Fictional multinational corporation BSSL has faced a lot of ethically questionable situations recently.
The Hon. Justice Potter Stewart defined ethics as “knowing the difference between what you have a right to do and what is right to do.” Blue Star Steamship Lines (BSSL) has recently found itself involved in several situations where their legal rights were overshadowed by the need to do what was ethically right. In making these decisions, BSSL has learned that the ethically right choice is often more difficult than simply doing what the company has the right to do.
Over the course of the previous 10 years, BSSL has worked hard to acquire the rights to develop oil contracts in South America. After sanctions preventing BSSL’s entrance into the South American market were finally lifted, BSSL had to decide if developing in this area was the right thing to do. BSSL’s focused research on Venezuela exposed several ethical problems with the country. It is widely believed that Venezuela’s democratic elections are rigged. Therefore, it is highly unlikely that President Hugo Chavez’s regime will end without a military coup (Tippee, 2008). Additionally, Venezuela requires all foreign oil operators to form partnerships with the state owned oil company, PdVSA. These partnerships are often one-sided and PdVSA is does not have a positive labor or environmental record (Briscoe, 2006). Despite the allure of inexpensive drilling in oil rich Venezuela, BSSL has no choice but to avoid involvement in the region on ethical grounds.
BSSL found its cruise lines in an ethically challenging position when a member of the crew robbed a traveling couple resulting in the husband’s death. Since the cruise ship Minnow sails under the Liberian flag, BSSL is bound by Liberian law when acts such as these occur at sea (Legal Database, n.d.). Unfortunately for the passenger in question, Liberian law offers very little protection for women. In this case, the passenger was not entitled to any compensation from BSSL since the property lost is not considered to be hers. Fortunately, the Cruise Lines International Association (2008) has specified guidelines to help cruise lines make the ethically right decision. The CLIA has a zero tolerance policy for crimes committed at sea (CLIA, 2008). In order to stay in compliance with the CLIA’s guidelines, BSSL had no choice but to work with the victim to ensure justice was served.
BSSL also ran into ethical complications with its acquisition of Appalachian Bell. This small phone company had been running a service whereby it provided anonymous billing for 900 number services. An elderly couple had managed to run up a $500 phone bill when their grandson made numerous calls to one of these services. Although the couple refused to pay their bill, Appalachian Bell was well within their rights to collect. The Federal Trade Commission (FTC) has very strict rules regarding the operation of 900 number services including how they can be advertised and how the can be billed (FTC, 1996). Although Appalachian Bell can discontinue the couple’s phone service if they fail to pay, this doesn’t mean they should. 900 number services are often confusing and one mistake can quickly become expensive. The right thing to do in this case was to offer the couple a charge forgiveness. The understanding in this case is that future charges will be collected or the couple’s phone service will be terminated.
Finally, BSSL has recently been involved in the Federal Communications Commission’s (FCC) decisions regarding the cross-ownership of local newspapers and television stations. The FCC decided in 1975 that cross-ownership presented a significant risk to customer’s ability to get news from an outside source. At the time, the Justice Department considered cross-ownership to be a monopoly issue (Wilke, 2000). Recently, the FCC amended this decision to allow cross-ownership in the top 20 U.S. markets. The U.S. Senate, led by Senators Dorgan, Clinton, and Obama, immediately moved to overturn the rule change. On this issue, the FCC seems to be making the change to protect the newspaper industry. Sen. Dorgan adamantly denies the FCC’s responsibility to protect the interests of newspapers (Skiba, 2008). Although the rule change seems logical, BSSL must keep the best interest of consumers in mind. Although there is an excellent profit opportunity in the acquisition of same market newspaper and television stations, Ferrell, Fraedrich, and Ferrell (2008) point out that customer service is entwined with customer’s perception of a company’s ethical behavior. Statistics show that 60 percent of consumers are more concerned with a company’s social record than brand recognition (Ferrell, Fraedrich, & Ferrell, 2008). Therefore, BSSL must oppose the FCC rule change in order to ensure consumers receive fair treatment of the news.
For the most part, these ethical decisions are fairly easy to make. When presented with a complicated situation, it is often the case that deciding what a company has a right to do is the more difficult question. The ethical decision is usually obvious when a moral compass is applied. James Burke, CEO of Johnson & Johnson, was faced with just such a decision when bottles of Tylenol were tampered with in 1982. He could have chosen to cover up the incident, but instead decided that the morally right thing to do was come forward and tell the public what was going on. Although the incident cost Johnson & Johnson a great deal of money in the short term, the long-term effect was to strengthen the trust between them and their consumers (Boatright, 2008).
Briscoe, I. (2006). The spoils of oil. (Cover story). New Internationalist, pp. 8,9. Retrieved October 10, 2008, from Academic Search Premier database.
Boatright, J. (2007). Ethics and the conduct of business, 5th ed. Upper Saddle River, NJ: Pearson.
Cruise Lines International Association. (2008). Personal safety and security. Retrieved October 14, 2008.
Federal Trade Commission. (1996). 900 numbers: FTC rule helps consumers. Retrieved October 17. 2008.
Ferrell, O. C., Freadrich, J., & Ferrell, L.. (2008). Business ethics: Ethical decision making and cases (7th ed.). Boston: Houghton Mifflin.
Legal Database. (n.d.). Admiralty law overview. Retrieved October 14, 2008.
Skiba, K. (2008). Senate Committee Votes to Overturn FCC Cross-Media Ownership Rules; Both Hillary Clinton and Barack Obama are among the cosponsors of the measure that now heads to the full Senate. U.S. News & World Report (April 24, 2008).
Tippee, B. (2008, August). High oil prices form weak base for state power. Oil & Gas Journal, 106(29), 76. Retrieved October 10, 2008, from ABI/INFORM Global database. (Document ID: 1529788771).
Wilke, J. R. (2000). Multi Media: Tribune Co. Deal Puts Cross-Ownership Rule In the Cross Hairs — Foes of Ban on Holding Print, TV Outlets in Same City Say It Is Outdated Now — Legacy of Bluefield, W.Va. Wall Street Journal, p. A1. Retrieved November 4, 2008, from ABI/INFORM Global database. (Document ID: 50995892).