Analyze how aig might have better handled the situation

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Choose ONE (1) of the following scenarios and respond the questions that accompany it.

Scenario 1: Suppose you are president of Orwell Corporation, a firm that makes high-tech surveillance equipment.  You have received an offer from the government of North Korea to bid on a huge contract to install a network of 4,000 surveillance cameras throughout the country. The North Koreans say the system will be used to prevent crime and monitor traffic jams. But you know the repressive regime will use the technology to target dissent and repress human rights, resulting in jail time and even torture for citizens who engage in free speech and other legitimate activities.  Moreover, your nation's government has laws prohibiting the export of crime-control products to North Korea, although the restrictions don't apply to surveillance cameras. What should you do? Do you bid on the project? Or do you abstain, not wishing to support repression in a tyrannical regime?  (Note: This dilemma is similar to real dilemmas faced by Cisco and other firms that have marketed surveillance equipment to repressive governments.)

Scenario 2: The American International Group (AIG) is the largest insurance company in the United States. In the global financial crisis of 2008-2010, AIG faced financial ruin. However, the U.S. government used taxpayer money to loan the firm over $170 billion in exchange for an 80% stake in AIG. A few months later, it was revealed that AIG had used part of the money (at least $30 billion) to pay off banks in Europe, largely for debt obligations it incurred in foreign transactions. U.S. government officials were furious. The furor intensified when AIG tried to renegotiate loans with some of its U.S. creditors, implying they were less important than the European banks. Suppose you were the Chief Financial Officer at AIG. What would you have done? How would you handle this predicament? Use the Ethical Framework above to analyze how AIG might have better handled the situation.

Scenario 3: Royal Dutch Shell has been doing business in Nigeria since the 1920s and has announced new plans to develop oil and gas projects there. However, over the years Shell has experienced a series of complex issues. Its operations are centered in Nigeria's Ogoni region, where the local citizens have protested Shell's drilling and refining activities, which harm the natural environment and reduce the amount of available farmland. Protestors also accuse Shell of extracting wealth from the region without adequately compensating local residents. Following sabotage of its facilities, the firm suspended some of its Nigerian operations. It then came under pressure to divest its Nigerian operations and pay reparations to the local people. Despite these problems, Shell has persisted in Nigeria. Management instituted various community development programs in the region, budgeted at $50 million per year. Using the Ethical Framework above, identify steps Shell can take to be a better corporate citizen in Nigeria.

For this week's discussion assignment: A FRAMEWORK FOR MAKING ETHICAL DECISIONS

1. Identify the problem

Acknowledge the presence of an ethical problem.

Ask questions such as:

  • Is there something wrong?
  • Is an ethical dilemma present?
  • Is there potential harm to personnel, customers, the community, or the nation?

In international business, ethical issues can be complex because subtleties may be outside your expertise/knowledge.

Rely on your instincts - if some activity or action feels wrong, it probably is.

2. Examine the facts

  • Determine the nature and dimensions of the situation.
  • Have all the relevant persons and groups been consulted?
  • What individuals or groups have a stake in the outcome?
  • How much weight should be given to the interests of each?
  • Do some parties have a greater stake because they are disadvantaged or have a special need?
  • Distinguishing facts from irrelevant information can be tricky.
  • The manager's task is to identify the true nature of the problem and validate the most useful information.

3. Create alternatives

Identify potential courses of action.

Review any proposed action to ensure it is legal. If it violates host or home country laws or international treaties, it should be rejected.

Review any proposed action to ensure it is consistent with company policy and the firm's code of conduct. If discrepancies are found, the action should be rejected.

Evaluate each proposed action to assess its consistency with accepted ethical standards, using the approaches described earlier:

  • Utilitarian-which action results in the most good and least harm?
  • Rights-which action respects the rights of everyone involved?
  • Fairness-which action treats people most fairly?
  • Common good-which action contributes most to the overall quality of life of the people affected?
  • Virtue-which action embodies the character strengths you value?

The goal is to arrive at the best decision or most appropriate course of action.

Any decision should be comfortably explained to your mother, a respected colleague, a valued mentor, or defended on television.

4. Implement course of action 

  • Put the chosen plan into action.
  • Create/implement new rules, processes, or procedures.
  • Success or failure of the chosen action is contingent on the implementation.

5. Evaluate results

  • Assess how effective the decision is.
  • If you had it to do again, would you do anything differently?
  • Evaluation should assess whether the intended effect is achieved, and if not, whether the firm should pursue a different action.

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Reference no: EM131538376

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8/23/2017 5:06:36 AM

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6/21/2017 1:19:20 AM

In this week’s readings, we’ll continue to focus on the International Monetary System. A theme that has been touched across the different chapters that require further attention as we haven't discussed it yet, is Ethics in International Business. So the focus for this week's discussion will be on Ethics. Review any proposed action to ensure it is legal. If it violates host or home country laws or international treaties, it should be rejected. Any decision should be comfortably explained to your mother, a respected colleague, a valued mentor, or defended on television.

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