Posted: February 9th, 2015

ASSURANCE OF LEARNING � ETHICS GREEN MOVE

Paper, Order, or Assignment Requirements

 

 

Ethic Based Paper for Business ethics and law course.

Using the 8 step analysis and consequentialist, deontological and virtue of ethics approach.

ASSURANCE OF LEARNING – ETHICS

GREEN MOVE

Department of Business Law and Ethics

 

Your assignment

Write a seven to ten page double-spaced essay addressing the case below. Please do not

exceed ten pages.

Please DO NOT rewrite the questions or the facts of the case in your answer. Just answer

the question. Also please do not hand in notes. This assignment requires a written essay.

As you answer the questions, you must refer to your readings and class discussions.

This is not a group project. You may not discuss your answers with anyone.

THE COMPANY

Green Move is a startup company that focuses on environmentally friendly and

sustainable transportation products. Its three founders and current shareholders, Robert,

Lewis, and Viktor attended the same MBA program in Boston. Robert and Lewis were

high school friends from an affluent Boston suburb while Viktor grew up in Russia. The

three agreed that their collective mindset could best be described as “competitive with a

conscience.” They support the fundamentals of capitalism and agree that the free market

operates to the benefit of society. Robert serves as the CEO of Green Move and Viktor

serves as the Chief Technology Officer while Lewis has moved on to other opportunities.

All three serve on Green Move’s board of directors along with two other corporate

officers and two outside investors. The seven directors along with the other corporate

officers and several of Robert’s relatives who invested heavily in Green Move own all of

the stock. Much of the startup funding, however, was the result of a $15 million

government loan at zero percent interest as part of an Investing in Green Technology 2

initiative. Green Move is incorporated in Delaware and maintains a corporate office in

Boston.

The last year has been very exciting at Green Move and the perceived value of its

shares has increased steadily. In fact, there are rumors that that Green Move will soon go

public. This is due largely to the much anticipated launch of the Zero Pedal; a solar

powered bicycle that includes a small throttle and brake system. Green Move recently

received a patent on the technology enabling the use of a small solar panel that propels

the bike at speeds close to 15 m.p.h. The popularity of the Zero Pedal has been limited to

the northeastern part of the United States mostly due to “word of mouth” advertising

throughout area colleges and universities.

PART A – YOUR EMPLOYMENT AT GREEN MOVE

You graduated six months ago from a Boston MBA program. You earned your

degree part time in the evenings so that you could continue your work as an advertising

assistant at a prestigious Boston firm. You are thankful that your firm financed a large

portion of your degree and that you were able to support your spouse and young child

while attending classes.

Green Move was one of several marketing positions for which you interviewed.

You were attracted to Green Move because it struck you as “young and energetic” with

the potential for tremendous growth. The interview consisted of a single meeting with

the three founders who explained that your primary objective would be to expand the

sales of the Zero Pedal to the southwestern part of the United States. It was explained

that your success at Green Move would be measured exclusively on the expansion of the

Zero Pedal into this new market. Your modest salary would be supplemented with stock

options in Green Move in proportion to the product expansion.

You learned during the interview that Green Move was replacing a “bad fit”

employee whose departure was “mutually agreed upon” after only six months. You 3

gladly accepted the position with a handshake and agreed to complete the necessary tax

forms to begin work in two weeks. The only documentation you received was a stock

option agreement. You never received any employment training, instruction, or manuals.

Three months have passed since you started at Green Car and you have made

several friends including Doug, a product engineer on the development of the Zero Pedal.

Much to your surprise, Doug has explained in confidence his concern regarding the

operation of the Zero Pedal in warm climates. He claims that the bike accelerates

dangerously after the solar panels have been exposed to temperatures exceeding 100

degrees Fahrenheit for four consecutive hours. Apparently, his team had uncovered this

defect during the design of the Zero Pedal. He tells you that he planned a report outlining

the dangers of the acceleration and that he shared his findings with your predecessor and

that he was suspicious of his firing. Doug believes that your predecessor was fired

because he questioned management about this defect.

Doug tells you that your predecessor presented the cost per bike to fix the defect

to the board but that Robert claimed the report was incomplete without a comparison to

the costs of “not fixing” the bike. Robert also claimed that he could not imagine a

situation in which the bike would be exposed to those conditions. The two had a heated

discussion and two weeks later you responded to the job posting.

Doug further discloses that regulations under the National Highway Traffic Safety

Administration (NHSTA) that would otherwise limit the production of the Zero Pedal do

not apply because the bike is not “gas powered.” As a result, the production of the Zero

Pedal is entirely unregulated.

You are wondering about what to do about the product safety problem on your

return trip from Scottsdale, Arizona where you had met with several sporting goods

chains to discuss the roll out of the Zero Pedal. The buyers seemed impressed by the

Zero Pedal but you did have a curious encounter at your final stop. There, the buyer 4

causally mentioned that he would personally expect payment of a “special “$5,000

annual fee to place the product on its shelves.

Questions A

A.1 What will you do about the product defect information that you have learned about

from Doug? What are the relevant pressures? What questions or problem solving

models will you consider in making your decision? How would you apply the model to

arrive at a solution to the problem?

A.2 Will you pay or recommend that your company pay the special $5,000 fee to have

the Zero Pedal placed on the shelves of the sporting goods store? What are the relevant

considerations? Is it legal? Is it ethical? Both?

A3. While this problem is in the “latency stage” should Green Move apply the

cost/benefit analysis in analyzing safety concerns about the product? What are the risks?

PART B – SUPPLY CHAIN

Green Move’s recent success is due largely to its strategic relationship with one of

its suppliers, the Solar Group. The Solar Group manufactures the solar panels that are

critical in the Zero Pedal. The Solar Group is located in Bangladesh where it employs

over one hundred people, including many child laborers. Consistent with Robert’s

conscionable mindset, Green Move’s contract with the Solar Group specifies that “no

children shall be employed by the Solar Group and that all workers shall be treated

fairly.”

One evening Robert receives a telephone call from an online blogger who claims

that he obtained video footage within the Solar Group factory depicting a dimly lit and

poorly ventilated work environment. He also claims that the factory workers are paid less

than an adequate wage to live in dignity. He asks Robert to comment and tells him that he

will be posting a link in his blog to the video to show the public that Green Move is a

phony and that its relationship with Solar is being used to exploit foreign workers. 5

Ironically, at the same moment, Akash is returning from his long day of work at

the Solar Group factory. He is 23 years old and has been working intermittently in

various factories since he was thirteen. Most of his childhood friends do not have jobs

and those who do earn less than Akash. He has never left Bangladesh. Akash is tired but

he is thankful to have found a job at the Solar Group. He understands that the work is

dangerous but he hopes to move into a supervisory position within five years where he

will realize a modest increase to his hourly wage. As a result, he has avoided the recent

debate among his coworkers whether they should unionize and leverage their collective

weight to demand better working conditions.

Robert knows that the workers at the Solar Group factory are paid more than the

average wage in Bangladesh. However, he also knows that work environment is much

worse compared to the conditions in the United States and that these labor practices

which are legal in Bangladesh are illegal in the U.S.

Questions B

B.1 What should Robert do about the conditions at the Solar Group? Terminate the

agreement? Whose interests are at stake?

B.2 What is the appropriate standard he should apply when considering the working

conditions and wages in Bangladesh?

B 3. How might the blog impact Green Move’s brand?

PART C – FOREGIN EXPANSION

Green Move has a small technology team employed in the Boston office and

outsources the remainder of its technology needs. Viktor has long advocated the

substantial cost savings and better management if Green Move were to hire well educated

individuals from Eastern Europe at low wages. Privately, Viktor realizes that he would

also like to make a difference in Russia by helping the underemployed and unemployed.

The board met and agreed that Green Move should consider this as a long-term strategy

and that Viktor should investigate a remote technology base in Russia. Viktor spoke to 6

his friends and believes that he has found the perfect location to lease. The governmentowned

property is large, well lit and its urban location will attract many workers.

Viktor has traveled to Russia to visit his family and to meet with the property

manager. The two discuss the rich history in the area and Viktor is under the impression

that the property is available. It is not until the end of the meeting that the manager

informs Viktor that there will be a competitive bid for the lease of the property. He

instructs Viktor to send him his best offer by the end of the week and hands him two

envelopes; one addressed to a government office labeled “property lease bid” and the

second addressed to the property manager labeled “facilitation.” He explains that

whatever he places in the second envelope will “keep the process moving” and the he

would hate to see him miss out. Viktor takes both envelopes.

Question C

C.1 – Should Viktor provide a bid on the property lease? Should he include both

envelopes? Why or why not? What are the legal and ethical considerations?

C.2 Should Green Move expand its operations in Russia?

PART D – THE BOARD AND REMEDIAL MEASURES

In addition to the previous facts, assume the following has occurred:

 You have continued to market the Zero Pedal in the Southeast and persuaded the

company to pay the special $5,000 fee.

 Robert has done nothing about the working conditions at the Solar Group.

 Viktor has leased the space in Russia and included a $2,000 payment in the

“facilitation” envelope.

Question D

D.1 What are the organizational issues that may have led to ethical and legal breaches

at Green Move? 7

D.2 Are there any residual risks (ie; civil or criminal liability) to Green Move as a result

of any legal and ethical breaches?

D.3 What short and long term steps should the board of directors take to “fix” Green

Move?

D.4 What is the role and responsibility of the government to “fix” these issues?