Ethical Issues in Loot Boxes and Ethical Leadership

This document discusses the ethical issues surrounding loot boxes in the gaming industry, specifically in the context of EA games. It explores the perspectives of the organization and the impact on public image. The document also applies two ethical theories to the case study and reflects on the qualities that make an ethical leader. Recommendations are provided for EA games to overcome challenges and change public perception.

ASSIGNMENT

Table of Contents
PART 1............................................................................................................................................3
A) Ethical issues included in having loot boxes as part of business model................................3
B)Applying two ethical theories for case study...........................................................................6
PART 2............................................................................................................................................8
Reflection on what makes an ethical leader................................................................................8
REFERENCES..............................................................................................................................10

PART 1
A) Ethical issues included in having loot boxes as part of business model
In context of EA games, loot box is a consumable virtual thing which will be redeemed to
receive a randomized selection of further virtual products or loot, increasing from simple
customization options for player's character, to game changing assets such as armour and
weapons. Spending money on loot boxes will be linked to gambling related harm among children
and adult, it is considered as ethical issue. Making misconstructions of small amounts of actual
world money for virtual and other items had been general in video games for several years
(Neely, 2019). Loot Boxes are relatively new term for players specially children to spend money
in video games.
Perspective of organization regarding issue-
Electronic Arts company believed that loot boxes are ethical in perspective of ethics, they
believe that boxes are quite fun and ethical, they are virtual crates that contain goodies like
costumes, weapons and other perks. According to organization it is not an ethical issue, kids
enjoy playing games just like a kinder Egg. Firm Fifa ultimate team & its packs is actually quite
fun and ethical as well as quite enjoyable to people. With loot Boxes receiving massive scrutiny
lately, EA firm came up with novel justification for what controversial game mechanic must be
considered perfectly legal. Loot boxes are not taking to gambling but are rather surprised
mechanics like kinder eggs, one of the most famous chocolate candies among children with toys
inside their pack, it is not technically considered as form of gambling. In simple words, EA
company should not look purchasing and playing games with loot boxes as ethical issue. The
vice president of government and legal affairs at video games EA, declared that there were no
ethical problem considered with loot boxes, UK government do not make it illegal to sell video
games featuring loot boxes given that consumers like surprises. Firm arguing loot boxes are
ethical, they are quite normal sight in EA games these times, so usually company does not
believe them to be anywhere around gambling on array of problematic game mechanics.
Ethical issue impact public image of company-
On contradictory, people who play games with loot boxes give their different point of
view in context of EA games, they are totally disagreed with company statement (King and
Delfabbro, 2019). They think that loot boxes are unethical is cause endorphin rushes, making
purchase feel benefited and want to repeat behaviour, it will lead to an addiction. Big firms target

these endorphin rushes to get consumers hooked which will be unethical when they target young
children. Loot boxes are classed as gambling, it makes negative impact on kids mind. The
statement of Kerry Hopkins are not right about Loot boxes. They are one of the most debated
topic in gaming sector, parents making complain against this, their children spend more time on
loot boxes games instead of study. This issue influences the market image of EA company
negatively, use of loot boxes will be unethical and has been challenged by several in gaming
sector due to predatory business practices associated with loot boxes. In response to loot boxes
and Fifa games in specific, many nations including Netherlands and Belgium have categories
loot boxes as type of illegal gambling, with several other nations including UK and more parts of
US also considering whether to follow suit. It directly impacts market reputation of EA and
decrease its profitability rather than past few years.
Alternative ways were there to think about business role in society-
The role of EA and other business in society is to work ethically and produce products
that satisfy the need of consumers, it does not harm people as well as company image. Ethics
play vital role in current business and its impact on overall growth of organization. It also affects
everything from public perception and brand reputation to workers productivity and profitability.
Develop ethical standards is one of the best way there to think about business role in society,
firm create a code of ethics area in its business handbook that outlines appropriate organizational
conduct. This must eliminate ambiguity and any confusion about organization ethical practices
and hold everyone on same place. By conducting ethical practices, EA can derive big advantages
, they will be able to gain attention of people towards purchasing their games. As it also helps to
gain competitive benefits in gaming industry and build strong position & image in market place.
By complying with ethical practices firm will gain better success and sustain its business for
longer period of time.
Along with this, honesty is another alternative way that firm think about its business role
in community, ethical executives within company must be honest in all their dealings, and they
do not intentionally mislead and deceive others by overstatements, misrepresentations and partial
truths.
Stakeholders impacted in scenarios and how they are impacted on-
Children are the main stakeholders in above scenario who are impacted by loot boxes and
other games provided by EA company in market, that directly affect behaviour of younger and

adult children. Particular form of gambling related to harm that is mostly associated with Loot
Boxes is problem gambling, it refers to excessive and disordered gambling activities that highly
lead to significant issues in an individual's personal, professional and family lives. It linked to
factors such as anxiety, suicide and depression (Zendle, Meyer and Over, 2019). Loot boxes will
not be sold to children, parents make complain against these games, their child invest money and
make accounts of parents empty. Children get addicted for playing this game and buying loot
boxes, 31 % of child aged 11 to 16 had paid for these games which is not good for their mental
well-being and health as well.
On the other hand, EA company is the another stakeholder who also impacted due to
controversy related to their games. They face many challenges while explaining the benefits and
provide justification of ethical point for loot boxes and other games.
This research shows good choices benefits companies, EA sell their games to younger
who enjoy while playing games, but on the other hand its shows negative impact when children
are addicted for same.
Conclusion and recommendations-
From above analysis it has been concluded that Electronic arts company face ethical
issues due to their loot boxes, whales and Fifa games. This study highlight the controversy of
Loot boxes that affect child and younger people when they play games. Furthermore, by
applying ethical practices company save their brand image in market and gain attention of new
consumers with existing once for long. Firm provide statement in regard to above games that are
not an ethical issue, it does not make any effect society and totally difference from gambling.
Recommendation-
 To over come challenges and change the perspective of people EA company
recommended adopting ethical practices, they must be honest and truthful in all area of
selling games.
 Organization should make promotional plan to show their concern towards well-being of
society, through which they should clear out the concept of loot boxes and other games
that are not related to gambling activities, it is just developed for purpose of fun nothing
more than it.

B)Applying two ethical theories for case study
Business ethics are specialized branches of ethics which are mainly focus on how the
moral standards are apply to the business organization. In the same way, there are many ethical
theories which assist business to run in ethical way and also attain define aim and objectives.
These theories are as mention below:
Utilitarianism ethical theory: It is one of the most common theory which is based upon
the one's ability in order to analyze the reasons of an action. This theory is of two types such that
act Utilitarianism, in which a person perform the acts so that it will get benefited most of the
people except their personal feelings. On the other side, another type is Rule Utilitarianism,
which seek to benefit the majority of people through honesty and transparency (Jones, Wicks and
Freeman, 2017). That is why, this type is most of the time used by majority of the company in
order to follow the ethical standards and perform the same. In the same time, when company's
leader uses this theory then it will be more beneficial because it is more concern to achieve the
maximum good.
As per the view of Westermarck (2017) ethical theories are based upon the rights and
these are also established by a society which are protected and also given the highest priority too.
It is so because rights are consider to be more ethically correct and valid which assist to make
proper decision for the company. In the same way, as per the current scenario of EA games, it is
analyzed that company's leader comply with the act utilitarianism because it did not change its
perspective and state that company's games did not creates any negative impact upon the people.
While on the other side, as per people's mindset it is analyzed that it affect children in negative
manner, as it indulge children and make them addicted. In order to support that, quoted firm's
leader should comply with rule utilitarianism in which entire work is done with proper
transparency and it honestly share their views to others.
Further, the theory also determine right from wrong by focusing on results and it is a
form of Consequentialism and it also holds the most ethical choice which is the one that leads to
provide good results as well (Kagan, 2018). For instance, EA games company increases the
number of people in the world who suffering from this games. While on the other side, by
providing good games to children will assist to actually benefit many people and creates positive
impact upon society as well.

Deontology Normative ethical theory: It is the theory which is voided of judgment and
biases. The theory is completely based upon the first principle i.e. thinking, logic and it also
assist to provide the prescription of how the people should make decision. Normative ethical
theory also provide prescriptive functions as well as decision rules which in further assist people
to maximize the expected inferior of the results (Campbell, 2016). Moreover, the theory also
describe the duty as well as obligation which a person must posses in order to take action and
also attain defined aim and objectives. Thus, it helps to determine the rules which are set by
organization in order to run in smooth manner. The main focus of this theory is to determine the
reason and also exclude other possible ethical frame which are further based upon the
assumptions.
In the same way, the theory further assist to identify the duty and obligation of people
who assist to meet the defined aim and objectives. That is why, most of the company uses this
theory because it helps to determine the duty and responsibilities of the manager who may easily
maintain the good relationship with their customers (Tavani, 2016). While on the other side, it is
critically evaluated that if company did not complying with ethical standards then it will affect
the overall business and this in turn also creates negative environment in front of society.
This theory is one of those types of normative theories regarding which selections are
mostly needed, permitted and forbidden. In other words, it falls within domain of moral concepts
that access and direct choices of what ought to be. According to this theory, EA company
conduct ethical practices, it emphasis on relationship between morality and duty of human
actions. Firm play their role in society in effective manner, they always consider the needs of
consumers and focus on areas where they can improve its business practices for well-being of
society. In context of deontological ethics, actions is considered morally or ethically good
because of some key features of actions itself, not because the goods of action is better. While
making games company consider the negative as well as positive aspects of their games, they
keep at least some acts are ethically obligatory regardless of their consequence for people
welfare.
Because this theory is best comprehended in contrast to consequentialist ones, a in depth
look at consequentialism and research of issues with it that motivate their deontological
elements, caters helpful prelude to considering up deontological theories themselves. According
to the principles of this theory, nothing is good and better without qualifications except a good

will, firm must apply this principle in its business while providing services or products. They act
ethically respect moral law that affect overall productivity of company rather than before.
PART 2
Reflection on what makes an ethical leader
Ethical leader is completely directed by the respect or an ethical beliefs and the values of
others. As my my view, I think that ethics is concerned with virtuousness of individuals and their
motives. Thus, an ethical leader also promote high level of integrity which stimulates a sense of
trustworthiness and also encourage subordinate in order to accept and follow the vision. Or else,
I think that an ethical leader definitely posses some unique qualities which makes an individual
different from others and these qualities are dignity and respectfulness. It means that an ethical
leader should not use his followers as a medium in order to attain the personal goals. Beside this,
they respect their feelings, decision and values as well (Babalola and et.al.,2019). On the other
side, serving others is another unique quality which helps to make them different from others.
Thus, this quality reflect the sense of selflessness which an ordinary leader did not posses.
Further, Justice is another trait that differentiate an ordinary leaders with ethical leader because,
an ethical leader is fair and also treat their employees equally, such that there should not be any
bias. These are some characteristics which an ethical leader posses that assist to determine
whether an individual is a ethical leader or not.
In addition to this, I also observe that an ethical leader is quite honest and it is the best
and essential trait for an ethical leader. Further, all the ethical leader also earn respect of their
followers, such that an honest ethical leader also present the facts and circumstances truly and
completely without thinking how critical and harmful the fact may be (Ali Chughtai, 2016). That
is why, it is analyzed that when a person have two way conversation with others then it will be
easy to understand the point and take decision accordingly. Moreover, I is also analyzed that
focus on team-building is another leadership trait because they think that working in a group is
more beneficial then working individual. It is so because in a group, people definitely share their
own ideas and views which in turn helps to take better decision. For instance, in top companies,
boss is the great example of an ethical leader such that boss always show respect to their
employees in order to support their personal interest and needs (Moore and et.al., 2019). This is
clearly reflected that ethical leaders have morals and values in their management position that
assist to lead a business towards success.

If I would be an ethical manager, then I make sure that I manage the work and always
tries to comply with ethical standards that assist to run a business in smooth manner. As Zhu,
Treviño and Zheng (2016) stated that ethics are moral principle which guide a person's behavior
and that is why, every organization have their own ethical programs and standards that every
individual must comply in order to smooth functioning of business operations. While on the
other side, there are some situation or condition that brings about unethical organization such
that misuse of company technology is consider one of the common example in unethical
practices. In which, company creates negative impact upon people and this in turn affect the
overall brand image of the firm. Therefore, this is same done in Electrical art in which company
state that loot boxes are not create any wrong impact, but actually, as per people' mind-set it
creates negative impact upon the individuals. Moreover, this shows that there must be proper
transparency and ethical standards that assist business to run smoothly.
In addition to this, I analyzed that many times, there is situation when managers did not
recognize ethical issues, but it is essential to comply with management concepts and this in turn
creates positive impact upon brand image of a company. In addition to this, I also think that
when I will become an ethical manager then I make sure that I comply with all the laws and
ethical standards. Along with this, I make sure that involve all the employees who are working in
the premises to determine their views. Or else, I also make sure that I clearly communicate my
views and create a open door policy in which we all discuss the issues in open manner.
Therefore, through this, I try to manage the work and also make people comfortable within the
premises. Overall, being an ethical leader, I prefer to manage work in a team where employees
of the company interact with each other and also assist to manage the work accordingly (Wong
and et.al., 2019).
Hence, I evaluated that an ethical leader easily manages the work because they posses
good skills and helps to solve conflicts because of having strong problem solving skill. On the
other side, codes of conduct of a business are also sufficient for managers in order to take good
decision and meet the defined aim and objectives as well.

REFERENCES
Books and Journals
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Babalola, M. T. and et.al.,2019. When do ethical leaders become less effective? The moderating
role of perceived leader ethical conviction on employee discretionary reactions to ethical
leadership. Journal of Business Ethics. 154(1). pp.85-102.
Campbell, T. D., 2016. The legal theory of ethical positivism. Routledge.
Jones, T. M., Wicks, A. C. and Freeman, R.E., 2017. Stakeholder theory: The state of the
art. The Blackwell guide to business ethics. pp.17-37.
Kagan, S., 2018. Normative ethics. Routledge.
King, D.L. and Delfabbro, P.H., 2019. Video game monetization (eg,‘loot boxes’): a blueprint
for practical social responsibility measures. International Journal of Mental Health and
Addiction. 17(1). pp.166-179.
Moore, C. and et.al., 2019. Leaders matter morally: The role of ethical leadership in shaping
employee moral cognition and misconduct. Journal of Applied Psychology. 104(1). p.123.
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Nguyen, A., Randau, D. and Mirgolozar, A., 2018. Loot boxes: gambling in disguise?: A
qualitative study on the motivations behind purchasing loot boxes.
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Westermarck, E., 2017. Ethical relativity. Routledge.
Wong, A. and et.al., 2019. Ethical leaders manage conflict to develop trust. Leadership &
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Zendle, D., Meyer, R. and Over, H., 2019. Adolescents and loot boxes: links with problem
gambling and motivations for purchase. Royal Society open science. 6(6). p.190049.
Zhu, W., Treviño, L. K. and Zheng, X., 2016. Ethical leaders and their followers: The
transmission of moral identity and moral attentiveness. Business Ethics Quarterly. 26(1).
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