding situations were addressed. A Kantian would view this as a violation within acting consistent to the rules and not being exempt. As in the case, sexual harassment was addressed with the breastfeeding scenario, except weeks later, the Emily Mitchell situation surfaced in the lawsuit. These actions are unethical and impermissible as they violate the formula of humanity. The formula of humanity claims that people should not be treated as a mere means but as an end. In other words, not using people in a negative way to achieve something. This relates back to the breastfeeding case, using a woman exposed to achieve some sort of sexual/ humor pleasure.
As the case unfolds, hundreds of Blizzards employee’s walkout against the company due to their sexual harassment scandals. The walkout promotes having a safe spot to work for women and that sexual harassment not belonging in the workplace. Energy was optimistic as hundreds demanded for a safer environment. Sticking with the Kantian view. Employees demand that all employees are equal to the rules, and nobody is exempt. Especially at the cost of a major federal lawsuit. A Kantian views the early and mid-parts of the case unethical. However, a Kantian would view the most recent parts of the case to be ethical.
From late September to our current date, Blizzard has been working with $18 million in means of compensation, improving management, and other improvisations of quality in the workplace. Blizzard’s mission is to improve honesty and trust as it is ethically right. These attempts to improve their record matches the three motivations of a Kantian…
1. I will be honest with my customers to gain their trust and get repeat-business.
2. I will be honest with my customers because I like them.
3. I will be honest with my customers because it’s the right thing to do.
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| Protesters outside of ACTi visions facilities |
These main motivations from a Kantian belief are being used to improve relations with their business internally and externally. Blizzard represents the Kantian view as it goes back to the core of playing by their own rules and having no one be exempt. Also improving themselves using Kantian motivations.
Virtue Theory
When talking about Virtue Theory, Aristotle made virtue theory. It focuses on if a person is virtuous or not. The main point in virtue theory is courage, honesty, temperance, and justice. Aristotle had said People must live by virtue theory to exercise rationality to function well and live good lives. And People who behave like this will live a good life. Activision Blizzard was not courageous because they weren’t doing the right thing. They discriminated against pregnant employees and sexually harassed females, causing a frat boy environment. The second one is honesty, and they weren’t treating their female employees equally. Men made way more money than the women working there, and when women would be in the lactation room(a lactation room is a place where women go to breast pump), room men would kick them out so they could have meetings, and they would have to find another place to do it. The third is temperance which is something reasonable. The workplace was not in which male employees drank copious amounts of alcohol as they made their way between office cubicles and engaged in inappropriate behavior towards female employees. The last virtue is justice. They were not very just to their employees. They treated the employees so unethically. They would get constant harassment from male employees.
An example of this is a former Senior Creative Director, Alex Afrasiabi, a World of WarCraft. They would hit on female employees engaging in blatant sexual harassment with little to no repercussions(theverge.com). During company events, he would tell them he wanted to marry them, attempt to kiss them, putting his arms around them in plain view of other employees, especially the male employees making it seem like it was “acceptable” (theverge.com). And people would have to intervene and physically pull him off his female counterparts. Also, since he had harassed females so much, his suits were nicknamed the “Crosby suite” after the alleged rapist Bill Cosby (theverge.com). And when the women would speak up, the people who were doing the harassment would get a slap on the wrist every time. And when it came to paying and being promoted, women were offered much fewer promotions than their counterparts and paid much less.
Action Plan
Our mission, to connect and engage the world through epic entertainment has never been more important. Through communities rooted in our video game franchises we enable hundreds of millions of people to experience joy, thrill and achievement.
Our mission is to overall provide a workplace harmony internally to provide the best experience possible from producer to consumer. We want to make the gaming community a place where people can feel included regardless of their overall orientation.
Step 1: Hiring more women means being more representative in the gaming community since they have been struggling with this in the past
Step 2: Make promotions available to people of different genders. This is a good step for the company to right the wrongs it had done before as well as add onto its new core values of transparency and accountability
Step 3: Remodel HR to be more employee-based/ friendly. This means starting with a new department head because the old human resources had lost a lot of credibility in the company with employees specifically since they were not protected by HR during this controversy
Step 4: Zero tolerance for harassment in the workplace rule. Applying this rule to the company seems like a no-brainer even before, but having it as a new step in the process will allow the company to follow through and make sure the rule is implemented throughout the company.
Core Values
Respect- In order to have a long-lasting company it needs to gain the respect of its employees and customers who were affected by the companies gross mishandling of these allegations.
Equality- as seen by the walkouts by former and current employees shows that they demand equality in the workplace. By implementing equality we can see Activision blizzard be a successful company once again.
Accountability- Being able to be held accountable is one of the most important parts of running a business if it is not one of the core values implemented when running a company you will not be successful in the long run.
Transparency- being transparent allows employees and customers to hold you at a high standard and build a better relationship with the company. Transparency is something that comes up a lot with business owners who are successful and profitable for a long time.
After establishing a new mission statement and core values in the company, Activision is now ready to start following them and holding their employees to the new standards. First, being one of the largest gaming companies in the world, Activision can start remodeling its Human Resources department. In the case controversy, we see that HR did not do an excellent job protecting employees in the company. This is why remolding this department can lead to a better function in the company, so this will not happen again. They can start with a new department head which they have already done by hiring other leaders from big companies such as Disney. Secondly, after that process has been taken care of,, they can segway into the hiring and promotion processes. Having a new department that understands the new values the company has placed can help them with hiring more women since they were grossly underrepresented in the company before. With hiring more women, we see a more significant representation in that company who can hold the leaders accountable better. As well as hiring, we can see a change in promotion at this company. They have struggled in the past since women almost never got the chance to be promoted into higher management at this company. This will show that the company is ready to move forward and be more inclusive after its past history showed it being more of a ‘frat house' like culture. As well as implementing these new changes we can finally move onto the last step which will hold everyone in the company accountable regardless of gender. We expect the company to insert a new rule which will hold everyone responsible. The new rule being there is zero room for tolerance of sexual harassment or discrimination in the workplace. Making this a rule in the company will be the final straw of the company's implementations. This rule will finally bring on the change in a good way for the new version of Activision Blizzard to take over and be a leader in the gaming world.
The mission statement we created differs from the old one as it relates more to the company's employees instead of just the customers. We wanted to keep the company's old statement but add a sense of inclusiveness to the workplace since that is the biggest point where they struggled in this case.
Connor Smith, Ryan Wawro, Ariel Johnson, Harrison Mendrala
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| Protesters outside of Activision's facilities |
References
Bankhurst, Adam. “Activision Blizzard Lawsuit Timeline: The Story so Far.” IGN. IGN, November 4, 2021. https://www.ign.com/articles/activision-blizzard-lawsuit-timeline-the-story-so-far.
Browning, Kellen, and Mike Isaac. “Activision, Facing Internal Turmoil, Grapples with #Metoo Reckoning.” The New York Times. The New York Times, July 29, 2021. https://www.nytimes.com/2021/07/29/technology/activision-walkout-metoo-call-of-duty.html.
Paul, Kari. “Activision Blizzard Scandal a 'Watershed Moment' for Women in the Gaming Industry.” The Guardian. Guardian News and Media, August 8, 2021. https://www.theguardian.com/technology/2021/aug/08/activision-blizzard-lawsuit-women-sexual-harassment.
Rhiannon. “California Gender Discrimination Laws.” Workplace Rights Law Group, June 23, 2021. https://workplacerightslaw.com/library/discrimination/gender-discrimination-laws-california/.
Salazar, H. The Business Ethics Case Manual. n.d.
Alford, A. (2021, October 27). Full timeline of the activision blizzard gender discrimination lawsuit [updated 08/12]. InvenGlobal. Retrieved November 15, 2021, from https://www.invenglobal.com/articles/14659/full-timeline-of-the-activision-blizzard-gender-discrimination-lawsuit.
Clayton, N. (2021, October 28). Activision CEO Bobby Kotick takes a significant pay cut amid the publisher's ongoing lawsuits. pcgamer. Retrieved November 15, 2021, from https://www.pcgamer.com/activision-ceo-bobby-kotick-takes-a-significant-pay-cut-amid-the-publishers-ongoing-lawsuits/?utm_source=facebook&utm_medium=news_tab&utm_content=algorithm&fbclid=IwAR2FUr8NRXoLZD-d08ng1BMNYdyJQ5Uo3S3GePTuzQz9DVOZIZUlCv2FJCA.
Diaz, J. (2021, September 28). Activision Blizzard strikes an $18 million deal over its workplace harassment lawsuit. NPR. Retrieved November 15, 2021, from https://www.npr.org/2021/09/28/1041068091/activision-blizzard-strikes-an-18-million-deal-over-its-workplace-harassment-law.
Fenlon, W. (2021, September 21). Everything that's happened since the Activision Blizzard Lawsuit Went Public. pcgamer. Retrieved November 15, 2021, from https://www.pcgamer.com/activision-blizzard-lawsuit-controversy-timeline-explained/.
Iyengar, R. (2021, September 28). Activision Blizzard says it will pay $18 million to settle harassment lawsuit. CNN. Retrieved November 15, 2021, from https://www.cnn.com/2021/09/27/tech/activision-blizzard-eeoc-harassment-settlement/index.html.
Peters, Jay. “Activision Blizzard's Rot Goes All the Way to the CEO, Alleges Bombshell Report.” The Verge, The Verge, 16 Nov. 2021, https://www.theverge.com/2021/11/16/22785457/activision-blizzard-bobby-kotick-ceo-wall-street-journal-wsj-report-allegations.
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