Business Ethics & CSR (Final Exam)
Time 2 Hours Total Marks: 28
Q1. You are working in a top multinational organization which has the responsibility of
conducting monitoring & evaluation of large construction projects (like shopping malls,
colleges, hospitals, factories). The organization employs thousands of employees, engages in
CSR activities worth millions every year, and sponsored your graduate degree. One day
while doing internal audit, you come across some secret documents that show that the
company has been allowing big contractors get away with very substandard construction for
five years. This has allowed the company to retain these big clients and make a large profit
every year. None of such buildings has, however, collapsed or resulted in any casualties so
far.
a) Please analyze whether whistleblowing is morally justified in this case (4).
b) Is whistleblowing a moral obligation in this case? Why or why not? (2)
c) What are the relevant rights of different parties in this case? (2)
d) You decide to go to the CEO of the firm and share these concerns. Your CEO hears your
concerns patiently. However, the next day you are handed your termination orders even
though you had a job contract for four years and the contract mentioned that you could
not be terminated without proper disciplinary proceedings. In this case, which of your
rights as an employee have been violated by the firm? (1)
Answer:
a) In this case the external whistleblowing is not justified because:
1. There is clear, substantiated, and reasonably comprehensive evidence that the
organization is engaged in conducting monitoring & evaluation of large construction
projects which allows big contractors get away with very substandard construction
that will seriously wrong other parties such as the client I would not want my building
to be substandard.
2. However, reasonably serious attempts to prevent substandard construction through
internal whistleblowing have not been tried and I have not failed from exhausting this
option.
3. It is not reasonably certain that external whistleblowing will prevent the wrong.
4. Moreover, the wrong is serious enough to justify the injuries that external whistle-
blowing will probably inflict on oneself, one's family, and other parties.
Business Ethics & CSR (Final Exam)
Time 2 Hours Total Marks: 28
In this case, I do not know if it would prevent the wrong and secondly, I still have the
option to exhaust other methods such as internal whistleblowing. 1 and 4 options are in
favour of external whistleblowing but 2 and 3 show that external whistleblowing is not
appropriate.
b) Whistleblowing is a moral obligation for me because I am member of internal audit
which has a special duty to prevent the wrong is the who can prevent the wrong.
Moreover, the substandard construction will involve an extremely serious harm to
society’s welfare, or extremely serious injustice, or extremely serious violation of rights.
c) Right to do business of the contractor, Right to employer of loyalty of the
employee(agency), Right to privacy of employer(confidentiality), Right to information of
the client.
d) I should be given the right to due process as there is a contract between the employer and
employee and cannot be terminated at the spot.
Q2.
a) Which of the following policies is the most ethical in your opinion? Why? (4)
A. A policy that creates a 50% quota for women in all government engineering universities.
B. A policy that gives 50% scholarships to all women selected for admission in engineering
universities.
Answer:
The policy that gives 50 A policy that gives 50% scholarships to all women selected for
admission in engineering universities. In the first option, admission is given on the basis of being
women. This will result in gender-based selection. It is a kind of tokenism. They are not giving
scholarships It is not based on the ability of a women to do engineering from government
universities. The first case is based on quota system. The selection is not based on merit. In the
first case it is a quota system caters for the unjust that exists in the society through affirmative
action. As there are less women in engineering in Pakistan, so to enhance their participation,
quota is selected. This can lead to deprivation from others their right of being to become an
engineer. The selection is not based on merit.
Business Ethics & CSR (Final Exam)
Time 2 Hours Total Marks: 28
Policy B is fairer as there is no discrimination in selection of the candidates. This makes it more
fair for those who want to pursue engineering. Marginalized community(women) are given
scholarship which is a kind of affirmative action that facilitates them to go for engineering
colleges. This is not only tokenism it also gives opportunity of women to get admission in
engineering. It facilitates them in getting admission. The selection is merit based not quota
based.
Q3. It is 2010 and a Pakistani firm is contemplating selling a new paint that shines at night and
has a huge demand in the local market. The Pakistan firm asks an engineer who is working in a
Japanese firm that invented this paint and is currently the only firm in the world that produces
this paint, to come work for them at a much higher salary on the condition that she helps them
manufacture the shiny paint using the information and skills she has learnt in Japan. The
engineer quickly resigns from her position, comes to Pakistan and the manufacturing starts. The
firm follows all the standard manufacturing protocols that the engineer tells them to follow but
does no research of its own to find out any dangers associated with the new paint. The firm sells
the paint to consumers who sign a contract which waives the company of any responsibility if
any risks or damages caused by the paint. A few years later, in 2020, it is found that inhaling the
vapor from the paint resulted in an increased probability of dying from COVID-19. The buyers
bring a lawsuit against the firm which claims it should not be held liable for any damages in this
case.
a) Did the engineer do anything unethical? (2)
b) How would contract, due-care and social cost views analyze the ethical responsibility of
the firm in this case? (2 + 2 + 2)
Answer: The trade secret of the Japanese company are nonpublic information that:
1. concerns the Japanese company’s own activities and technologies, that if known by
competitors would materially affect the company’s ability to compete commercially against
those competitors
Business Ethics & CSR (Final Exam)
Time 2 Hours Total Marks: 28
2. The information is owned by the company because it was developed by the company for its
private use from resources it owns, or it was legitimately purchased for its own use from others
Both the above criteria are applicable to the engineer who went to work for another company.
As, the paint was made by the Japanese company. The engineer had stolen the trade secret as
information is exchanged between both the companies. As the information of the paint was not
produced by the engineer therefore it is unethical.
In Due care, the risk of COVID-19 was unforeseeable, but the manufacturer did not take
adequate steps to prevent even foreseeable risks. Therefore, it is not ethical with regards to due
care. The firm has ethical responsibility.
In contract view, sellers can remove all their duties to buyers by getting them to agree to
disclaimers of responsibility. As the consumers sign the contract, thus it is ethical. The firm has
no ethical responsibility.
In social cost view, the manufacturer of the paint should pay the costs of any injuries caused by
defects in the product, even if the manufacturer exercised all due care in designing, making, and
marketing it, and the injury could not have been foreseen. Product injuries are external costs that
should be internalized as a cost of bringing the product to market. As it is found that inhaling the
vapor from the paint resulted in an increased probability of dying from COVID-19. Therefore,
company is responsible in terms of social cost view.
Q4. Suppose Pakistani scientists figure out a way to produce intelligent robots which will be able
to automate the entire farming process and help increase agricultural production a lot. Since
robots are new, no one really knows what will happen if the farming process is entrusted to them.
Some scientists think that there is a chance these robots run amok and start killing any farmers
(or other people) that step in their farming area. Others argue that these risks are being
exaggerated by naysayers who prefer to live in the past. The government is contemplating
whether to approve production of these robots and to station them in the farms of five villages in
North Sindh. However, it is not clear how these villages will be chosen. Suppose the government
asks you for advice on how best to proceed on both these decisions (approving production and
selecting villages). What principles & perspectives that you learnt about Business &
Environmental Ethics will help you in this case (you cannot rely on utilitarianism in this case as
Business Ethics & CSR (Final Exam)
Time 2 Hours Total Marks: 28
you know that it is difficult to put a dollar value on the lives that may be risked by these robots)?
(Production decision: 4 + Village selection: 3)
Answer:
Maximin Rule:
First assume the worst that robots will kill the farmers is going to happen and then choose the
option that leaves us best off when it does happen. In the worst case scenario, it would kill
farmer so we will not produce the robots. So, it should not be produced.
Precautionary Principle:
The farming process carries an unknown risk of catastrophic and irreversible consequences, but
it is uncertain how large that risk is, then the practice should be rejected until its certain the risk
is nonexistent or insignificant. The proposed technology applies because it contains unknown
risk of irreversible consequences. It is uncertain how much risk will be caused through
introduction of robots. The strong version will apply in which, the burden of the proof is on those
who want to adopt this new farming process that proves that the technology will not cause any
catastrophic harm and it will not kill farmers.
Selection:
The cost-benefit analysis should be used for selecting the villages and then target the villages in
which the costs involved are voluntarily accepted by those who must bear them by no violation
of their rights. The farmers should be given complete information and the technology should
only be introduced in villages where farmers agree to this technology. The farmers are not
knowledgeable enough to understand the dangers which makes it an ethical dilemma.
