Case study A
Microsoft was in the process of conducting an agency review. RGS&H, a Boston-based company sent some business information in the form of a flier to Microsoft. The advertisement company was under the stewardship of its president known as Neil Hill. With only an existence period of 5 years, the company was impressive to Microsoft associate Rob Lebow mainly due to its $26 million worth. As mentioned, the company sent a business flier communicating its message and further highlighting why it believes it is the best poised to take on the advertisement job. One of the reasons highlighted by RGSH in the flier was that it was well aware of the strategies employed by Lotus, a rival company of Microsoft. Mr. Lebow is enticed with the offer because it is apparent that the company will offer them much value due to the immense knowledge it has regarding their main competitor, Lotus.
The first ethical issue at hand is the fact that RGS&H is persuading Microsoft to give them a job on the grounds that they have two employees with basic knowledge of their main competitor. The second ethical issue should center on how Lebow should reject the offer. Lebow has three different ways he can deal with the problem. The first one would be ignoring the flier and its information altogether. Secondly, he can return the flyer and decline the offer. Thirdly, he can also opt to forward the flyer to their rivals, Lotus. However, this is a difficult decision because the information that Microsoft communicated with RGS&H alone can have implications on the reputation of the latter. The fact that Lebow refuses to take the offer emphasizes the fundamental ethical value of integrity. Under the virtue theory of ethics, integrity entails showing a sense of openness, goodwill, truthfulness, and honesty in conducting business. Integrity is emphasized by the fact that Lebow refuses to hire a company that possesses confidential information about its rival company.
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Case study B
Although Procter & Gamble was not directly responsible for any violation that came out of its intelligence gathering process, it was partly liable for the not informing its contractors of the limit acceptable during the process of collecting classified information of their rival Unilever. The management of the company did not create any ground rules as to what would be acceptable or unacceptable in the process of data collection. Mr. Pepper had a moral obligation of informing Unilever of the trespass in information gathering in the spirit of showing fair competition and the virtue of ethics. Although solving the issue internally was a viable option, it would be difficult to control the employees who had already accessed the critical information of their rival organization. It was therefore imperative for Mr. Pepper to show integrity to allow Unilever to possibly conduct an independent audit to enable it safeguard its competitive advantage.
The ethical theory that can best explain this situation is the justice theory. Justice provides that fairness in business undertakings should always take precedence. Mr. Pepper engages in a type of justice known as the restorative justice where he informs the chairman of Unilever of their wrongdoings in collecting information and seeks to settle the matter out of court. The compensation that Unilever asked for is part of the restorative justice process where restitution plays a significant role in agreement and settlement. However, since Proctor and Gamble was the whistleblower in the case, it meant that it had done it in good faith. It was therefore irresponsible and unethical for Unilever to demand for some form of compensation. Protector and Gamble had not broken any law and was ready to carry out changes within the organization’s rank to ensure that the information acquired would not affect their rivals.
Case study C
Two different advisory companies had vested interest in the El Paso deal. The lead banker of Goldman Sachs was inclined to Kinder Morgan because of the personal investments he had with the company. Part of Morgan's Stanley contract clause stipulated that he would receive a payment of $35 million if only El Paso in its entirety were sold to Morgan Kinder. Therefore, the most significant conflict of interest in this case study was the personal one featuring advisory companies that would have tilted the deal towards favoring Morgan Kinder. In the wake of these conflicts of interest, El Paso should have remained steadfast to mitigate each one of them. The first endeavor in which the company could have leveraged is the investigation of a potential relationship between Morgan Kinder and the advisory companies. If it found any form of association, then the option would, therefore, hinge on selecting a different company.
An independent entity would have assisted in providing an honest and unbiased assessment of the deal. The second important consideration in mitigating any possibility of a conflict of interest would involve the contracting signing between the advisory companies and El Paso. The contract signing should not show bias toward financial payment and deal completion. Since the advisory company was doing its work, it deserved a fair share of the compensation. Therefore, any linkage of the compensation with the eventual fulfillment or success of the deal can viewed as a biased approach. As a result, such conditions must be give considerable check before proceeding with the agreement. It is in the best interest of El Paso to conduct the best business that is free from personal and vested interests in specific outcomes.
