ethics team

Slide1: 

“We see totalitarian forces in the world who seek subversion and conflict around the globe to further their barbarous assault on the human spirit. What, then, is our course? Must freedom wither in a quiet, deadening accommodation with totalitarian evil?” -- President Ronald Reagan

Proximity Mines, Espionage, and an Engineer: A Cold-War Conundrum: 

Proximity Mines, Espionage, and an Engineer: A Cold-War Conundrum April 19, 2002 Bovay Ethics Team Texas A&M David Anderson Elizabeth Bristow John Coyle Mike Gavin James Prescott Ammi Tan

Cold-War Culture: 

Cold-War Culture Siege Mentality Duck-and-cover drills in schools “How to Survive” letter from President Kennedy in Life Popular Culture War Games The Day After Red Dawn

NATO and Alpha Electronics: 

NATO and Alpha Electronics In 1984 “Alpha Electronics” contracted with NATO to produce a capacitor and testing apparatus. NATO provided all technical specifications. Alpha Electronics fulfilled the contract with no problems.

What is a Capacitor?: 

What is a Capacitor? A capacitor stores electric charge. It consists of two metal plates separated by air or another insulating material. An insulator is a substance through which it is difficult to pass an electric current.

How a Capacitor Works: 

How a Capacitor Works Air Insulator

How a Capacitor Works: 

Air Insulator How a Capacitor Works

How a Capacitor Works: 

Air Insulator How a Capacitor Works

How are Capacitors Used?: 

How are Capacitors Used? Capacitors are everywhere: Computer monitors and TV screens Camera flashes Emergency defibrillators

Military Applications: 

Military Applications Proximity Fuse Detects distance of an object from a weapon Uses: Land mines Artillery shells Patriot missiles

A New Contract: 

A New Contract In 1987, Rudy Kojavik, a Finnish company, contracted Alpha Electronics to produce the same capacitor. “Sam” was an engineer and the manager of the plant scheduled to manufacture the capacitor.

A New Contract, Cont.: 

A New Contract, Cont. Sam noticed that the designs were identical to those from NATO’s contract in 1984. He realized that the plans for the new order of capacitors had probably been stolen. Rudy Kojavik has filled orders for Soviet countries before.

Ethical Dilemma: 

Ethical Dilemma Questioning the ethics of producing the capacitors, Sam: Halted the production so that he could investigate the situation further Asked his supervisors for advice on how to proceed

Board Meeting: 

Board Meeting The question finally came before a meeting of the company’s Board of Directors David Anderson, Chief Financial Officer James Prescott, Chief Legal Analyst Ammi Tan, Director of Public Relations Mike Gavin, Ethics Officer

Financial Considerations: 

Financial Considerations David Anderson Chief Financial Officer

Financial Considerations: 

Financial Considerations Current financial state of corporation Short-term cost/benefit analysis Expected sales revenue for upcoming year Long-term implications Valued customer relationship Reputation in industry David Anderson Chief Financial Officer

Immediate Financial Impact: 

Immediate Financial Impact Contract includes $1.875 mil over 15 years $125,000 per year No further hiring or equipment purchase is necessary (income would be pure profit) $150,000 penalty for breaking contract David Anderson Chief Financial Officer

1987 Dollar Sales & Volume Tantalum Capacitors: 

1987 Dollar Sales & Volume Tantalum Capacitors David Anderson Chief Financial Officer

Future Considerations: 

Future Considerations Cost of $1.875 mil profit over next 15 years Potential damage to customer relationship Long-term effects of possibly losing a valued customer Reputation in industry David Anderson Chief Financial Officer

Financial Summary: 

Financial Summary Immediate financial impact of breaking the contract is minimal Long term impact is potentially significant Damage to our customer relationship Harm to our reputation in industry Recommendation: proceed with contract David Anderson Chief Financial Officer

Slide21: 

Legal Considerations James Prescott Chief Legal Analyst

Legal Considerations: 

Legal Considerations Would producing and exporting tantalum capacitors to Rudy Kojavik be legal? Two U.S. agencies involved in export control Department of Commerce Bureau of Export Administration Department of State Office of Munitions Control James Prescott Chief Legal Analyst

Department of Commerce: 

Department of Commerce “A general license designated G-DEST is established…authorizing the export of any commodity…to any destination for which a validated license is not required…” 1987 Export Administration Regulations No validated license is required for the export of tantalum capacitors; therefore, under the Dept. of Commerce, Alpha may export the tantalum capacitors under a general license. James Prescott Chief Legal Analyst

Department of State: 

Department of State “By law, all U.S. manufacturers, exporters, and brokers of commodities covered by the U.S. Munitions List must register with the Department of State.” Code of Federal Regulations, Title 22, Part 120 Category IV of the U.S. Munitions List includes most missiles, land mines, and “all specifically designed or modified components” for these weapons. James Prescott Chief Legal Analyst

Dept of State (cont’d): 

Dept of State (cont’d) However, though tantalum capacitors may be used in proximity fuses, the tantalum capacitor is not “specifically designed” for this application. Alpha may legally export the tantalum capacitor to Rudy Kojavik under the Department of State. James Prescott Chief Legal Analyst

Legal Summary: 

Legal Summary Exporting is legal within the Export Administration Regulations of the Department of Commerce. Despite opposition, the Department of State has granted us permission to export. Recommendation: proceed with contract James Prescott Chief Legal Analyst

Social Considerations: 

Social Considerations Ammi Tan Public Relations Director

Social Considerations: 

Social Considerations Main question: Would a responsible corporate citizen break the contract with Rudy Kojavik? Ammi Tan Public Relations Director

Corporate Citizenship: Rights and Responsibilities: 

Corporate Citizenship: Rights and Responsibilities A corporate citizen enjoys the right to keep and increase property. A corporate citizen has a responsibility to its community’s well-being. Corporate citizenship can be applied on a global, national, or local level. Ammi Tan Public Relations Director

Global Corporate Citizenship: 

Global Corporate Citizenship Alpha Electronics has a responsibility to examine how land mines will impact the global community. Ammi Tan Public Relations Director

Global Citizenship:Land Mines: 

Global Citizenship: Land Mines Negative effects? Civilian casualties PICTURE OF CIVILIAN CASUALTIES Ammi Tan Public Relations Director Photo courtesy of Nic Dunlop

Global Citizenship:Land Mines: 

Global Citizenship: Land Mines Responsible Use? Civilian casualties Barren land Ammi Tan Public Relations Director Photo courtesy of Daily Mail and Guardian

Global Citizenship:Land Mines: 

Global Citizenship: Land Mines Responsible Use? Civilian casualties Barren land Cost of mine clearance PICTURE OF CLEARING LAND MINE FIELD Ammi Tan Public Relations Director Photo courtesy of Nic Dunlop

Global Citizenship:Responsible Use of Land Mines: 

Global Citizenship: Responsible Use of Land Mines Negative Effects... Civilian casualties Environmental harm Cost of clearing mines borne by poorest countries Root Causes… Mine placement is not marked and recorded. Impact to local area is not considered during site selection. End users fail to clear land mine zones. Ammi Tan Public Relations Director -WorldVision.org

Global Citizenship:Responsible End Users: 

Global Citizenship: Responsible End Users Ammi Tan Public Relations Director Sample NATO Map of mine locations

Global Citizenship:Responsible End Users: 

Global Citizenship: Responsible End Users Ammi Tan Public Relations Director

Global Corporate Citizenship: 

Global Corporate Citizenship Based on responsible end use, Alpha Electronics may produce the tantalum capacitor for NATO but not for Rudy Kojavik. What about the national level? Local level? Ammi Tan Public Relations Director

National Corporate Citizenship: 

National Corporate Citizenship Alpha Electronics has a responsibility to examine how this contract will impact the American community. Would we be good American corporate citizens by aiding the Soviets? Ammi Tan Public Relations Director

National Citizenship:Basic Principle: 

National Citizenship: Basic Principle “Aid enemies of your country only when they are better global citizens than your own country.” Since potential Rudy Kojavik customers are not better global citizens than the United States, we should not sell the tantalum capacitors to Rudy Kojavik. Ammi Tan Public Relations Director

Local Corporate Citizenship: 

Local Corporate Citizenship Alpha Electronics has a responsibility to examine how land mines will impact the local community. Disgruntled employees Animosity in community and bad press Lower shareholder and stakeholder experience Ammi Tan Public Relations Director

Social Summary: 

Social Summary Alpha Electronics should not sell tantalum capacitors to Rudy Kojavik. Globally, potential Rudy Kojavik clients do not responsibly use land mines. Nationally, potential Rudy Kojavik clients are not better global citizens than the United States. Locally, selling military technology to foreign companies would create bad public relations. Ammi Tan Public Relations Director

Ethical Considerations: 

Ethical Considerations Mike Gavin Ethics Officer

Ethical Considerations: 

Ethical Considerations Main question: Should we break the contract with Rudy Kojavik? Mike Gavin Ethics Officer

Conflicting Obligations: 

Conflicting Obligations Do not break formal agreements Maintain profitable operations if legal vs. Be ethically patriotic (to home country) Do not harm innocent people Do not reward or support espionage Mike Gavin Ethics Officer

Our Approach: R. M. Hare’s System of Applied Ethics: 

Our Approach: R. M. Hare’s System of Applied Ethics We use a modification of R.M. Hare’s “two-level” utilitarianism Rule utilitarianism is satisfied if people obey the strictures of common morality Do not kill Do not steal Do not lie Mike Gavin Ethics Officer

Hare’s System cont.: 

Hare’s System cont. However, sometimes we must break the rules to be moral Rules can be broken if all the following are met: rare situation no biasing factors certain of all outcomes net good of breaking rule greatly outweighs net good of keeping rule Mike Gavin Ethics Officer

Rule Set 1: 

Rule Set 1 Intuitive Rules: Do not break formal agreements Maintain profitable operations if legal Hare’s Escape Criteria Rare situation?…Yes Certain of outcomes?…Yes No biasing factors?…None Net good of breaking rule >> net good of keeping rule?…Yes Outcome: Permissible to break Rule Set 1 Mike Gavin Ethics Officer

Rule Set 2: 

Rule Set 2 Intuitive Rules: Be ethically patriotic Do not harm innocent people Do not reward or support espionage Hare’s Escape Criteria Rare situation?…Yes Certain of outcomes?…Yes No biasing factors?…Factors Exist Net good of breaking rule >> net good of keeping rule?…No Outcome: Impermissible to break Rule Set 2 Mike Gavin Ethics Officer

Ethical Summary: 

Ethical Summary

Summary: 

Summary Alpha Electronics would survive financially if they broke their contract, but there are several financial risks: Broken contract fees Decrease in future contracts with Rudy Kojavik Damage to the company’s reputation The capacitors are legal to sell overseas only due to a loophole in the law

Summary: 

Summary If the news got out, the company could suffer low public opinion. Potential end users not known to be responsible with land mines. The moral analysis is against producing the capacitors because of the likelihood of their abuse by the enemies of the United States.

The Board’s Decision: 

The Board’s Decision Alpha Electronics will: Not produce the capacitors for Rudy Kojavik Recommend that the government fix the loophole so that other companies cannot export the capacitors either

What Really Happened?: 

What Really Happened? The real board allowed the production of the capacitors. Sam: refused to produce the capacitors threatened to report the situation if any company plant produced them The board: halted production on the capacitors took no disciplinary action against Sam

What Really Happened?: 

What Really Happened? The loophole in the export laws was revised in the next printing. Rudy Kojavik was lost as a customer. Alpha Electronics is still a thriving company today.

Bibliography (Selected Sources): 

Bibliography (Selected Sources) CNN Cold War Experience, www.cnn.com/specials/cold.war Department of Commerce, www.commerce.gov Department of State, www.state.gov General Dennis J. Reimar Training and Doctrine Digital Library, www.adtdl.army.mil Internation Campaign to Ban Landmines, www.icbl.org Hare, R.M. Moral Thinking: Its Levels, Method and Point, Oxford University Press, 1981. North Atlantic Treaty Organisation Official Homepage, www.nato.int U.S. News and World Report, www.usnews.com Varner, Gary. “Hare’s Utilitarianism.” http://www-phil.tamu.edu/~gary/phil482/hare.html World Vision, www.worldvision.org All websites referenced on April 10, 2002

Proximity Mines, Espionage, and an Engineer: A Cold-War Conundrum: 

Proximity Mines, Espionage, and an Engineer: A Cold-War Conundrum April 19, 2002 Bovay Ethics Team Texas A&M David Anderson Elizabeth Bristow John Coyle Mike Gavin James Prescott Ammi Tan