Imagine you started a company that makes meatless burgers, and your products are now available in stores worldwide. Recently, you received alarming news: three people in one city died after eating your burgers. Investigations revealed that someone deliberately injected a harmful substance into your burgers in at least two grocery stores. The criminal used a method that left no visible signs on the packaging, making it impossible to identify which products were tampered with. As a result, your burgers were pulled from those stores, but the suspect remains unidentified, and the media is heavily covering the story. Sales have plummeted, and you need to act fast to manage the crisis. Your team suggests three possible actions:
Your company lawyer advises that a recall isn’t legally necessary since the criminal is responsible. She suggests doing nothing to avoid implying fault. But is this the most ethical choice?
To determine the most ethical option, you can conduct a “stakeholder analysis.” This involves considering the interests of key stakeholders such as investors, employees, and customers.
Choosing the first option might mean the crisis eventually fades, but sales could remain lower than before, leading to potential layoffs and minor investor losses. However, there’s a risk that more customers could be harmed if the criminal strikes again.
The second option would be costly initially, resulting in more layoffs and financial losses for investors. Yet, it would enhance customer safety in the city and might help rebuild trust, potentially boosting sales in the future.
The third option is the most expensive and would lead to significant layoffs and investor losses. Although there’s no evidence of an international threat, this option offers the highest level of customer protection.
Balancing the interests of customers, investors, and employees is challenging. To guide your decision, consider these ethical tests:
A historical example to consider is the 1982 Tylenol crisis faced by Johnson & Johnson CEO James Burke. After a criminal tampered with Tylenol, causing seven deaths, Burke decided to pull Tylenol from all shelves worldwide, prioritizing customer safety. This decision, despite predictions of the company’s downfall, helped regain customer trust and led to a sales rebound within a year. Johnson & Johnson became a leader in tamper-resistant packaging, influencing stricter government regulations.
Burke’s decision prevented further deaths from the initial tampering, although the federal government had to deal with many copycat incidents later. Was Burke’s decision driven by public interest or company interest? Was it a matter of good ethics or good marketing?
In ethical dilemmas like this, there is no definitive right or wrong answer. The choice for your meatless burger company is ultimately yours to make.
Gather in small groups and conduct a stakeholder analysis. Identify all stakeholders affected by the crisis and discuss their interests and concerns. Present your findings to the class, highlighting which stakeholder interests you believe should be prioritized and why.
Participate in a role-playing exercise where you assume the roles of different stakeholders, such as the company CEO, a customer, an investor, and an employee. Debate the three proposed actions and try to reach a consensus on the most ethical decision. Reflect on how your perspective changed based on the role you played.
Read about the 1982 Tylenol crisis and analyze the decisions made by Johnson & Johnson. Compare and contrast their approach with the options available to your burger company. Discuss in groups whether you think their decision was driven by ethics or marketing, and how it applies to your situation.
Individually apply the ethical tests (Utilitarian, Family, Newspaper, Mentor) to the three proposed actions. Write a short essay on which option you believe is the most ethical based on these tests and why. Share your conclusions with the class for feedback and discussion.
Work in teams to create a comprehensive crisis management plan for the burger company. Include strategies for communication, stakeholder engagement, and long-term brand recovery. Present your plan to the class, focusing on how it addresses ethical considerations and stakeholder interests.
A few years ago, you founded a company that manufactures meatless burgers. Your product is now sold in stores worldwide. However, you’ve recently received concerning news: three unrelated individuals in one city died after consuming your burgers. The authorities concluded that a criminal targeted your brand, injecting a harmful substance into your product in at least two grocery stores. The perpetrator used a precise instrument that left no trace on the packaging, making it impossible to determine which products were compromised. Your burgers were immediately removed from the two stores where the victims purchased them. The situation has garnered significant media attention, the suspect is still at large, and sales have drastically declined. You must quickly develop a strategy to address the crisis. Your team proposes three options:
1. Do nothing.
2. Pull the products from grocery stores citywide and destroy them.
3. Pull and destroy the product worldwide.
Which option do you choose? Your company lawyer explains that a recall is not legally required because the criminal is fully responsible. She recommends the first option—doing nothing—because recalling the product could be perceived as an admission of fault. But is that the most ethical strategy?
To assess the ethicality of each choice, you could perform a “stakeholder analysis.” This would allow you to weigh the interests of key stakeholders—investors, employees, and customers—against one another.
With the first option, your advisors project that the crisis will eventually subside. Sales will improve but likely remain below prior levels due to damage to the brand. Consequently, you may have to lay off some employees, and investors will experience minor losses. However, more customers could be at risk if the perpetrator poisoned products elsewhere.
The second option is costly in the short term and will necessitate greater employee layoffs and additional financial losses for investors. Nevertheless, this option is safer for customers in the city and could foster enough trust for sales to eventually rebound.
The third option is the most expensive in the short term and will require significant employee layoffs and investor losses. Although there is no evidence that these crimes pose an international threat, this option offers the greatest protection for customers.
Given the conflict between the interests of your customers versus those of your investors and employees, which strategy is the most ethical? To make this decision, you could consider these tests:
1. **Utilitarian Test**: What would be the impact of each option in terms of maximizing the greatest good for the greatest number of people?
2. **Family Test**: How would you feel explaining your decision to your family?
3. **Newspaper Test**: How would you feel reading about it on the front page of the local newspaper?
4. **Mentor Test**: If someone you admire were making this decision, what would they do?
A historical example to consider is Johnson & Johnson CEO James Burke, who faced a similar challenge in 1982 when a criminal tampered with Tylenol, resulting in seven deaths. Despite industry analysts predicting the company’s downfall, Burke chose to pull Tylenol from all shelves worldwide, prioritizing customer safety. The company recalled and destroyed an estimated 32 million bottles, which helped regain customer trust and led to a rebound in sales within a year. This incident prompted Johnson & Johnson to become a leader in developing tamper-resistant packaging and led to stricter government regulations.
Burke’s decision prevented further deaths from the initial tampering, but the federal government investigated numerous copycat incidents in the following weeks. Could a different response have prevented these? Was Burke acting in the interest of the public or his company? Was this a matter of good ethics or good marketing?
As with all ethical dilemmas, there is no clear right or wrong answer. The choice for your meatless burger company remains yours.
Ethical – Relating to moral principles or the branch of knowledge dealing with these; conforming to accepted standards of conduct in business practices. – In business, it is crucial to ensure that all operations are ethical to maintain a good reputation and trust with consumers.
Dilemma – A situation in which a difficult choice has to be made between two or more alternatives, especially equally undesirable ones. – The company faced a dilemma when deciding whether to lay off employees or cut down on product quality to save costs.
Stakeholders – Individuals or groups that have an interest in the decisions and activities of a business, including employees, customers, suppliers, and the community. – Effective communication with stakeholders is essential to ensure that their needs and concerns are addressed in the company’s strategic planning.
Choices – The act of selecting among alternatives; in business ethics, it often involves selecting the most ethical option among several possibilities. – Managers must make choices that align with the company’s ethical standards and long-term goals.
Safety – The condition of being protected from or unlikely to cause danger, risk, or injury; in business, it often refers to the safety of products, services, and workplace environments. – Ensuring the safety of workers and consumers is a fundamental ethical responsibility for any business.
Trust – Firm belief in the reliability, truth, ability, or strength of someone or something; in business, it is essential for building strong relationships with customers and partners. – Building trust with clients is a key component of successful business ethics and long-term success.
Decisions – The process of making choices, especially in a business context, where ethical considerations play a significant role. – Ethical decisions in business often require balancing profit motives with social responsibilities.
Marketing – The action or business of promoting and selling products or services, including market research and advertising, with a focus on ethical practices. – Ethical marketing involves being honest about product capabilities and avoiding misleading advertisements.
History – The study of past events, particularly in human affairs; in business, it refers to the historical context of business practices and ethical standards. – Understanding the history of corporate ethics can help businesses avoid repeating past mistakes.
Crisis – A time of intense difficulty or danger in a business context, often requiring immediate and ethical decision-making to resolve. – During a crisis, a company’s ethical stance can significantly impact its reputation and recovery process.
