EA Games Fifa Loot Boxes and Whales Business Ethics and Responsible Management

This document discusses the ethical issues surrounding EA Games' use of loot boxes and in-game purchases in FIFA. It explores the role of business in society and the stakeholders affected. The document also delves into the theories of utilitarianism and deontology and their application to the case. It provides recommendations for ethical improvement and emphasizes the importance of ethical leadership.

Assessment Case Choice 1 :
EA Games Fifa Loot Boxes and Whales -
Business Ethics and Responsible
Management

Table of Contents
Part 1-A REPORT............................................................................................................................1
1. Ethical issues...........................................................................................................................1
2. Role of business in society......................................................................................................2
3. Stakeholders............................................................................................................................2
4. Good and bad ethics................................................................................................................3
5. Recommendations...................................................................................................................4
Part 1-B TWO THEORIES..............................................................................................................4
1. Description of Ethical Theories..............................................................................................4
2. Application of Ethical Theories..............................................................................................4
3. Critical Analysis of Ethical Theories......................................................................................5
4. Recommendations...................................................................................................................6
PART 2 REFLECTIVE ESSAY......................................................................................................6
REFERENCES................................................................................................................................9
PART 1-A...................................................................................................................................9
PART 1-B...................................................................................................................................9
PART 2.......................................................................................................................................9

Part 1-A REPORT
1. Ethical issues
The evolution of technology with the passage of time together with the incorporation of
innovations like AR and VR into gaming industry has brought extensive growth and success for
the concerned sector. Majority of the games in the present time are made by the well renowned
organisation named Electronic Arts (EA). The games developed by this company are mainly
based on a freemium model. Hereby, a user can get free access to the game, however to gain
access to the interesting as well as exciting elements of the game, they are directed to the in-
game purchases for the generation of revenues from these games. Lately, the concept called as
loot box has been criticised by people because of the unethical element involved within it. These
loot boxes persuade the players of the game to carry out in-game purchases which are not really
justified. As per the views of the Vice President of Electronic Arts, loot boxes are ethical,
exciting and fun. These boxes tend to trigger the gambling activities as well as addictive
behavioural pattern within the children who play such kinds of games. Owing to the instillation
of addiction within the children, these loot boxes are acknowledged to be working in the favour
of game developer companies like EA for the generation of revenues. BBC has published that
these boxes does not account to gambling, they are similar to the Kinder Egg (EA Games: Loot
boxes aren’t gambling, they’re just like a Kinder Egg, 2019).
It is determined that the players who expend their money upon purchase of loot box are
often not happy about such things present within the game but can not resist themselves from
buying them due to their extreme addiction. This gives rise to the emergence of ethical issue on a
number of grounds. At first, the game developers make these games in a manner such that users
become addicted to them and get induced to purchase the loot box, however, this is unethical
generation of revenues. Secondly, it is determined that such games also promote gaming
addiction since a heavy sum of money is invested by users for the anticipation of exciting stuff
making the game more thrilling with the loot box. There are several revenue generation ways
available for these gaming companies however the model currently being exploited by Electronic
Arts is the epitome of business ethics violation.
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2. Role of business in society
In accordance with the business ethics, it is the prime responsibility of a business entity to
give their effective contribution towards greater good of the society and thereby, carry out
business activities epitomising ethical behaviour. It is important for the top management of
Electronic Arts to reconsider their revenue generation approach by taking business ethics into
account. The present model of EA is having a significant negative influence upon the society. In-
game purchases along with loot boxes trigger gambling addiction within individuals, especially
in children who get easily persuaded to make the purchase. The games are developed in a
manner such that they can effectively appeal to the audience and make it addicted to them. The
resultant outcome of the same is unnecessary expenditure done by children of their parents'
money upon purchase of these elements of the games. Owing to such unethical act of EA, users
of these games get addicted and thereby purchase everything that can make the game more
thrilling and exciting (Brady and Prentice, 2019). This results into depression, anxiety, mental
health issues, cognitive functioning, isolation, and so on, within the users. It is important for
business to adopt ethical business practices and activities in order to generate revenues. This
helps the corporation in acting in the interest of the society. For this, businesses should adopt a
business model which demonstrates greater societal good, contrary to the act of Electronic Arts.
3. Stakeholders
Gamers:
By virtue of the given case, gamers is acknowledged to be the stakeholder group which is
most affected by the unethical behavioural conduct of Electronic Arts. Designing of an addictive
game to persuade the individuals to carry out the in-game purchases leads to severe mental
health problems. Further, it is acknowledged that addictive gaming results into loss of sleep,
stress and anxiety within individuals of less age. It also put the users in emotional phase as
despite knowledge of wasteful expenditure of purchase of loot boxes, they find themselves
induced for purchasing extra elements to make the game more interesting, just because of their
addiction to the game.
Friends and family:
Families of the users who are addicted to games having the option of in-game purchases
and loot boxes are often seen to report issues of their children spending their hard earned money
on wasteful purchases related to the game. Also, the friends and families of these individuals
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often find the game users to be so addicted to the game that they put themselves in a phase of
social isolation (Nielsen, R.K.L. and Grabarczyk, 2019). This leads to disconnection of the
individuals from their peers as well as their family members.
Educational institutions:
Addictive gaming negatively impacts upon the educational institutions in the manner that
the students who are used to playing such games get distracted from studies. These students
alienate themselves and enter a phase of social isolation. This has a profound impact on their
study patterns and thus the results of educational institutions.
Developers:
Owing to the increment in demands for addictive games, game developers like
Electronics Art are motivated to develop such games which can gain the attention of large base
of audience. However, such games include the element of loot boxes as well as in-game
purchases raising a question on the business ethics of the organisation. Thus, the game
developers are affected by the case and they have to make a decision about their act in context of
business ethics.
Government:
The government is also affected by the games carrying in-game purchases and loot boxes
which cause gambling addiction within individuals. The society blames the government for not
putting a ban on such games which cause mental health issues in children and results into
wastage of parents’ hard earned money by parents on unnecessary elements of the game to make
it more interesting (McCaffrey, 2019). Government is accountable for this situation and thus
needs to take serious actions against the same.
4. Good and bad ethics
Starbucks serves as an exemplary organisation for demonstration of business ethics. This
company carries out ethical marketing and ethical material sourcing. The respective entity is also
committed to combating the environmental concerns and for this purpose, has entered into
partnership with several local entities (The world’s most ethical companies, 2017). On the
contrary, TESCO is an entity which faced allegations in the year 2016 for delaying the payment
to its vendors in order to maintain its financial stake (TESCO knowingly delayed payments to
suppliers, 2016). In response to this, the management agreed and compensated the suppliers for
the damage caused.
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5. Recommendations
Certain recommendation should be taken into account by Electronic Arts for improvement
of their ethical behaviour. The company should develop a zero tolerance policy for ethical
misconduct. Further, stakeholders should be proactively included in important decisions of
entity. The games should be offered in marketplace with strict maximum playing duration
regulations printed on the label.
Part 1-B TWO THEORIES
1. Description of Ethical Theories
Theory of Utilitarianism:
Utilitarianism seeks to determine morally right and wrong choices in accordance with the
results in terms of consequentialism. This is a theory which focuses upon decision making that
can ensure greater good and preventing a decision that results into sorrow. As per this theory, an
action which causes good to large number of individuals is considered to be a morally right
decision and vice versa also holds true (Frey, 2013). In this relation, a business should focus
upon behaving in a manner that abides by the premises of utilitarianism.
Theory of Deontology:
As per this theory, actions intrinsically are right or wrong based on a number of factors
irrespective of outcome and the result of actions (Barrow and Khandhar, 2017). Under this
theory, an action might be considered morally good or bad based on its characteristics without
any consideration of its outcomes. Actions are evaluated to be good or bad under a series of rules
and regulations. For example, in the context of business organisation, an action that falls under
the scope of duty and obligation of a business manager is considered morally good irrespective
of its outcome and the influence of welfare on the society. In case of ethical dilemmas, actions
should be based on duty and obligations to demonstrate a strong work ethic.
2. Application of Ethical Theories
By applying utilitarianism in the context of given case, the prime consideration is
identifying the people who are positively benefited with the action of EA. Now, it has been
identified that management, employees and shareholders are benefited with the unethical revenue
generation model of this entity. However, the game users, their friends and families, government,
media, educational institutions are all negatively affected, thus implying the violation of the
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principle of this theory. So, application of utilitarianism theory results into determination of EA
Games at default while considering the greater good for society.
The theory of deontology focuses on moral obligation as well as duties of an action
regardless of outcome (Finker and Negreiros, 2018). In context of the given case, management of
Electronic Arts is morally obligated to take into account the stakeholders’ interests at all times.
However, the current business practices and activities of the organisation have resulted into
violating the interests of stakeholders like media, government, customers, and many more. Thus,
application of deontological theory implies that the entity is violating the basic principle of this
theory and thus is not behaving in an ethical way.
Thus, the application of both the theories to the given case led to the outcome that EA is
demonstrating an unethical behaviour which is not desirable by the society and stakeholder
groups. Thus, the entity should transform its business practices into a way which can ensure that
the society is not negatively affected by the actions of the company.
3. Critical Analysis of Ethical Theories
Theory of Utilitarianism:
Benefits:
This theory emphasizes upon greater good for society. This theory is easier to execute
within the organisational premises (Lyons, 2015). Further, it is widely used by the companies
functioning across the globe. This theory ensures that the decision taken by an organisation takes
into due account the good of maximum number of individuals.
Limitations:
This theory often leads to creation of an unrealistic perspective for society. Besides this,
it has also been acknowledged that uncertainty as well as unpredictability of future also serves as
a limitation of the respective theory (Mulgan, 2014).
Theory of Deontology:
Benefits:
This theory instils a sense of moral and ethical behaviour within the individuals by
making them aware of the ill effects of the contrary. This theory emphasizes upon the
individualistic value of an individual (Heinzelmann, 2018). It further instils a sense of moral
obligation within individuals towards the society to behave in a manner desirable by the society.
Limitations:
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Actions which are pertinent to this theory are considered to be absolute and thus may
account to development of a paradox which ignores the maximum societal welfare in several
conditions. It is considered as a more subjective approach towards classifying the actions into
morally right or wrong in the absence of a fundamental code of ethics.
4. Recommendations
 The management of Electronic Arts should take into due account the effects of its
decision on stakeholders and society. It should eliminate or lessen the concept of loot
boxes or in-game purchases from its games. This will help in reinforcing behaviour of
business in accordance with utilitarianism theory.
 As per the theory of deontology, the respective entity should reconsider its moral and
ethical duties towards the society. Thus, it should reinforce the code of ethics so that the
workforce does not get engaged in any unethical act. This will help in sustaining the
image of EA in market.
PART 2 REFLECTIVE ESSAY
Ethical leadership can be acknowledged as the way of leading an organisation in a
manner such that the subordinates work together for the achievement of organisational goal
keeping in mind, the aspects and norms of business ethics. This implies that all the decisions of
business should be taken in the virtue of ethics and morals. Within an entity, ethical leadership
tends to play a critical role in terms of abiding by the values and norms of business ethics and
integrating ethics into the culture of the company (Brown and Treviño, 2006). This is important
in terms of upholding the integrity and reputation of the employees pertinent to the organisation.
An ethical leader has certain qualities which makes them distinct from other individuals.
First of all, it is ascertained that an ethical leader is self motivated and acts as a role model for
the other employees working within the company. This is done by way of demonstrating ethical
and moral behavioural in front of the staff at all times. This encourages the workforce to behave
in the same manner and work in accordance with the principles of business ethics. Secondly, it
has been determined that an ethical leader behaves in a fair and honest way in each and every
situation (Gallagher and Tschudin, 2010). This helps in facilitating an atmosphere of positive
behaviour within the confines of the organisation. This further helps in promoting equality and
diversity at the workplace. Further, an ethical leader likes to lead by an example. This is the most
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prominent quality of their personality. This helps in laying down the foundation for
implementation of ethical code of conduct and ethical standards in practice within the company.
Unethical leaders make use of force and coercion to make employees work in a particular
manner. Opposed to this, ethical leader is identified to be the individual who takes initiatives in
an ethical manner to create an organisational culture whereby ethical and moral behaviour is the
top priority.
Implementation of ethical leadership as well as maintenance of integrity and compliance
within an unethical business environment tends to create a challenge for the business. For this
purpose, strong communication is required (Yukl and et. al., 2013). Further, provision of ethical
training to employees also becomes necessary in order to create an ethical business environment
whereby workforce works in accordance with moral and ethical principles. Another step towards
the promotion of business ethics within an organisational environment is via the stipulation of a
strict and zero tolerance policy in response to unethical behaviour exhibited by any of the staff
members. In addition to this, another initiative towards the same is rewarding those employees
who demonstrate constant ethical behaviour and punishing those who do not.
As per my personal knowledge as well as experience, I can state that commitment to
business ethics is the duty of an ethical leader and manager. Being a leader, I have always
demonstrated ethical behaviour at all times at the workplace. I have acted like a role model in
front of my subordinates in order to encourage them to adopt ethical and moral principles in
working context. Further, I ensure that employees are provided with ethical training at regular
intervals of time in order to acquaint them with the importance of behaving in an ethical context
and consequences of behaving to the contrary. I have believed in appraising those employees
who have been inclined towards the code of ethics and agree to abide by the same at all times.
Many a times, leaders and managers get involved in unethical decision making which has
a negative impact over the employees working in an organisation. Thus, it is crucial to not just
create awareness among the lower level employees but also the top and the middle level staff
members. This will ensure that the entity does not get alleged for being involved in unethical
conduct at any point of time. This will aid in keeping up the reputation of the organisation in the
long run.
Thus, it has been inferred that ethical leadership acts as the foundation for development
of extensive goodwill of a company in the confines of the global market place. It ensures that an
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entity behaves in a manner desirable by the statute and the society. This renders greater good for
the society and seeks to put forth an exemplary behavioural conduct for other organisations to
follow.
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REFERENCES
PART 1-A
Brady, A. and Prentice, G., 2019. Are Loot Boxes Addictive? Analyzing Participant’s
Physiological Arousal While Opening a Loot Box. Games and Culture,
p.1555412019895359.
McCaffrey, M., 2019. The macro problem of microtransactions: The self-regulatory challenges
of video game loot boxes. Business Horizons. 62(4). pp.483-495.
Nielsen, R.K.L. and Grabarczyk, P., 2019. Are Loot Boxes Gambling? Random reward
mechanisms in video games. Transactions of the Digital Games Research
Association. 4(3).
EA Games: Loot boxes aren’t gambling, they’re just like a Kinder Egg. 2019. [Online].
Available through:<https://www.bbc.com/news/newsbeat-48701962>.
TESCO knowingly delayed payments to suppliers. 2016. [Online]. Available
through:<https://www.bbc.com/news/business-35408064>.
The world’s most ethical companies. 2017. [Online]. Available
through:<https://www.forbes.com/sites/jeffkauflin/2017/03/14/the-worlds-most-ethical-
companies-2017/#739251fb7bc3>.
PART 1-B
Barrow, J.M. and Khandhar, P.B.. 2017. Deontology.
Finker, M. and Negreiros, D.P., 2018. Training x education, Deontology x ethics: rethinking
concepts and repositioning professors. Rev ABENO. 18(2).
Frey, R.G., 2013. Act‐utilitarianism. The Blackwell guide to ethical theory, pp.219-237.
Heinzelmann, N., 2018. Deontology defended. Synthese. 195(12). pp.5197-5216.
Lyons, D., 2015. Utilitarianism. Wiley Encyclopedia of Management, pp.1-4.
Mulgan, T., 2014. Understanding utilitarianism. Routledge.
PART 2
Brown, M.E. and Treviño, L.K., 2006. Ethical leadership: A review and future directions. The
leadership quarterly. 17(6). pp.595-616.
Gallagher, A. and Tschudin, V., 2010. Educating for ethical leadership. Nurse education
today. 30(3). pp.224-227.
Yukl, G., Mahsud, R., Hassan, S. and Prussia, G.E., 2013. An improved measure of ethical
leadership. Journal of leadership & organizational studies. 20(1). pp.38-48.
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