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Chapter 2: Defining Business Ethics
Horse, Pig Meat Found in Frozen Burgers
Run Time: 2:21
The reaction to revelations that meat from horses and pigs were contained in products sold by British retailer Tesco as containing 100 percent beef was quick and condemning. British Prime Minister David Cameron forcefully attacked the retailer for selling mislabeled products stating that the company was fully responsible for the products it sells. The scandal emerged after testing by Irish authorities revealed that various products sold by the British grocer contained as much as 29 percent horse meat despite being labeled as 100 percent beef. Testing also revealed that products labeled as beef contained meat from pigs.
Tim Smith, the CEO of Tesco, has promised to get to the bottom of the issue. He announced that the company was investigating the supplier to determine exactly what had happened in the production of the products involved. In the meantime, all affected products were being removed from shelves and consumers were being offered a full refund for any affected products they had bought.
Tesco contends that its suppliers are either grossly negligent or are simply lying about the products they are selling. One of the suppliers involved, Liffey Meats, claimed that the problem goes further back in the supply chain, accusing an unknown third party European Union supplier of the product mix-up. Another supplier, Silvercrest Meats, made a similar statement. For now, consumers are faced with the fact that they may have violated their moral or religious beliefs by unknowingly eating a product that contained horse or pig meat.
- Identify the stakeholders involved in this scandal. What is the impact of the situation on each stakeholder?
- Tesco has blamed its suppliers for producing products containing horse meat. Do you agree with Tesco? Who is ultimately responsible for the products sold in the store?
- Reflect on the horse meat scandal from both a descriptive and from a normative perspective. How would you characterize each situation?
- Consider corporate governance in this situation. Did Tesco do what it should? What else could the retailer have done? Did suppliers like Liffey Meats act in a responsible manner?
homework 4 –closing down a factory
Using the discussion on Wednesday in your group and the feedback from other groups, answer the questions on the following case.
Your company is managing to maintain a good profit margin on the computer parts you manufacture in a very tough economy. Recently, an opportunity has come along to move your production capacity overseas. The move will reduce manufacturing costs significantly as a result of tax incentives and lower labor costs, resulting in an anticipated 15 percent increase in profits for the company. However, the costs associated with shutting down your U.S.-based operations would mean that you wouldn’t see those increased profits for a minimum of three years. Your U.S. factory is the largest employer in the surrounding town, and shutting it down will result in the loss of over 800 jobs. The loss of those jobs is expected to devastate the economy of the local community.
- If you move your factory overseas which approach to corporate social responsibility (CSR) are you taking, instrumental or social contract? Explain your answer.
- If you don’t move which approach are you taking? Explain your answer.
- If you move what could you do to minimize the effect on your employees and the local community?
- If you stay what could you do to increase your profits by 15% in three years?