MGT 444: Ethics, Governance & Covid-19 Issues

• MGT 444: Business Ethics and Corporate Governance, covering Covid-19 related ethical and corporate governance issues.

Today's Class

• There are reminders about Exam 1 on February 13 and Essay 1 due February 28.
• Topics include the Business Critical Thinking Skills Test (BCTST), the triage problem, the lockdown problem, and a utilitarian analysis of Covid-19.

Exam 1 Details

• The exam is on Thursday, February 13, and will last 50 minutes.
• The exam is in-person and in-class.
• There is no scheduled bathroom break.
• you must bring a pencil and an eraser.
• There will be two essay questions.
• The exam is closed-book and closed-notes.
• Electronic devices like phones, laptops, tablets, smart watches, earphones, earbuds, or headphones are prohibited.
• Hats and headwear are not allowed, you should speak to the proctor for accommodations.
• Proctors will not answer questions except in physical/medical emergencies.
• Academic honesty policies are on page 3 of the syllabus, violations will be reported, and ignorance of the policy is not an excuse.

Essay 1 Details

• Due date is Friday, February 28, at 11:59pm.
• Complete instructions are on Canvas.
• The essay should be 400-600 words.
• Submit as a Microsoft Word document on Canvas.
• Essays will be scanned by TurnItIn for plagiarism.
• You must use your own personal case, integrate it with ethical theory/concepts, and demonstrate coherent logic and critical thinking.
• You also need to see the rubrics on Canvas and add a Design Statement.

Business Critical Thinking Skills Test (BCTST)

• The Fowler College of Business selected this section to participate.
• It is an online test of critical thinking skills.
• Participation is voluntary, participants will receive a detailed report.
• You should note that your participation and the test results will not affect course grades.
• You will receive an official invitation by email soon, with more information available online.

Utilitarianism

• Utilitarianism is defined as when an action or decision is ethical if and only if it brings about the greatest amount of net happiness (i.e., utility) than any alternative action or decision.
• The text questions how is utilitarianism different from majority rule as utilitarianism isn't always about finding "the greatest good to the greatest number of people"
• Considers strengths like a clear and straightforward basis for decisions and an objective way of resolving conflicts of self-interest.
• And weaknesses, like potential impracticality, moral justification of results, and disregard for justice.

Discussion Questions Related to Utilitarianism

• How is utilitarianism different from majority rule?
• Is utilitarianism always about "the greatest good to the greatest number of people"?
• Would Rawls agree with utilitarianism?
• If the City of San Diego were to remove 300 street parking spaces to create bike lanes in Convoy District, would you support the plan based on utilitarianism?
• Would utilitarianism support self-driving cars?

Triage Problem: Covid-19 Case

• In a scenario about choices, Santiago is a 68-year-old doctor with moderate chronic obstructive airways disease, has contracted Covid-19 while caring for patients, and develops respiratory failure.
• Jason is a 52-year-old CEO who contracted Covid-19 during business travel, is otherwise healthy, but develops respiratory failure.
• Only one ventilator is available.
• It asks if only one ventilator is available, who should receive it: Santiago or Jason?
• What factors that you consider for this decision?
• How would utilitarianism decide?

Utilitarian Analysis Steps

• Choices are to save Santiago or Jason.
• To analyze, first list potential benefits of saving Santiago such as probability of survival, length of life, quality of life, and social benefits.
• List the costs of saving Santiago such as duration of treatment and required resources.
• Repeat the same analysis for Jason.
• Compare the net utility (benefits minus cost) for each.

Utilitarian Analysis: Shutdown Decision

• The choices are Shut down or not?
• The benefits of shutdown are to "flatten the curve" and save lives.
• Costs of shutdown include revenue loss for businesses, impact on mental health, and job loss.
• The text asks What is the next step?

Utilitarian Theory Details

• Definition: An action/decision is ethical if it brings about the greatest net happiness (utility) compared to alternatives.
• Assumption: Happiness/benefits and pain/costs can be aggregated in a quantitative way.

Utilitarianism Tradeoff Example

• Two options are presented:
• Option A: A mild pain (headache) lasting 10 minutes affects 100 people; its called 1 unit of pain.
• Option B: An 80-unit pain (lethal, 80 times stronger than a mild headache) affects 1 person.
• Which option would utilitarianism choose?
• The concept of interpersonal aggregation morally justified is questioned.

Modifications to Utilitarianism

• Minor gains, no matter how numerous, cannot reasonably outweigh a single serious harm.
• Example: Wearing masks for eight hours to save one life isn't necessarily more ethical than not wearing a mask.
• Preventing moderate harms, if numerous, can outweigh a single serious harm.
• Example: Prolonged lockdown causing unemployment, business failures, and mental illness may not be more ethical than reopening the economy.

Criticisms of Utilitarianism

• Maximizing utility (happiness, well-being, cost-effectiveness) is all that matters.
• Justice and rights are only important insofar as they maximize utility.
• From the justice perspective, it is asked: Does utilitarianism exacerbate existing inequality? and Does utilitarianism allow (and even justify) bias and discrimination?
• From the rights perspective, it is asked: Does utilitarianism infringe upon individual liberty (negative rights)?

Lockdown Effectiveness

• Researchers describe use of a 'stringency index' that measures a country's response to Covid-19, considering control measures like closures and restrictions.
• Data is presented for China, Germany, United Kingdom, Hong Kong, Italy, South Korea, Sweden, and the United States.
• Countries which took longer to reach widespread mask usage experienced greater COVID-19 cases and fatalities.
• Denmark had a strict lockdown
• Sweden had no lockdown, restaurants and bars open

Lockdown in the US Case

• Initial CEA estimates (2 weeks) had 7.8 QALYs gained per death avoided, 200k-1.7M deaths avoided, 1.56M-13.26M loss of QALYs adjusting for unemployment, a cost of shutdown from $1T - $4T.
• Initial CEA had Cost per QALY gained from $75,000-$650,000.
• CEA estimates (2 months) had 6.4 QALYs gained per death avoided and 200k-1.7M deaths avoided, 780k-10.33M loss of QALYs adjusting for unemployment and cost of shutdown costing $5.2T.
• Increased CEA estimates had Cost per QALY gained from $503k - $6.7M.
• As the shutdown continues, the cost per QALY gained increases exponentially.

Discussion Questions

• Focus on whether utilitarianism seeks to save the greatest number of lives and if/how it treats every life equally when resources are limited.
• Questions of whether early lockdowns/strict enforcement is cost-effective and if this justifies enforcement of severe policies like surveillance and penalties for noncompliance.
• And whether global eradication of malaria, estimated to cost $120 billion and potentially save 11 million lives, should take priority.

Reminders

• Exam 1 on Feb 13
• Essay 2 due Feb 28