MGMT3006 - Business Ethics: Venice's Ethical Dilemma Case Study

This case study examines the ethical issues arising from the tourism industry's impact on Venice, focusing on the city's decline due to unethical practices. It analyzes the actions of key players, including the tourism industry, local government, and residents, and identifies stakeholders such as Airbnb owners and cruise ship operators. The study applies three normative theories – utilitarianism, Kantian ethics, and virtue theory – to evaluate the ethical dimensions of the situation, revealing how these frameworks expose the negative consequences of current practices. The analysis highlights issues like population decline, infrastructure strain, environmental damage from cruise ships, and the displacement of locals. The paper concludes by categorizing the decisions and practices as unethical and morally wrong, and proposes recommendations to address these issues and promote a sustainable future for Venice.

Running head: BUSINESS ETHICS
BUSINESS ETHICS
Name of the Student
Name of the University
Author Note

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Executive summary
This paper is a case study about the beautiful city Venice which is at the verge of destruction
because of the unethical practices in the tourism industry that has contributed to this huge issue.
This paper will consider the ethical issues aligning with the three normative theories,
Utilitarianism theory, Virtue theory and Kantian theory. This paper will also provide other issues
that have been identified and will provide probable recommendation that will help the city to
overcome the issues that it has been currently facing.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Brief overview of the case study.................................................................................................3
Actions of the main players in the case study..............................................................................4
Stakeholders in the case...............................................................................................................5
Other issues in the case................................................................................................................6
Recommendation.........................................................................................................................7
Conclusion.......................................................................................................................................7

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Introduction
Business ethics are said to be the code of conduct that organization need to follow while
doing their business (Werhane 2019). Ethics helps in setting a standard for an organization in
order to regulate the behaviour. This highly helps organizations in making a decision as to what
is right and what is wrong. Ethics has become an integral part of every organization and most
businesses consider while making decisions or creating policies for the company for fair and a
healthy workplace (Porter and Mark 2019). This paper is a case study and reflects on how
different ethical philosophies come up with different ethical solutions and identify the issues that
the case study has in order to recommend suitable actions that may help in overcoming the
situation in an ethical manner.
Discussion
Brief overview of the case study
Venice one of the greatest and famous tourist destinations in the world and has been
going through issues that is going to have a negative impact on the city especially in the long
run. The beauty and the popularity of the city are becoming a curse for the city. The city has
been seeing a decline in their local population. Near the Rialto Bridge which is spanning the
Grand Canal has a clock which tracks the decline in the population. Currently it shows there are
only around 53,000 locals left in the city. On the other hand it has been estimated that 25 to 30
million tourists will be visiting this beautiful city this year. The visitors usually visit this city for
around 3 hours and leave which has a deep impact on the local economy because of the less

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revenue generated from tourism. However, the crowds that come every day in the city have put a
pressure on the infrastructure of the city.
The demand of the city and the huge amount of people coming regularly has contributed
to the rise of the accommodation sector especially Airbnb which causes a huge issue to the locals
residing in the city. The locals who stay on rent are pressurized to leave the apartments by their
landlords in order to give it to Airbnb who turn the residential apartments to tourism rentals.
Physical damage is another concern for city because of around 500 cruise ships visiting
the city every year. It has been said that the currents that are created by the ships damage the
Renaissance building. These have been detrimental to the society in terms of pollution as well as
it has been seen that harmful emissions from one ship is equal to emissions from around one
million cars daily. Moreover, the money paid by the cruise ships to not add to the local economy
rather is enjoyed by the federal government of Italy. Cruise ships do not give any money to the
city they are operating in neither to their bar workers or taxi drivers. Instead the money goes to
the hands of the powerful and there are politicians who are a part of this.
Climate change is a rising concern in the city and according to local engineers the ground
floor of Venice may drown completely under the water due to the rise in sea levels in 50 years
and the beautiful building will get destroyed in the next 30 years.
These detrimental issues of Venice have UNESCO on high alert and it has been seen that
the issues that Venice is currently is facing is dysfunctional and manmade. Business has been the
sole reason that has been killing the beautiful city. Thus, Italy needs to make some measurable
steps in order to save Venice which has a huge contribution to the economy of Italy.

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Actions of the main players in the case study
Venice, the beautiful city is facing issues and is slowly at the verge of destruction
because of the unethical decisions and practices that has been going on in the city. The issues not
only affect the people but also the city. The use of normative theories in the case study shows the
case studies in a different light and gives a different ethical perspective.
Kantian ethics was developed by Immanuel Kant and is a deontological ethical theory.
The theory highly promotes the right for dignity and autonomy of individuals. The theory
captures the respect for persons, importance of intention and dignity. Kantian ethics state that
the world is understandable through reason and the action take by an individual must conform to
the moral law. According to the theory, good will is given the utmost priority (Wood 2017).
Aligning this theory with the case study it can be seen that the practices and the decisions that are
being taken in Venice do not give priority to good will in any sense. Majority of the local people
and the city is suffering. The tourism industry on the other hand is making money and has been
contributing to the suffering of others and the destruction of the beautiful city. From the
perspective of Kantian ethics it can be seen that the tourism industry and the government of Italy
have been making unethical decisions and have been practicing unethical work that is harming
the environment and the local people. According to the theory, the work one is practicing
whether right or wrong is making it the universal law and thus it is important to make good and
ethical decisions which help everyone (Wood 2017). In this case study, the decision of
pressurizing locals to evacuate their rental apartments and the use of cruise ships that are
harming the environment is being taken into consideration making it the universal law according
to the ethics. Thus, if this is normalized and considered to be morally fine then other countries
will start practicing these actions which will have negative and adverse consequences. Thus, the

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decisions and the methods that are practiced for work are morally unethical and restrict good will
in the society.
The Utilitarianism is a theory that was proposed by Jeremy Bentham that suggested that
actions can be morally permissible if and only the actions produce as much as happiness
(Chandler 2019). The action is considered to be better if they result in more happiness. This
theory states that human beings value pleasures the most and whatever they do it results in
happiness and their pleasure. Impartiality in happiness is required in this ethics (Barrow 2015).
Aligning the theory of utilitarianism with the case study it can be seen that the things that are
practiced or performed in the country are unethical and breach the theory as it does not see to the
happiness of most of the people and neither does it bring any kind of pleasure to most of the
people. In the case study, only the disruptive tourism industry Airbnb, the owners of cruise ships
and the government of Italy are enjoying and are happy with results on the other hand the local
people are suffering and the emissions from the cruise ships are contributing to the rise in climate
change that are going to have negative effects on the entire world. Not only human beings but
even animals are going to have negative consequences from climate change. The climate change
cannot only destroy Venice but the entire world. From the utilitarianism perspective the
decisions and the practices in the case study are morally wrong as this brings unhappiness and
negative consequences to the majority of the people.
The Virtue theory proposed by Aristotle states that every human being should strive to
become virtuous. This theory is more about the character and not about following any kind of
rules like categorical imperatives that was done in the Kantian ethics (Bell, Bruno and Neubert
2017). However the theory focuses on certain traits of people which are compassion, courage and
kindness which makes human beings flourish. Virtue serves compassion, temperance, kindness

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and courage. The virtue theory involves skill and judgment to act in the right manner at the right
time (Jordan and Kristjánsson 2017). Aligning this theory with this case study, it can be seen that
the case study is not right morally as it does not less human beings flourish. The tourism industry
and the government flourish by using Venice however it can be seen that the local people do not
flourish and have been suffering as the earnings from the tourism industry have no contribution
to the local economy and the emissions from the cruise ships are destroying the city vehemently.
Thus the decisions and the practice in the case study are highly ethical as it hinders the growth of
the human beings.
All the three normative theories categorize the decisions and the practices highly
unethical and morally wrong in their own way as it hinders the aspects proposed in the theory.
Thus it can be seen that Venice is going through a manmade crisis which has been having a huge
effect on the local people and on city which may not exist after 80 years.
Stakeholders in the case
In this case study there are various stakeholders that have been identified. Stakeholders
are classified to be the people that have a concern or interest on something especially in a
business. One of the most important stakeholders of the case study is the local people of Venice.
The local people of Venice are the stakeholders that fall under the category of urgency. Urgency
is defined as the degree to which the stakeholder calls for immediate help or attention. In the case
study, it is the local people of the city who claim for immediate attention because of the rise in
issues that has not only been affecting the locals also the city.
The other stakeholder that has been identified in the case study is the owner of the
disruptive tourism industry like Airbnb. The rise and the popularity of Airbnb have contributed

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to the local people being forced to leave their rental apartments by their landlords. Airbnb is
famous for their rental apartments that give tourists the feeling of the locals. This has made
landlords give preference to Airbnb more in comparison to the locals because of the money. The
owners of Airbnb fall under the category of power. Power is said to be the relationship between
the social actors where one social actor can make the other social actor act and do something that
they would not have done otherwise (Cairns, Goodwin, and Wright 2016). Here in the case study
it can be seen that Airbnb makes the landlords evacuate the local people from their apartment
because of the sheer manipulation and money. This shows the power of the owners of Airbnb
who have influenced the behavior of the landlords in Venice to make decisions that cater to the
needs of the owners of Airbnb and also their own needs as well.
The other stakeholder that has been identified in the case study is the government of Italy.
The government of Italy, who is closely associated with the tourism industry that is in Venice as
the money that are being generated from the cruise ships in Venice do not go to the local
economy rather go to the government where the money is often enjoyed by certain powerful
politicians. The government of Italy also falls under the category of power as their power had
made the law of contributing the money to the federal government and not in the local economy
of the country. The rules and regulations imposed by the government are important and
powerful.
The tourists are other stakeholders that has been identified and who are the key people
who contribute to the success of the tourism industry in the city. The behavior of the people in
this case study fall under the category of legitimacy. The local people of Venice are bothered
with the behavior of the people however on the other hand it has been bringing fruitful results to
the tourism industry and the government of Italy. Legitimacy is considered to be an assumption

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or a perception where the actions of a person are appropriate and desirable within some system
of beliefs, norms and values that are constructed socially (Hiroaki and Ruhanen 2017). Thus the
actions of the tourists are desirable to the tourism industry because of their beliefs.
Other issues in the case
One of the major issues in the case is the environmental issues that have been cropping
up in the city. Environment ethics is important and has been incorporated by many organization
and businesses in the world as it is the moral responsibility of organizations to ensure the safety
of the environment. The issue regarding environment ethics is one of the other issues that has
been identified as the environment is being polluted because of the harmful emissions from the
cruise ships that have been operating in Venice. These have contributed to the climate change
and the rise in sea levels which in the later years can be detrimental for the city as well as the
entire world.
The cruise ships and Airbnb show the lack of corporate social responsibility activities in
their operations and their work. The cruise ships do not have any concrete CSR activities that
will help for the betterment of the society as well as the human beings. Corporate social
responsibilities are the activities that businesses undertake in order to make a positive
contribution to the society for the upliftment of the society ((Wang et al 2016). It is the way of a
business connecting to their target audience and gaining a positive reputation in the market.
However with these unethical practices by cruise ships where they are contributing to climate
change and global warming shows the lack of CSR practices and activities.
Recommendation

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The issues that have been discussed hinder the morals and values of business ethics. The
issues that are currently prevailing in the city Venice is due to the lack of proper governance and
the unethical practices by the companies and the government. This issues have been negatively
impacting Venice thus needs to make measurable steps that will help the city to overcome the
issues.
 The government of Italy should come up with strict rules and regulations that ensures the
tourism industry shares the economy with the local economy so that the locals can benefit
from them
 The government should also regulate strict environmental laws that will help cruise ships
keep a check on their emissions in order to save the city from the detrimental
environmental issues like climate change.
 Strict laws should be made in order to protect the local people who were forced to
evacuate from the apartments. The laws should safeguard the interests of the people
Conclusion
Venice is a beautiful city that has been on the verge of destruction due to the unethical
practices by the tourism industry and the government of Italy. The issues that are on the rise are
dysfunctional and have cropped because of the lack of business ethics of the tourism industry.
However the issues can be resolved if the government considers the recommended steps that will
help in protecting the city and will also help the people flourish in the city.

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