Cases in Business Ethics
Preparing SCU students for the ethical challenges of a career in business and fostering a broad community of ethical support both on campus and in the working world. These cases were written by Santa Clara University seniors Alexis Babb, Saayeli Mukherji, Amanda Nelson, and Noah Rickling as part of their work as Hackworth Fellows in Business Ethics at the Markkula Center for Applied Ethics.
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David Johnson holds a major leadership position within an established biotechnology firm. The firm has successfully pursued wildly innovative research utilizing DNA that has pushed the boundaries of science. Many potential clients – from universities and medical centers to private institutions – expressed a strong interest in the company's technology. Knowing that this technology was both powerful and relatively unregulated by the government, both Johnson and the company were keen to monitor who they sold their products to.
The company's solution was to investigate potential clients and only sell to those who demonstrated “bona fide use,” i.e. a legitimate use that would be carried out in good faith. However, determining what was and was not bona fide use proved to be tricky. Some researchers wanted to use the technology to investigate the genes of specific ethnic groups in order to understand common genetic diseases within that group. While this particular project was intended to benefit people, the company was concerned about how that information could potentially be used in the future, not to mention the company's culpability for that use given that its technology was used in the research.
The company was concerned that the kind of information the potential customer would have access to could be used to discriminate against people with certain genetic markers, particularly by insurance companies looking to increase rates for clients at a higher risk for illness. At the same time, the investors of the biotech firm expect a return, given the high costs of research and development as well as the amount of risk they took on funding the project.
Does the firm have an obligation to self-regulate their product? Are their “bona-fide use” standards sufficient?
Arnold is the Chief Operating Officer of a multibillion-dollar public company in Silicon Valley. The staff is predominantly male, and holds quarterly upper management meetings offsite. Arnold attends one of the meetings, along with the company's CEO, CFO, and numerous VPs. The opening speaker is the Vice President of Operations, Jordan Tompkins, who was brought into the organization by the CEO, having been close friends in college.
Jordan, who has college-age daughters, starts his presentation by sharing that he was out late the night before "partying," and that he “threw together” his slides. His first slide is a photo of a cheerleader from a local team—in a hot tub. He jokes that he is a big fan of this particular team. He goes on to cover some highlights of the company's recent performance. His last slide, however, is formatted to resemble a motivational poster. Entitled “Opportunity,” it is a photo of an apparently intoxicated college girl lying on the floor wearing only her underwear.
Despite the widespread laughter, the consensus was that Jordan had pushed the envelope too far, but no harm, no foul. The CEO covered for Jordan, stating “That's just Jordan being Jordan.” Arnold was the exception, finding Jordan's behavior to be completely out-of-line and deserving of immediate termination. Arnold, being the COO, technically has the power to fire Jordan at any time, but it is clear that he is under the protection of the CEO.
What should Arnold do?
Posted June 2013
Bob Harris, a recently retired CFO, has served on the Board of a Silicon Valley tech company for several years. He was initially asked to join the Board by the CEO. The two initially met while serving on another Board and now have become close friends. Recently, the Board was confronted with allegations that the CEO had been having a sexual relationship with a mid-level sales manager at the company. Staff had observed that the individual in question had received numerous promotions and bonuses, and many employees expressed resentment over her seemingly preferential treatment.
Bob shares in the widespread concern that the incident is affecting morale and needs to be addressed. At the same time, a public firing would damage the company's image, and in turn the stock price. He considers confronting the CEO directly, but fears that would be putting his friendship before his duty to the company, its employees, and shareholders. The board has scheduled a meeting for later that day to deliberate on the issue.
What should Bob do?
Posted June 2013