There is nothing new about multinational corporations (MNCs) facing challenges as they do business around the world, especially in developing nations or emerging markets. Royal Dutch Shell had to greatly reduce its production of oil in Nigeria due to guerrilla attacks on its pipelines. Cargill was forced to shut down its soy-processing plant in Brazil because of the claim that it was contributing to the destruction of the Amazon rainforest. Tribesmen in Botswana accused De Beers of pushing them off their land to make way for diamond mines. Google was kicked out of China only to be later restored. Global business today is not for the faint hearted. It should not come as a surprise, therefore, that MNC giants such as Coca-Cola and PepsiCo— highly visible, multibillion dollar corporations with well-known, iconic brands around the world—would encounter challenges in the creation and distribution of their products in some countries. After all, soft drinks are viewed as discretionary and sometimes luxurious products when compared to the staples of life that are often scarce in developing countries. One of those scarce staples is water. Many observers think a shortage of water is the next burgeoning global resource crisis. Whether it is called an issue, an ethics challenge, or a scandal, the situation confronting both Coke and Pepsi in India, beginning in 2003, richly illustrates the many complex and varied social challenges companies face once they decide to embark on other country’s shores. Their experiences in India may predict other issues they may eventually face elsewhere or trials other companies might face as well. With a billion-plus people and an expanding economy, and with markets stagnating in many Western countries, India, along with China and Russia, represent immense opportunities for growth for virtually all businesses. Hence, these companies cannot afford to ignore these burgeoning markets. INITIAL ALLEGATIONS Coke and Pepsi’s serious problems in India began in 2003. In that year, India’s Center for Science and Environment (CSE), an independent public interest group, made allegations that tests they had conducted revealed dangerously high levels of pesticide residue in the soft drinks being sold all over India. The director of CSE, Sunita Narain, stated that such residues could cause cancer and birth defects as well as harm nervous and immune systems if the products were consumed over long periods of time. Further, CSE stated that the pesticide levels in Coke’s and Pepsi’s drinks were much higher than that permitted by European Union standards. On one occasion, Narain accused Pepsi and Coke of pushing products that they wouldn’t dare sell at home. In addition to the alleged pesticides in the soft drinks, another special interest group, India Resource Center (IRC), accused the companies of over consuming scarce water and polluting water sources due to its operations in India. IRC intensely criticized the companies, especially Coca-Cola, by detailing a number of different “water woes” experienced by different cities and regions of the country. IRC’s allegations even more broadly accused the companies of water exploitation and of ……. Required: 1. Identify the ongoing issues in this case with respect to global business ethics, issue management, crisis management, and stakeholder management. Rank these in terms of their priorities for Coca-Cola and for PepsiCo. 2. Assess the corporate social responsibility (CSR) of Coke and Pepsi in India. 3. Are these companies ignoring their responsibilities in India, or is something else at work? 4. Why does it seem that Coke has become a larger and more frequent target than Pepsi in India? Does having an Indian-born CEO help Pepsi’s case? 5. How do companies defend themselves against the nonstop allegations of activist groups that have made them a target? Is any form of stakeholder management workable? 6. IRC seems to have made it its life’s work to defeat Coca-Cola. Is IRC an interest group that has just gone too far? 7. What lessons do Coke and Pepsi’s experiences in India present for multinationals in their global business and society relationships? Enumerate three to five lessons and give examples from the case to document them.
> Identify the principal reasons why we have a product liability crisis. Have any reasons been omitted? Discuss.
> What ethical theories can help us to better understand the issue of quality? Discuss.
> Identify the major dimensions of quality. Give an example of a product or service in which each of these characteristics is important.
> Does the new Consumer Financial Protection Bureau make sense? How do you keep politics out of government agencies? In a free market, why shouldn’t consumers be left to fend for themselves with respect to consumer financial products?
> Are companies genuinely interested in marketing sustainable products or is this just a marketing strategy that is popular today. Do you think “green fatigue” has set in? If so, what should companies now do?
> Give an example of a major abuse of advertising via social media from your own observations and experiences. How do you feel about this as a consumer?
> What is your opinion of the consumer movement? Is it “alive and well” or is it fading away? Why has consumerism been such an enduring movement for so long?
> Assume that you are in your first managerial position. Identify five ways in which you might provide ethical leadership. Rank them in terms of importance, and be prepared to explain your ranking.
> In addition to the basic consumer rights expressed in the consumer’s Magna Carta, what other expectations or rights do you think consumer stakeholders have of business? Do consumers have some moral rights that have not yet been articulated in law?
> What are the limits of corporate political strategy? Are there lines that companies should not cross?
> What does corporate accountability mean to you? How important is corporate political transparency?
> Discuss Citizens United and Speechnow and their likely effect on future elections. What, if any, reforms would you recommend?
> What is a PAC? How is it different from a Super PAC? What are the major arguments in favor of PACs? What are the major types of PACs and how do they differ? In your opinion, are PACs a good way for business to influence the public policy process? What ch
> Explain lobbying in your own words. Describe the different levels at which lobbying takes place. Why is there a lack of unity among the umbrella organizations?
> What are deregulation and reregulation? Under what circumstances should each be considered?
> What are the trade-offs between privatization and federalization? When would one or the other be more appropriate? What problems might you foresee and what future events would merit a shift in the current mix?
> Outline the major benefits and costs of government regulation. In general, do you think the benefits of government regulation exceed the costs? In what areas, if any, do you think the costs exceed the benefits?
> What is regulation? Why does government see a need to regulate? Differentiate between economic and social regulation. What social regulations do you think are most important, and why? What social regulations ought to be eliminated? Explain.
> Which is most important in ethics principles – consequences or duty? Discuss.
> Explain why the public is treated as a separate group in the interactions among business, government, and the public. Doesn’t government represent the public’s interests? How should the public’s interests be manifested?
> Briefly explain how business and government represent a clash of ethical systems (belief systems). With which do you find yourself identifying most? Explain. With which would most business Students identify? Explain.
> What are the major strategies companies might employ in improving global business ethics? What are the key steps research has shown are important to successful company anticorruption efforts?
> Conduct research, for purposes of updating the latest rankings of Transparency International and the activities of the OECD, UNCAC, and individual country initiatives. How could countries such as China, India, and Russia most effective improve their TI r
> Differentiate between a bribe and a grease payment. Give an example of each.
> Investment banking company Goldman Sachs flags employee e-mails that contain inappropriate “swear” words. Bank of America’s call centers track employee movements. Other companies check their employees’ browser histories, log their keystrokes for producti
> On April 24, 2013, an eight-story garment factory building collapsed in Rana Plaza, which is on the outskirts of Dhaka, Bangladesh. The Rana Plaza building is located in Savar, near Dhaka. The collapse occurred just after work had begun that morning in s
> As a State employee, I am restricted from receiving excessive gifts because of my opportunity to direct business toward certain vendors. Currently, the State forbids acceptance of gifts that exceed $100 in value. Regardless of the limit, I make it a pers
> In April 2012, the Equal Employment Opportunity Commission (EEOC) issued revised guidance on the use of arrest and conviction records in employment decisions. In it, the EEOC warned that the use of criminal background as an exclusion must be “job related
> When a roadside explosion in Afghanistan blew up his Humvee, Russ Murray sustained brain and back injuries as well as posttraumatic stress disorder that made it very difficult to leave his home in Watkinsville, Georgia. Getting Ellie, his service dog, ma
> When then-Abercrombie & Fitch (A&F) CEO Michael Jeffries said the following in a Salon interview, relatively few took notice: Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A l
> Our department has two buildings about three miles apart. The extension office operates quite differently from headquarters. Folks seem to come and go as they please, and the atmosphere is casual. April works in the extension office and takes full advant
> Few people question an employer’s right to control an employee’s behavior on the job. However, when an employer takes action based on an employee’s offduty conduct, questions of ethics arise. More than half of all states prohibit firing based on various
> As an MNC seeks to balance and honor the ethical standards of both the home and host countries, conflicts inevitably will arise. What criteria do you think managers should consider as they try to decide whether to use home or host country ethical standar
> Ruth Hatton, a waitress for a Red Lobster restaurant in Pleasant Hills, Pennsylvania, was fired from her job because she was accused of stealing a guest-comment card that had been deposited in the customer comment box by a disgruntled couple.1 The couple
> Caroline Murray was mourning the death of her husband, Mike, when she received a call from the employee benefits division of his company requesting a copy of the death certificate. After asking why they needed the certificate, Caroline was surprised to l
> Following the lessons learned in the 2008/2009 mortgage crisis, one would think that issues of egregious lending practices would have gone away. Instead, they have taken a different twist in the context of student loans. Take the example of Scott Burnsid
> Data mining of large data sets, frequently called Big Data, has become a big part of analyzing consumerrelated data that companies collect. Basically, data mining is a computational process of extracting information patterns from data sets and transformi
> KIRK’S FIRST YEAR Kirk was a bright individual who was being groomed for the controller’s position in amedium-sizedmanufacturing firm. After his first year as assistant controller, the officers of the firm started to include him in major company function
> Lack of safe drinking water is a global issue. One of the United Nations Millennium goals is to “halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation.” Climate change has made this goal d
> When Jeff Lebesch and Kim Jordan expanded from home beer brewing to commercial production in 1991, they envisioned two goals for their new company: they believed they could produce world-class beers and they believed they could do this while kindling soc
> Global supply chains have been wrought with controversy for decades now. Images and stories of global manufacturing, and particularly textile manufacturing, have highlighted issues of unsafe working conditions, child labor, unfair wages, and corruption.
> Often, state and local governments use tax cuts (abatements) or other types of incentives to entice firms to locate within their area. While tax abatements remain useful incentives to help governments achieve job creation goals, those same cuts may creat
> One of the major challenges businesses face with respect to government regulations is that often compliance with existing regulations during an earlier period does not protect them against expensive problems that occur or come to light later. The plight
> Drawing on the notions of moral, amoral, and immoral management introduced in Chapter 7, categorize your impressions of (a) Nestle, in the infant formula controversy; (b) Union Carbide, in the Bhopal tragedy; and (c) Google, in moving its search engine o
> The McDonald’s coffee spill is the most famous consumer lawsuit in the world. Everyone knows about this case, and the details involved in it continue to be debated in many different venues—classrooms, Web sites, blogs, law schools, and business schools.
> “Big Pharma” is the name the business press uses for the gigantic pharmaceutical industry. Most of us are familiar with Big Business and Big Government. Now Big Pharma continues to be in the news and has been for several years regarding its marketing, ad
> Recent election cycles have brought new challenges for corporations and their boards of directors. For example, in the 2016 presidential election campaign, candidate Hillary Clinton unveiled a prescription drug plan to lower prescription prices following
> The United States Food and Drug Administration’s (FDA) approval of interferon beta-1b (brand name Betaseron®) made it the first multiple sclerosis (MS) treatment to get FDA approval in 25 years. Betaseron was developed by Berlex Laboratories, a U.S. unit
> AN ETHICAL DILEMMA Assume that you are the top executive for a firm doing business in Colombia, South America. If a known terrorist group threatens to kill your employees unless you pay extortion money, should the company pay it? If you answer “no,” ho
> Jonah Peretti decided to customize his Nike shoes and visited the NikeiD Web site. The company allowed customers to personalize their Nikes with the colors of their choice and their own personal 16-character message. Peretti chose the word “sweatshop” fo
> As the topic of corporate governance has been in the news more and more during the past several decade, it is useful to reflect on what boards of directors have to do in terms of their roles and responsibilities. Acting on behalf of shareholders, one of
> Jane had just been hired as the head of the payroll department at R&S Electronic Service Company, a firm comprising 75 employees. She had been hired by Eddie, the general manager, who had informed her of the need for maintaining strict confidentiality re
> Jane Adams had just completed a sales training course with her new employer, a major small appliance manufacturer. She was assigned to work as a trainee under Ann Green, one of the firm’s most productive sales reps on the East Coast. At the end of the fi
> Do you think genetically modified organisms (GMOs) raise a legitimate safety hazard? Should government agencies such as the FDA take more action to require safety testing? Do you think labeling unfairly stigmatizes GMOs and make consumers question their
> When I was in college, I worked part-time one summer at a childcare center that was in a fitness center. Most mornings, I worked from 8 A.M. until noon, but some days I was scheduled to work from 7 A.M. until 11 A.M. My roommate also worked there, and ou
> Ethan Dorsett was a retired and disabled Marine living in Missouri. He struggled for five years trying to pay back a $2,500 payday loan, which had escalated to $50,000 in interest due. Ethan’s plight began when his wife, Emily, slipped on ice and broke h
> SELECTING A NEW COMPUTER ANALYST As a manager in human resources, part of my job is to guide the process by which my company selects new employees. Recently, we selected an applicant to fill a computer analyst position. The supervising manager and a sele
> THE SAN BERNARDINO MASSACRE On December 2, 2015, a married couple used automatic weapons to attack and kill 14 people during an employee training event and holiday party at the Inland Regional Center in San Bernardino, California. One of the shooters wa
> Between 2009 and 2015, Volkswagen manufactured and marketed clean diesel automobiles that were designed to provide high performance without the polluting emissions commonly associated with diesel engines. These turbocharged direct injection (TDI) clean d
> After the Enron scandal of 2001 and the WorldCom, Tyco, and Adelphia debacles that followed a couple of years later, the business ethics industry really started to take off. Business ethics consulting and training became a booming field of expertise and
> What do Tamiflu® and Natazia® have in common? They are both goldmedal winners for their direct-to-consumer advertising (DTCA). Although their brand name recognition does not rival that of Coca-Cola, their names are familiar to consumers across the nation
> When five customers entered the Chipotle restaurant, Seattle, Washington, in July of 2015, they placed their normal orders…burritos, bowls, tacos—you name it. These customers expected to indulge in what they had come to love over the years, what Chipotle
> PART A: PURSUING SOCIAL AND ENVIRONMENTAL CHANGE When North American consumers are asked to describe the cosmetics industry, they often respond with words such as “glamour” and “beauty.” Beginning in 1976, The Body Shop International PLC (BSI) provided
> Historically, the primary criticism of Walmart, the world’s largest company, has been its impact on communities and small merchants. Anti-sprawl activists and small-town merchants, in particular, have taken issue with the company moving
> Is it an exaggeration to question the ethical implications for business of cell phone and text-messaging use? Discuss both sides of this issue.
> Sam Walton, founder, owner, and mastermind of Wal-Mart,1 now spelled Walmart and often used that way in many advertisements, passed away on April 5, 1992, leaving behind his spirit to ride herd on the colossal Walmart organization. To the consumer in the
> Analyze how the triple bottom line and the Pyramid of CSR are similar and different. Draw a schematic that shows how the two concepts relate to one another.
> Differentiate between corporate social responsibility and corporate social responsiveness. Give an example of each. How does corporate social performance relate to these terms? Where do corporate citizenship and sustainability fit in?
> In your view, what is the single strongest argument against the idea of corporate social responsibility? What is the single strongest argument for corporate social responsibility? Briefly explain.
> Explain the Pyramid of Corporate Social Responsibility. Provide several examples of each “layer” of the pyramid. Identify and discuss some of the tensions among the layers or components. In what sense do the different layers of the pyramid “overlap” with
> Does socially responsible, sustainable, or ethical investing seem to you to be a legitimate way in which the average citizen might demonstrate her or his concern for CSR? Why is it also called impact investing? Discuss.
> Explain in your own words the Iron Law of Responsibility and the social contract. Give an example of a shared understanding between you as a consumer or an employee and a firm with which you do business or for which you work.
> Give an example of each of the four levels of power discussed in this chapter. Also, give an example of each of the spheres of business power.
> Identify and explain the major factors in the social environment that create an atmosphere in which business criticism takes place and prospers. Provide examples. How are the factors related to one another? Has the revolution of rising expectations run i
> What is the one greatest strength of a pluralistic society? What is the one greatest weakness? Do these characteristics work for or against business?
> Do you think business is abusing its power with respect to invasion of privacy of consumers? Is surveillance of consumers in the marketplace a fair and justified practice? Which particular practice do you think is the most questionable?
> Using the examples you provided for question 1, identify one or more of the guides to personal decision making or ethical tests you think would have helped you resolve your dilemmas. Describe how it would have helped. Question 1: From your personal expe
> (a) In Example 5, find the total sales for January 10, and determine the rate at which sales are falling on that day. (b) Compare the rate of change of sales on January 2 ( Example 5) to the rate on January 10. What can you infer about the rate of change
> Let S(x) represent the total sales (in thousands of dollars) for the month x in the year 2005 at a certain department store. Represent each following statement by an equation involving S or S’. (a) The sales at the end of January reached $120,560 and wer
> Refer to Exercise 41. Is it profitable to produce 1300 chips per day if the cost of producing 1200 chips per day is $14,000? Exercise 41: Let R(x) denote the revenue (in thousands of dollars) generated from the production of x units of computer chips pe
> Let R(x) denote the revenue (in thousands of dollars) generated from the production of x units of computer chips per day, where each unit consists of 100 chips. (a) Represent the following statement by equations involving R or R’: When 1200 chips are pro
> Let P(x) be the profit from producing (and selling) x units of goods. Match each question with the proper solution. Questions A. What is the profit from producing 1000 units of goods? B. At what level of production will the marginal profit be 1000 dollar
> The revenue from producing (and selling) x units of a product is given by R(x) = 3x - .01x2 dollars. (a) Find the marginal revenue at a production level of 20. (b) Find the production levels where the revenue is $200.
> Estimate the cost of manufacturing 51 bicycles per day in Exercise 37. Exercise 37: Let C(x) be the cost (in dollars) of manufacturing x bicycles per day in a certain factory. Interpret C (50) = 5000 and C’ (50) = 45.
> Let C(x) be the cost (in dollars) of manufacturing x bicycles per day in a certain factory. Interpret C (50) = 5000 and C’ (50) = 45.
> If s = 7x2y√z, find: (a) d2s/dx2 (b) d2s/dy2 (c) ds/dz
> If s = Tx2 + 3xP + T2, find: (a) ds/dx (b) ds/dP (c) ds/dT
> Differentiate. y = (2x + 4)3
> If s = P2T, find (a) d2s/dP2, (b) d2s/dT2.
> If s = PT, find (a) ds/dP, (b) ds/dT.
> A supermarket finds that its average daily volume of business, V (in thousands of dollars), and the number of hours, t, that the store is open for business each day are approximately related by the formula Find dV/dt |t=10. V = 20 1 100 100+ 1², t
> A company finds that the revenue R generated by spending x dollars on advertising is given by Find dR/dx |x=1500. R = 1000 + 80x-.02x2, for 0 ≤ x ≤ 2000.
> Compute the following. d/dt (dy/dt), where υ = 2t2 + 1/t + 1
> Compute d/dt (dυ/dt) |t=2, where υ(t) = 3t3 +4/t
> Compute the following. g’(0) and g’’(0), when g(T ) = (T + 2)3
> Compute the following. f ‘(1) and f ’’(1), when f (t) = 1/2 + t
> Compute the following. d/dx (dy/dx) |x=1, where y = x3 + 2x - 11
> Compute the following. d2/dx2 (3x3 - x2 + 7x - 1) |x=2
> Differentiate. y = 4x3 - 2x2 + x + 1
> Compute the following. d2/dx2 (3x4 + 4x2) |x=2
