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An Example of Ethical Analysis
Consider the following case example of an ethical dilemma [Yuthas and Dillard(1999)]:
Granger Stokes, managing partner of the venture capital firm of Halston and Stokes, was
dissatisfied with the top management of PrimeDrive, a manufacturer of computer disk drives.
Halston and Stokes had invested $20 million in PrimeDrive, and the return on their investment
had been below par for several years. In a tense meeting of the board of directors of PrimeDrive,
Stokes exercised his firm’s rights as a major equity investor in PrimeDrive and fired
PrimeDrive’s chief executive officer (CEO). He then quickly moved to have the board of
directors of PrimeDrive appoint himself as the new CEO.
Stokes prided himself on his hard-driving management style. At the first management
meeting, he asked two of the managers to stand and fired them on the spot, just to show everyone
who was in control of the company. At the budget review meeting that followed, he ripped up
the departmental budgets that had been submitted for his review and yelled at the managers for
their “wimpy, do nothing targets.” He then ordered everyone to submit new budgets calling for at
least a 40% increase in sales volume and announced that he would not accept excuses for results
that fell below budget.
Keri Kalani, an accountant working for the production manager at PrimeDrive, discovered
toward the end of the year that her boss had not been scrapping defective disk drives that had
been returned by customers. Instead, he had been shipping them in new cartons to customers in
order to avoid booking losses. Quality control had deteriorated during the year as a result of the
drive for increased volume and returns of defective TRX drives were running as high as 15% of
the new drives shipped. When she confronted her boss with her discovery, he told her to mind
her own business. And then, in the way of a justification for his actions, he said, “All of us
managers are finding ways to hit Stoke’s targets”.
Case Analysis
1. Identify the primary “ethical dilemma (or question)” in the case. (5 points)
2. Discuss the role that information technology played in creating the special circumstances of
the case. (5 points)
3. List the stakeholders in the case (and try to identify an important “right” of each stakeholder).
(10 points)
4. List and describe alternative courses of action that may be taken and determine the likely
consequences of each proposed action for each stakeholder. (20 points)
5. From a teleological perspective which action is morally right? Explain. (15 points)
6. From a deontological perspective which action is morally right? Explain. (15 points)
7. Describe
your normative recommendation in this case. What is the basis of your
recommendation (teleological or deontological)? (30 points)
References
Yuthas, K. and Dillard, J. (1999). Teaching ethical decision making: Adding a structuration
dimension
, Teaching Business Ethics 3(4), 339-361.