Santa Clara University


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.

The following postings have been filtered by tag Product Issues. clear filter
  •  Unchartered Territory: When Innovation Outpaces Regulation

    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?

  •  Quality Management: Signing Off on a Substandard Product

    Lauren's first job after graduation from Santa Clara University was working as a quality engineer with a highly respected technology company. She had to monitor the manufacturing process and make sure that all products met customer specifications. Just three months into her position, the company booked a very large deal with a strategic customer, helping establish the company's dominance in the industry.

    Specifically, Lauren's company was designing a device that would be integrated into another company's product. The customer contracted out this work because they were experiencing rapid growth and cannot meet demand otherwise. They picked Lauren's company because of its good reputation and fast turnaround time. Lauren's role was to test the new device and make sure it met technical and environmental specifications, particularly functionality under extreme conditions, such as high humidity.

    The test results showed that the products did not meet the quality standards agreed upon, but only by a very small margin. Her general manager instructed her to push it through anyway, stating that the risk of failure was not great enough to delay mass production. Moreover, the likelihood of the product ever being placed in such extreme situations was so small that the manager did not feel jeopardizing the contract was worth it.

    Lauren spoke to her immediate boss, who worked under her general manager, and he also advocated pushing the product through to production. She was faced with the choice of ignoring company protocols or going against management. Sweeping the problem under the rug would require Lauren to sign off on a report that she knew to be fraudulent. She also knew that if she went to upper management her working relationships with her immediate bosses would be strained, maybe even preventing her success in the company. Not to mention, the company would have to delay production and possibly lose the contract.

    What should Lauren Do?