Fox News: Chairman Faces Multiple Sexual Harassment Accusations (2016)

CONTROVERSY
Fox News Channel launched in October of 1996 by billionaire mogul Rupert Murdoch, who hired media consultant Roger Ailes as its founding CEO. Today, the company is worth upwards of $11 billion dollars, is available in 90 million homes, and is recognized as the dominant cable news network. The channel has been the most watched cable news network for fourteen years in a row, with more prime time viewers than MSNBC and CNN combined. Despite its massive success, the company's reputation has been tainted by accusations of bias, misrepresentation of facts, and most recently, fostering a work environment in which sexual harassment can easily occur.

Roger Ailes
 Former Chairman and Founding CEO of Fox News

On July 26, 2016 Gretchen Carlson, a former anchor for Fox News, filed a sexual harassment lawsuit against long time Fox News Chairman Roger Ailes. The lawsuit alleged that Carlson was terminated for rejecting Ailes' sexual advances. Later that week, New York Magazine reporter Gabriel Sherman reported similar accounts from six other women who also alleged sexual harassment at the hands of Ailes. Ailes and his representatives vehemently denied all allegations, claiming that each story was fabricated. However, upon an internal review into Carlson's claims, Fox News owner Rupert Murdoch apparently found enough information early into the review to conclude that Ailes needed to be let go. Murdoch decided to give Ailes an ultimatum, asking him to either resign by August 1 or be fired immediately. Ailes chose to resign on July 21, but not without a $40 million dollar check from Fox News and a public thank you for his time with the company. Additionally, he was able to stay on as a consultant for the parent company, 21st Century Fox, for another two years.

In August 2016, following Ailes’ resignation, reporter Andrea Tantaros also filed a lawsuit against Fox News for sexual harassment, accusing Ailes as well as two other men on the Fox News Team. Her suit claimed that she had spoken to Fox News executives about Ailes' inappropriate behavior toward her in 2015, and that her allegations got her demoted then later taken off the air. One month later, 21st Century Fox announced it had settled a lawsuit with Gretchen Carlson over her allegations of harassment against Ailes for $20 million dollars. The company also made at least two other settlements, the names and details of which were not publicly disclosed.   

Gretchen Carlson
Reporter, Most Public Ailes Accuser

STAKEHOLDERS
This controversy involves many stakeholders, more of which seem to be discovered every few weeks. Fox News itself is a stakeholder, as the allegations were made from several employees about another employee. The allegations make for embarrassing headlines and have led to millions of dollars spent on behalf of the company in court. Roger Ailes is an obvious stakeholder, for he was accused of the harassment and asked to resign. Additionally, Gretchen Carlson and Andrea Tantaros, as well as the other six victims who anonymously filed complaints and any woman working for Fox News as a reporter, consultant, or recurring guest are all stakeholders because they either have been or could have been victims of sexual harassment in this workplace. Fox News reporter Megyn Kelly and other women on the Fox News team have also been affected by this case, as they were asked to defend the accused and discredit the accusers.

INDIVIDUALISM

Example of a Potentially Damaging Headline

Individualism states that a business's only goal should be to make as much profit as possible, so the only obligation that a business person has is to maximize profit for the owner and stockholders of a company while obeying the law. Individualism analyzes the outcome of a decision rather than the intention of it. Fox News paid out at least $20 million dollars to Gretchen Carlson, one of Ailes' accusers. The company also settled with at least two other women for undisclosed amounts, and paid Roger Ailes $40 million dollars upon his resignation. Additionally, the company incurred other fees such as paying its legal teams and private investigators, plus paying Ailes a salary for at least two more years as he advises another area of the company. The company also broke laws by allowing sexual harassment to occur and continue to occur within the workplace. According to individualism the owners and stockholders of the company were stolen from, as their profits were spent on costs that could have been prevented. In sum, the company did not obey the law or maximize profits for its owners, and did not act ethically according to this theory.

UTILITARIANISM
Utilitarianism argues that happiness is the only thing of intrinsic value and therefore people must impartially bring about happiness in all beings capable of feeling it. A utilitarian would consider a decision ethical if it maximized happiness and minimized pain for all stakeholders. Fox News suppressed claims of sexual misconduct in the work place, failed to investigate early on, and fired women who came forward. This created a hostile work environment in which a powerful man was allowed to behave inappropriately for allegedly at least a period of one year without consequence, and any young female employee was expected to endure it or leave the company. The company's decision did not impartially bring about happiness, as it appeared to only maximize the happiness of one man, while hurting the company's own reputation, the victims, and other employees. Their behavior does not fit the criteria of utilitarian ethics, and so it cannot be considered ethical under this theory.

KANTIANISM
The basic principles of Kantian ethical theory are to act rationally, allow and help others to act rationally, respect others and their individual needs, and be motivated by the Good Will. Good Will refers to doing what is right simply because it is right. Kantianism does not allow deception or manipulation, for these behaviors cheat others out of receiving complete information which is necessary to make their own rational decisions. This theory also includes the Formula of Humanity, which requires that people act in such a way that they treat others always as both an end and a mean. The term "end" according to Kant refers to something that is valuable in itself, or a goal, while the term "means" refers to a way to get something else. Essentially what this formula means is that people cannot use other rational people simply as tools to get what they want. Fox News violated some of the key principles of this theory. The company did not respect Roger Ailes' accusers when they fired or demoted them. They were not motivated by the Good Will - Fox News only let Ailes go to avoid further harm to the company's reputation, not because it was the right thing to do. Furthermore, the company never issued an official statement regarding the controversy, instead they issued a kind 'thank you' to Roger Ailes for his decades of service with the company. This, coupled with the secret law suits and anonymity of other victims, left viewers and other stakeholders not fully informed. Fox News did not behave ethically according to Kantian ethical theory.

VIRTUE THEORY
Virtue Theory is derived from Aristotle's Functionalism, which states that a good person fulfills their function well, and that a person is happy when that function is fulfilled. Virtue Theory focuses on virtues, which are good characteristics that enable things to function properly, versus vices, which enable things to malfunction. There is a plethora of each, but the theory highlights four main virtues. These four main virtues include courage, honesty, temperance, and justice. In business, courage means risk-taking and a willingness to stand for what is right. Honesty refers to agreements, hiring, and employee treatment. Temperance means having reasonable expectations and justice means hard work, fair practice, and quality products. Fox News did take a risk by continuing to employ Roger Ailes amidst the various accusations, but it is not considered virtuous because it inhibited others from doing their jobs. The company was not honest in hiring, as Ailes allegedly offered jobs to women in return for sexual favors and the company did not treat him the way it treated others. Fox News did not exhibit temperance, for its expectations for women to remain silent were not reasonable. Finally, the company did not practice justice when it paid Roger Ailes tens of millions of dollars upon resignation. Fox News violated each of the four main virtues of business in this theory or allow all employees to fulfill their duties well and therefore did not behave ethically.

JUSTIFIED ETHICS EVALUATION

Fox News Logo

Upon researching and analyzing the facts of this case, I personally believe that Fox News’ gravest ethical violation was initially siding with him over his accusers with little investigation. In some ways, it appears as though Ailes was even rewarded for his behavior in the form of a $40 million dollar exit deal - twice the amount granted in Gretchen Carlson's settlement - and public praise for his professional career. This behavior reflects poorly on the company's values and priorities. In addition, they suppressed victim claims and even punished those who tried to seek justice by firing, demoting, or discrediting them. Fox News failed to provide a workplace offering fairness, equality, safety, or comfort. My opinion is separate from the ethical theories examined above and could be changed with new information.

UPDATE APRIL 13, 2017

Although Roger Ailes has been removed from the position of Chairman and Chief Executive Officer, the controversy involving the culture of sexual harassment at Fox News is ongoing. On April 1, 2017 the New York Times published an investigation on Bill O’Reilly, star of cable news’ most popular program, “The O’Reilly Factor.” The story detailed how over $13 million has been paid out to address complaints and settle law suits from women about O’Reilly over the past decade. The complaints alleged either verbal abuse, sexual harassment, or sometimes both. Most recently, Wendy Walsh, a former recurring guest on “The O’Reilly Factor,” was just granted an internal investigation by Fox into her sexual harassment claims.

Since the story broke, the show’s ad time has decreased from just over fifteen minutes to less than seven minutes. This is because advertisers such as Mitsubishi, Aleve, Mercedes-Benz, Allstate, Subaru, and BMW have pulled their ads slated to air during his show. On April 11, amid this exodus of advertisers, O’Reilly announced he would be taking a voluntary, two week vacation to an undisclosed location. As of April 13, O’Reilly is expected to return to his show on Fox News on April 24 with no punishment by Fox or changes to his program.

RESOURCES

Byers, Dylan. "Megyn Kelly Outlines Harassment Allegations against Roger Ailes in New Book." CNNMoney. Cable News Network, 3 Nov. 2016. Web

Byers, Dylan. "Bill O'Reilly taking vacation amid scandal, advertiser exodus." CNNMoney. CNN Media, 11 Apr. 2017. Web.

Kelly, Megyn. Settle for More. S.I. Harper Collins, 2017. Print.

Kurtz, Howard. "Gretchen Carlson Harassment Suit against Roger Ailes Settled." Fox News. FOX News Network, 6 Sept. 2016. Web.

Kurtz, Howard. "Roger Ailes Resigns as Fox News Chairman, Rupert Murdoch Assumes Acting Role." Fox News. FOX News Network, 21 July 2016. Web.

Link, Taylor. "Here’s how Fox retaliated Against a Local Reporter." Salon. Salon Magazine, 11 Apr. 2017. Web.

Reilly, Katie. "More Women Accuse Fox News CEO Roger Ailes of Sexual Harassment."Time. Time, 9 July 2016. Web. 31 Jan. 2017. Web.

Steel, Emily. "Fox Faces New Lawsuit Claiming Harassment by Roger Ailes." The New York Times. New York, 13 Dec. 2016. Web.

Sherman, Gabriel. "How Fox News Women Took Down Roger Ailes." Daily Intelligencer. New York Magazine, 2 Sept. 2016. Web.

Sherman, Gabriel. "6 More Women Allege That Roger Ailes Sexually Harassed Them." Daily Intelligencer. New York Magazine, 9 July 2016. Web.

Steel, Emily, and Michael S. Schmidt. "Bill O’Reilly Thrives at Fox News, Even as Harassment Settlements Add Up." The New York Times. The New York Times, 01 Apr. 2017. Web.

Is GameStop ripping off it's Customers? (2010)

By Alexis Javier-Gomera

Controversy

Power to the Player

           GameStop might seem like the kind of store that all players would love. Has the newest game, pre-order bonuses, is always well informed so it can answer any questions you might have, as all the accessories when it comes to games. Publishing a magazine by the name of Game Informer. Everything that they did was for the customers and the player, proof of their slogan 'Power to the Player'. But does that mean that they care for their customers? Do they really care about them in the first place? While GameStop does have genuine care for their customers and the employees themselves doesn't try to cheat out the customers. There is no denying the fact that there are some "deals" that GameStop has that would be better if they didn't exist at all. Some of the few example would be the trade deal, where you would bring in any number of games and/or console and can trade it for real cash or store credit. With this you can trade in your old games that you either don't want or got bored of it, even those games that you bought by mistake, and get back money from it. It can sound good on paper but that only last until you trade. For one, you get little amount of money back. You could have bought a new console that just came out recently (like the Nintendo Switch) to trade and you get back only 20-30% of the total price that you paid for it. So far nothing has been done about this and in fact seem like GameStop knows what it's doing.
Stakeholders
           Stakeholders are the party that are involved in the transaction. In this case, it would be the customers, which are the gamers or family members of said gamers, and the employees. None of the party are at fault about this. The employees are just doing their job, they have no say on how the deals goes and only says what they were told to say. The customers, however, are obviously not happy in the less bit about almost getting cheated on by the company that they believe tried to satisfy them to the fullest. Or at least that would be the case if the customers noticed how they are getting ripped off. As it stands, they don't know that they are selling their game, console, or accessories at a lower price than what they should rightfully get if their items are in mint condition.

Individualism
           Individualism is the habit or principle of being independent and self-reliant as well as the profit that is made in the process. This was not in favor of the consumers and were instead in favor of GameStop. GameStop gained more money by giving away as little as possible back to the customers. Because they were getting the games and consoles back, they could easily refurbish it and getting it working as good as new. Sell it for a lower, but still high, price for the next person to buy it. Rinse, repeat and the executives of GameStop find themselves making more money than ever. In a way, it can almost be argued that GameStop did the trade deal so that they can get the game back and sell it again without having to buy the same copy too many times, and when a game becomes broken beyond repair then they throw it out and buy a new one to replace it.

Utilitarianism
          Utilitarianism is the doctrine where any action is made to make the majority happy. And it does do that but only when it doesn't come down to any return deals that they make. Selling games and console, telling about the latest release and information, and being nice in general is the right way on doing things, which was what brought satisfaction to the customers. The trading, however, doesn't help the company when it does get noticed by the customers. Customers can easily get angry when it comes to them buying stuff as well as making deals with the employee and it doesn’t go their way. If they don't believe they are getting the best, like any other customers everywhere else, they'll end up complaining and the employee will get exasperated and no one would win.

Kantianism
          Kantianism states that if something is harming someone or something then it is unethical and not rational in the least. This doesn't exactly harm anyone physically. In the end, you do get money back from a game and/or console that you didn't want anymore and wanted to get rid of it. It's mostly the principal of things. Given the game cost a good amount of money but then you soon found out that you didn't like it so you're returning it, only to find that you don't even get half of your money back for it. For games that you had for years is understandable since you had it for a long time and it got old as well, but for a game that you only had for a week or so and had more than enough? That’s the sort of thing that is not rational as the company is ripping people with the deal that sounds good in general when it actuality it can be in a way, robbery.

So sad even the Xbox is crying

Virtue Theory
           Virtue Theory is where if something is functioning the way it should, then it is happy. GameStop was technically being honest about their deals and about the trade function. That doesn't mean that everyone that walked out of the store were happy. GameStop managers gains more by the deal than the customers and that's very unethical. The employees don’t have any say in how much they can give back to the customers as everything is done by the computer. It can't be considered ethical of the employees since they let it happen for who knows how long. So, in all this, it can be considered unethical since the manager doesn't change how the trade system works. The same couldn’t be said about the employees since they don’t like the trade one bit.

Justification Ethics Evaluation
          The actions of both the manager of GameStop and the employees aren't that justified as neither tried to work in a way that can leave the customers satisfied. While this is a small thing compared to everything else that GameStop does for the gamers. You would think that a company that has the slogan 'Power to the player' would do everything they can to give the best of the best for the customers, and that includes the trade system. The fact that this has been going for a long as anyone can remember, there's no way the manager hasn't noticed the unfairness that this was doing. Especially with how the customers has social media to recount their tales about GameStop. The words would have gone to the manager eventually, so the fact that nothing is changing just shows how little he cares.

References

Does GameStop try to rip you off? (n.d.). Retrieved from GameSpot: https://www.gamespot.com/forums/offtopic-discussion-314159273/does-gamestop-try-to-rip-you-off-26792485/

Gaudiosi, J. (2012 , April 16). An Employee Believes GameStop's Used Game Racket Would Be Illegal If Government-Regulated. Retrieved from Forbes: https://www.forbes.com/sites/johngaudiosi/2012/04/16/an-employee-believes-gamestops-used-game-racket-would-be-illegal-if-government-regulated/#51d6a1d64e2c

Mueller, J. (2014, August 6). Gamestop ripping customers off now more than ever. Retrieved from TechnologyTell: http://www.technologytell.com/gaming/133161/gamestop-ripping-customers-now-ever/

CoverGirl: The First Ever CoverGirl Male (2016)

Controversy

   

CoverGirl's "So Lashy" Campaign

 CoverGirl is a worldwide known cosmetics brand and has been known for its use of celebrities for being their “cover girls”, but on October 11^th, 2016, James Charles became the first male to be CoverGirl’s cover guy. “James Charles will appear in campaigns for CoverGirl’s newest mascara, “So Lashy.” The brand explained that its newest launch is designed to work on all lash types… he is perfect person to front the campaign” (Feldman, 2016). He will represent CoverGirl because “CoverGirls” are role models who break the boundaries and are able to express themselves without any fear about what others say. James Charles is the perfect person to represent CoverGirl because he is confident and fearless when it comes to putting his makeup work on social media for millions of people to criticize him for being a boy who is into makeup (Feldman, 2016). 

James Charles in the new ad for CoverGirl's "So Lashy" mascara

     Makeup is typically only supposed to be worn by woman so by having a male represent a cosmetic product, it can either make or break the company. Men are supposed to be rugged and tough while women are supposed to appear flawless and soft. Many older generations in society are against people changing social norms. “The topic of gender confusion and transgenderism has been the subject of much controversy in the United States, with conservative voices…speaking out against movements that seek to teach children that…they want to be on any given day” (Zaimov, 2016). This shows that many conservative people are against people expressing themselves with whatever gender they choose to be. 
     With a male being the spokesman for CoverGirl’s new product, it causes a lot negative responses on social media and on other social platforms like blogs. “Many trolls on social media went onto James Charles’ Instagram page to comment negative things about his CoverGirl sponsorship. One comment read, “’@CoverGirl by definition, you might want to reconsider the name of your brand since this new change of your cover’” (Szilagyi, 2016). The main controversy is the how people are not willing to be okay with CoverGirl broadcasting males as wearing makeup. Another example of criticism is through blog platforms. This blog talks about how her six-year-old child asked about why her father doesn’t wear makeup and she had to make the choice to tell him that he doesn’t wear makeup because makeup is for girls. She stated that her son is living in a world where he has to grow up faster than she wants him to. “I need to find new makeup now. I can’t support this” was the final thing Nicole Dean said about CoverGirl (Dean, 2016). Although this is only one blog, it shows that many conservative parents do not want their children being exposed to a man wearing makeup so they will not buy CoverGirl’s products. There is a large amount of backlash on CoverGirl for using a male brand ambassador which, in the end, is only hurtful to their brand.

Stakeholders

            Stakeholders are people that are affected by the company’s actions. In this case the people that are affected by CoverGirl’s action to use James Charles as a spokesperson for their new product are the customers and the community. The first group of people by CoverGirl’s actions are its customers both male and female. Many customers are unsure if they are going to buy their products because a man is marketing it. This will decrease the sales of CoverGirl because regular customers do not believe that the new products will work as well as other products that were sponsored by women.  The next stakeholder is society because many people have strict views on social norms. They believe that only women should wear makeup. The last stakeholder is CoverGirl’s brand itself. The risk of putting a man as the face a cosmetic brand is extremely high. Choosing a wrong spokesperson is toxic to a brand which means people will not respect CoverGirl’s choice and not purchase products from them anymore. 

Individualism

Coty's headquarters in NYC

     Individualism is equal to egoism (selfishness) plus rights-based constraints. Friedman’s theory of individualism is to only be obligated to the stockholder and that the only goal of the business is to maximize profit for the owner or stockholders within the constraints of the law. Before the decision of using James Charles as the brand ambassador, Procter and Gamble sold CoverGirl to Coty. In order to increase the marketing of CoverGirl, which will help increase sales, CoverGirl decided to have someone that they can market to younger generations, how they are going to use more digital markets and use someone who has a large following on social media.CoverGirl chose James Charles because he is able to connect with others on social media and he could increase the social buzz surrounding CoverGirl, but it also allow for more people to publicly express their negative opinions.  . The Coty stock right now does not maximize the profits for the stockholders (Lachapelle, 2017). According to Procter and Gamble’s 10k annual report, their beauty brands, which includes CoverGirl before they were sold to Coty, the net sales in 2016 from their beauty brands was $11,477 while in 2015 it was $12,608 (“Annual Report”). This is a decrease in their sales which does not maximize profits for their stockholders. The decision of using James Charles as their ‘cover boy” is an unethical one because he is not going to help maximize stocks which does not benefits the stockholders of the company.

Utilitarianism

     Utilitarianism is that happiness or pleasure are the only things of intrinsic value. The business is responsible to bring happiness and pleasure to all beings capable of feeling it. A utilitarian measures the happiness of each stakeholder and looks at what can be changed. By picking James Charles as the new brand representative for CoverGirl, the company was looking to make everyone happy both men and women. There is a mix of people who are happy and unhappy with James Charles representing a cosmetics’ brand in society though. Older generations are unhappy because they are focused on the old social norms where only women can wear makeup which leads to many loyal customers not purchasing Covergirl’s products. CoverGirl does not maximize the happiness of their customers with their decision to have James Charles representing their brand. With all the negative tweets/comments on social media to the conservative blogs that do not agree with a man wearing makeup, a majority of society is unhappy with CoverGirl which leads them to boycott CoverGirl and go to another brand. The brand suffers from this decision because they are losing their loyal customers which hurts CoverGirl’s profits and their image to their consumers. When a brand starts to lose valuable customers, they lose their image as a reputable brand. Since most of the stakeholders will not maximize their happiness with the decision of using James Charles’ as a brand spokesman, CoverGirl was unethical.

Kantianism

James Charles' makeup looks

     The basic principles of Kantianism is to act rationally, allow and help people to make rational decisions, respect people, their autonomy, and individual needs and differences and be motivated by Goodwill which is seeking to do what is right because it is right. CoverGirl’s decision to use James Charles as their brand spokesperson was not a Kantian decision because they disrespected everyone based on how they wanted to be treated. They are not giving consumers enough information of the mascara and information of James Charles as a spokesperson to allow customers to make critical decisions on whether or not to buy from CoverGirl. CoverGirl is not going with the formula of humanity because they are not treating their consumers as equal individuals.They are only focusing on the younger generation that relies more on social media and having their own views on males wearing makeup. CoverGirl is not focusing on how older generations are more resistant to change and are not familiar with men wearing makeup.  Using James Charles to introduce the new product called So Lashy, which is a universal mascara, is not allowing the brand to respect older generations who wants to transform their lashes regardless of their gender (Kell, 2017). This is not an ethical decision according to a Kantian.

Virtue Theory

     Virtues are characteristics that allow things to function properly which depend on the things function and the thing’s circumstances. The virtues of character that CoverGirl uses are courage, justice/fairness, temperance, and honesty. In order to go along with the Virtue theory, CoverGirl’s should continue to with using James Charles as its spokesman which goes along with courage. Putting someone as the face of a brand, especially since a man has never represented CoverGirl, is a huge risk that a company takes in order to market to their young consumers, not their older customers. CoverGirl did not treat all of their customers fairly. They completely disregarded how their older, loyal customers would react to the news of a male brand ambassador. Although they tried to make a decision that treated the new generation fairly, they completely disregarded their other customers. The next virtue is temperance which means that the business had to have realistic expectations and desires. CoverGirl had expectations and desires when they chose James Charles as their brand ambassador. They believed that a fresh male face would help them increase their sales for their brand and it would help them reach a larger market for their products. These were unrealistical expectations because CoverGirl neglected a big part of their market which is the older generation of customers. The last virtue was honesty which is taking responsibility for one’s feelings and actions. CoverGirl did not address these hateful comments which they should have done from the beginning and state why they chose a male representative. CoverGirl was not honest with their motives which disrespects their customers. CoverGirl was not ethical in this theory because they are not able to justify their actions with the justice/fairness, temperance, and honesty virtues, but did display the courage virtue.

Justified Ethical Decisions

James Charles on the Ellen show

     CoverGirl’s actions were all unethical according to all four of these theories. I believe that CoverGirl was unethical in their decision to use James Charles as a brand ambassador. If they formally introduced James Charles to the world and issued a clear reason why they chose him, they could have reduced the amount of hate that CoverGirl and he received. CoverGirl only was thinking about the younger generation that is more focused on dismissing gender norms. They did not take into consideration how their loyal, loyal customers would feel about this decision. CoverGirl could have avoided any negative consequences if they took time to look at their market and evaluate all possible candidates to be their CoverGirl before they chose James Charles. If CoverGirl can easily lose customers over a brand representative, I think it is worth it to fully understand who their customers are and evaluate how much they are willing to risk due to this decision. 

References

Dean, N. (2016, November 27). "Mommy, why doesn't daddy wear makeup?" - Black Friday Events Lead Conservative Mother To Fear The Worst. Retrieved April 09, 2017, from https://homeschoolbase.com/mommy-why-doesnt-daddy-wear-makeup/

Feldman, J. (2016, October 11). Meet The First Ever Male CoverGirl, James Charles. Retrieved January 27, 2017, from http://www.huffingtonpost.com/entry/cover-girl-boy-james-charles_us_57fbf36ee4b0b6a43034bd60

Kell, J. (2016, October 13). CoverGirl's First-Ever Male Model Is Genius Gen Z Marketing. Retrieved March 28, 2017, from http://fortune.com/2016/10/13/covergirl-male-model-gen-z-james-charles/

Lachapelle, T. (2017, February 28). Coty's CoverGirl Makeover Requires Patience. Retrieved March 28, 2017, from https://www.bloomberg.com/gadfly/articles/2017-02-28/coty-s-covergirl-makeover-won-t-be-easy-breezy

Makeup, Men, and Stereotypes. (2016, July 22). Retrieved March 27, 2017, from https://www.trendage.com/blog/2016/05/16/makeup-men-and-stereotypes/

Zaimov, S. (2016, October 12). CoverGirl Picks 'CoverBoy' as Its First-Ever Male Makeup Model. Retrieved January 27, 2017, from http://www.christianpost.com/news/covergirls-new-makeup-model-is-a-boy-james-charles-170753/

American Airlines: Bankruptcy (2011-2013)

Controversy

American Airlines logo

In 2011, American Airlines filed for bankruptcy, the same day the new CEO, Tom Horton took control of the company. Over the prior 10 years, American Airlines had lost over $10 billion, putting the company in a precarious financial position. In efforts to reduce costs, Horton proposed a variety of so-called solutions. One of his proposed solutions was to cut over 13,000 jobs, which the bankruptcy court didn’t allow. Instead, Horton cut pay and benefits for pilots, which resulted in many flight delays and cancellations that year. Over the two years Horton spent as CEO of American, he only marginally improved the company’s deficit. Horton decided to leave the company in 2013 and hand the position over to Doug Parker, who is currently the CEO of American Airlines. Upon Horton’s departure, he requested a $20 million severance package, otherwise known as a golden parachute, all while the company was still in bankruptcy. The bankruptcy court ruled against the severance package; however Horton fought against it claiming that he had assisted with the company merging with its biggest competitor, United Airlines and that he still deserved the severance package. In the end, Horton received a $17 million golden parachute as well as 171,000 shares of American Airlines stock, despite the fact that the company was in bankruptcy at the time and the investors should have been the top priority. 

Stakeholders 

Tom Horton, former CEO of American Airlines

American Airlines over the years has been seen in a negative light by its stakeholders, which as a result has damaged the company’s reputation and tarnished the faith of investors. American Airlines has three major groups of stakeholders: its employees, its investors, and its customers. American Airlines’ largest group of stakeholders are likely its investors because they were the ones who primarily financed American Airlines’ operations. By allowing Horton to take a severance package that large, it is essentially robbing the investors of the capital they put forward for American. The other group of stakeholders for American are its customers because they are the ones who purchase American’s tickets and provide the company with revenue that they need to operate. By cutting pay and not maximizing the return to investors, American provides its customers with a subpar flying experience, which as a result provides them with less revenue as they choose to fly other airlines. Finally, another large group of stakeholders are American’s employees because they rely on American for a job. If the company isn’t maximizing profits and is giving their CEO enormous severance packages while cutting employee pay and benefits, they are doing their employees a disservice and potentially costing them their jobs in the future.

Individualism

Individualism is an important aspect of business ethics. Originally coined by Milton Freedman, individualism states that “the only goal of business is to profit, so the only obligation that the business person has is to maximize the profit for the owner or the stockholders”. In respect to this case, American Airlines did not comply with the ethical concept of individualism. Not only did Horton not help American Airlines much in terms of generating profit for the company, but he also counteracted the maximization of profit for the shareholders by claiming a large sum of money for himself. An individualist would most likely recommend that Horton took a smaller severance package and redistributed the money back to the shareholders who have lost so much on their investments in the defunct airline. Like most business decisions, the stakeholders are always affected, and under the principle of individualism, the stakeholders are the ones who should have received compensation for the poor business decisions that American Airlines has made. 

Above: Summary of American Airlines' (AAL) financial statements during Horton's years as the company's CEO.

Utilitarianism

Utilitarianism is the belief that decisions made should be made to benefit the greater good. Essentially what this means is that when making decisions it is important to give the most amount of good to the most amount of people. This, in a way builds off of individualism in the sense that the company should be focused on the bigger picture and the people it impacts, rather than itself. Where utilitarianism differs, however, is that it considers more than just the stakeholders. In American Airlines’ situation, the CEO did not make decisions with utilitarianism in mind. It is apparent that the only person that CEO Tom Horton wanted to benefit was himself. Unfortunately, for many businesses, greed is a major issue – an issue that utilitarianism tries to mitigate. By taking a $20 million severance package, it does not reflect the beliefs of utilitarianism whatsoever. Even if American Airlines decided not to compensate its investors, they could have reinvested the money back into the airline and making it better for its customer base, thus benefiting the greater good. When Horton was confronted about receiving such a large severance package while the company was losing money, he defended himself by stating the company was able to cut labor costs by 20%. In other words, the former CEO defended his extravagant severance package by cutting jobs and hours of many employees who earn much less than him. A utilitarian would absolutely agree that Horton has gone against every utilitarian value with his statement. There are a number of things American Airlines could have done to align with utilitarianism, but it’s obvious that greed is a major factor that got in the way.

Kantianism

Doug Parker, CEO of American Airlines following Tom Horton

Kantianism is the study of the ethical beliefs of Immanuel Kant, which fall into four major categories. Act rationally, allow and help people to make rational decisions, respect people and their needs and differences, and to be motivated by good will and seek to do what’s right because it’s right. The second and third points of Kantianism really do not apply to this particular case; however the first and last points relate perfectly. Horton’s decision was completely irrational and filled with greed. A rational person would not cut jobs and hours in order to receive a golden parachute. One could argue that Horton’s decision was rational if he was in desperate need of money; however, Horton received over a million dollars a year in salary and stock units. It is completely irrational for someone who makes roughly $1.25 million per year to request a severance package nearly 40x their base salary, at the expense of others. Leading off of that, the last point of Kantianism is to be motivated by good will and seek to do what’s right because it’s right. It is evident that Horton was motivated by greed rather than good, and had no intention to do right, whether it was good or not. Horton seized an opportunity to be CEO of a failing company, run it into the ground and cash out. 

Virtue Theory

Aristotle believed in four virtues that allowed things to function properly: courage, honesty, temperance and justice. Unfortunately, Tom Horton didn’t see things the same way as Aristotle. The first virtue, courage, essentially means to stand with what is right. As discussed in the paper, we know that Horton stood with what was wrong and was opposed by the majority of people. However, due to his own personal desires, he chose to stand with the wrong decision, despite the obvious objections. This leads us to the temperance virtue which states that people should have self-control and to have reasonable expectations and desires. Most people would agree that a severance package that is 40x larger than a base salary for doing a sub-par job leading a company out of bankruptcy is completely unreasonable, yet, Horton seemed to think otherwise, which leads us to justice. The justice virtue revolves around fairness in decisions and good ideas. Horton’s view on this matter included laying off employees, cutting pay and benefits for pilots, charging unnecessary fees to customers and raising airfare while taking large bonuses and other compensation. The act of greed is anything but just, and it negatively impacted many stakeholders and people who relied on American Airlines to be a successful and profitable company. The final virtue doesn’t apply much to this case considering Horton was honest regarding his decisions; however, due to the greedy nature of his decisions, one could argue Horton had an ulterior motive in the merger between United and American Airlines which is one of the main reasons Horton received his severance package in the first place, which can be portrayed as dishonest. Regardless, Horton’s decisions by definition were not virtuous at all and were a step backwards for the company that current CEO Doug Parker hopes to correct.


Works Cited

American Airlines. Becoming a new American. n.d. 2 October 2014. <http://www.aa.com/newamerican>.

American Airlines CEO Quits. 25 April 2003. 30 September 2014. <http://www.cnn.com/2003/TRAVEL/04/25/american/>.

Carey, Susan. American Airlines Raises New CEO's Pay. 27 January 2014. 2 October 2014. <http://online.wsj.com/news/articles/SB10001424052702303277704579347270112960830>.

Finger, Richard. Paid To Fail: Bankrupt American Airlines CEO Slated For $20 Million Severance. 29 March 2013. 2 October 2014. <http://www.forbes.com/sites/richardfinger/2013/03/29/paid-to-fail-bankrupt-american-airlines-ceo-slated-for-20-million-severance/>.

Martin, Hugo. American Airlines' former CEO gets $17-million severance package. 11 December 2013. 2 October 2014. <http://www.latimes.com/travel/la-fi-mo-american-airlines-former-chief-gets-17-million-severance-package-20131211-story.html>.

The Associated Press. A timeline of events in American Airlines' history. 12 November 2013. 30 September 2014. <http://finance.yahoo.com/news/timeline-events-american-airlines-history-011902886.html>.

Yahoo! Finance. AAL Income Statement | American Airlines Group Inc. (AAL). n.d. 2 October 2014. <http://finance.yahoo.com/q/is?s=AAL+Income+Statement&annual>.

Bud Light: Whatever, USA Not As Whatever As You Think

             
 

 Anheuser-Busch, the world’s largest beer selling company in the world controls a staggering 47.6% of the market share globally. The company started with one small brewery in St. Louis in 1860 and has grown into a fortune 500 company. In an attempt to control more of the market, Anheuser-Busch launched a creative, unheard of marketing campaign dubbed Whatever, USA. The event was advertised starting during the 2013 Super Bowl, and was to be held the weekend of September 1, 2014. However, in the weeks leading up to the event, controversy and criticism hit the company. [1]            Whatever, USA was to be a three-day bash held in a secret location of the United States. The company was to purchase part of a town and decorate it from head to toe in Bud Light colors. 1,000 lucky contestant winners were to be flown to the location for the ridiculous party. Leading up to the event, Anheuser-Busch representatives underwent secret negotiations with town officials in Crested Butte, Colorado. When this information leaked to the towns people the town erupted into an irate protest of the event. The townspeople did not believe their public goods and livelihood should be disrupted and bought out for a three-day alcohol fueled bash. The town entered into an 8-hour debate in the town hall over the event. Anheuser-Busch doubled their offer from $250,000 to a mere $500,000. The event went smoothly, however the aftermath did not. The paint used to transform the town was washed all over town in a storm after the event, damaging over $75,000 worth of personal property. In addition, the overload of people overwhelmed transportation companies, where people were stranded for days due to missed flight and security was lowered to try to speed up travel. In addition, the removal of the paint covered the town in a blue dust causing unseen lung damage and health effects form breathing in the paint chips.[2]

             This event did not only affect Anheuser-Busch and the townspeople, but the environment, American people, transportation providers and surrounding communities. TSA agents were told to push the crowd through security in order to speed up the process, threating the American people if anything were to happen. The stripping of the paint sprayed paint chips and fumes into the atmosphere, threatening the health of surrounding communities. As well as the stripping of the paint, the storm days after the event washed paint was spread all over town damaging trees, bushes, and grass.  In order to analyze this case, we must look through the four main ethical theories: Individualism, Utilitarianism, Kantianism and Virtue Theory.

Individualism entails businesses to maximize profits while behaving within the constraints of the law. Milton Friedman first developed the theory and believed that the sole goal of business is to maximize profits and nothing else. However, Machan came around years later and enhanced the theory to state that business should act socially responsible while maximizing profits and acting within the law. Anheuser-Busch did just that, through their marketing campaign, profits were enhanced, and they acted within the boundaries of the law. Utilitarianism deals with the total pleasure of the most beings against the pain experienced by the event.  Developed by Jeremy Bentham, a social activist, he believed that business should act in a way that promotes the most happiness for the most amounts of people. This case provides short-term happiness for 1,000 party

goers, while providing a disruption of peace for an entire town, transportation providers and a threat to the American people. Kantianism, developed by Immanuel Kant, states that one should “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.” [3]While looking at the case through this perspective, Anheuser-Busch acted unethically in the respect of being honest, and obtaining consent from all parties. In addition, they manipulated the town by throwing more money at the problem. Virtue theory uses four virtues in order to determine if an action is ethical: Justice, Courage, Temperance and Honesty. In this case, the company showed little courage by throwing money at the problem to get what they want rather than admitting their mistakes and moving forward. Then, continued to show little temperance by expanding their budget and throwing money around just to hold the event. Moreover, they showed little honesty by hiding the event details from the townspeople. Furthermore, they showed no justice or fairness because they provided a threat to the American people, disrupted many peoples peaceful lives, and damaged the environment just to hold a three day alcohol infused bash.

 

 

 

 

 

 

 

 

References:

"Crested Butte, Bud Light Controversy Builds as Whatever Rollout Starts." - The Denver Post. N.p., n.d. Web. 01 Oct. 2014.
"Crested Butte Residents Unhappy over Blue Paint and a Closed Street." - The Denver Post. N.p., n.d. Web. 01 Oct. 2014.
"Bud Light Bumps Into One Big Problem With Its Secret Party Town: The Residents." AdWeek. N.p., n.d. Web. 01 Oct. 2014.
Salazar, Heather. Case Manual. N.p.: n.p., n.d. Print

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[1] "Crested Butte, Bud Light Controversy Builds as Whatever Rollout Starts." - The Denver Post. N.p., n.d. Web. 01 Oct. 2014.

[2] "Crested Butte Residents Unhappy over Blue Paint and a Closed Street." - The Denver Post. N.p., n.d. Web. 01 Oct. 2014.

 

[3] Salazar, Heather. Case Manual. N.p.: n.p., n.d. Print