Ethics bowl for environments of the organization  (Page 4/14)

Biomatrix argument

Biomatrix group summary

• Identify, evaluate, and rank three solution alternatives on the Biomatrix decision point mentioned above. Use the ethics and feasibility tests.
• Prepare a socio-technical system table on Biomatrix. What role does Online Service Provider, Yahoo, play in this system? How is freedom of speech covered in your table? In the law section? As an organizational procedure? Under software, such as Yahoo Bulletin Board features?
• Ouline arguments tied to freedom of speech in favor of and against the use of John Doe lawsuits.

Enron

Enron debate scenario

• You will find information on the Enron Case from two sources: Business and Society, 450-462 and cnx.org/content/m31972/latest. The Connexions module condenses the case into eight important points and three cautionary tales.
• Lay formulated an exciting new idea: trading energy futures, that is, deregulating the energy market and trading energy futures in the same way that agriculture futures are traded. To bring about deregulation in the energy market, Kenneth Lay became a formidable Washington lobbyist who benefitted from close ties to the Bush family (President George H. W. Bush and President George W. Bush). What are the ethical and risk implications of deregulating the energy industry and trading energy futures on the market?
• Skilling implemented a rank and yank performance evaluation system. Each Enron employee was ranked in relation to his or her coworkers. Then the bottom 15% were fired and replaced the next year by new hires. This process then continued: every year at Enron, employees are ranked and the bottom 15% yanked. The ranking process was based primarily on an adversarial procedure where your mentor advances your portfolio and a detractor pushes it back and advances that of another candidate. The process terminates when the rankers get exhausted. Skilling implemented this system because he believed in a philosophy called “Social Darwinism” where only the fittest survive. (Social Darwinism is based on a misinterpretation of Darwin’s theory of evolution.) What do you think about this personnel process both from the standpoint of Human Resources or Personnel and from an ethical standpoint?
• Enron developed "creative" accounting methods. Mark-to-market allowed them to declare future earnings expected from a project at the moment the deal is made. While good in the short term, this method quickly put Enron on an accelerating treadmill: to maintain the illusion of profitability they had to keep making deals and immediately declaring expected profits. Enron also used Special Purpose Entities to distribute risk and secure needed loans at low interest rates. SPEs were artificial corporations endowed with Enron assets like gas pipelines and energy contracts. These assets made it possible for Enron to get low interest loans and generate needed cash flow. The problem was that Enron used its stock to guarantee the loans given to the SPEs. Thus, Enron had to continually make deals to appear profitable to keep its stock value rising, and we’re back to the accelerating treadmill. Evaluate the practices of mark-to-market accounting and the use of SPEs to distribute risk and secure loans. Are these practices unethical considered on their own terms? Ethically evaluate Enron’s use of these accounting practices. Use the three ethics tests.