Unit II Ethical Issues in Business TU BBA MBA

 

Concept of Ethical Issues in Business

Ethical issues in business are situations where a choice must be made between alternatives that may be evaluated as right (ethical) or wrong (unethical). These issues arise when a business’s actions conflict with societal moral principles or accepted norms.

These situations often involve a tension between a company's pursuit of profit and its responsibility to adhere to societal moral principles and accepted norms.

Conflict of Interest

o   When a person or company has competing interests or loyalties that could influence decisions.

o    A purchasing manager selecting a vendor owned by a relative.

Discrimination and Harassment

o   Ethical concerns regarding unfair treatment of employees based on gender, race, religion, etc.

o    Refusing to hire someone solely based on ethnicity.

Insider Trading

o   Using confidential company information for personal gain.

o    Buying shares before a company announces a major profit increase.

False Advertising

o   Misleading consumers about a product’s features or benefits.

o    A company claiming a product cures a disease without scientific proof.

Environmental Violations

o   Ignoring regulations to reduce costs, harming the environment.

o    Dumping toxic waste illegally.

Bribery and Corruption

o   Offering money or gifts to influence decisions.

o    Paying government officials to secure contracts.

Exploitation of Labor

o   Paying unfair wages or poor working conditions.

o    Using child labor in factories to cut costs.

Privacy Violations

o   Misusing customer or employee personal data.

o    Selling user data without consent.

v  Recognizing an Ethical Issue (Ethical Awareness)

Ethical awareness is the ability to recognize when a situation has moral implications and could affect others' rights or welfare.

Observing Stakeholder Impact

Notice when decisions may harm customers, employees, or communities.

 Downsizing a plant without notice affects workers and the local economy.

Conflict with Values or Policies

When a choice contradicts the company’s mission or personal morals.

 Being told to lie to clients by a superior.

Potential for Harm or Deception

Situations where actions may mislead or hurt others.

 Hiding defects in a product.

Injustice or Inequality

Any indication of unfair treatment in the workplace.

 Promoting employees based on favoritism.

Violation of Laws or Regulations

Ethical awareness includes knowing legal boundaries.

 Not reporting workplace accidents to authorities.

Whistleblower Activity

Recognizing when to speak up against wrongdoing.

 Reporting embezzlement by a manager.

Cultural Sensitivity

Being aware of ethical norms in different cultures.

 Gift-giving may be polite in one culture but bribery in another.

Moral Intuition

A gut feeling that something is wrong ethically.

 Feeling uneasy about exaggerated sales pitches.

v  Foundational Values for Identifying Ethical Issues

A. Integrity

Integrity means being honest, consistent, and upholding strong moral principles even when it’s inconvenient or costly.

Consistency in Actions and Values

Aligning decisions with core ethical beliefs.

 A CEO refusing to cut corners despite pressure to meet targets.

Trustworthiness

Gaining others’ trust through ethical behavior.

 Keeping promises made to clients.

Courage to Do Right

Choosing right over easy or profitable.

 A whistleblower exposing fraud.

Transparency

Open communication without deception.

 Disclosing product side effects.

Accountability

Owning up to mistakes.

 A manager admitting to a failed strategy.

Moral Responsibility

Considering how decisions affect others.

 Ensuring fair treatment of suppliers.

Self-Regulation

Following ethical practices without supervision.

 Declining gifts from vendors.

Professional Ethics

Abiding by the industry’s moral code.

 Lawyers keeping client confidentiality.

B. Honesty

Honesty is the act of being truthful and transparent in all business dealings without hiding or distorting information.

Truth in Communication

Providing accurate information to customers and stakeholders.

 Admitting to a delay in delivery.

No Deception or Fraud

Avoiding misleading tactics.

 Not using bait-and-switch pricing.

Financial Integrity

Properly reporting financial data.

 Not hiding losses in accounting reports.

Authenticity

Being genuine in branding and customer engagement.

 A restaurant honestly advertising ingredients used.

Disclosure of Conflicts

Informing stakeholders of any bias.

 Revealing investments before giving financial advice.

Ethical Marketing

Ads should not mislead or manipulate.

 Being clear about terms in a discount.

Data Honesty

Not falsifying or misrepresenting research or results.

 Pharma companies revealing both positive and negative clinical trial results.

Fair Representation

Being honest about one’s qualifications or achievements.

 A job candidate not inflating their resume.

C. Fairness

Fairness means treating people equitably, making impartial decisions, and avoiding favoritism or discrimination.

Equality of Opportunity

Everyone gets the same chance regardless of background.

 Open recruitment without bias.

Merit-Based Decisions

Promotions based on performance, not favoritism.

 Awarding bonuses based on KPIs.

No Discrimination

Avoiding unfair treatment based on gender, race, etc.

 Providing equal pay for equal work.

Impartial Dispute Resolution

Handling conflicts objectively.

 HR investigating complaints fairly.

Fair Pricing

Charging reasonable prices without exploitation.

 Not inflating prices during crises.

Honest Competition

Avoiding sabotage or deception in the market.

 Competing by improving quality, not defaming rivals.

Fair Contracts

Agreements that don’t exploit one party.

 Avoiding hidden clauses in service agreements.

Transparency in Evaluation

Clear criteria for assessment.

 Employees knowing how performance is rated.

v  Ethical Dilemmas

An ethical dilemma is a situation where a person faces two or more conflicting moral choices and must decide which ethical principle to prioritize.

Conflicting Duties

Choosing between honesty and loyalty.

 Reporting a friend’s misconduct.

Profit vs. Ethics

Choosing between making money and doing the right thing.

 Selling a harmful but profitable product.

Short-term vs. Long-term Ethics

Sacrificing short-term gains for future reputation.

 Investing in costly sustainability measures.

Individual vs. Company Interest

Doing what’s right personally vs. what the employer wants.

 Rejecting a bribe that benefits the company.

Laws vs. Morality

Legal actions that may still be unethical.

 Paying minimum wage that is legal but not livable.

Whistleblowing

Deciding whether to expose wrongdoings.

 Reporting fraud at personal risk.

Cultural Differences

Ethics vary across cultures.

 Accepting gifts in international business.

Lack of Clear Guidance

When policies don’t cover the issue.

 Handling personal relationships in a small business.

v  Emerging Ethical Issues and Dilemmas in Business

These are new challenges brought on by globalization, technology, environmental concerns, and social expectations that create complex ethical decision-making scenarios.

Artificial Intelligence and Automation

Ethical use of AI and impact on jobs.

 Firing workers after automating roles without support.

Data Privacy

Handling sensitive customer data ethically.

 Companies selling data without permission.

Sustainability and Climate Ethics

Balancing profit and environmental responsibility.

 Choosing cheaper but polluting materials.

Remote Work and Monitoring

Ethical use of surveillance in remote work.

 Tracking employees' personal devices.

Diversity and Inclusion

Moving beyond tokenism to real equality.

 Having diversity but no inclusion in decision-making.

Global Supply Chains

Ensuring ethics across borders.

 Suppliers using sweatshops abroad.

Corporate Social Responsibility (CSR)

Balancing charity with core business ethics.

 Doing CSR campaigns while violating worker rights.

Misinformation and Social Media

Spreading misleading content.

 Influencer marketing without disclosure.

v  Ethical Issues in Functional Area of Business

ü  Ethical Issues in Marketing and Sales

1.1. False or Misleading Advertising

Promoting products with exaggerated or untrue claims.

Example: A skincare brand claiming “instant wrinkle removal” without clinical evidence.

This misguides consumers and violates truth-in-advertising laws.

1.2. Bait and Switch Tactics

Advertising a product at a low price to attract customers, only to push a more expensive item.

Example: A furniture store promoting a $299 sofa that's "out of stock" and upselling a $799 model.

It manipulates customers and damages trust.

1.3. Manipulative Pricing Strategies

Using psychological pricing to confuse or pressure buyers.

Example: Hiding additional costs until checkout (e.g., resort fees).

Erodes consumer confidence and violates fair pricing ethics.

1.4. Targeting Vulnerable Populations

Aiming marketing at children or elderly individuals in exploitative ways.

Example: Junk food ads during children’s shows.

These groups often cannot evaluate advertising critically.

1.5. Unethical Use of Consumer Data

Using personal browsing or purchase history for invasive marketing.

Example: Sending pregnancy-related ads to teens based on predictive algorithms.

Violates privacy and can cause distress.

1.6. Failure to Disclose Sponsorships

Influencer marketing without revealing paid partnerships.

Example: A celebrity promoting a diet pill without stating it's a sponsored ad.

Deceives audiences and breaches advertising standards.

1.7. Greenwashing

Falsely portraying products as environmentally friendly.

Example: Packaging that reads "eco-friendly" without verification.

Misleads ethical consumers and weakens environmental accountability.

1.8. High-Pressure Sales Techniques

Using fear or urgency to force purchases.

Example: “Last seat left at this price!” countdowns that reset.

Manipulates consumer behavior under false pretenses.

 

ü  2. Ethical Issues in Finance

2.1. Insider Trading

Using non-public information for stock trading.

Example: An employee buys shares before a positive earnings announcement.

Undermines market fairness and investor trust.

2.2. Financial Statement Fraud

Manipulating accounting data to deceive stakeholders.

Example: Enron inflated earnings to increase stock price.

Leads to investor losses and legal penalties.

2.3. Bribery and Corruption

Offering financial incentives to influence business decisions.

Example: Bribing tax officers to overlook financial irregularities.

Corrupts institutional integrity and distorts competition.

2.4. Conflict of Interest in Investment Advice

Recommending products that benefit the advisor over the client.

Example: A bank advisor pushing a fund with high commissions.

Violates fiduciary duty to act in the client's best interest.

2.5. Money Laundering

Hiding illicit funds through complex transactions.

Example: Shell companies used to funnel criminal proceeds into legitimate accounts.

Funds crime and terrorism, illegal in all jurisdictions.

2.6. Excessive Risk-Taking

Taking unjustified financial risks for short-term gain.

Example: Lehman Brothers’ subprime mortgage practices.

Contributed to the 2008 financial crisis; harms society at large.

2.7. Unethical Debt Collection Practices

Harassing or misleading debtors.

Example: Threatening arrest for unpaid debts.

Violates debtor rights and legal boundaries.

2.8. Executive Compensation Manipulation

Structuring pays packages that encourage unethical behavior.

Example: Bonuses tied solely to stock price increases.

Encourages short-termism and stock manipulation.

ü  3. Ethical Issues in Information Technology

3.1. Data Privacy Breaches

Mishandling or leaking sensitive user data.

Example: Facebook–Cambridge Analytica scandal.

Violates user trust and privacy laws.

3.2. Surveillance without Consent

Monitoring employees or users without informing them.

Example: Installing hidden tracking software on work computers.

Intrusion into personal rights.

3.3. Cybersecurity Negligence

Not implementing adequate protection against hacks.

Example: Equifax’s failure to patch known vulnerabilities.

Causes financial and reputational loss to users.

3.4. Algorithmic Bias

AI systems that reflect or amplify societal biases.

Example: Facial recognition software misidentifying minorities.

Leads to discrimination and injustice.

3.5. Plagiarism and Intellectual Property Theft

Copying code, content, or designs without credit.

Example: Software company using open-source code without licensing.

Disrespects creator rights and can lead to lawsuits.

3.6. Digital Addiction Engineering

Designing systems that manipulate user behavior.

Example: Infinite scroll on social media to increase usage.

Negatively affects mental health, especially of youth.

3.7. Fake News and Misinformation

Allowing spread of false information for profit.

Example: Monetizing clickbait articles on unverified medical claims.

Can lead to panic, public harm, and erosion of trust.

3.8. Misuse of Big Data

Analyzing data without user consent for business gains.

Example: Predictive policing software profiling neighborhoods.

Raises human rights and discrimination concerns.

 

ü  4. Environmental Ethics

4.1. Pollution and Waste Dumping

Disposing of waste in water bodies or landfills illegally.

Example: Exxon Valdez oil spill.

Irreversible ecological damage.

4.2. Overuse of Natural Resources

Unsustainable extraction of minerals, water, or timber.

Example: Nestlé extracting groundwater in drought-prone regions.

Depletes local resources, affects livelihoods.

4.3. Greenwashing

Misleading claims about sustainability.

Example: H&M promoting “eco” clothing made of polyester.

Distracts from real environmental harm.

4.4. Carbon Emission Negligence

Avoiding emissions reduction to cut costs.

Example: Volkswagen’s emissions scandal.

Contributes to climate change.

4.5. Ignoring Environmental Laws

Violating or circumventing regulatory standards.

Example: Illegal deforestation in protected areas.

Breaches legal and social responsibility.

4.6. Lack of Environmental Reporting

Not disclosing the ecological impact of operations.

Example: Oil companies hiding fracking data.

Obstructs informed decision-making by stakeholders.

4.7. Improper E-waste Disposal

Dumping electronics in developing countries.

Example: Smartphones sent to Africa without safe recycling.

Harms human health and local environments.

4.8. Neglecting Renewable Alternatives

Sticking with fossil fuels despite clean options.

Example: Energy firms lobbying against solar subsidies.

Slows transition to sustainable energy.

 

ü  5. Whistleblowing

Whistleblowing is the act of exposing unethical, illegal, or harmful activities within an organization by an employee or an insider. The person who discloses such misconduct is called a whistleblower.

5.1. Exposing Fraud

Reporting financial misstatements or scams.

Example: Cynthia Cooper exposing WorldCom fraud.

Protects investors and maintains integrity.

5.2. Reporting Unsafe Practices

Speaking out on hazardous working conditions.

Example: Boeing employees alerting authorities about 737 Max issues.

Prevents accidents and saves lives.

5.3. Revealing Discrimination

Reporting biased promotion or pay systems.

Example: Google employee suing over gender discrimination.

Promotes equality and fairness.

5.4. Challenging Environmental Negligence

Whistleblowing against polluting activities.

Example: Scientists reporting BP’s underreporting of oil spill size.

Protects ecosystems and public health.

5.5. Highlighting Customer Exploitation

Reporting mis-selling or deception.

Example: Wells Fargo employees revealing fake accounts.

Upholds customer rights and ethical sales.

5.6. Protecting Data Integrity

Exposing misuse of personal data.

Example: Facebook whistleblower Frances Haugen.

Strengthens digital ethics.

5.7. Opposing Human Rights Violations

Reporting abuse in global supply chains.

Example: Reporting child labor in cocoa industry.

Protects dignity and global ethical standards.

5.8. Facing Retaliation Risks

Whistleblowers often face termination or legal threats.

Laws like the Whistleblower Protection Act exist to protect them.

 

Key Elements of Whistleblowing

1. Wrongdoing – This may include fraud, corruption, health and safety violations, environmental harm, discrimination, or abuse of power.
2. Insider Knowledge – The whistleblower usually has direct access to information due to their role in the organization.
3. Reporting to Authority – Disclosure can be:
• Internal (to managers, ethics officers, HR),
• External (to media, government, regulatory bodies), or
• Anonymous (via hotlines or reporting platforms).
4. Public Interest – Whistleblowing typically serves a broader social, legal, or ethical concern.

Types of Whistleblowing

Type	Description	Example
Internal	Reported within the organization	Telling HR about safety violations
External	Reported to an outside body	Reporting fraud to a government agency
Anonymous	Identity kept hidden	Emailing an ethics hotline with evidence
Open	Whistleblower reveals their identity	Public interview about company pollution

 

Motivations Behind Whistleblowing:

• Ethical duty or personal integrity
• Legal obligation
• Protection of public interest
• Frustration over ignored internal reports
• Moral courage

Examples of Famous Whistleblowers:

Whistleblower	Issue Reported	Organization	Outcome
Sherron Watkins	Accounting fraud	Enron	Corporate collapse and regulation changes
Edward Snowden	Mass surveillance	NSA (U.S.)	Global privacy debate
Frances Haugen	Mental health h arm and misinformation	Facebook	Senate hearings and tech scrutiny

 

Benefits of Whistleblowing

• Promotes transparency and accountability
• Prevents disasters and protects stakeholders
• Strengthens ethical culture
• Encourages lawful behavior
• Protects public safety and human rights

Challenges and Risks

• Retaliation (termination, demotion, harassment)
• Isolation from colleagues
• Legal consequences (if confidential data is leaked)
• Emotional and psychological stress
• Reputational damage

Legal Protection for Whistleblowers (Varies by Country)

• U.S. – Whistleblower Protection Act, Sarbanes-Oxley Act
• India – Whistle Blowers Protection Act, 2014
• UK – Public Interest Disclosure Act (PIDA), 1998
• EU – EU Whistleblower Protection Directive (2019)

These laws protect individuals from unfair dismissal, provide anonymity, and may even offer financial rewards in specific sectors (e.g., finance).

Ethical Importance of Whistleblowing

• Upholds moral responsibility of individuals in the face of wrongdoing.
• Reflects organizational justice—encouraging fair treatment and ethical standards.
• Acts as a check and balance when systems fail internally.
• Encourages a speak-up culture in business.

Whistleblower-Friendly Practices in Organizations

• Establish anonymous reporting channels.
• Train employees on how to recognize and report misconduct.
• Assure non-retaliation policies.
• Create an independent ethics committee.
• Respond seriously and promptly to concerns.

ü  6. Making Ethics Work in Organizations

6.1. Developing a Code of Ethics

A formal document outlining expected conduct.

Example: Google's “Don’t be evil” principle.

Sets clear behavioral expectations.

6.2. Ethics Training

Educating employees on handling dilemmas.

Example: Workshops on data handling in IT firms.

Increases awareness and reduces violations.

6.3. Transparent Leadership

Ethical behavior starts from the top.

Example: CEOs disclosing personal conflicts of interest.

Builds organizational culture and trust.

6.4. Anonymous Reporting Systems

Allows safe reporting of unethical behavior.

Example: Ethics hotlines or digital suggestion boxes.

Encourages whistleblowing without fear.

6.5. Rewarding Ethical Behavior

Recognizing and rewarding integrity.

Example: Incentives for sustainability innovations.

Reinforces the value of ethical conduct.

6.6. Integrating Ethics into KPIs

Measuring ethical metrics alongside financial ones.

Example: Including customer satisfaction and CSR in evaluations.

Balances profit and purpose.

6.7. Regular Ethical Audits

Evaluating business practices for compliance.

Example: Auditing supplier ethics in global sourcing.

Prevents violations and builds transparency.

6.8. Empowering Middle Management

Ensuring ethical practices trickle down.

Middle managers are the bridge between policy and practice.

v  Case Analysis

ü  Case Title: Ethical Crossroads at Alpha Gama Limited

Alpha Gama Limited (AGL) is a multinational consumer electronics company headquartered in Singapore, with operations spanning Asia, Africa, and parts of Europe. Founded in 1998, AGL grew from a small mobile handset assembler into a technological powerhouse renowned for its affordable smart devices, eco-friendly packaging, and social outreach campaigns. Over the past two decades, AGL has positioned itself as a people-first, innovation-driven, and environmentally responsible corporation.

With the rise in demand for affordable smart gadgets in developing countries, AGL focused its growth strategy on underserved markets. The company gained market share rapidly, celebrated for its sleek marketing campaigns that promoted digital inclusion, ethical sourcing, and green innovation. AGL claimed to avoid child labor, support women-led supply chains, and use recycled packaging. These claims formed the core of its brand identity and were integral to its competitive advantage.

By 2022, AGL’s valuation surpassed $12 billion, and it was listed among the “Top 50 Most Ethical Companies in Asia.” But behind the façade of ethical branding, troubling signs began to emerge. Leaked documents, whistleblower emails, and investigative journalism began pointing to a darker side of AGL’s operations—sparking an internal ethical crisis by late 2024.

 

In December 2024, an explosive investigative report by an international watchdog organization revealed serious ethical violations committed by Alpha Gama Limited across its supply chain and digital operations. The report, titled “Behind the Green Logo,” accused the company of greenwashing, misuse of user data, labor exploitation, and deceptive marketing tactics—contradicting its public image as an ethical and transparent brand.

Although AGL promoted its “Eco-Pack” line of smartphones as being made from 80% recycled materials, the report exposed that much of the packaging came from virgin plastic mixed with synthetic dyes. Even worse, AGL’s key manufacturing partner in Vietnam was caught illegally dumping toxic waste near a rural community, contaminating water sources and causing health problems among local residents. Though the plant bore another name, it was majority-owned by AGL under a shadow subsidiary structure.

 

AGL often claimed to empower marginalized workers. Yet investigations in Ethiopia and Myanmar revealed that several assembly lines employed underpaid teenage labor under harsh, unsafe conditions. Workers reported 14-hour shifts, wage theft, and lack of protective gear. Though AGL’s public procurement policy banned such practices, audits were either forged or ignored. Internal emails revealed that cost-cutting measures had knowingly approved these suppliers to maintain a profit margin of 40%.

In 2023, AGL launched its own fitness and health app bundled with its devices, promoting it as a free service that respects privacy. However, a whistleblower revealed that the app secretly tracked user locations and shared behavioral data with third-party marketing firms without user consent. This included sensitive health patterns, shopping behavior, and even religious affiliation derived from location data (e.g., frequent visits to places of worship). The company monetized this data for targeted advertising, contributing to a 12% surge in Q3 profits.

AGL’s advertising heavily focused on empowerment narratives—especially targeting young female consumers. However, it was found that many influencers were secretly paid to promote the product without disclosure. Additionally, the “Empower Her” campaign, which claimed to donate $1 per device sold to girls’ education in Africa, had no verifiable records of fund distribution. The company had only donated 8% of the claimed amount, pocketing the rest to subsidize ad costs.

A former sustainability officer, Maria Chen, tried to raise concerns internally about the Vietnamese factory's environmental violations and labor conditions. After her repeated reports were ignored, she went public. In retaliation, AGL filed a defamation lawsuit against her and revoked her severance pay. An internal memo labeled her as a “disgruntled former employee,” and executives warned staff against speaking to media without approval.

The backlash was swift. Activists began calling for a global boycott of AGL products. Hashtags like #AlphaShame and #FakeEthics trended worldwide. Two key retail partners in Europe suspended distribution. Media outlets widely covered the scandal, and several governments began investigating AGL’s tax filings, supply chains, and digital privacy practices.

Internally, employee morale plunged. Some senior marketing and HR officials resigned. Shareholders began questioning the company’s governance and ethical oversight. The Board of Directors faced immense pressure from both regulators and the public to restore the company’s ethical standing.

The CEO, Ravi Malhotra, called for an emergency ethics task force and publicly stated, “We have always strived to do right by people and planet. These allegations are serious, and we commit to taking corrective action.”

But within AGL, no one could agree on the path forward. Four primary strategies were debated among the top executives and ethics task force. Each path had different priorities and consequences.

 

The ethical scandal at Alpha Gama Limited has significantly impacted both its operational performance and brand reputation. Following the media exposé, AGL’s stock price fell by 27% within three weeks. Major retailers in the UK, France, and Germany suspended sales, citing ethical non-compliance. Consumer trust surveys showed a 43% decline in brand favorability across Asia and Africa—AGL’s largest markets. Online reviews were flooded with negative feedback, and several social media influencers terminated their collaborations.

From a financial standpoint, the company suffered a loss of $410 million in Q4 due to declining sales, increased legal fees, and suspended advertising contracts. Venture capitalists began pulling out from planned investments in AGL’s AI-enabled devices scheduled for 2025. Regulatory probes have stalled expansion plans into Brazil and South Africa.

Internally, morale reached a low point. Exit interviews revealed that employees no longer believed in the company's mission or values. Recruitment slowed as AGL’s reputation on employer-review platforms plummeted. The ongoing defamation case against whistleblower Maria Chen triggered outrage among industry professionals and human rights groups, further alienating partners and future hires.

Brand consultants now warn that unless the company acts decisively and transparently, the damage could become permanent. From a once-celebrated ethical brand, AGL now faces the risk of being viewed as just another corporation hiding unethical practices behind a green facade. The credibility gap threatens long-term loyalty, innovation partnerships, and stakeholder trust.

The leadership team at Alpha Gama Limited is currently reviewing four possible strategic responses to restore ethics, rebuild brand trust, and regain market stability. Each solution focuses on different aspects of the crisis.

 

Solution A: Full Transparency and Accountability Overhaul

1.      Public Apology and Acknowledgment: Issue a formal apology accepting full responsibility for all violations (environmental, labor, data, and marketing).

2.      Engage Third-Party Auditors: Hire independent ethics and sustainability auditors to assess every global supplier, marketing campaign, and data policy.

3.      Establish Whistleblower Protection Office: Create an independent office for reporting misconduct, ensuring anonymity and legal protection.

4.      Publish Impact Reports Quarterly: Release detailed environmental, labor, and data privacy reports every quarter, made public and verified by NGOs.

5.      Retract Legal Case Against Maria Chen: Drop the lawsuit, offer reinstatement or compensation, and honor her ethical courage.

Solution B: Focused Environmental and Labor Reforms

1.      Shut Down and Rebuild Offending Supply Chains: Cancel contracts with violators and transition to verified fair-trade suppliers.

2.      Launch “Ethical Roots” Product Line: Create a new product line that is 100% ethical, traceable, and certified, rebuilding trust from conscious consumers.

3.      Invest in Community Cleanups: Fund environmental restoration efforts in affected regions like Vietnam and provide medical care to impacted communities.

4.      Establish Ethical Sourcing Taskforce: Appoint experts to review and approve all supplier contracts with stringent labor checks.

5.      Certify with Global Ethics Labels: Partner with organizations like Fair Trade, B Corp, or Rainforest Alliance for credibility.

Solution C: Internal Culture and Governance Reform

1.      Ethics Education for All Employees: Mandatory training modules on data ethics, human rights, green practices, and cultural sensitivity.

2.      Revise Mission and Core Values: Co-create new ethical values with staff, partners, and stakeholders for authentic buy-in.

3.      Leadership Accountability Review: Require senior executives to undergo performance and ethics evaluations tied to their bonuses.

4.      Create an Ethics Oversight Board: Include external watchdogs, NGOs, and academic experts to review all major decisions.

5.      Anonymous Ethics Hotline with Rewards: Encourage employees to report concerns with incentives and protection policies.

Solution D: Data Ethics and Digital Responsibility Program

1.      Rebuild the Health App with Consent First: Redesign the app to require clear user consent, data minimization, and opt-outs for data sharing.

2.      Ban Behavioral Advertising: End third-party data sales and stop targeted ads based on private user behavior.

3.      Hire a Chief Data Ethics Officer: Appoint an executive solely responsible for ensuring digital transparency and compliance.

4.      Conduct a Public Apology Campaign on Data Use: Use media channels to clarify past errors, show current reforms, and invite public scrutiny.

5.      Offer Data Amnesty and Deletion Rights: Allow users to permanently delete their historical data from AGL systems if desired.

 

Questions:

1.      What are the problems associated with this case, or what went wrong? Identify the issues, and explain why you think these are serious problems (discuss the impact).

2.      As a business ethics analyst at Alpha Gama Limited, you are tasked with choosing ONE of the four proposed solutions (A, B, C, or D) and preparing a justification for your choice. Consider ethical theories, stakeholder impact, brand recovery, long-term trust, and organizational feasibility in your argument.