December 1999
Dear Friends,
Once again, I am happy to send you a copy of the annual report of the Center for Ethics and Business at Loyola Marymount University. Our 1999 program saw considerable growth over 1998, we achieved a major goal of attracting teams from other parts of the country, and this produced substantial improvement in the quality of the presentations in our student team competition.
In the spirit of assisting anyone interested in putting on an event like this, this report will continue to describe our attempts to improve it and to detail our discoveries about what works and what doesn’t work in a program of this sort.
Sincerely,
Thomas I. White, Ph.D.
Hilton Professor of Business Ethics
Director, Center for Ethics and
Business
I. 1999 Business Ethics Fortnight
We began planning for the 1999 Business
Ethics Fortnight with the same basic format we’ve used since 1996.
The Competition/The Winners
Approximately 100 LMU students comprising
20 teams participated in the preliminary round of the presentation competition.
Five LMU teams advanced to the intercollegiate round where they were joined
by teams from Loyola University of Chicago, Manhattan College, the United
States Naval Academy, the University of Texas at Austin and Valparaiso
University. (See the end of this report for a complete list of team members
and topics, as well as summaries of the winning presentations.) The competition
was very keen, with less than a point separating the top teams. Loyola
University of Chicago placed first, receiving both the $1,000 Emmons Prize
(for the overall winner) and the $500 Maxwell Prize (for the top non-LMU
team). We had originally planned to award a second and third place, with
prizes of $600 and $400 respectively. However, the scores of the next three
teams were identical, so we declared three runners-up who shared $1,000:
the University of Texas at Austin, Valparaiso University, and one of the
LMU teams. The 5K biathlon, with its $500 Cordova Prize, was won by Valparaiso.
There was a tie for the 10K biathlon, and its $500 Cordova Prize, between
the team from the Naval Academy and one of the LMU teams.
All of the teams excelled in a variety
of ways, and the judges were extremely impressed with everyone. However,
the team from Valparaiso merits special mention because of some unusual
circumstances they faced. The Valparaiso team was assigned to present Saturday
afternoon. However, they were competing in the 5K division of the biathlon,
which meant that they had to race that morning. Unfortunately, Shannon
Bachman of the Valparaiso team was hurt during the run and had to be taken
to a hospital to determine the extent of her injury. After receiving treatment
(and a pair of crutches), she returned to her hotel to change, and then
headed back to LMU for her team’s presentation. To present well enough
to be one of the runners-up and to win the biathlon is difficult enough
in the best of circumstances, but to do so under these conditions is very
impressive indeed. Even though Shannon and her teammates were the youngest
group in the competition, made up only of freshmen and sophomores, they
handled this situation with a level of poise and maturity that eludes many
people twice their age, and for that they deserve our admiration as well
as congratulations.
*
Commentary on the Event
Attracting Participants
One of the most difficult aspects
of holding a competition of this sort is to get enough students interested
to make the contest competitive. In the first three years of the program,
we tried three different patterns for attracting students. In essence,
we experimented with changing our sense of the students whom we were trying
to serve by the contest. The 1996 competition required participation by
students in a variety of LMU core courses and allowed participation by
any other interested LMU students. The 1997 competition required participation
by students in one LMU core course and allowed participation by any other
interested LMU students. The 1998 contest encouraged students in selected
LMU electives to participate and allowed participation by any other interested
students (from LMU or elsewhere).
After evaluating the results of these
three approaches, we decided that, for 1999, we would use a variation of
the pattern from the program’s second year. Feedback from LMU students
suggested that the amount of work involved in preparing a competitive presentation
was such that most students felt that unless they were doing the work for
a course in which they were enrolled, involvement in the contest took away
too much time from other courses. In other words, if they could get course
credit, they were happy to do it. In order to guarantee an adequate field
for the preliminary round in 1999, then, we required participation in selected
sections of a core course required of all business majors. Happily, the
strategy worked. Through careful scheduling of the day and time of certain
sections of "Business as an Institution in Society," we saw a substantial
increase of LMU students over 1998, with approximately 20 teams in the
preliminary round.
The 1999 competition also saw us
achieve a major goal of making the competition intercollegiate. This was
one of our original goals, but when we began the event in 1996, we decided
that we would keep the competition as a campus event for a few years as
we worked out the kinks. In anticipation of the day when we would want
to invite outside teams, we did do national mailings of reports and announcements
about the 1996 and 1997 events. In 1998, we decided to see if we could
attract students from colleges and universities in the Los Angeles area,
and a small number of students from UCLA and Cal State/Long Beach teamed
up with some LMU students. Given the success of this initial foray, we
decided to make a major push on this front for 1999. We began looking for
interested teams in the fall of 1998 through a combination of announcements
on our website and mailings to deans of business schools, members of the
Society for Business Ethics, and area faculty who were teaching business
ethics courses. As a way of dealing with the fact that many teams simply
couldn’t afford to travel to Los Angeles, we also offered the option of
participating via a videotaped presentation or by videoconferencing. While
we did get some response from our initial mailings, it was much less than
we’d hoped. So we decided to narrow our focus and approach schools with
a history of sending students to such competitions—specifically, teams
competing in the "Ethics Bowl," a contest which has been put on for the
last few years by the Association for Practical and Professional Ethics.
So I went to the APPE meeting in Washington at the end of February, and
personally approached students and coaches from a variety of teams. As
mentioned earlier, we were able to interest five schools: Loyola University
of Chicago, Manhattan College, the United States Naval Academy, the University
of Texas at Austin and Valparaiso University. However, there was still
one final hurdle to overcome. Some of these teams had difficulty finding
the necessary funds to travel to Los Angeles, but fortunately we were able
to come up with a patchwork solution. A long-standing friend and supporter
of the Center provided us with a small fund that we could use to defray
some travel costs; we received help with airfares from Southwest Airlines;
and we were offered excellent rates by Los Angeles Rent-a-Car and the Wyndham
Garden Hotel in Culver City.
The matter of the financial barriers
to teams traveling to Los Angeles brings up an important issue that we
are currently grappling with. Even though we were able to assist some of
the teams financially, it was only for a relatively small percentage of
the cost of travel. Fortunately, despite the fact that this was a last
minute matter, the schools that sent teams had enough resources that they
were ultimately able to find the money to cover most of the costs. However,
this would not be true of many schools. The first 13 years of my teaching
career were spent at a college that was ultimately forced to close because
of financial problems. As a result, I am painfully aware that there are
some schools that—no matter how much advance planning they did—simply would
not be able to afford sending a team to Los Angeles. These schools are
always hard-pressed financially which means that they are prevented from
offering their students opportunities that regularly go to students from
better-endowed schools. Moreover, a disproportionate number of these schools
have student bodies that are wholly or primarily African American, Native
American, female, and the like, that is, groups that traditionally have
had a more difficult time entering business. Therefore, we have set as
a major goal for the 2000 competition finding a corporate partner who will
be willing to cover all travel costs for five teams from such schools.
Judging/Scoring
One of the perennial issues that
we face in this contest is how to keep the judging fair and consistent.
We use about 50 different judges, and, because their schedules are so busy,
most judges evaluate only one or two presentations. The challenge is obvious.
We’ve approached this matter from
a variety of angles. Based on suggestions from the judges, we’ve regularly
tried to make the evaluation form that they use clearer and more precise.
We try to pair new judges with veterans. As a way of muting the effect
of a judge who’s either too critical or too generous, we try to have four
judges at each session. And, if it comes to it, if the scoring of one judge
is significantly different from his or her colleagues, we reserve the right
to take that into account in determining the team’s score.
While we were largely satisfied with
the judges’ performance in the 1999 competition, we did observe some significant
differences among some judges in how they thought the teams should deal
with the financial dimensions of their cases. Some judges were very
demanding, looking for evidence that the team had done meticulous, real-life
research on all the relevant financial details relating to the solution
they were proposing. Other judges took a very different tack. They thought
that as long as the teams showed that they understood the general financial
concepts that were involved, the specific numbers the teams worked with
could even be fictional. We are currently addressing this issue by working
with the judges to determine a reasonable and specific set of financial
criteria.
On a related topic, the fact that
the overall scores of the top four teams were so close—with only a fraction
of a point separating them—makes it clear that we need to revise the form
the judges use to make it even more discriminating. We are currently considering
a variety of options, ranging from using a different numerical scale for
existing categories to adding new categories.
Of course, the new financial criteria
and the revised judging form will be made available to all competitors
well in advance of the competition.
Ethical Analyses
The students’ analyses of the ethical
dimensions of the problems they studied showed significant improvement
over 1998. We attribute this to a combination of factors. The outside teams,
all of whom had participated in the Ethics Bowl, brought an impressive
level of sophistication to the competition. We also notified teams in advance
that we would "weight" the scores for the ethical analysis so that they
constituted one-third of a team’s final score. And we developed better
written guidelines. Trying to help students with the challenge of discussing
ethics in a simple and practical way yet still remaining within a basic,
philosophical framework, we suggested that teams address at least the following
four questions.
Despite the improvement, we hope
to see continued progress on this front. It was still too frequently the
case that the financial and legal analyses of a team’s presentation were
far more sophisticated than their ethical analysis. But, conversely, the
ethical analyses were sometimes more technical than is desirable. It’s
true that this is primarily a business ethics competition, and that the
ethical dimensions of the case should take center stage. However, one of
the competition’s major goals is to help students learn how to argue for
an ethical course of action in a way that men and women in business find
engaging and convincing. Thus, one of the major challenges that each team
faces is to explain issues in a way that will lead average executives,
lacking a specialist’s background, to readily see both the ethical issues
and, in particular, their financial implications.
Tools for Improving Quality: Videotaping/Website
There was a marked improvement in
the presentations of LMU students between our second (1997) and third (1998)
competitions, improvements that we attributed largely to the fact that
we began videotaping presentations in 1997. We taped the presentations
in the final round, put the tapes on reserve in the library, and strongly
encouraged students to study as many as they could. Because of our success
in 1998 and our hope for further improvement, we used the same strategy
for 1999. Once again, it seemed to have the desired effect, as the LMU
presentations improved again. The tapes were also helpful in letting teams
from other schools know what the competition entailed.
As we continue developing the competition
as an intercollegiate event compressed into a small amount of time, however,
the logistics associated with doing high quality taping become increasingly
complex. We are thus rethinking whether we want to continue this. We currently
have a good set of tapes of excellent presentations, so we probably won’t
tape the 2000 competition. We’ll then assess that decision in light of
the teams’ performances.
As another way of trying to improve
the quality of the presentations, we began using the Center’s website as
a place to post any material that we thought could help teams put together
stronger presentations. We uploaded: general information on the competition,
reports on the 1996-1998 contests, a list of possible topics, a detailed
description of what was expected in a presentation, the form that the judges
would use, and extensive material on philosophical ethics. (For more information
about the website, see below.)
Increased role of students
The original impulse behind this
competition was the desire to design a program in which students, not "ethics
experts," would occupy center stage and in which students would be active
participants, not passive observers. In light of this fact, we are planning
in the 2000 competition to ask students to take on yet another task—evaluating
other teams’ presentations. While we have not yet worked out the details,
teams will be required to observe at least one (but possibly more than
one) presentation, and to quickly prepare a written evaluation that summarizes
its main points and identifies both its strengths and weaknesses. The assessment
will itself be evaluated, and the team preparing it will receive a score
for how well they did. These evaluations will not go into the presenting
team’s score, but the team which is the subject of the evaluation will
receive a copy as feedback. Our goal is to set students a task that they
cannot prepare for in advance, to expose them to a variety of topics and
presentations throughout the competition, and, in particular, to help them
recognize that in performance evaluations, identifying strengths is just
as important as pointing out flaws.
II. WWW.ETHICSANDBUSINESS.ORG
From 1996 to 1998, the Center’s exclusive
focus was the Business Ethics Fortnight program. As the competition began
to take shape, however, we began looking for ways that we could be an educational
resource for a wider range of people. In 1997, we had posted a very basic
website, but as the power and popularity of websites grew, we saw that
the internet offered us the opportunity we were looking for. A website
can easily contain a large number of tools and materials that can help
stimulate a websurfer’s thinking about ethics. So at the end of 1998 we
launched a completely redesigned website, trying to make it helpful to
a variety of audiences. We continued to use the site as the primary place
to post information about the spring Business Ethics Fortnight competitions
and the LMU Run for the Bay. But we also tried to give readers material
that they would find engaging and useful.
"Ethics Toolbox"/Links
We began by creating a section called
the "Ethics Toolbox," where people can find a number of intellectual tools:
a) a questionnaire that helps them learn how they currently approach ethical
issues, b) a practical strategy for approaching ethical dilemmas, c) a
brief defense of the moral life, and d) a description of some corporate
ethics programs. From the first three of these "tools," readers can also
find more extensive information: a description of these two ethical styles,
discussion about whether these styles are related to gender, an overview
of a philosophical approach to ethics, and a detailed discussion of Socrates’
and Plato’s defense of a life of moral virtue. The variety of material
and the difference in its depth resulted from our belief that while some
readers would prefer something short, others would want something more
detailed. We wanted to make sure that the reader with a casual interest
could get something at that level and not feel overwhelmed, but that readers
with a bigger appetite could be satisfied as well. The "Ethics Toolbox"
is by far the largest part of our site.
Visitors to the website can also
find an extensive list of links to other sites concerned with ethics.
Cases/Discussion
We also wanted the site to have some
interactive material, so we included a section that contains short descriptions
of some contemporary ethical issues in business. We began with the Long
Term Capital bailout and the more prosaic issue of taking credit for someone
else’s idea. When the opening of a Hooters restaurant stirred considerable
local controversy, we posted that as a case. And, even though it was more
of a sports issue than a business issue, we asked for reaction to the charge
that the goalie of the world champion American women’s soccer team had
in fact "cheated." On some of these cases, we ask specific questions; on
others, we simply solicit reactions. We also have a general bulletin board,
where anyone is welcome to post comments on any issue of interest to them.
Visitors can sort through the results
of how readers vote on these cases by sex or age, and at least on one issue,
we’ve seen a small, but interesting, difference in how men and women have
responded. The case is as follows: "You make a suggestion at a meeting.
You’re ignored. Ten minutes later, someone else says the same thing—without
giving you credit. Is this stealing?" Readers are asked whether they’ve
ever experienced this in the workplace, how they would rate the action
("nothing wrong," "somewhat wrong," or "very seriously wrong"), and whether
they consider it "stealing."
Throughout the first 300 responses,
a pattern has emerged in how men and women respond to this scenario. Although
there is no significant difference in the percentage of men and women who
have experienced this in the workplace (76% of the men and 81% of the women
say they have) or who think it counts as "stealing" (76% of the men and
77% of the women label it as such), there is a difference in how seriously
wrong the sexes see this matter. More women think it’s more seriously wrong
than the men do: 58% of the women versus 51% of the men say "very seriously
wrong" (while 40% of the men versus 32% of the women say it’s only "somewhat
wrong," and 10% of the women versus 9% of the men say "nothing wrong.")
It’s not a huge difference, but the 58% versus 51% and the 40% versus 32%
differences seem noteworthy when all of the other figures are about the
same.
Visitors can also post comments on
any of our cases or on any topic they choose on the site’s discussion board.
Or, they may write directly to the Center via an e-mail link.
Business Ethics Fortnight/LMU’s
Location/Website Contest
As mentioned above, the site is the
main location for information about our annual competition: the intercollegiate
student team presentation and "L.A.’s Weirdest Biathlon" (the combined
academic/athletic contest). We include reports on earlier competitions,
detailed guidelines, a copy of the form that judges use to evaluate presentations,
a list of possible topics, and any other information that we think might
be helpful. The page describing the biathlon even includes a link to training
programs on the Runner’s World website for anyone new to running.
We have a separate, but linked website for the LMU Run for the Bay (www.runforthebay.org),
where readers can find race information, a course map, and the best times
from past races. In the hope of providing some extra incentive to students
from other parts of the country who might be interested in putting together
a team, we also use the website to shamelessly promote the university’s
proximity to the beach. LMU is only one mile from the ocean, and April
in Los Angeles is decidedly warmer than April in Boston or Chicago, for
example. We thus offer links to some of the webcams at area beaches and
even to a surf report.
We are also using the website to
promote a new addition to the program. In order to make it easier for more
students from a distance to be involved in Business Ethics Fortnight, and
as a way to challenge students to learn how to work effectively with new
technologies, the 2000 Business Ethics Fortnight will include a business
ethics website design competition. Because we believe that websites will
continue to evolve as tools that individuals in business use for the sake
of communication and persuasion, we are inviting students from across the
country to design a website that addresses an ethical issue in e-commerce.
We’ll choose a case that all teams will work on; we’ll post the details
of the case; teams will submit their websites to us; we’ll upload them
all at the same time; and then they’ll be judged. Competitors face a daunting
challenge. How do you design a site that educates a viewer about the ethical,
financial and legal dimensions of the problem and persuades them that you’ve
come up with a reasonable solution that passes muster on all three counts?
How do you design a site that is at the same time "user-friendly," comprehensive
and effective? We believe that this is a good educational exercise in itself.
But since our goal is for the websites to be judged by men and women from
business who have a fair amount of online sophistication, we’re hoping
that this will be another way that we can develop connections between business
and the academy.
Two Surprises
We’ve been pleased with the reaction
to the website and with the number of visitors it attracts. There is also
regular use of the discussion board. And we’ve had a number of requests
from individuals in human resource departments for permission to use our
ethical style questionnaire in ethics training sessions. However, three
developments have surprised us. First, we have attracted more international
visitors than we’d initially expected—especially more students. We now
regularly respond to inquiries on a variety of topics from students working
on projects in business ethics from one side of the planet (Great Britain)
to the other (New Zealand). Second, we have been able to assist a wider
constituency than would have been the case if we had no website. During
the first few months of the site, I received requests for assistance from
programs designed to bring individuals from other countries to the United
States in order to learn how business and government handle ethical issues.
In each case, we were contacted after a web search on business ethics turned
up our site, and after the program officer was impressed enough with it
to think that we might be a useful resource. As a result, we have had the
opportunity to discuss a variety of issues connected with implementing
ethics programs with individuals from such countries as Estonia, Jordan,
Namibia, Vietnam and Paraguay—opportunities that we never imagined would
present themselves.
The Third Surprise: Our Slogan/Going
Retail
While the two matters just described
surprised us, they were still within the scope of what might be reasonable
to expect from a business ethics website. However, one matter took us far
beyond what we’d ever expected.
I have detailed in an earlier report
that during the third year of the program, we began using a slogan designed
to catch students’ attention. We said that the competition was, "More fun
than decent people think should be legal." The first time we used this
slogan on a banner, the banner was stolen after one day. The second banner
lasted five days before it too disappeared. This convinced us that we had
an attractive slogan, so we began the process of copywriting it, and we
started looking for ways to use it effectively. The first thing we did
was to produce bumper stickers with the slogan on them and to give them
away. (We hoped that this would at least reduce the likelihood of losing
another banner.) We offer the bumper stickers at campus events, throughout
the competition, at the LMU Run for the Bay and through our website.
However, it was our offer on the
website that has produced our greatest surprise. Over the last year, we
have received nearly 5,000 requests for bumper stickers from different
parts of the world, and this led us to wonder whether we could find a way
to use the slogan to raise funds for teams in the competition who needed
help with travel expenses. As a result, we have just opened a "store" on
the Center’s website that offers both T-shirts and coffee mugs that carry
the slogan. I will report in the future whether this venture proves successful.
However, it is fair to say that the last thing we ever imagined being involved
in is retail sales.
III. The future
The development of Business Ethics
Fortnight through its first four years, our foray into the internet, and
some major events at LMU have taken us to a point where we need to do give
serious thought to our future.
1999 BUSINESS ETHICS FORTNIGHT
INTERCOLLEGIATE STUDENT TEAM PRESENTATION COMPETITION
PARTICIPANTS
First place/Presentation Competition (Emmons Prize)
Mawell Prize (Best non-LMU presentation)
English-Only Language Policies:
Civil Rights and Liberties in the Workplace
Joseph Kirkland, Marty Julia Lentz,
Charles Tate; Chris Field, advisor; Loyola University Chicago
Golden Mean Consulting, a quality-oriented
consulting firm with a commitment to providing legally, ethically, and
financially superior solutions to meet our client’s needs and exceed their
expectations.
Business Identity of Judges
A committee comprised of senior executives
from Watlow Electric Manufacturing Company (St. Louis, Missouri), whose
Illinois-based subsidiary Watlow Batavia, Inc., is facing a lawsuit filed
by the U.S. Equal Employment Opportunity Commission as a result of the
company’s "English-only" policy.
Executive Summary
In August of 1997, Watlow Batavia,
Inc., an Illinois-based subsidiary of your St. Louis-based manufacturing
company, Watlow Electric Manufacturing Co., adopted a brief policy with,
as senior management would soon discover, potentially disastrous results.
This policy, a so-called "English-only" policy, mandates that "no worker
can speak a language other than English for whatever reason during business
hours while on business premises." Four employees were terminated and three
employees were disciplined for violating the policy by conversing in Spanish
with co-workers. The employees terminated in relation to the "English-only"
policy were workers on a twelve-person assembly line. As a result of these
firings, the U.S. Equal Employment Opportunity Commission has filed a lawsuit
against Watlow Batavia on the grounds that the "English-only" policy violates
the civil rights of employees because it bars them from speaking Spanish
at any time during working hours.
Though "English-only" rules may be
adopted for reasons that are legally and ethically questionable, it is
easy to conceive of a business environment wherein such policies would
be appropriate. Companies may adopt "English-only" rules for apparently
legitimate reasons such as to promote efficiency, productivity, safety,
or employee morale. As David Griesing reports in the Chicago Tribune,
"There
are workplaces where an English-only rule may make sense. In operating
rooms, where teamwork is vital with lives on the line. In nuclear reactors,
where misunderstanding could cause meltdowns. In airport control towers."
In short, English-only policies are defensible by appeal to a legitimate
business necessity. As we will argue, however, Watlow fails to provide
a legitimate business necessity.
Insofar as Watlow’s current "English-only"
policy is legally questionable, ethically suspect and fiscally irresponsible,
we urge your company to (1) negotiate a fair, out-of-court settlement with
the EEOC and (2) adopt a legal, ethical, and financially-sound alternative
to Watlow’s current "English-only" language policy. Our hope is that Watlow
will be able to minimize the possibility of future legal action and the
exorbitant costs, financial and otherwise, which result from litigation.
Ms. Lentz will speak to the legality of Watlow’s current policy, defining
the admittedly ambiguous case law in this area and any relevant legal precedents
surrounding English-only rules. Given this legal foundation, Mr. Tate will
elaborate on the ethical nature of English-only rules, demonstrating both
the extent to which our proposed alternative is ethically superior to Watlow’s
current English-only rule and the relevance of such ethical reasoning to
the art of business. Mr. Kirkland will summarize our policy proposal with
a special emphasis on the financial benefits of our proposed solution.
It is our hope that Watlow Batavia can become a stronger, more competitive
company as a result of this challenge.
Winner, 5k Biathlon (Cordova Prize)
Considering Johnson & Johnson’s
Operations in China
Shannon Bachman, Joel Boehm, Benett
Bootz, Robert Evans, Jonathan Huffman; Sandra Visser, advisor; Valparaiso
University
Representatives of the Executive
Committee of Johnson & Johnson
Business Identity of Judges
Johnson & Johnson shareholders
Executive Summary
Currently, Johnson & Johnson
manufactures in and sells products to China. Due to the recent debate over
the United States’ position with China, we at Johnson & Johnson have
re-evaluated our position with respect to operations in China. Since there
are no clear legal guidelines governing our actions, our evaluation focused
mainly on moral and financial considerations. Having found that the Chinese
Government engages in activity we find unacceptable, and given that our
operations in China and our sales to China result in taxes paid to this
Government, we were forced to decide whether we can in fact justify our
current status with China.
Certainly there is no clear answer
to this dilemma. Whether we cut off, maintain, or increase operations in
China, there will be negative consequences. The taxes paid to the Chinese
Government will certainly help support this institution. Yet withdrawal
will hurt our Chinese employees, particularly if other companies recognize
our actions as correct, and follow suit. The effects of Johnson & Johnson’s
decision are certainly not limited to those mentioned above as well.
The situation is also dynamic. Any
decision made will need to be re-examined as circumstances change. However,
Johnson & Johnson cannot sit idly by, adopting a "wait and see" attitude.
We must examine closely the data available, and weigh this information
against our consciences, as well as the company Credo -- our guiding inspiration
since General Robert Wood Johnson introduced it over 50 years ago.
Having weighed the multiple aspects
of this dilemma, we will recommend to you, our shareholders, that Johnson
& Johnson both remove manufacturing operations and discontinue sales
in China.
Global Profts, Global Headaches
Jessica Chou, Elizabeth Edrington,
Helen Wei; Bill Shaw, advisor; University of Texas at Austin
K-PAN Business Practice Improvement
Committee
Business Identity of Judges
K-PAN Board of Directors
Case: Global Profits, Global Headaches
K-PAN is a Ft. Worth maker and marketer
of textiles. It’s a publicly traded firm whose name, for over 50 years,
was synonymous with men’s and women’s work clothes. The 80’s and 90’s brought
great changes to the textile industry. Among other things, labor costs
were on a steep incline. In K-PAN’s North Carolina and Texas plants, costs
were squeezing profits to the point that K-PAN’s board decided to follow
its competitors overseas. Over a three year period, K-PAN phased-out its
domestic operations with a generous re-training, re-settlement program
for former employees in need of help, built a $28 million state-of-the-art
plant in Nicaragua ($20.5 million in bonds placed by Dillion), and purchased
its remaining needs through local agents in Pakistan and Indonesia.
The worldwide popularity of one of
K-PAN’s articles, "Hangin," put a welcomed spike in its earnings, but also
focused public attention on problems that its board was determined to resolve.
The adverse publicity that first
stunned Nike and Kathy Lee, began to haunt K-PAN with a vengeance. Ft.
Worth residents, supported by a vocal group of former K-PAN employees and
the Amalgamated Textile Workers Union, assailed the firm via informational
picketing and through the media. K-PAN’s "model" plant in Nicaragua exhibited
a number of shortcomings (long hours, low pay, environmental, health, and
safety problems). The negative publicity generated by its Central American
operations paled in comparison to the outcry that stemmed from its link
with "sweatshops." Its purchases through local agents in Pakistan and Indonesia
[allegedly] contributed to the perpetuation of atrocious working conditions
in those countries.
K-PAN’s insistence that it owned
and operated no facilities in those countries couldn’t begin to ward-off
attacks on its corporate policy. "K-PAN ETHICS," the central focus of its
code had been untouched since it was carefully crafted by K-PAN’s founder,
Mr. W, as he was widely known. K-PAN ETHICS spoke of a "living wage," "shareholder
satisfaction," "community responsibility," and "customer confidence," but
those components of the code were met satisfactorily (or, at least, they
were un-protested) since their post-war inception.
"If we forego profits to raise working
conditions in the Third World," remarked one board member, "we’re just
going to have to reduce our purchases, and that’s going to cost jobs. Who’ll
be better off? And our customers won’t be happy with the higher prices
either. They could switch to Levis or Wranglers."
"Why not take those costs out of
profits?" asked Professor Dickinson, boyhood pal of the founder and the
most recently elected board member. "My God," groaned the chief financial
officer. The representative of Dillion rolled her eyes and remarked, "The
bondholders are going to love us. "Someone caught the Chairman’s attention
and asked, "Can we take a break now?"
The Chairman was about to grant the
request, when Elizabeth Edrington, daughter of the founder, interrupted.
"I’d like for the Chairman to appoint Helen Wei, Jessica Chou and me to
a committee to look into this matter further and report back at our next
meeting." "So Ordered," said the Chair, "we’ll hear your report at our
West Coast retreat, scheduled for the 16th April in L.A. Meeting adjourned."
Executive Summary
To: K-PAN Board of Directors
From: K-PAN Business Practice Improvement
Committee
Background
K-PAN, a Fort Worth, Texas firm,
produces and markets textiles while specializing in men’s and women’s work
clothes. As the prices of domestic labor rose throughout the 1980s, the
company decided to move production to Nicaragua and acquire supplies through
merchants in Pakistan and Indonesia. Although K-PAN gained popularity and
profits through its new strategy, adverse publicity arose due to its association
with and exploitation of sweatshops.
Issues
At last month’s board meeting, K-PAN executives discussed the problem at length and organized a committee to examine the issues involved. The appointed committee convened and evaluated
possible solutions to the problem
according to three primary issues:
· Financial performance over
the short and long term
· Current lack of legal standards governing the industry
· Ethical implications of
any solutions prepared
Recommendations
The goal of the committee is to bolster ethical standards while maintaining profits in order to align K-PAN’s actions with its corporate policy. After completing a thorough analysis of the
issues, the committee designed a three-part solution in order to remedy the sweatshop problem:
· Phase out of purchases in Indonesia and Pakistan
· Focus on improving working conditions and employee wages in Nicaragua
· Adopt new business partners
who will help enforce our ethical standards
Should Coca-Cola Continue to Sponsor
the Olympics?
Jennifer Cabeje, Michael Kelley,
Regan Ranoa, Marie Sia, Lisa Watkins; Loyola Marymount University
Coca-Cola Marketing Ethics Committee
Business Identity of Judges
Senior Management of Coca-Cola
Executive Summary
Recently, the International Olympic
Committee (IOC) has been accused of accepting bribes from cities bidding
for the Olympic Games.
Coca-Cola spends about $350 million
on their Olympic marketing campaign. Corporate sponsors expect not only
to gain positive exposure of their company name, but also to increase sales
of their products and to increase market share.
The United States Senate’s proposal
for a change in tax-exemption legislation and the OECD’s anti-bribery treaty
may hinder attempts of bribery in the United States and abroad.
Both the Olympic Games and the International
Olympic Committee claim to be founded upon fundamental principles of fair
play and honor. For this reason, Coca-Cola had decided to be the Olympics’
longest continuing sponsor. Yet, the IOC scandal has presented ethical
dilemmas for the IOC and its corporate sponsors.
After a lengthy investigation of
the situation, we recommend that the Coca-Cola Company pressure the IOC
to reform. Because Coca-Cola and the IOC have had a long relationship,
we feel that the IOC will seriously consider Coca-Cola’s request for a
public financial statement, an independent bid committee, and accountability.
The Role of Women in the Military
Dennis Doyle, Alexs Thompson, Robert
Devine; Aine Donovan, advisor; United States Naval Academy
Long Term Capital Management
Britta Bucholz, Colin Casey, Joseph
Harrison, Rob Taylor; Loyola Marymount University
Other Finalists:
Compliance Risk Management:
James Gannon, Timothy Giroux, Elizabeth Hickey; Manhattan College, John
Wilcox, advisor
Software piracy: Bill Buermann,
Michelle Chapman, Trevor Foley, Sarah Reed, Vincent Kostiw; LMU
Sex and advertising: Sammy
Chow, Lavinia Iskandar, Traniece Jackson, Christopher Johnson, Myetta McCoy,
Magan Mitchell; LMU
Maquiladoras: Kerry Bardwil,
Richard Michael, Anthony Podegracz; LMU
LMU Preliminary round competitors:
Production of collegiate apparel
in sweatshops: Tamaya Petteway, Melissa Redondo, Tricia Thompson, Nina
Vujanovic
Investment opportunities in brothels
abroad: Lindsay Gladner, Akash Lal, Yvette Nino, Jia Lin Wang
Hawaiian Tropic and bikini contests:
Lou Ceniza, Edward Figueroa, Alex Martinez, Marcel Perez III, Ou Te
Child labor and Disney: Paul
Babatunde, Gabe Pagtama, Lynn Presto, Roxanne Stonerock
Ethical issues in electronic information
systems: Amine Chamchoum, Dayra Dominguez, Lisa Mak, Ana Valdivia,
Valisara Vongsrirungruang
Advertising and sex: Ed Chen,
Nuantia Flowers, Kathy Kim, Kenichi Saito, David Theroux
Pornography and the internet:
Viendif Gunawan, Victor Ibrahim, Indrawan Januardy, Brian Kleinhofer, Lyris
Oliva, Jenn Woodward
Violence and films: Abby del
Rosario, Franchesa Gordon, Jodi Murayama, Todd Okamoto, Nicole Zabat
Animal testing and cosmetics:
Brian Davis, Carrie Estes, Alexa Fasheh, Richard Mills, Mala Trifunovic
Beer and advertising to minorities:
Maureen Langham, Jessica Norlin, Analia Piccollo, Liliana Torres
Pricing of pharmaceuticals:
Juan Flores, Daniel Mursalim, Eric Sutanto, Hector Torres, Robert Utomo
Biotechnology: Alexis Cole,
Meghan Dunbabin, LaVonne Gonsalves, Mark San Buenaventura, Aimee Shimizu,
Daphne Vadman
Three Gorges Dam: Richard
Michael, Maria Moy, Jay Romias, Grace Szebelledy, Tulinh Vu
Maquiladoras: Lynn Brown,
Fanny Kosasi, Omar Gonsalez, Alicia Soto, Jinie Tenges
Hooters of America, Inc.:
Anabel Caraballo, Jorge Cuervo, Conrad Haro, Julian Liu, Eldo Lopez, Ricardo
Ordonez
Judges:
Dolphy Abraham, LMU
Angel Barragan, Los Angeles Times
Ross Bengel, LMU
Gail Bernstein, PNC Business Credit
Blanche Bettinger, LMU
Ben Bobo, LMU
Peter Brockett, Brockett Tamny and Co.
Richard W. Burden, Burden and Associates
Janice Burrill, Wells Fargo Bank
Richard W. Capalbo, Oxford Group
Linda Carlisle, Northrop Grumman
Kevin Choroomi, Stonecraft Enterprise
Jeff Covert, Oracle Corporation
Frank Daly, Northrop Grumman
Lynn DeGroot, U. S. Trust
Leah DeLancey, Baker & Hostetler, LLP
Carville Dennehy, Northrop Grumman
Patricia Douglas, LMU
Tom Fleming, LMU
Robert Foster, UCLA
Jeff Gale, LMU
Frederica Hendricks, LMU
Les Hribar, Ukiah Software
Hal Huffer, MXPXA Planning Group
Joseph Jabbra, LMU
Mary Korey, Automobile Club of Southern California
Sherry Lawson, Coldwell Banker
Joe Lim, Imperial Bank
Dale Loepp, United Building Materials Corp.
Jerry Mann, UCLA
Thomas J. McCabe, Jr., Northrop Grumman
Mahmoud Nourayi, LMU
Tracie Ricketts, Steelcase
Peter Smith Ring, LMU
Barney Rosenberg, LRN, Inc.
Ricci V. Ruffinelli, VCS, Inc.
Tom Sabol, Englekirk and Sabol, Inc.
Kala Seal, LMU
Jim Stalker, The Maxwell Group
Annette Stoll, The Maxwell Group
Rolf Strutzenberg, Toyota
Courtney Surls, LMU
Louke van Wensveen, LMU
Steve Venghaus, Stevens Air Transport, Inc.
Thomas Edward Wall, Los Angeles County Metropolitan Transportation Authority
Ray Watts, LMU
Aimee Wheeler, Norwestern Mutual Life/Baird
James Wilson, Toyota
Millie Yamada, Northrop Grumman
Beverly Youngstrom, Northrop Grumman
LMU Run for the Bay
5K Men
2. Martinez Hilario, 35, 16:45
3. Michael Oleata, 36, 16:48
2. Adrianne Trader, 35, 19:04
3. Kelle Taylor, 35, 20:27
1. Dan Goldstein, 34, 33:12
2. Stefan Skasa, 28, 35:35
3. Marco Ortiz, 49, 35:40
10K Women
1. Angela Isbill, 24, 35:40
2. Lene Tapangco, 25, 38:16
3. Phyllis Pastre, 34, 42:35
Winner of race T-shirt design competition:
Maureen Pacino, LMU
DONORS AND SPONSORS
Business Ethics Fortnight: Donors
Moses and Rachel Cordova
Northrop Grumman
Robert H. Kerrigan, Northwestern Mutual Life/Baird
The Robert and Christine Emmons Foundation
The Maxwell Group
Center for Asian Business
Conrad N. Hilton Foundation
Los Angeles Chapter: National Association
of Purchasing Management
Business Ethics Fortnight: Sponsors
Los Angeles Rent-a-Car
Wyndham Garden Hotel, Culver City
Southwest Airlines
LMU Run for the Bay: Sponsors
Amazing Balloons by Gee
Boise Cascade Office Products
Kuli Image
Runner’s World
Ralphs
Sparkletts
Trophymasters
OTHERS WHO ASSISTED WITH THE COMPETITION
OR THE RUN
Andy Barillas
Katherine Berry
Kim Francis, Heal the Bay
Mark Gold, Heal the Bay
Allen Gray
Suzanne Kite
Akash Lal
LMU Conferences and Scheduling
LMU Development Office
LMU Public Safety
Herbert Medina
Peter Mosinskis
Michael Reiner
Ken Summers
Time Management
Chad Yussman
The 40+ race volunteers