TechNova Ethical Dilemma

• TechNova Ltd., a consumer electronics company:
  • It produces affordable smartphones and tablets popular in Europe and Asia.
  • An NGO report revealed a supplier in Southeast Asia uses child labor, exposes workers to toxic chemicals, and makes them work overtime without fair pay.
  • The supplier also dumps dangerous waste into local rivers, threatening the health of local communities.
• TechNova faces a decision:
  • Cut ties with the supplier, potentially increasing costs.
  • Stay with the supplier to maintain low costs and protect profits.
• The decision impacts various stakeholders:
  • Workers in the supply chain
  • Customers seeking affordable products
  • Shareholders expecting profits
  • TechNova's public image
  • Communities and the environment

Group Task Guidelines

• Each person in a group embodies a persona to discuss the dilemma.
• Explain how your ethical theory determines TechNova's course of action.
• Question each other on theoretical strengths and weaknesses.
• Reach a consensus on a final recommendation for TechNova, justifying the ethical theory behind your choice.

Ethical Theories and Personas

• Roxana-Maria (Utilitarian Ethics):

  • Main Focus: Select the action ensuring the greatest happiness for the majority.
  • All stakeholders must be considered including workers, customers, shareholders, and communities.
  • Switching suppliers benefits workers and the environment, which can offset increased costs through customer trust.
  • Question: How happiness is measured, as higher prices will financially impact customers.

• Viktor Petkov (Kantian Ethics):

  • Main Focus: Always choose the morally correct path, regardless of the outcome.
  • Exploiting workers or harming the environment is wrong, even if it cuts into profits.
  • TechNova should uphold worker rights and adhere to universal moral principles.
  • Question: Cutting ties with suppliers might lead to job losses for many workers; does morality outweigh potential harm?

• Florentina (Ethical Egoism):

  • Main Focus: Decisions should prioritize TechNova's interests.
  • If terminating the supplier lowers profits and endangers market share, the company must come first.
  • Question: Could keeping the supplier damage the TechNova brand and customer trust, leading to destruction of long-term success?

• Stefan (Virtue Ethics):

  • Main Focus: Act in a way that reflects TechNova's strong character, honesty, fairness, and responsibility.
  • Like a person, businesses must have a good reputation
  • Acting responsibly shows care for the workers and the environment, which results in the respect from customers and employees.
  • Question: Standards of good character can vary around the world, are ethical expectations the same in Europe and in Asia?

• Elena Filkova (Cultural Relativism):

  • Main Focus: Ethics are tied to local culture; morality varies.
  • Long hours and poor wages can be typical cultural norms in some countries so it is wrong to judge cultures based on Western standards.
  • Question: When local norms allow serious harm like pollution or child labor, should universal human rights apply regardless of culture?

• Ionut (Stakeholder Theory):

  • Main Focus: Businesses must balance their responsibilities between all stakeholders.
  • Profit alone cannot drive decisions
  • TechNova ought to consider the needs of workers, customers, investors, and communities matter.
  • TechNova should take responsibility for everyone its actions affect, not just its shareholders.
  • Question: What if stakeholders have completely opposite desires Investors want low costs, laborers desire higher wages, consumers desire affordable products, environmental protection?

Reflection Questions for Class Discussion

• Which ethical theory is the most convincing and why?
• Should TechNova stick to a single ethical theory, or combine approaches?
• Can you identify any real-world cases of consumer electronics companies dealing with similar issues?
• Is it practical to maintain ethical supply chains while keeping prices low?

Why the Case Matters

• Directly applies key Business Ethics module themes:
  • Applies of ethical theories to global issues
  • Assesses corporate responsibility in supply chains
  • Highlights business tradeoffs between stakeholder groups