ASSURANCE OF LEARNING “ ETHICS GREEN MOVE

QUESTION

ASSURANCE OF LEARNING “ ETHICSGREEN MOVEDepartment of Business Law and EthicsSawyer Business SchoolSuffolk UniversityYour assignmentWrite a seven to ten page double-spaced essay addressing the case below. Please do notexceed ten pages.Please DO NOT rewrite the questions or the facts of the case in your answer. Just answerthe question. Also please do not hand in notes. This assignment requires a written essay.As you answer the questions, you must refer to your readings and class discussions.This is not a group project. You may not discuss your answers with anyone.THE COMPANYGreen Move is a startup company that focuses on environmentally friendly andsustainable transportation products. Its three founders and current shareholders, Robert,Lewis, and Viktor attended the same MBA program in Boston. Robert and Lewis werehigh school friends from an affluent Boston suburb while Viktor grew up in Russia. Thethree agreed that their collective mindset could best be described as œcompetitive with aconscience. They support the fundamentals of capitalism and agree that the free marketoperates to the benefit of society. Robert serves as the CEO of Green Move and Viktorserves as the Chief Technology Officer while Lewis has moved on to other opportunities.All three serve on Green Moves board of directors along with two other corporateofficers and two outside investors. The seven directors along with the other corporateofficers and several of Roberts relatives who invested heavily in Green Move own all ofthe stock.Much of the startup funding, however, was the result of a $15 milliongovernment loan at zero percent interest as part of an Investing in Green Technology1initiative. Green Move is incorporated in Delaware and maintains a corporate office inBoston.The last year has been very exciting at Green Move and the perceived value of itsshares has increased steadily. In fact, there are rumors that that Green Move will soon gopublic. This is due largely to the much anticipated launch of the Zero Pedal; a solarpowered bicycle that includes a small throttle and brake system. Green Move recentlyreceived a patent on the technology enabling the use of a small solar panel that propelsthe bike at speeds close to 15 m.p.h. The popularity of the Zero Pedal has been limited tothe northeastern part of the United States mostly due to œword of mouth advertisingthroughout area colleges and universities.PART A – YOUR EMPLOYMENT AT GREEN MOVEYou graduated six months ago from a Boston MBA program. You earned yourdegree part time in the evenings so that you could continue your work as an advertisingassistant at a prestigious Boston firm. You are thankful that your firm financed a largeportion of your degree and that you were able to support your spouse and young childwhile attending classes.Green Move was one of several marketing positions for which you interviewed.You were attracted to Green Move because it struck you as œyoung and energetic withthe potential for tremendous growth. The interview consisted of a single meeting withthe three founders who explained that your primary objective would be to expand thesales of the Zero Pedal to the southwestern part of the United States. It was explainedthat your success at Green Move would be measured exclusively on the expansion of theZero Pedal into this new market. Your modest salary would be supplemented with stockoptions in Green Move in proportion to the product expansion.You learned during the interview that Green Move was replacing a œbad fitemployee whose departure was œmutually agreed upon after only six months. You2gladly accepted the position with a handshake and agreed to complete the necessary taxforms to begin work in two weeks. The only documentation you received was a stockoption agreement. You never received any employment training, instruction, or manuals.Three months have passed since you started at Green Car and you have madeseveral friends including Doug, a product engineer on the development of the Zero Pedal.Much to your surprise, Doug has explained in confidence his concern regarding theoperation of the Zero Pedal in warm climates. He claims that the bike acceleratesdangerously after the solar panels have been exposed to temperatures exceeding 100degrees Fahrenheit for four consecutive hours. Apparently, his team had uncovered thisdefect during the design of the Zero Pedal. He tells you that he planned a report outliningthe dangers of the acceleration and that he shared his findings with your predecessor andthat he was suspicious of his firing. Doug believes that your predecessor was firedbecause he questioned management about this defect.Doug tells you that your predecessor presented the cost per bike to fix the defectto the board but that Robert claimed the report was incomplete without a comparison tothe costs of œnot fixing the bike. Robert also claimed that he could not imagine asituation in which the bike would be exposed to those conditions. The two had a heateddiscussion and two weeks later you responded to the job posting.Doug further discloses that regulations under the National Highway Traffic SafetyAdministration (NHSTA) that would otherwise limit the production of the Zero Pedal donot apply because the bike is not œgas powered. As a result, the production of the ZeroPedal is entirely unregulated.You are wondering about what to do about the product safety problem on yourreturn trip from Scottsdale, Arizona, where you had met with several sporting goodschains to discuss the roll out of the Zero Pedal. The buyers seemed impressed by theZero Pedal but you did have a curious encounter at your final stop. There, the buyer3causally mentioned that he would personally expect payment of a œspecial œ$5,000annual fee to place the product on its shelves.Questions AA.1 What will you do about the product defect information that you have learned aboutfrom Doug? What are the relevant pressures? What questions or problem solvingmodels will you consider in making your decision? How would you apply the model toarrive at a solution to the problem?A.2 Will you pay or recommend that your company pay the special $5,000 fee to havethe Zero Pedal placed on the shelves of the sporting goods store? What are the relevantconsiderations? Is it legal? Is it ethical? Both?A3.While this problem is in the œlatency stage should Green Move apply thecost/benefit analysis in analyzing safety concerns about the product? What are the risks?PART B – SUPPLY CHAINGreen Moves recent success is due largely to its strategic relationship with one ofits suppliers, the Solar Group. The Solar Group manufactures the solar panels that arecritical in the Zero Pedal. The Solar Group is located in Bangladesh where it employsover one hundred people, including many child laborers.Consistent with Robertsconscionable mindset, Green Moves contract with the Solar Group specifies that œnochildren shall be employed by the Solar Group and that all workers shall be treatedfairly.One evening Robert receives a telephone call from an online blogger who claimsthat he obtained video footage within the Solar Group factory depicting a dimly lit andpoorly ventilated work environment. He also claims that the factory workers are paid lessthan an adequate wage to live in dignity. He asks Robert to comment and tells him that hewill be posting a link in his blog to the video to show the public that Green Move is aphony and that its relationship with Solar is being used to exploit foreign workers.4Ironically, at the same moment, Akash is returning from his long day of work atthe Solar Group factory. He is 23 years old and has been working intermittently invarious factories since he was thirteen. Most of his childhood friends do not have jobs;and those who do, earn less than Akash. He has never left Bangladesh. Akash is tired buthe is thankful to have found a job at the Solar Group. He understands that the work isdangerous but he hopes to move into a supervisory position within five years where hewill realize a modest increase to his hourly wage. As a result, he has avoided the recentdebate among his coworkers whether they should unionize and leverage their collectiveweight to demand better working conditions.Robert knows that the workers at the Solar Group factory are paid more than theaverage wage in Bangladesh. However, he also knows that work environment is muchworse compared to the conditions in the United States and that these labor practiceswhich are legal in Bangladesh are illegal in the U.S.Questions BB.1 What should Robert do about the conditions at the Solar Group? Terminate theagreement? Whose interests are at stake?B.2 What is the appropriate standard he should apply when considering the workingconditions and wages in Bangladesh?B 3. How might the blog impact Green Moves brand?PART C – FOREGIN EXPANSIONGreen Move has a small technology team employed in the Boston office andoutsources the remainder of its technology needs.Viktor has long advocated thesubstantial cost savings and better management if Green Move were to hire well educatedindividuals from Eastern Europe at low wages. Privately, Viktor realizes that he wouldalso like to make a difference in Russia by helping the underemployed and unemployed.The board met and agreed that Green Move should consider this as a long-term strategyand that Viktor should investigate a remote technology base in Russia. Viktor spoke to5his friends and believes that he has found the perfect location to lease. The governmentowned property is large, well lit and its urban location will attract many workers.Viktor has traveled to Russia to visit his family and to meet with the propertymanager. The two discuss the rich history in the area and Viktor is under the impressionthat the property is available. It is not until the end of the meeting that the managerinforms Viktor that there will be a competitive bid for the lease of the property. Heinstructs Viktor to send him his best offer by the end of the week and hands him twoenvelopes; one addressed to a government office labeled œproperty lease bid and thesecond addressed to the property manager labeled œfacilitation.He explains thatwhatever he places in the second envelope will œkeep the process moving and that hewould hate to see him miss out. Viktor takes both envelopes.Question CC.1 “ Should Viktor provide a bid on the property lease? Should he include bothenvelopes? Why or why not? What are the legal and ethical considerations?C.2 Should Green Move expand its operations in Russia?PART D – THE BOARD AND REMEDIAL MEASURESIn addition to the previous facts, assume the following has occurred:You have continued to market the Zero Pedal in the Southeast and persuaded thecompany to pay the special $5,000 fee.Robert has done nothing about the working conditions at the Solar Group.Viktor has leased the space in Russia and included a $2,000 payment in theœfacilitation envelope.Question DD.1 What are the organizational issues that may have led to ethical and legal breachesat Green Move?6D.2 Are there any residual risks (ie; civil or criminal liability) to Green Move as a resultof any legal and ethical breaches?D.3 What short and long term steps should the board of directors take to œfix GreenMove?D.4 What is the role and responsibility of the government to œfix these issues?7

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