BUSINESS AND SOCIETY/ETHICS TRACK 1998
 

BOLDER BOULDER (1998)

Nancy Sampson, Vijaya Narapareddy & Keri Ellisor, University of Denver
 

Case Objectives and Use

This case deals with a dilemma that the Bolder Boulder race organizers faced when they tried to impose a new rule restricting the number of Kenyan elite competitors in the Bolder Boulder race in 1998. In debating the men't of the Bolder Boulder's proposed participation format and deciding the best participant policy, students have the opportunity to apply Management models of decisionmaking and the three models of Ethics, viz., Utilitarian, Moral Rights, and Justice.

The case is appropriate for graduate or undergraduate courses in Public Policy, and Ethics. It will be of special interest to graduate students in Sports Management programs.
 

Case Synopsis

The case describes the controversy, which surrounded the decision made in Spring 1998 by the Bolder Boulder race organizers. The format limited foreign runners to a maximum of three athletes per country in the men's and women's divisions, while U.S. runners were unlimited in numbers. A front-page article in the New York Times suggested that the decision was racially motivated.

Bolder Boulder organizers were confronted with the dual challenge of responding to the unanticipated wave of accusations and of having some U.S. runners place high in the elite races. Distance running in the U.S. was a declining sport. Leaders in the track and field community, including the USA Track & Field officials encountered the daunting task of attracting, retaining, and developing a cadre of professionally talented young runners.

The case presents the unique opportunity of debating the ethics surrounding the policy keeping in mind the realities of the issues faced by American long-distance sporting community leaders.
 



Contact Person: Nancy Sampson or Vijaya Narapareddy, University of Denver
Mail: Department of Management, DCB, University of Denver, 2020 S. Race Street, Denver, CO 80208, USA.
Voice: (303) 871-2195 Fax: (303) 871-2294 E-mail: nsampson@du.edu/ or vnarapar@du.edu

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BUSINESS AS WARFARE" AT MCDONNEL DOUGLAS CORPORATION

Robert J. Rafalko, University of New Haven
James E. Fisher, St. Louis University
 

Case Objectives and Use

This case illustrates the dangers (morally and prudentially) of carrying an analogy too far. Specifically, "Business as Warfare' at McDonnell Douglas Corporation" illustrates the dangers of applying heavy-handed tactics to business practice and treating business decisions like wartime strategies. The case is intended for both undergraduate and graduate audiences. It is targeted specifically for a managerially-oriented business ethics course for MBA's, but would be appropriate for managerial and personnel courses-perhaps in a module on labor-management relations or negotiations-or, more broadly, to introduce larger issues about business and society or competing concepts of corporate responsibility that might arise in a variety of business, economics or philosophy courses.
 

Case Synopsis

The case describes a major labor dispute that occurred in 1996 between McDonnell Douglas Corporation (MDC), a large U.S. defense contractor, and its employees who were members of the International Association of Machinists and Aerospace Workers (IAM). Herbert Lanese, MDC's point man in this episode, became the focus of considerable controversy with his tough negotiating tactics and provocative public statements. In this case, the management-labor struggle is placed in a larger business context: MDC's struggle to emerge on a sound financial footing in a defense industry undergoing dramatic restructuring in a post-Cold War era and a similar trend among U.S. businesses to downsize their labor force, to cut costs, and to engage in other efforts that held forth prospects for improved productivity and enhanced competitiveness. A 99-day strike by the IAM against MDC was in many respects emblematic of a larger national controversy about the stability and mutuality of the employer-employee relationship as well as reflecting concerns and doubts about the solidarity of labor. Although the strike was eventually settled at MDC, it came at considerable cost for many involved. In addition to providing further strain on employee morale, the episode also sullied MDC's reputation as a socially responsible and ethically motivated organization; the company's prospects for an important government contract had dimmed considerably; it also apparently cost Herb Lanese his job as well as impairing his future career prospects.
 
 



Contact Person: Robert J. Rafalko, Director, The Center for Professional Ethics, Assistant Professor of Philosophy, The University of New Haven, 300 Orange Avenue, West Haven, CT 06516
Voice: (203) 932-7179; Fax: (203) 931-6097; E-mail: rafalko@charger.newhaven.edu
 

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COLUMBIA/HCA AND THE MEDICARE FRAUD SCANDAL

Anne T. Lawrence, San Jose State University
 

Case Objectives and Use

The objective of this case is to encourage students to think broadly about the causes of, and remedies for, unethical or fraudulent behavior by corporations.
The case suggests that both external and internal factors may have contributed to the commission of Medicare fraud at Columbia/HCA. An effective strategy to reduce or eliminate fraud may, therefore, require changes in both the external environment and management behavior. Students may be challenged to consider: In what ways did public policy or the actions of government regulators contribute to the problem? In what ways did the company's strategy, culture, leadership, or organizational structure and practices contribute? What could or should Columbia management have done differently? How should Columbia respond to the government jiwesticyafion? In general, what actions by health care corporations, government regulators, the public (health care consumers), industry shareholders, and other stakeholders would help reduce the incidence of health care fraud?

This case is suitable for graduate or upper-division undergraduate courses in business and society, business ethics, health care policy, or business policy and strategy. It is especially useful in modules dealing with the interaction of ethics and strategy in health care or other highly regulated industries.
 
 

Case Synopsis

This case focuses on decisions facing the top management of Columbia/HCA Corporation following initiation of a massive anti-fraud investigation of the company by the federal government in July, 1997. Columbia at the time was the largest health care company in the United States, with 340 hospitals under ownership. The government probe focused on allegations that Columbia/HCA had systematically and criminally defrauded Medicare, the federal health insurance program for the elderly and disabled. The case describes the history of Columbia/HCA and the company's strategy, leadership, and organizational policies. It also provides a brief history of Medicare and a description of the extent and nature of Medicare fraud and its regulation. The case closes with the dilemma facing Columbia/HCA's board of directors, as it considered how best to respond to the allegations against the company.
 
 



Contact Person: Anne T. Lawrence, College of Business, San Jose State University, San Jose, San Jose, CA 95192-0070.
Phone: (408) 924-3586; Fax: (408) 924-3555; E-mail: atlawrence@aol.com
 

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FISH OR CUT BAIT...

Melodie Philhours & Sarath Noms, Arkansas State University

Case Objectives and Use

"Fish or Cut Bait..." illustrates the ethical and practical considerations present in a complex decision making situation. The student is encouraged to apply the concepts of ethical decision, making, along with the theoretical basis for such decision making, in light of the realities of human nature involved in the case. A second objective is to provide the opportunity for students to explore the traits of non-decision-makers as well as the ethical implications of these traits. A third objective of "Fish or Cut Bait" is the evaluation of the misuse of, or reliance on, outdated and possibly invalid data as support for a decision when better information is available and the ethical implications of this practice. A fourth objective of the case is to introduce the student to the College Level Examination Program (CLEP).

The case and teaching note were written for undergraduate courses in Ethics, Organizational Management, Leadership or Organizational Behavior.

Case Synopsis

In "Fish or Cut Bait...," the Chairman of the Economics and Decision Sciences, Dr. Charles Bingham, was faced with a somewhat difficult decision and plagued by a number of considerations as well as an apparent aversion to decision making. There's the "easy" thing to do, the "night" thing to do, the "what looks wrong, but is right" thing to do, the "I don't know what to do." He had been approached by a faculty member from the Marketing Department regarding the credit-granting CLEP score for the Microeconomics course. Dr. Steve Norman's wife took the exam, scored well above the credit-granting score set up the American Council of Education but below the score required by the Economics and Decision Sciences Department. After researching the situation, Dr. Norman made a very convincing argument for reevaluating the required score.

The standard was set in 1971, when Greenville University began to accept CLEP credit. It was studied in 1973 using sample of three students taking the Microeconomics exam. The standard had not been reevaluated since, even though the CLEP exam has been modified several times due to changes in subject content. The standard is above those of one comparable and two much larger universities. At all three institutions, Mrs. Norman's score would have produced credit.

The case illustrates the reluctance of an individual to make a decision and the ethical considerations and realities of making or not making the decision. The Chairman must either "fish or cut bait... !"



Contact Person: Melodie Philhours, Arkansas State University, State University, AR 72467; Mail: P.O.
Box 59, State University, AR 72467 USA
Voice: (870) 972-3430; Fax: (870) 972-3868; E-mail: mphil@cherokee.astate.edu
 

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GEO SEARCH Co. LTD. AND THE MINE EYE PROJECT

Armand Gilinsky, Jr., Sonoma State University

Case QbjecCives and Use

Land mines and their removal pose seemingly long term, intractable problems and necessitate potentially costly and far-reaching solutions. This situation is most acute in poor, war-tom nations where the preponderance of landmines has been deployed. The 1997 Nobel Peace Prize was awarded to the International Campaign to Ban Land Mines. The UN estimates that there are 120 million unexploded land mines around the world, with millions being laid each year. To solve the problems of clearing those mines could involve an estimated $33 billion and 1,100 years. The "Geo Search Co. Ltd. and the Mine Eye Project" case was written to illustrate the various-and often conflicting-contexts in which financial decisions regarding new ventures and corporate diversification are made.

The "Geo Search Co. Ltd. and the Mine Eye Project" case is suitable for use in an undergraduate or graduate-level introductory Finance course. It could also be used in business school courses such as Business and Society; Management of Technology; or Entrepreneurship. As indicated in the teaching note, at the core of the case is the issue of relationships. These include financial relationships used to determine the valuation of an opportunity and social relationships that can satisfy the needs and wants of the stakeholders of the enterprise. What happens when these relationships come into conflict, i.e., the tension between the economic or "bottom-line" performance of the venture and corporate social performance, which does not easily lend itself to clearly defined "bottom-line" measurement?

Case Synopsis

Geo Search Ltd., a Japanese entrepreneurial venture, attained success in creating the world's first practical sinkhole detection system using "Ground Penetrating Radar" (GPR). This technology became very effective after the devastating earthquake in Kobe, Japan, in January 1995. This tragedy greatly increased the company's 1996 revenues to $4.88 million and profits estimated at $500,000. At a conference in Sweden, the company's President, Hiroshi Tomita, stumbled upon a diversification opportunity upon meeting some of the victims of land mine detonations. Tomita ("Tommy") sought and received support from his board of directors to spend $2 million to adapt GPR technology to a prototype device for land mine detection, called Mine Eye. Mine Eye was subsequently lauded by experts as a breakthrough technology, however, an estimated additional $2 million was needed to perfect the prototype and bring it closer to production, perhaps as early as 1999. Geo Search sought outside financing since it did not have enough capital to sustain the project nor to build engineering capabilities and production capacity. A not-for-profit foundation, Japan Alliance for Humanitarian Demining Support, (JAHDS) was formed in early 1997, to direct fund raising efforts in Japan and in America via the company's Houston subsidiary, but there were no guarantees that needed funds would ever be raised by JAHDS nor that the device could ever be profitable.

If Geo Search were to take the lead in providing technology and raising funds for production of a system to mitigate the land mine problem, it could provide a needed boost to Japan's languishing industrial competitiveness and restore a sense of national pride.
 



Contact Person: Armand Gilinsky, Jr., Sonoma State University, 1801 Cotati Ave., Rohnert Park, CA 94928-3609
Voice: (707) 664-2709; Fax: (707) 664-4009; E-mail: Armand.Gilinsky@sonoma.edu
 

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GET FIRED UP FOR THE UNITED WAY OR GET FIRED?

Joyce M. Beggs, UNC-Charlotte
 

Case Objectives and Use

The purpose of the case is to provide and example of a conflict between personal interests and company interests. Betty Beauregard has been asked to lead a United Way fund raising campaign. This conflicts with her personal feelings toward the organization. Henri Fayol, the father of the classical school of management, presented the principle of subordination of individual goals to company goals. Betty does not know whether she is willing to place company goals above individual goals.

The case can be taught in a 50-minute class. Data for the case were gathered from field research, and the names of the company and the individuals were changed. The case has been classroom related.

The discussion of the case can be based on ethical principles. Students should be encouraged to provide arguments for and against each issue. The case is appropriate for junior or senior level management courses including business ethics, business and society, and principles of management. A teaching suggestion is to role-play the meeting between Betty, Harry Rosenblatt, the CEO, and Sarah Applebee, Senior Personnel Administrator. Another teaching suggestion is to have the students' debate the issues with the discussion organized around ethical decision making rules.

Case Synopsis

Betty Beauregard sat in her office contemplating the decision of whether to head the United Way fund raising campaign at First Street Bank. She had arranged a meeting with Sarah Applebee, Senior Personnel Administrator, and Harry Rosenblatt, CEO. This meeting was to start in one hour. She had problems with the pressures that the bank puts on its employees to donate to the United Way. First Street had a policy that states that employees were not to be solicited during company hours but made an exception for the United Way. In addition, the past scandal of the United Way involved Mr. Aramony, the previous president of the organization, defrauding the charity out of more than $1,000,000 made her question the ethics of the United Way, She was faced with the decision of whether to lead or decline to lead the fund raising project for First Street.
 



Contact Person: Joyce M. Beggs, Department of Management, Belk College of Business, University of North Carolina Charlotte, Charlotte, NC 28223; Phone: (704) 547-2736; Fax: (704) 547-3123; E-mail: jbeggs @email.uncc.edu
 

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LE FAUX MONNAYEUR

Vijaya Narapareddy & Reza Gharai, University of Denver
 

Case Objectives and Use

This case deals with the predicament a young business school graduate confronts on his first job as he discovers the corrupt business practices prevalent in the global lice trading business. Consequently, he faces the difficult decision of whether to stay on the job or quit. This classtested case captures the interest of students with ease as it enables students to engage in a simple yet powerful discussion of the dilemma that a whistle blower faces on the job, and to decide the appropriate course of action.

The case is appropriate for use in undergraduate and graduate courses in International Management as well as Ethics and Social Responsibility. It offers the opportunity to discuss pertinent issues offered in the "Whistle Blowing" literature and to revisit the classic debate of economics vs. ethics.
 
 

Case Synopsis

This case describes the ethical dilemma and inner turmoil a young and new employee, Andr6 Confus, faces at his first job as he stumbles onto inconsistencies, which lead him to understand the true nature of deals made by his employer in the rice trading business. The realization that the poor in developing countries were being ripped off by greedy government officials and rice traders like his boss infuriate him. Andr6 confronts his boss only to find himself being ridiculed. He is stunned by his boss' casual reaction and feels helpless when his boss chastises him. The case ends with the storm that brews in Andr6's mind as he is faced with the personal dilemma of making a decision regarding his job and communicating it to his elderly parents.
 



Contact: Vijaya Narapareddy, University of Denver.
Mail: Department of Management, DCB, University of Denver, 2020 S. Race Street, Denver, CO 80208, USA.
Voice: 303-871-2198 Fax:303-871-2294; E-mail: vnaral2ar@du.edu
 

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"SAVE THE RAINFOREST, BOYCOTT MITSUBISHI!"

Rebecca L. English, Bentley College
Supervised by John A. Seeger, Bentley College

Case ObJectives and Use

Students should learn 1) to see both sides of a contentious issue, and to identify bias in the views expressed by involved parties; 2) to identify the constraints upon decision-makers in a corporate environment, and search for ways to circumvent those constraints; 3) to evaluate the validity of civil disobedience as a strategy of the environmental movement; and 4) to see the importance of personal relationships between adversaries in long-term conflict resolution. The case and note are written for graduate or undergraduate courses in Business and Society, with possible applications also in Strategic Management. The case permits students to identify with a leading environment activist cause (if they so choose, and we think many will), and then to consider the actual effects of "beating" the enemy.

Case Synopsis

Beginning in 1989, environmental groups campaigned against the Mitsubishi Corporation and its affiliated companies in a worldwide effort to force the company to change its policies and actions. Mitsubishi (MC) was engaged in at least 15 logging and development projects, ranging from Malaysia to Siberia to Chile to Alaska. In 1991, the Rainforest Action Network (RAN) focussed on two units of the Mitsubishi keiretsu with concentrated operations in the United States - Mitsubishi Motors Sales of America (MMSA) and Mitsubishi Electric of America (MEA). Auto dealers and electronics stores began to feel the impact of demonstrations, protests, and civil disobedience as Rainforest local groups and national staff drew public interest to the "Boycott Mitsubishi!" campaign.

By 1995, the leadership of MMSA and MEA professed agreement with the Rainforest objectives. A personal relationship between RAN's Michael Marx and MMSA's Dick Recchia developed, and the framework of an agreement was reached as the two men stood in the Roaring Fork River in Colorado, during a negotiating meeting at the Rocky Mountain Institute. They caught (and released) some 36 trout during the conversation. Three more years of detailed negotiations produced a 1998 agreement: all would work toward sustainable environmental practices, the Mitsubishi units would press their keiretsu partners and other corporations to join in the effort. A full-page ad in the New York Times trumpeted, "Before, Rainforest Action Network and Mitsubishi Electric America were barely on the same planet. Now, they're on the same page."
 



Contact Person: John A. Seeger, Bentley College AGC-308, Waltham, MA 02154-4705 Voice: (781) 891-2532; Fax: (781) 891-2896; E-mail: jseeger@bentley.edu

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THE NEW YORK STATE ASSEMBLY WAYS AND MEANS COMMITTEE

Mitchell Langbert, Brooklyn College, C.U.N.Y.



Case Objectives and Use

In the context of a look at New York State's accounting and financial control policies, this case illustrates public choice theories about the role of interest groups in the development of public policy. It illustrates the interaction among interest group pressures, government accounting principles and public sector management as well. It does so in the context of a decision that a senior budget analyst, Jeannette Penske has to make concerning the decision whether or not to send a letter to the Governmental Accounting Standards Board that reflects her thoughts on governmental accounting but that might prove troublesome to her employer, the New York State Assembly. The case therefore additionally illustrates ethical issues in whistle blowing.

The case was written for an undergraduate course in public policy and ethics, and is expected to be useful following readings and discussion about the role of interest groups in public policy formulation and ethical issues in whistle blowing. It is also directed at courses on accounting and public sector management.

Case Synopsis

Jeannette Penske, senior analyst for the New York State's Assembly's ways and means committee, is asked to develop a response to the Governmental Accounting Standard Board's proposed changes to rules on governmental financial statements. Penske is reluctant to develop the response that she believes is correct because of the issue's political sensitivity. In particular, Penske believes that in large measure private sector accounting principles could be applied to the public sector. She believes various management problems that have plagued New York, for example, excessive construction costs, to be artifacts of unnecessarily complex accounting rules that shield inefficient state management processes from public scrutiny. However, excessively vocal calls for reform might be inconsistent with tacit norms among the state assembly's hierarchy. Her ethical problems is to balance expression of her beliefs with her career goals.
 



Contact Person: Mitchell Langbert, Ph.D., Brooklyn College, Brooklyn, NY
Mail: 140 Riverside Drive #16-K, New York, New York 10024 USA
Voice: (212) 595-2366
 
 


(Compiled by JDH on 5/11/2000)