Ethical Failures of Corporations

This assignment examines four corporate cases: Volkswagen, BP, Exxon, and VTech. Students analyze the ethical failures of each company, focusing on their disregard for environmental sustainability, stakeholder safety, and ethical business practices. The analysis delves into the theoretical frameworks of deontology, utilitarianism, and corporate social responsibility (CSR), highlighting the companies' violations and proposing solutions through revised CSR policies.

Running head: REPORT
Business Ethics: Case Study
Name of the Student
Name of the University
Author’s Note

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Executive Summary
The importance of business ethics is discussed in the report. Definition of ethics along
with the principles and theories governing the ethics of business organization. Four case studies
have been analyzed in the report that shows ethical dilemma and misconduct in the real world.
Similarities and differences have been identified. The report shows that each of the organizations
failed to considered the work ethics and their responsibilities towards its stakeholders. The cases
then linked with the theories discussed in the report from a critical perspective.

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Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................4
Business Ethics................................................................................................................................4
Definition.....................................................................................................................................4
Principles and Theories....................................................................................................................4
Deontology...................................................................................................................................5
Utilitarianism...............................................................................................................................5
Rights...........................................................................................................................................5
Virtues..........................................................................................................................................5
Case Studies.....................................................................................................................................6
Volkswagon.................................................................................................................................6
BP Mexico....................................................................................................................................6
Exxon Mobil................................................................................................................................6
Vtech............................................................................................................................................6
Comparison......................................................................................................................................7
Similarities...................................................................................................................................7
Differences...................................................................................................................................7
Theories in Consideration................................................................................................................7
Conclusion.......................................................................................................................................7

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References........................................................................................................................................9

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Introduction
Business ethics is an essential part that needs consideration by every company. It is the
study of business policies and practices that a company uses for operating in the market. These
are like fiduciary responsibility, corporate social responsibility, discrimination, bribery, insider
trading and corporate governance and are considered as controversial issues. There are various
theories of business that requires consideration in a business organization for gaining the public
acceptance. This report represents critical analysis of different business ethics and theories
related to it with. Four business organizations that are BP Mexico, Volkswagon, Exxon mobil
and Vtech are taken as examples to explain the common ethical issues that are seen in business
organizations. Commonalities and differences are highlighted.
Business Ethics
Definition
Business ethics is the learning and distinguishing right from the wrong in the workplace
that is studied in relation to the effects and consequences of the products and the services
provided by the company. In other words, it involves the various stakeholders of the company
and effects on them of the actions taken by the company. Business ethics in the workplace can be
managed using ethics management team following the principles and theories of business ethics.
Principles and Theories
Major principles that are identified in business ethics are beneficence, least harm, respect
of autonomy and justice. Every business ae bound to follow these principles during their
operation in the market (Fryer 2016). On the other hand, the theories of ethics are the guidelines
that should be followed during the decision-making, they are as follows.

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Deontology
It states that the companies are bound to obey the obligations and duties to the society
while making any decision for the organization. In other words, the companies should make
ethnically correct decisions, as it is their duty being a member of the society (Fryer 2016).
Utilitarianism
This theory help an organization to make predictions of the consequences of their
decisions and revise them accordingly to take ethically correct decisions that will benefit to the
greater mass. Two types of utilitarianism are act and rule utilitarianism. Act is to perform obtain
the benefit for the most regardless of personal feeling. Whereas, rules are like laws that seeks to
benefit the most people through the most just and fairest means available (Vaughn 2015).
Rights
It gives priority to the rights that are established by the societies to protect it from harm.
As the large population endorses right, it is considered as valid and ethically correct (Gasper
2016).
Virtues
Virtue on the other hand gives priority to the characteristics of the people rather the
action that may deviate from his or her normal behaviour. The motivations, reputation, and
morals ae taken into account while judging the unusual and irregular behaviour that is unethical
(Shafer-Landau 2014).

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Case Studies
Volkswagon
The company fitted a software in nearly 11 million of its diesel cars to cheat the nitrogen-
oxide emission tests worldwide. It was a shameful and unethical act as they not only violated the
ethics of and laws of Environ Protection agency, but also invented a device to hide it during the
emission test that in normal condition smokes out four time of nitrogen-oxide gas than the
normal limit. It coasted the nearly $14 billion (cnn.com. 2017).
BP Mexico
BP deep-water horizon spill is considered as an ethical nightmare. The use of chap and
poor quality instrument caused the massive explosion that is now leaving the marine ecosystem
in danger (wordpress.com. 2017).
Exxon Mobil
The climate investigation team of Exxon Mobil detected the chances of global warming
and its effect back in the early 80. However, the company decided to sit on the report solely for
the benefit of the company and continue its venture to make profit (theguardian.com. 2017).
Vtech
The largest electronic toy manufacturing company was hacked by an unauthorized party
that made over 5 million parents who bought them for their kids vulnerable to the attack. The
hacker is supposed to have the all the details of the customers. Though the company claim not ot
have any bank details on that particular segment of their security. The algorithm used by the
company to protect this information is MD5, which is considered as a poor defense system, and

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it is unethical from company’s part to use such vulnerable system for the protection of such
valuable information (securityaffairs.co. 2017).
Comparison
Similarities
All the cases under study shows clear ethical inconsideration from the part of the
company. They compromised the security of the society to increase their profit margin and left
the stakeholders at risk. Greater similarities for the first three cases can be found as they directly
denied the environmental sustainability and caused major damage for the environment.
Moreover, they have considerably contributed toward global warming.
Differences
Differences is observable in the above cases where Volkswagon, BP, and Exxon
intentionally violated the ethical rules and principles of business. On the other hand, VTech’s
actions were not intentional though, the ethical ignorance is clearly noted in both the cases.
Theories in Consideration
The cases of Volkswagon, BP, and Exxon denies the theories of deontology and
utilitarianism compared for the monetary profit of the organization leaving the stakeholders in
danger. Violation of rights and virtues of the company is notable in the case of VTech as the
compromised the security of its stakeholders. All the companies under studies fails to make
ethical decisions either intentionally or accidentally.
Conclusion
Conclusion can be drawn from the above discussion that the four companies under study
fails to perform their ethical duties towards the society leaving their stakeholders vulnerable to

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the threat of the actions of the company. There is a clear need of new CSR policies for each one
of the company to review their ethical considerations. It will be vital for them to recover the loss
that the company underwent due to these ethical misconducts. When saying loss, it is not only
the monetary loss that the company had to face but also the loss of stakeholders’ faith. Hence, a
stronger CSR policy in needed to regain their value in the market.

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References
cnn.com. 2017. Volkswagon. [online] Available at:
http://money.cnn.com/2015/09/28/news/companies/volkswagen-scandal-two-minutes/index.html
[Accessed 12 Sep. 2017].
Fryer, M., 2016. A role for ethics theory in speculative business ethics teaching. Journal of
Business Ethics, 138(1), pp.79-90.
Gasper, D., 2016. Ethics of development.
Shafer-Landau, R., 2014. The fundamentals of ethics.
securityaffairs.co. 2017. toy maker hacked. [online] Available at:
http://securityaffairs.co/wordpress/42352/cyber-crime/vtech-hacked.html [Accessed 12 Sep.
2017].
theguardian.com. 2017. Exxon Mobil under investigation. [online] Available at:
https://www.theguardian.com/environment/2015/nov/05/exxonmobil-investigation-climate-
change-peabody [Accessed 12 Sep. 2017].
Vaughn, L., 2015. Doing ethics: Moral reasoning and contemporary issues. WW Norton &
Company.
wordpress.com. 2017. Deepwater Horizon Spill. [online] Available at:
https://bizgovsoc4.wordpress.com/2012/11/11/the-deepwater-horizon-spill-an-ethical-nightmare/
[Accessed 12 Sep. 2017].