Leslie Moonves: CEO's and Sex Scandals (2018)

CONTROVERSY
CBS was founded by Arthur Judson in 1927. Unable to find work, Judson created his own network which combined with another to finally be signed on as the Columbia Broadcasting System in 1929, after being bought out by William S. Paley. Programming was free to the large audiences and by 1970 they were airing infamous shows such as M*A*S*H, 60 Minutes and All in the Family. The company developed itself to gain the interests of all generations of the country.

 

CBS Company Logo

The company has developed immensely as a result of their hard work and dedication that led them to a growth in various forms of entertainment. They offer viewers a choice of CBS media in Publishing, Local Media, Cable TV, TV Network, and internet based businesses. CBS is one of the largest mass media companies in America. They have continued their growth in the new generation, as well as in older generations, with their consistent development of TV shows aiming to all audiences. Until recently, there were not a lot of complaints of the values and intentions of the company, and then came Leslie Moonves.  

Leslie Moonves, Former CEO of CBS 

Over the past few decades rumors of sexual misconduct were presented to the staff at CBS, but many were without reliable support to back them up. A New Yorker story, written by Ronan Farrow, attacks Moonves with the claims that he “forced oral sex, exposed himself, committed violent acts." Many people knew of the allegations against Moonves, but they were deemed inadmissible due to the fact that they had fallen out of the statute of limitations. Moonves is finally under review by the company as they decide whether he will receive a settlement for his step down. As of now, he is looking to receive at least 100 million dollars, or nothing at all. This decision, made by the company, could change the way people view CBS. This is not in consideration of the many women affected by Moonves’ decision, or in the company’s best interest. Moonves acknowledged his past actions, and now more women have come forward to bring his true character into light. If he had done it in the past, it is possible he is still doing it today. The position Moonves held gave him an advantage over aspiring women in the work force. He also did not see a reason to hide from the publicity. 

INDIVIDUALISM

Individualists would view CBS as unethical. An individualist’s perspective states that business should maximize profits for a company, but do so within the law. The publicity of the Leslie Moonves scandal created a poor image of the company, and the way the company handled the allegations created potential long term damage of viewers. The actions of the company to not fire Moonves, but rather let him resign from his position, created criticism from Americans. This is considered ethically

News Clip of the Resignation of Moonves

wrong from an individualist perspective because in doing this the company lost profit. Viewers are boycotting CBS for their negligence to the stakeholder, and they will continue to lose money as viewer rates decrease. Moonves went against the code of conduct of the business when he used his position to negotiate sexual favors from women. He abused his power and caused the company to lose profits as a result of his actions. The main values of an individualist’s perspective is to maximize the profits for the owners. In the case of Moonves, individualist would say it is ethically wrong because it not only goes against the company’s code of conduct, but it also caused a loss for the owners of the company. 

UTILITARIANISM

A Utilitarian perspective would also evaluate the Moonves case as ethically wrong. A utilitarian belief states that business actions should aim to maximize the happiness in the long run for all

CBS Newscasters Discussing the Moonves Settlement

scandals. The consequences of the Moonves case are causing the Stakeholders pain, they are not happy. CBS as a company is not following the utilitarian code due to the fact that they are considering giving Moonves a settlement. This decision, if it is agreed to, will make the stakeholders feel as if they lost, and Moonves will get paid out by the company. When coming to a decision on giving Moonves a settlement, the company should follow the utilitarian perspective. They will need to consider the risks to the stakeholders; They will be humiliated if the company decides to grant Moonves a settlement, on top of the pain they are already feeling as a result of the actions of Moonves. 

KANTIANISM
A Kantian theorist would be concerned with the process CBS took in handling the case of Moonves. They would look into the way the company took action in their own hands, and made a statement declaring their full corporation with the investigation. It is considering the actions of the company, and if they are using rational decision making in the process. The company did not cause the victims harm, it was an individual in the company that did this. When the case became public, CBS tried to do everything in their power to inform viewers that they would corporate, and they also did not lie to protect their employee. They were acting with honesty and acknowledgment of the allegations. This case also passes the Categorical Imperative test of the Formulation of Humanity. This test states that it is wrong to use someone to get what you want; CBS did not use anyone as a mere means, and therefore, it is morally acceptable. CBS was acting ethical under Kantianism because they spoke out and informed their viewers of the any information, and their stance on the case. 

VIRTUE THEORY
There are four main virtues that are followed under virtue theory: Honesty, temperance, courage and justice. The company was being honest with the corporation when discussing the case through the media. They showed temperance with their control to handle the allegations with no blame to the victims. They showed courage as they continued to air their program, and not let the loss of viewers scare them. Finally, the company is showing justice as they are not putting the blame on one individual or another. They are keeping everything fair until it is all settled. 

CBS did not violate any virtues necessary to judge one’s character. They aimed to comfort the public with their response of the issue and their cooperation with the scandal. They did not lie to the public, and they acted in good character when they gave their response with honesty. They are trying to regain the trust of their viewers and they continue to show that they are aiming to act ethical under virtue theory. 

These facts and analyses are based on an original research paper by Emily Sajdak, "Leslie Moonves: CEO's and Sex Scandals" 

WORKS CITED

About CBS Corporation. (n.d.). Retrieved from https://www.cbscorporation.com/about-cbs/

Farrow, R. (2018, September 10). Leslie Moonves Steps Down from CBS, After Six Women Raise New Assault and Harassment Claims. Retrieved from https://www.newyorker.com/news/news-desk/as-leslie-moonves-negotiates-his-exit-from-cbs-women-raise-new-assault-and-harassment-claims

Folkenflik, D. (2018, July 28). Report Details Sexual Harassment Allegations Against CBS CEO Les Moonves. Retrieved from https://www.npr.org/2018/07/28/633376943/report-details-sexual-harassment-allegations-against-cbs-ceo-les-moonves

Hagey, K., & Flint, J. (2018, September 11). CBS's Handling of Les Moonves Accusations Hampered by Battle for Control. Retrieved from https://www.wsj.com/articles/cbss-handling-of-les-moonves-accusations-hampered-by-battle-for-control-1536624692

Introduction – CBS Corporation. (n.d.). Retrieved from https://www.cbscorporation.com/diversity/about-us/introduction/

Keveney, B. (2018, September 10). CBS CEO Les Moonves becomes most powerful media exec to resign in wake of #MeToo. Retrieved from https://www.usatoday.com/story/life/people/2018/09/09/cbs-ceo-leslie-moonves-hit-new-sexual-misconduct-allegations/1249724002/

McDermott, M. (2018, October 02). Illeana Douglas: Les Moonves called my sexual assault 'a lot of fun'. Retrieved from https://www.usatoday.com/story/life/people/2018/10/02/illeana-douglas-les-moonves-called-my-assault-lot-fun/1498309002/

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

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.

PetSmart: Mistreatment of Animals (2016)

PETA: An eyewitness reports not one sighting of a
veterinarian in three months.

Controversy:
The well known and generally loved company PetSmart has recently lost most of its credibility in the public's eyes. What was once a company loved by children and their families for their cute animals and clean stores is now being seen as a supporter and funder of animal cruelty. Not only was PetSmart caught doing business with Holmes Farms, whom had become publicly known for their cruelty to animals, but the company was also caught performing similar acts within their own stores. What is the case in many PetSmart locations, if animals were to escape, the stores would leave out glue traps to capture them. Now catching them is one thing, but a lot of those animals were left there for days at a time causing them to thrash about and injure themselves. Reptiles were found with broken limbs, rotting limbs and limbs literally torn or cut off by people and wire cutters. Some workers were instructed to treat those wounds with Neosporin which is not clinically proven to heal a torn off limb of a lizard. Some animals were put into tubing without food or water to be put down at a later time, and then dumped into a bag and gassed by the managers (Ref. 5). Any incidents as large as these ones getting out to the world can do a number on the business. People are not going to buy their pets from a place known to raise them so poorly. This is not only a problem because people are typically against animal cruelty, but because animals raised in those conditions may be unfriendly, diseased and sickly. Paying for a sickly, likely to die pet seems like a poor investment for pet owners. Additional to that, having a pet die, new or old, is heartbreaking. PetSmart is aware of a lot of the issues, but mostly those with the suppliers. They claim they take these allegations very seriously and are investigating the issues, and if their standards are not met than they will deal with it. As of current, PetSmart has not publicly released an action plan to deal with such allegations although this incident hit the public more than a year ago.

Household animals such as dogs are
available at many PetSmart locations.

Stakeholders:
A clear cut definition of who is considered to be a companies stakeholder is basically any person or party that has interest or concern is an organization, and can also be affected by the organizations actions. One important group of stakeholders are the animals sheltered by PetSmart. As some managers are being instructed to deal with their unwanted animals in unethical ways, not only are the animals affected by the fact that they are suffering and being killed inhumanely, but the managers and staff are being forced to act in a way that may make them incredibly uneasy. Some staff were even instructed to ignore the animals in need of water and clean in preparation of a supervisory visit. The consumers are also a group to suffer greatly. As mentioned previously, poorly treated animals in most cases will not make good house hold pets and therefore be a poor investment to any consumer. 

Individualism:
The theory of individualism is one of the main ethical theories and it's main focus is to maximize profit for the owners or the stockholders while staying within the law (Ref. 7). Under this theory, an action within the company that is committed without the goal in mind of maximizing profit would be considered unethical. In the case of PetSmart and their act of animal cruelty, the company made the decision to cut corners and go with a more shady dealer with the knowledge that they were possibly breaking the law. The company themselves were also caught performing unethical and cruel acts to animals within their own stores. Prior to this situation, PetSmart was seen as a clean and caring home for the animals in the eyes of the public. Now after what has been said through the media, the company's image has taken a major blow with many consumers choosing to no longer support their business. In the end although the company did act under the premise of maximizing profit, they did not act within the law and the negative impact it had on their stockholders and public image has had too large of an inverse effect on their business and under the theory of individualism would be considered unethical.

In utilitarianism, it is important for pleasure
to outweigh pain.

Utilitarianism:
Utilitarianism has a simple goal, to maximize happiness in yourself and others. This ethical theory also takes into consideration the costs and benefits of each of its main stakeholders. In the eyes of a utilitarian, pleasure must outweigh pain and this goes for all sentient beings which includes not only humans but animals as well. In a case where only one party can feel pleasure while the other must feel pain, the greater happiness would be considered the right course of action. PetSmart chose to take a more selfish route caring only about themselves and the immediate benefits it would give to the company. In doing so they caused a great deal of harm and unhappiness to all of the animals involved. When the story became more public, consumers also became displeased by the cruel acts of the company which further weighs down the scale on the side of pain. Maximizing profit is important for a company, but if you fall too deep into that mentality than you end up forgetting about the other stakeholders involved. The PetSmart employees may have experienced positive effects from the companies upward climb in profits but it would be at the cost of their own comfort and happiness. An alternative approach to what the company was doing would be to investigate your suppliers further before conducting business with them. It would also be in the best interest of everyone involved if the company kept in mind their multiple stakeholders when they make major decisions. This way the benefits can be more spread across the board creating a higher level of happiness instead of being focused on one central party. With that being said, the majority of the companies stakeholders remain unhappy and the acts in question would be deemed unethical. 

Kantianism:
The theory of Kantianism was created by a man named Immanuel Kant. His theory focuses on the basic principles of acting rationally, consistently, with free will and being able to respect others. In the case of PetSmart and their cruelty to animals, the company did in fact act consistently. They chose to support a supplier known for their cruelty to animals, and then continued that course of action into their own stores with their own acts of cruelty. The major problem with that is they may or may not have considered themselves exempt from the rules. They knew they were clearly breaking the law, but there has been no evidence that they expected to be exempt from that law. Kant also explains that one should help others make their own rational decisions and respect their individual needs. With that being said, PetSmarts forcing of their employees to do things that made them uncomfortable and not giving them the choice to take their own course of action would be heavily disagreed with within the theory of Kantianism. Kant himself believed strongly in something called Good Will. A solid representation of its meaning is "Having a good will necessitates that people have good intentions and use good reasoning to come to conclusions that will make their good intentions effective" (Ref. 7). The company should have been motivated by their own Good Will and chosen a more trustworthy buyer and a more humane way to operate their stores. One of the main roles in the Kantian belief is the Formula of Humanity. This belief states that every person should be treated as something valuable in and of it self, and not as a means to achieve something else. To do this, a person must be able to respect the humanity of each other person. In this specific case it would be believed to be unethical because of how the employees were treated. Kantianism believes in free will, which requires self consciousness and animals do not have an applicable level of that. Therefore the animals would be considered a means to an end and unimportant. 

Aristotle declared that a virtuous person has
ideal character traits.

Virtue Theory:
Virtue Theory is an ethical theory that takes a different approach than the three we previously reviewed. This theory focuses on the virtues of a person in place of a company or a business. The four major virtues relating to business are Courage, Honesty, Temperance, and Justice. Courage is the ability to take risks, and to stand up for what is right. PetSmart was fully able to take risks, but they were for all the wrong reasons. The company is seen with cowardice and in order to change their image to being more courageous they would need to go against the industry average, take the risk to set a standard, and treat their stakeholders properly. When it comes to Honesty, there may not be a poorer word to describe the company. The decision makers within the company had actually denied the allegations sent upon them by actual employees and former management and denied their knowledge of what had been going on in the stores. Although there is no hard evidence that either side is telling the truth, PetSmart would need to prove themselves as being trustworthy for their word to hold meaning in any situation. When it comes to the third virtue of Temperance, it means to have realistic expectations and desires. Realistically PetSmart could have or was achieving the profits they were expecting. When it comes to the employees on the other hand, expecting someone to gas, dismember and kill innocent animals although it would be considered as breaking the law is an unrealistic expectation. The final virtue is Justice. Justice refers to the hard work, quality products, good ideas and fair practices of the company. As this at one point may have been a selling point for the company PetSmart, they have since then altered their course of action and can no longer be seen as providing any of those. According to Virtue Theory, in a business scenario PetSmart would not be seen as a virtuous or ethical company.

Justified Ethics Evaluation:
After closely analyzing the case of PetSmart and their acts of animal cruelty by using the four major ethical theories it is very easy to make a decision. I personally would say that just about everything PetSmart has done in this situation would and should be deemed as unethical. They failed to meet the majority of factors needed to be ethical according to each theory. When reports were released by both PETA and the media PetSmart did not do much in the way of responding to the allegations. Their response was that if standards were not met, than they would deal with it (Ref. 11). Since that was their response, what does it mean when these allegations pop up and the company chooses to not deal with it? PetSmart has not done what an ethical business would typically do. Instead of hastily working to find a solution they chose to ignore the problem and try to cover their tails in the process. In my opinion the company had tried to cut corners regardless of if it was the right thing to do and got caught doing something wrong. Cruelty to animals no matter what circumstance is wrong by both majority opinion and state law. I don't fully support pets being sold in mass quantities as it is, but I hope for the sake of all stakeholders involved that PetSmart makes the right decision and fixes their mess.
References:

1. "Reptiles Suffer, Left to Die at Another Massive PetSmart Supplier Mill." PETA Investigations. N.p., n.d. Web. 04 Feb. 2017.

2. "Dog Abuse at Petsmart Stores Review 383140 Oct 19, Animal Abuse @ Pissed Consumer."Pissed Consumer. N.p., 19 Apr. 2015. Web. 10 Apr. 2017.

3. 10152652173065943. "Open-source framework for publishing content." The Dodo. N.p., 07 Oct. 2015. Web. 04 Feb. 2017.

4. "Animals Frozen Alive, Crudely Gassed at Petco, PetSmart Supplier." PETA Investigations. N.p., n.d. Web. 04 Feb. 2017.

5. "Inspectors Find Sick, Filthy, & Frozen Alive Animals At Petco & PetSmart Supplier Ranch! Read The Unsettling Report!" PerezHilton RSS. N.p., n.d. Web. 04 Feb. 2017.

6. "Raining (on) Cats and Dogs." Snopes. Snopes, 07 Oct. 2015. Web. 04 Feb. 2017.

7. Salazar, Heather. The Case Manual . N.p.: n.p., n.d. Print.
8. PETA. "PetSmart Stores Cruelty to Animals Revealed." N.p., n.d. Web. 17 Mar. 2017.

9. "Our Mission." Beliefs and Values | Careers at PetSmart. N.p., n.d. Web. 10 Apr. 2017.
   
10. "PetSmart, Inc." Google Finance. N.p., n.d. Web. 10 Apr. 2017.
    
11. Bitette, Nicole. "Petco supplier accused of torturing, freezing live animals." NY Daily News. N.p., 21 Jan. 2016. Web. 11 Apr. 2017.
    
12. PetSmart. "PETSMART CORPORATE." PetSmart® Company Information Company History. N.p., n.d. Web. 10 Apr. 2017.

Based on a paper written by Devin Wesolowski

Nakéd Juice: Unnatural Ingredients (2013)

Controversy

Popular flavors of Nakéd Juice

In 2013 PepsiCo had a lawsuit brought against them for their marketing of "Nakéd Juice". Marketed and sold as an "all-natural" juice drink the lawsuit brought against PepsiCo took issue with health phrases that did not accurately portray the product. The lawsuit states that the drink contains Genetically Modified Organisms (GMOs) despite PepsiCo's denial of such claims. Additionally PepsiCo's use of the phrase "all-natural" is seen as misleading since some of the Naked Juice products use some synthetic vitamin boosters and a synthetic fiber additive. PepsiCo decided to settle the lawsuit with a $9 million settlement fund that allows consumers to get up to $75 with proof of purchase from consuming the Naked Juice products between September 2007 and August 2013. The settlement fund looks to pay reparations to the consumers of the product within the given time frame. The stakeholders in this lawsuit are all the affected consumers who purchased the Naked Juice products up until August 2013 and PepsiCo itself. This post will look at PepsiCo's use of phrasing in marketing and selling Naked Juice as well as the message the settlement sends to consumers using four ethical theories: Individualist Theory, Utilitarianism, Kantianism, and Virtue Theory.
Individualism
In Individualist Theory a business's primary goal is to make profits for its stockholders and employees so long as the business respects laws and human rights in the process. PepsiCo's actions in marketing Naked Juice as "all natural" and "non-GMO" allowed for consumers to trust the all natural label in making a healthy drink choice. Without a doubt this allowed profits for Naked Juice to gain a foothold in the market thanks to the healthy, all natural marketing. However, this marketing is deceptive at best for the consumer since some genetically altered ingredients are used in the drink. Genetically altered soy, vitamins, and fiber do not fit the image of an "all natural" product. While the Food and Drug Administration (FDA) does not have a formal definition for what makes a product "natural," they do have guidelines that states as long as a product does not have added color, artificial flavor, or synthetic substances the product could be labelled as "all natural." With the use of some synthetic ingredients PepsiCo clearly mislabeled their product and did not respect the FDA's guidelines of natural.

Utilitarianism

PepsiCo. logo, owner of Naked Juice

For Utilitarianism the most valuable emotion is happiness. Utilitarianism states that any action that tries to make everyone happy is ethical. PepsiCo may have tried to maximize the happiness of their consumers by offering an "all natural" product and thus tried to maximize their profits at the same time. That may seem good on the surface but the lawsuit highlights the unhappiness of the consumers in being misled about some of the ingredients in their juice product. The settlement tries to make up for this mislabeling by allowing the consumers to be reimbursed but that does not excuse PepsiCo's actions according to this theory. They intentionally labeled the Naked Juice product to make money but overlooked the part of the market that holds all natural products to a high standard in making sure that they do, in fact, contain all natural ingredients.

Kantianism
Kantianism states that businesses should always work within the rules, never consider themselves exempt from those rules, and help consumers make well informed choices for the good of everyone. This intrinsic value system to allow people to make rational, autonomous decisions is the cornerstone for this theory. PepsiCo had deliberately labeled their Naked Juice products as all natural to persuade consumers to choose that drink over other competing juice products. The all natural label worked to bring in consumers that were worried about making healthy drink choices but the questionable ingredients and their discrete inclusion in the Naked Juice products works to misinform the consumer. Under Kantianism PepsiCo makes an unethical choice in choosing the all natural label because of their use of some synthetic ingredients. The settlement shows that PepsiCo thought that they would be able to skirt by with the loose definition of "all natural", but when eventually called out for it they would rather pay up than go through a lengthy judicial process.

Virtue Theory

Donald M. Kendall, one of three founders of PepsiCo.

Virtue Theory uses four cornerstone characteristics: courage, honesty, self-control, and fairness. Courage marks a company's willingness to take chances and stand up for what is right. Honesty marks a company's truthfulness with their business actions. Self-control refers to a company's ability to create reasonable expectations and live up to those expectations. Fairness refers to a company's hard work and fair practice. PepsiCo definitely took a chance in labeling Naked Juice as "all natural" but when brought up to the lawsuit, they decided to drop the "all natural" label in favor for a "non-GMO" label. Yet PepsiCo was considerably truthful in their explanation for dropping the "all natural" label: "In some products, we also include an added boost of vitamins. Naked juice and smoothies will continue to be labeled 'non-GMO,' and until there is more detailed regulatory guidance around the word 'natural' -- we've chosen not to use 'All Natural' on our packaging." This is a fair explanation behind the use of the label and the lack of FDA definition for what a natural product is. As far as self-control goes PepsiCo failed to live up to the "all natural" expectations when some synthetic ingredients were found in their Naked Juice products. As far as Virtue Theory goes PepsiCo did good in how they handled the situation once synthetic ingredients were found but their use of the "all natural" label from the beginning was dubious.

Conclusion Overall PepsiCo acted fair in their response but rather unethically in trying to use the all natural label when such a flimsy guideline was in place. By using this label they tried to create profits using an expectation of natural ingredients despite the existence of synthetic additives in their Naked Juice products. While not outright unethical it is rather dubious for PepsiCo to try to pass it off as all natural but in the end "non-GMO" may be the better label to accurately represent the drinks.

References

Kim, Susanna. "Naked Juice Class Action Settlement Offers Up to $75 Per Consumer."ABC News. ABC News Network, 27 Aug. 2013. Web. 13 Mar. 2014.


Long, Josh. "Naked Juice to Verify Non-GMOs under "All Natural" Settlement." Food Product Design. FoodProductDesign.com, 23 Aug. 2013. Web. 13 Mar. 2014.


Sarich, Christina. "PepsiCo's Naked Juices Have to Drop 'All Natural' Label After $9 Million Class Action Lawsuit" Nation of Change. NationofChange.org, 23 July 2013. Web. 13 Mar. 2014.


Tepper, Rachel. "Naked Juice Class Action Lawsuit Settlement Over Health Claims Means $9 Million For Consumers." The Huffington Post. TheHuffingtonPost.com, 28 Aug. 2013. Web. 13 Mar. 2014
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GlaxoSmithKline Bribery in China (2013)

GlaxoSmithKline Bribery in China (2013)

By Chris Murray

     GlaxoSmithKline (GSK) is a British pharmaceutical company that distributes worldwide.  Recently in 2013 the company became the target of accusations that head managers in China were bribing government officials and doctors in order to prescribe higher costing treatments to patients.  GSK is suspected to have offered approximately $500 million in travel packages, entertainment, favors, and cash over six years to these doctors and officials.  Due to the recent healthcare boom in China since GSK started doing business there, the Chinese government has been cracking down on corruption at all levels.  Several employees in GSK's Chinese division have been questioned about the bribery charges including Liang Hong, one of the top executives for GSK's Chinese division, who made a television confession on the bribery charges while Steve Nechelput, the division's CFO, and Mark Reilly, the division's country manager, have been barred from leaving the country until the investigation by the Chinese is over.  Ethically, these charges put Liang Hong, Steve Nechelput, and Mark Reilly in a tough spot.  GSK offers apologies for their employees working outside of their internal controls but seem to have done so to only distance themselves from the problem.  This post will survey Hong's, Nechelput's, and Reilly's actions ethically using individualist theory, utilitarianism, Kantianism, and virtue theory.

Liang Hong, at his televised confession

     The individualism theory states that the goal of business is to make profits for stockholders and employees.  However this is only seen as ethical so long as the company respects laws and human rights.  In bribing doctors and government officials with travel packages and other entertainment to help push their drugs on the population, the Chinese division of GSK was trying to make as much profit as they could in the booming market to compete against other pharmaceutical companies in China.   This does not respect the rights of the people to be fully informed about their treatments.  Since officials were pushing advertising for more expensive drugs and doctors were prescribing the more expensive drugs to citizens, GSK was infringing on their autonomy to make well informed choices as well as making them pay more, comparatively.  During the investigation, GSK's sales in China dropped a whopping 61% due to the bribery accusations.  Public opinion on the company dropped radically as seen by these dramatic sales cuts.

      Utilitarianism states that every action that aims to make everyone happy is ethical.  In this case, the actions by the GSK's Chinese executives to increase sales would lead them to bribe doctors and officials who would then promote GSK's drugs to the people.  That may sound all well and good; GSK gets paid more from the citizens who are happy to accept the 'better' drugs as described by their doctors who are being paid by GSK themselves.  Everyone seems happy except that the consumers are unknowingly paying more for drugs they could get cheaper by buying a different brand or from a different company/manufacturer other than GlaxoSmithKline.  When the consumers found out that they were paying more than they needed too, they moved en masse away from GSK supplied drugs and found other brands to buy.  This is evident in GSK's huge drop in sales in the third quarter of 2013.

     Kantianism states that businesses should never consider themselves exempt from the rules and work to help consumers make well informed decisions while doing so for the good of everyone, intrinsically.  Evidently Liang Hong, Steve Nechelput, and Mark Reilly sought to make monetary gains for the company in exchange for the peoples' ignorance to competing brands of drugs.  Not to mention that Liang, Steve, and Reilly thought that they would be able to be exempt against the Chinese' fight against corruption in the new healthcare boom in the country.  They also went against the basic Kantian principle that the people should be considered an end, rather than a means to an end.  They treated their consumers as a means to get richer in making them buy more expensive drugs.  With the doctors playing by their rules, the Chinese branch of GSK was able to keep consumers misinformed about their choices in treatments.  These practices were all against Kantianist ethics.

     Virtue Theory is based on four characteristics: courage, honesty, self-control, and fairness. Courage stands for a company's willingness to take chances and stand up for what is right.  Honesty stands for a company's willingness to be truthful with their business actions.  Self-control refers to a company's ability to create reasonable expectations.  Fairness refers to a company's hard work and fair practice.  If a company follows all four of these characteristics then it is therefore ethical.  Interestingly this is where GSK retains most of its ethical virtues as a whole.  Liang Hong was honest when confronted with his accusations.  GlaxoSmithKline's headquarters was courageous in extending apologies for actions of their employees in the Chinese branch.  However the Chinese branch was hardly playing fair in pushing their more expensive drugs on patients through their doctors and officials.  They also lacked self-control in succumbing to bribes to push their drugs in the market.  While there were certainly some redeemable aspects to the situation, it could have been avoided completely in the first place had Hong, Nechelput, and Reilly stuck to the four virtues from the get-go.  

     GlaxoSmithKline's Chinese division will suffer dramatic sales cuts well into the next few years most likely due to these accusation and subsequent investigation.  The public has already showed a massive boycott on their drugs during the third quarter of 2013 which will only continue until fines are paid, executives are jailed or fined, and the company on the whole can be trusted again.  Hong, Nechelput, and Reilly worked against the ethical theories discussed and put their company in a bad light.  Now GlaxoSmithKline has to deal with the backlash in the Chinese market, to try and gain the peoples' trust again despite seeming unethical now.  

References:

     Barnato, Katy. "GSK's China Sales Topple on Bribery Scandal." CNBC.com. CNBC, 23 Oct. 2013. Web. 20 Feb. 2014.

     Jack, Andrew. "Q&A: China’s Investigation into GlaxoSmithKline." Financial Times. Financial Times, 4 Dec. 2013. Web. 20 Feb. 2014.

     Shobert, Benjamin. "Three Ways To Understand GSK's China Scandal." Forbes. Forbes Magazine, 04 Sept. 2013. Web. 20 Feb. 2014.

     Jack, Andrew, and Patti Waldmeir. "GSK China Probe Flags up Wider Concerns."Financial Times. Financial Times, 17 Dec. 2013. Web. 20 Feb. 2014.

Kashi’s Claim on Natural Foods (2011)

Based on a Paper by Mayara Jordani
Summary by Mayara Jordani

 

 

Kashi brand was first created in 1984 by Phil and Gayle Tauber and is owned by the Kellogg’s Company. Kashi’s goal is to “give people what the need to live their best lives, while making great tasting, naturally nutritious foods.” Kashi does this by offering minimally processed foods, with no artificial colors, flavors preservatives or sweeteners.

However in October of 2011, Cornucopia Institute tested Kashi’s GoLean cereal and found that it contained 100 percent genetically engineered soy.  In August of 2011, shortly before this controversy broke, Michael Bates and his attorneys in California brought forth a law suit against Kashi and Kellogg’s for falsely advertising their products as “All Natural” and “Nothing Artificial.”

Kashi was finally exposed of their secret in late 2011. Kashi used all natural ingredients except when it came to their soy, which was genetically engineered with a gene inserted to protect the soybeans from the herbicide Roundup, which kills weeds. However Kashi still continued to advertise their products as “natural” and “only natural ingredients used.”

David DeSouza, Kashi’s general manager stated that they had done nothing wrong. DeSouza stated that the FDA had chosen not to regulate the term natural. DeSouza states that Kashi defines natural as "food that's minimally processed, made with no artificial colors, flavors, preservatives or sweeteners.” Shortly after this controversy occurred, Kashi, in an effort to gain their reputation back has partnered up with the Non-GMO Project. The Non-GMO Project is a non-profit organization that verifies foods to make sure they are clear of any genetically modified ingredients. Kashi has seven of their cereals verified by the Non-GMO project.

There are laws against false advertising which is why Michael Bates and his attorneys won the law suit against Kashi and Kellogg’s. As a result, Kashi violate ethical standards. Under the Individualism theory and part of the Utilitarian theory Kashi did nothing wrong. However, under the Kantianism theory, Virtue theory and part of the Utilitarian theory, Kashi acted unethical.

 The Individualism Theory according to Friedman states that the only goal of a company is to profit and maximize the profit for the owner and stockholder. According to the individualism theory, Kashi did nothing ethically wrong. On the contrary, the company did everything to maximize the company’s profits by labeling their products as ‘natural’ and selling them for the same price as cereals that are natural.  The average price of a cereal by Kellogg’s is $3.80. Kashi Squares Berry Blossoms Cereal is marketed as ‘natural tasting’ and costs about $4.30. For the same price of Kashi’s cereal, those looking for actual natural tasting and organic cereal can buy Nature’s Path Cereal that is certified organic and natural. Also, looking at Kellogg’s 2012 Annual Financial Reports, it is clear that Kellogg’s has profited from the sale of Kashi’s food. In 2010, the company reached a net sale of $12,397 million. In 2011 when the controversy occurred, the company’s net sales still increased to $13,198 million and in 2012, the company’s net sales reached a peak of $14,197 million.

The Utilitarian Theory states that we must act in order to maximize the overall good to the greatest amount of people. The stakeholders in this situation were Kashi’s customers, Kashi brand and Kellogg’s. Looking at Kashi’s customers, the company was not able to bring happiness to their customers. This is because the customers were tricked into thinking that Kashi’s products were actually natural. Many of Kashi’s faithful customers after finding out Kashi’s definition of ‘natural’ have stopped buying their products. Many store owners have also removing Kashi products from their shelves until Kashi completely removes all genetically engineered ingredients from their products. On the other hand, the sale of the genetically modified cereals brought a lot of happiness to the company. Kashi and Kellogg’s were able to maintain their products on the shelves while marketing them as ‘natural’ and using genetically modified ingredients in their cereals. By marketing the products as ‘natural’ the company was able to sell the products for more, increasing the company’s profit and ultimately increasing their happiness. The sale of the genetically modified foods has also allowed many employees to keep their jobs, where as if the company had to recall the cereal, some employees could have been fired.

The Kantianism theory has several different parts. Part one states that one must act rationally and not consider one exempt from the rules. According to the first principal, Kashi did not act ethical because they felt that they were expect from telling consumers the truth about their products. Kashi felt exempt from the rule of being honest with customers. The second part of the theory states that it allows and helps people make rational decisions. With this, Kashi did not act ethical because although it seemed like the company acted ethical because they allowed the customers to make their own decision as to whether or not buy the products that contained genetically modified soy, Kashi lied about their ingredients which took away from customers making rational decisions, the decision to either consume the products or not. The third part to Kantianism states that it respects people, their autonomy and individual needs and differences. Kashi did not act ethical in under this principle because they did not respect people’s needs in eating healthy. They took advantage of those who wanted to eat healthier and better by marketing their products as natural when they were not. Lastly, the fourth principal states one is motivated by the good will, seeking to do the right thing because it is right. Kashi did not act under good will because they were not being honest about the ingredients in their products. If they had acted under good will, Kashi would have been honest about the ingredients in their products and not had advertised the products as ‘natural’ even if the FDA was vague about the definition of ‘natural.’

Lastly, the Virtue theory is based on four characteristics, courage, honesty, temperance/self-control and justice/fairness. Kashi did not display courage because they were not willing to tell their customers what their products actually contained. When Kashi was faced with the issue, their representatives stated that they had done nothing wrong. They used excuses to try to take the blame away from them. Kashi was also not honest in owning up to their mistakes and being honest to consumers about their products. Kashi was also unethical in the temperance/self-control aspect of this theory. This is because the company had no self-control in advertising their products. If the company wanted to advertise the products as natural, then they should have used all natural ingredients and stayed clear of genetically modified ingredients. Kashi should have had the self-control and done the right thing when advertising their foods. Lastly, the final characteristic is justice.  Kashi did not act upon this characteristic because they did not work hard to try to get the best product out to their customers. They took the easy way out and simple labeled their product as natural instead of using natural ingredients. The company was also not fair in the price of their products. The company sold the cereal for the same price as a certified organic cereal would be sold at. Overall, Kashi did not act ethical according to the virtue theory in this controversy.

According to the four ethical theories described above, Steve Madden Ltd. acted unethical in their work and to their stakeholders. The only ethical theory that Kashi is able to argue they acted ethical under is individualism. However, the remaining ethical theories would find Kashi’s actions to be unethical and incorrect. 

 

These analyses and facts are based upon the original paper by Mayara Jordani entitled "Kashi’s Claim on Natural Foods (2011)?" (Apr. 15, 2013).

 

DesJardins, J. (2011). An Introduction To Business Ethics. (4th ed.). New York, NY: McGraw-Hill Humanities/Social Sciences/Languages.

Holter, M. (2012, August 16). Kashi false advertising class action lawsuit survives in court. Top Class Actions, Retrieved from http://www.topclassactions.com/lawsuit-settlements/lawsuit-news/2288-kashi-false-advertising-class-action-lawsuit-survives-in-court

Johnson, L. (2013, March 28). GMO Controversy Heating up as Kashi Cereal Comes Under Scrutiny. Retrieved from http://www.naturalnews.com/039676_Kashi_GMO_ingredients.html

Kashi Seven Whole Grain Cereal Snacks Entrees. (n.d.).Kashi Seven Whole Grain Cereal Snacks Entrees. Retrieved March 30, 2013, from http://www.kashi.com/ourcommitment

Kellogg Company 2012 Annual Report. (2013). Retrieved from annualreport2012.kelloggcompany.com

Philpott, T. (2011, September 30). Mother jones. Retrieved from http://www.motherjones.com/tom-philpott/2011/09/gmos-safe-eat

Salazar, H. (2013, January). Individualism. Lecture conducted from Western New England University, Springfield, MA.

The Non-GMO Project. (2013). Retrieved from http://www.nongmoproject.org/about

Weise, E. (2012, March 29). Kashi cereal's 'natural' claims stir anger. Retrieved from http://usatoday30.usatoday.com/money/industries/food/story/2012-04-29/kashi-natural-claims/54616576/1