Case Memos
#1
Write an analysis in business memo
format, addressed to the Board of Directors for the company. The memo is
written by the student acting as a hired consultant for the company.
The case study to be analyzed, The
Case of Nutritional Foods, is attached.
By completing this assignment,
students will meet the outcome(s):
- identify ethical issues that
arise in domestic and global business environments using an understanding
of ethical concepts and of legal and business principles;
- develop and evaluate
alternatives to, and recommend solutions for, ethical dilemmas, taking
into account ethical and legal requirements and the essential mission of
the business enterprise
- effectively communicate to
internal and external business stakeholders the complexities of ethical
issues, suggesting and analyzing various solutions in order to ensure
appropriate business practices and accountability
Requirements
of Case Memo #1:
- Draft memo using the prescribe
format (subheadings/sections) prescribed below;
- All sections must be
comprehensive, in-depth and fully justified;
- Resources from previously
assigned course materials or from your own research may be used to justify
and support rationale;
- All in-text citations and
resources must be in APA style;
- Submit the completed case in
the Assignment Folder.
- make sure your discussion is founded on principles in
the articel A Framework for Thinking Ethically [http://www.scu.edu/ethics/practicing/decision/framework.html] and also use the
Student Toolbox found in Table of Contents.
Memorandum
Format:
TO:
FROM:
RE:
DATE:
INTRODUCTION: Brief 1-paragraph intro to subject
of memo.
FACTS
SUMMARY: Summarize and explain
the facts that are directly significant and relevant to the ethical dilemma in
this case.
ETHICAL
DILEMMA: Discuss
the either/or ethical dilemma facing the company.
ETHICAL
ISSUE: Discuss the most
significant ethical issue (there is more than one, but choose one) related to,
and arising from, the ethical dilemma and then, explain the ethical issue and
why it is an ethical/moral issue, etc.
ALTERNATIVES: List, explain and justify two
(2) possible alternatives/solutions to address and resolve the ethical
dilemma and ethical issue discussed above. Each alternative
should be comprehensive so that it addresses the related ethical issue.
Alternatives should be feasible,
logical, directly related to resolving the ethical dilemma and addressing the
ethical issues in the case.
Alternatives are expressed in the
form of propositions or prescriptive statements suggesting action and are
framed by asking the normative question, what could or should the company do?
Consider consequences. Identify relevant stakeholders and the effects on
them, pros and cons, etc. of each alternative. Apply ethical theories in
context of your evaluations, but do not overdo this aspect. For example,
teleological or consequentialist theorists would examine who the stakeholders
are, both internal and external to the company, and the positive and negative
consequences for each stakeholder group, etc.
RECOMMENDATION: Recommend one and only
one (1) alternative from the two (2) alternatives suggested above.
Justify and explain your choice discussing:
- why you chose this alternative
- how, specifically, the
recommendation will address the ethical dilemma and ethical issues
- how the recommendation will
likely impact relevant stakeholders
- pros and cons of recommendation
- feasibility of recommendation
- how the recommendation will be
implemented
- Apply ethical theories,
resources from previously assigned course materials, or resources from
your own research to justify and support your recommendation.
FUTURE
IMPLICATIONS for RECOMMENDATION: Discuss potential implications arising from
recommendation for:
- the company
- other businesses within the
industry
- other industries
CONCLUSION: Summarize the case
and its ethical issues, implications, etc.
Case Memo 1 Case
The Case
of Nutritional Foods
First Warnings
Fred James, chief executive of
Nutritional Foods Inc., a $50 million manufacturer of healthful foods, listened
with concern as John Healy, his vice president for production, described
reports that had come in during the past hour.
The reports came from two county
health departments, one in Seattle and the other in Southern California. In
each case, the health department official reported a possible link between
acute food poisoning of a child and an unpasteurized apple product produced by
Nutritional Foods and distributed throughout the Western United States. The
health departments had not yet ruled out all other possible causes. Additional
information was not yet available, and Healy did not have batch numbers for the
products in question.
Nutritional Foods was rapidly becoming
the best-known brand of natural or non-pasteurized foods in the Western United
States. It made its products in two facilities, one in California's Central
Valley and the other in a coastal city of Central California. Fresh fruit and
vegetable products were shipped from growing regions throughout the West to
these two facilities for processing and canning or bottling. The handling of
non-pasteurized products was critical as contamination could occur in picking,
transporting, or processing the fresh product.
Distribution was also critical to
the freshness and safety of the company's products. Daily distribution from the
company's processing facilities in company-owned refrigerated trucks ensured
freshness.
Unpasteurized products had been
popular in the health-food market for many years, but Nutritional Foods was the
most successful of several companies seeking to appeal to the mainstream market
as well as to the niche consumer. The company's success had led to its rapid
growth and the construction of its new processing facility in the Central
Valley.
"OK, John," said James,
"what's our response? Do two 'maybes' mean we should do something
immediately? We have had an occasional report, perhaps one every couple of
months, during the past two years. None of those turned out to be traceable to
our product. Do two reports represent anything other than a statistical quirk?
Should we be doing anything but waiting for the final reports from the health
departments in a couple of days?"
Concern
Deepens
Healy dispatched company managers to
the two counties where initial reports indicated there might be acute food
poisonings related to one of the company's unpasteurized products. He was
startled a short time later to receive a third and fourth report similar to the
first two.
Although also not conclusive, the
new reports made Healy wonder if something was terribly wrong. Healy
immediately dispatched company managers to the two new counties, urging all
four to get the batch numbers of the products in question. He also asked for an
immediate meeting with James.
"Now what should we do?"
asked Healy. "Should we warn the retailers, asking them to stop selling
the product? Should we also warn the public? Such a move could devastate the
company's reputation and its stock price at a critical moment. Don't we have an
obligation to think long and hard before we take that step? How much certainty
must we have and how serious does a problem have to be for us to proceed?"
Time to
Act?
Healy was deeply troubled when he
heard from his managers that health officials in the four counties they visited
were virtually certain Nutritional Foods' product was indeed involved in the
food poisonings. All the batch numbers, however, were not available. The two
cases where company managers could get batch numbers were from a single day's
production.
Healy was further troubled that
three additional reports of possible food poisonings had come in by the end of
the workday, though two were relayed by newspaper reporters. Each was checking
claims by consumers that one of Nutritional Foods' products had made them sick.
One of the reports involved a different company's products.
Healy also heard late in the
afternoon from one of his children who had read in an Internet nutritional chat
room that Nutritional Foods had a poisoning problem. Had the time come, Healy
wondered, for more dramatic action? If so, what action should he take?
Crisis
At 7 p.m., Nutritional Foods
announced publicly and through its retail network that it was pulling all
batches of the unpasteurized product associated with all but one of the alleged
poisoning incidents. Once the news hit the wire services, 50 more calls
cascaded into company headquarters late that night and early the next morning.
Most were from consumers alleging they, too, had been poisoned by the company's
products. Five more were reports from health professionals who stated they were
treating possible poisonings.
At 9 a.m. the next morning, James
convened a meeting of his Crisis Action Committee, an ad hoc group of managers
that had been formed a few months earlier for just such a crisis. "Let me
put several questions before the group," said James. "Are we doing
enough by conducting a recall for the specific product in question, publicly
asking consumers to return all unused products to their local retailer, and
asking retailers to stop selling and return all of their supply to us? The
press has done a pretty good job getting the word out. It's on the front page
of perhaps 80 percent of the daily newspapers in our distribution area this
morning.
"Should we do more to notify
customers? Should we consider pulling all our products? The calls this morning
allege adverse reactions from many different products.
"And what should be our
strategy toward those who have been made sick by our product? If we show
concern, isn't there a risk we will look like we are admitting liability?
Finally, what should we do about the sickest of those affected? Two children
are reported this morning to be in critical condition."
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