Case Studies

Watch this video, and then read the instructions for the assignment below. 

This week’s video is found here: https://www.youtube.com/watch?v=PFYRbPVrQrw&list=PLKlAaRGVRcbIVcLh55bCGoQGIZDC7–SR&index=2

There are three case studies within the video: one about the subprime mortgage crisis of 2008, the second about fudging numbers in a report, and the third about marketing Prozac. 

The professor in the video mainly uses two tests for each case: the utilitarian test and the generalizability test. When he thinks about utilitarianism, he’s asking if outcomes go up (more utility/happiness) or down (less or even negative utility/happiness) depending on what the company chose to do (or could have chosen, if they’d picked another path of action. If the utility goes up for everyone, or sometimes for a subset of the stakeholders involved, then your (or the company’s) choice passes this test. 

When he talks about generalizing, he’s referring to Kantian deontology. The test here is to imagine what would happen if every single person in the market behaved in the same way you choose to behave. (or the company in the case study) Is this a logically plausible scenario? If it isn’t, then your ethical choice does not pass the generalizability test. For example: if you made a promise to someone, fully intending to not fulfill your end of the bargain, is that generalizable? The answer is no! If everyone making a promise could secretly intend to break the promise, the act of promising itself would no longer hold any meaning, and no one would be able to promise anything to anyone. The entire concept would be meaningless. Thus, false promises cannot be universally accepted. 

Put yourself into the perspective of a decision-maker in each case: 1) you are a lender, 2) you are the person writing the report, 3) you are a part of the marketing team for Prozac. What are ethical choices you can make in each instance? What are unethical choices? 

Make sure to refer to the material we have studied throughout the semester. You are not to offer bare opinions, but instead full arguments. 

Your “thesis statement” for each case should be the action you are arguing is ethical, and your supporting evidecne should be why you think that is the ethical thing to do. 

Quick references:

Utilitarianism, Kantian deontology (chapter 2)

Corporate responsibility in social issues (chapter 4, especially section 4.3, relevant to the Prozac case)

Stakeholder management (chapter 3, section 3.3, who are the stakeholders in the mortgage case? We know that the lenders and the borrowers are on the list, but what about the community at large?)

What employees owe employers (chapter 7, relevant to the financial reporting case)

Textbook: https://openstax.org/details/books/business-ethics