Green Moves Zero Pedal Invention for a Startup Order Instructions: I’ve attached the file with the description of my assignment.
Green Moves Zero Pedal Invention for a Startup Sample Answer
Question A.1
Green Move’s Zero Pedal is a good invention for the start-up company. It provides users with a cheaper option to gas-powered models and is environmentally friendly.
However, the bike has a design flaw that causes it to accelerate dangerously in temperatures over 100 degrees Fahrenheit. My first step would be to ask Doug, the supplier of this information to share with me the report that he had shared with my predecessor outlining the dangers posed by the bike. Next, I would perform an independent analysis of the report and this time, I would calculate all costs necessary to repair the bike and also the costs of not fixing the bike. To do this, I would apply a rational decision-making model namely; the cost-benefit analysis model. Rational decision-making models involve four stages: identifying the problem, generating a myriad of solutions, selecting the best alternative and finally implementing it. In this case, Green Move’s costs of repairing the bike or not repairing it should be compared to the benefits accruing to the company in either scenario. If the costs of not fixing the bike outweigh the benefits to the company whilst considering the cost of lawsuits in cases of injuries caused by the design flaws, Green Move would then make the appropriate decision. The pressures involved in the decision making are huge due to the fact that the product has already been rolled out to the market and fixing of flaws would require recalls. Finally, I would then present my findings to Robert with all scenarios analyzed including the likelihood of bikes being exposed to the conditions stated.
Question A.2
Black Laws Dictionary describes bribery as “The offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or another person in charge of public or legal duty.” In this context, we analyze the payment of the $ 5,000 dollars demanded by the buyer to put the Zero Pedal bike on their shelves. To find out whether this payment is legal or unethical, we need to find out whether it constitutes a bribe. According to Unger (1998), bribery is “the act of making payments, usually secretly, intended to induce the recipient to act in a manner that is illegal or favorable to the payer, at the expense of the recipient’s employer, of the payer’s competitors, or of other parties, including the general public.” In this case, the buyer’s demand is not illegal in the strict sense of the law since putting a bike on their shelves is a normal business practice. Again, the recipient of the fee has not given Green Move a favorable position compared to competitors. In US law, this also does not qualify as a bribe since it is mere payment for someone to do what they are supposed to do. In determining whether the payment is unethical, we would look at Fieser (1995) model of business ethics where it was stated that “When people refer to business ethics, they are often referring to 1 of 3 things: avoid breaking the criminal law in one’s work-related activity, avoid activities that may result in civil lawsuits against the company, or avoid actions that may be bad for the company’s image.” In this case, all the three requirements have been satisfied. To determine whether to pay the $ 5,000, I would analyze the benefits that would accrue to the company e.g. where the buyer is a large and influential retailer, the placing of the product on their shelves would lead to increased sales. If the benefits do outweigh the $ 5,000 cost, I would recommend the company to pay it since it is neither illegal nor unethical.
Question A.3
The company should indeed employ a cost-benefit analysis in making a decision regarding the Zero Pedal’s safety concerns. There are two risks involved in this: first, if the company decides to repair the bikes, they lose revenue that would otherwise have been saved had the flaw been ignored and the other is that the company might face legal action for all injuries arising from the product’s design flaws. However, a cost-benefit analysis for the option of not repairing the bikes should include the risk of negative market reaction to the product. A cost-benefit analysis, in this case, would put both scenarios into perspective and the decision making should be relatively easier.
Question B.1
While few companies often set out to deliberately commit unethical practices, the desire by most to have a competitive advantage has a direct impact on the way products are manufactured, and how the business treats workers. In the past, companies did not concern themselves with the ethical considerations in the supply chain due to the assumption that if the customer was in the dark, their concern would be limited to product quality and safety. However, with recent scandals involving Nike, Reebok and GAP Apparels, more and more companies are looking to evaluate relationships with overseas suppliers. Most of the drive to do this comes from today’s economic climate where media and other persons not in the business chain are increasingly vigilant about business practices that encourage slavery, child labor and unfavorable conditions for workers in poor countries. Most consumers today are increasingly becoming better educated about working conditions in overseas “sweatshops”, and the unfair treatment of factory workers. These concerns can seriously harm a company’s sales and brand identity. In addition, the company might find itself in trouble with regulators. In the case of Green Move, Robert needs to assess the actual working conditions independently. If indeed Solar Group has been forcing workers to work in unsafe environments, Robert should ask them to improve the working conditions and if this fails, terminate the agreement altogether and source for a supplier with better working conditions. This is the ethical way out for Robert as Green Move risks its brand by continued association with Solar Group.
Question B.2
Today’s supply chains are quite complex in the sense that a product has various components sourced from a global pool. In a competitive global marketplace, companies have to maintain competitive prices to survive, while at the same time enhancing quality. This normally puts pressure on businesses to reduce manufacturing costs. Increasingly, this drive has led to a great deal of outsourcing and off-shoring of manufacturing activities mainly Asia where labor costs are cheaper and businesses are not well regulated. However, from a moral and ethical standpoint, a company’s pursuit of better profits in no way justifies placing the health and well being of the employees of suppliers at greater risk. Promoting worker safety abroad can be achieved in many ways. First, companies should sign contracts with overseas suppliers that are very specific about the conditions under which the products are to be manufactured. Through these contracts, a standard for employee treatment should be developed and constantly monitored. This standard does not necessarily have to be similar to U.S. legal standard but it should at the very least advocate for humane working conditions where the dignity and safety of the worker are not compromised. Continued violation of these set standards should lead to cancellation of supplier contracts. It is also important that U.S. companies work with suppliers to promote the desired work environment. In Roberts case, Green Move needs to come up with an acceptable safety standard and embed it into the contract with Solar Group. This way, both parties would know the required work environment and constant monitoring would improve worker welfare. Monitoring involves making periodic visits to Solar Group plants to see working conditions first-hand. These visits should be unannounced so as to be more effective. Moreover, the company may use reputable third parties in Bangladesh to assesss factory conditions on its behalf and churn regular reports.
Question B.3
In the recent case of Apple where it was accused of violations of international labor practices in its Chinese supply chains, the New York Times played a big role in breaking the story and ensuring public debate raged about Apple’s misgivings. The media plays a huge role in ensuring that ethical practices are followed even in foreign countries where the sights of the U.S. consumer cannot reach. This is done by frequent investigations into supply chains of various companies that have outsourced much of their work. In Green Move’s case, the blogger’s threat to go public with the story about working conditions in Bangladesh would really do a great deal of harm to Green Move’s brand. Robert needs to come up with a mitigation plan to counter the bad press likely to arise from the publishing of the story. The plan should emphasize the company’s commitment to maintaining a responsible supply chain.
Question C.1
In the global setup and history of trade and business, there have often been several alternative—mostly unethical—ways of closing business deals in the form of extra kick-backs and luxurious gifts. These unethical incentives are called bribes. In the U.S. itself, bribery has been reported in various high-profile corruption cases in the international marketplace with companies such as Johnson & Johnson and Daimler AG were found culpable. Internationally, bribery is seen as a way to compete in the global market and most companies engage in the vice to stay afloat. In discussions about bribery, we look at the ways in which businesses practice it, the ethical issues considerations, the effects of U.S. laws enacted to prevent it such as the Foreign Corrupt Practices Act (FCPA), as well as the general controversy behind this practice in the public eye. The FCPA was enacted in 1977 to promote integrity in the conduct of U.S. businesses in foreign markets. It outlaws bribing of public officials in foreign governments to achieve favorable treatment. In Green Move’s case, the bid for the public lease is supposed to be competitive. However, the property manager has asked for an off-the-books facilitation fee to enable the company to get an edge over other competitors. This qualifies as a bribe under the FCPA since it involves the provision of money to a public official to influence his actions. If Viktor was to pay the $ 2,000 fee to the property manager, his actions would be both illegal and unethical. The illegality would stem from the fact that Green Move is a U.S. company hence should comply with the FCPA. The payment would also be unethical since it would give Green Move an unfair advantage over other competitors as well as adversely affecting the welfare of the Russian people by preventing them from getting value for the property. In my opinion, Viktor should not pay the bribe but instead, prepare a competitive bid. He can also formally complain to the relevant Russian authority and notify them of the solicitation of the bribe so as to help curb corruption in the country.
Question C.2
Viktor has stressed the need for the company to move technological operations to Russia as a means of cutting on costs and improving resource management. However, cost-cutting should not be used as the ultimate reason to move to Russia since a number of other reasons need to be considered before making the decision. One of these reasons is the business environment in Russia. Already, Viktor has been asked to offer a bribe to a government employee in exchange for a favorable property bid. This is an indicator that corruption is necessary for businesses to thrive in the country. Green Move would, therefore, place itself in a precarious position if it decides to engage in unethical behavior so as to receive the benefits of operating in Russia. The company should perform a cost-benefit analysis to assess all the costs required to make the move and to quantify the benefits attached to those costs. The analysis should include FCPA fines which often run into millions of dollars and the impact of reputational damage. I would advise the company to hold off its planned expansion into Russia until it is able to get a proper assessment of the costs and benefits of the decision.
Question D.1
Green Move’s unethical behavior in the payment of a bribe in Russia, ignoring of design flaws in the Zero Pedal bike and neglecting the poor working conditions in its supply chain stems from a number of issues. Chief among the issues is pressure to succeed. This pressure emanates from the company management’s desire to grow the start-up business into a successful venture. This is evident in their firing of an employee who complained about the design flaws in the bike. It also explains why the company would circumvent the law and business ethics to get ahead of the competition. Another reason for this behavior could be the personality traits of its management especially the C.E.O., Robert. Robert clearly seems willing to “roll the dice” on matters pertaining to ethical conduct and has ignored all warning signs that would otherwise stop a rational C.E.O. The organizational culture at Green Move where success at all costs is the motto could also have led to the unethical behavior. The culture is the guideline in making moral decisions and is normally set by those at the top.
Question D.2
Green Move runs into several residual risks due to its unethical actions. This might accrue in the form of civil and criminal liability for the company’s illegal and unconscionable conduct. First, its Zero Pedal bike is likely to cause injuries to users which would lead to several lawsuits that the company might not be able to successfully defend. Secondly, Robert’s decision to ignore the plight of the workers at Solar Group might lead to fines for unethical conduct from various bodies regulating the international labor market. Finally, the decision to bribe a public official in Russia might lead to punitive fines under the FCPA as well as criminal culpability on the part of the company’s management. The sum total of all these risks puts the company at great risks and if they were all to attach, the companies future would be decidedly bleak.
Question D.3
As the body in charge of corporate governance at Green Move, the board of directors has a huge task ahead of them in trying to mitigate against the risks that the company’s management has exposed it to. Since the majority of the problems seem to stem from the company’s decision makers, it is imperative that there is a change in the ‘tone at the top’. The board should fire the management as a matter of principle and take further action against them for committing crimes and putting the lives of consumers at risk. In addition, the company should move to correct the situation by reversing the decisions made by Robert and his team. This includes: recall of the Zero Pedal bikes so as to address the safety concerns, addressing the issue of poor working conditions for Solar Group’s employees in Bangladesh by giving the supplier an ultimatum as to the acceptable labor standards and to cancel the contract where this is not agreeable or followed and finally, to notify the relevant anti-corruption authorities in both the U.S. and Russia on Viktor’s bribe instead of covering up the crime. Ultimately, the board should help eradicate the culture of loose ethics in the organization by sourcing for managers with an ethical track record and through sensitization programs. The board can also reduce pressure by lowering revenue targets to manageable levels.
Question D.4
Ultimately, the U.S. government has a responsibility to ensure that unethical and illegal business practices are eradicated. The enactment of laws that provide strict business requirements and adequate deterrent measures in the form of huge fines is one such responsibility. While the FCPA is a good start in eradicating corruption in foreign dealings, it needs to be enhanced to provide more coverage of corrupt practices. For example, the Act does not define bribery which means that a number of emergent bribery practices might escape the arm of the law. Various regulators also need to be vigilant in ensuring that businesses in the U.S. are run in a manner that does not jeopardize consumer safety. An example of this should be to bring the Zero Pedal bike under regulation by the National Highway Traffic Safety Administration (NHSTA). This way, solar-powered bikes can be assessed for safety and quality. It is also important that supply chains are assessed by the various government departments to ensure that the purchase of goods in the U.S. is not inadvertently promoting the abuse of labor rights for workers in poor countries or those with poor regulation mechanisms.
