Case Study

– Read the case studies identified below. These case studies are found in your textbook, Business Ethics, 7th edition. Prepare a single document that answers the specified Discussion questions listed at the end of the case study. – For formatting, research, paper length, and other requirements for the case studies paper, please visit the Case Studies tab under Course Home. The grading rubric for this assignment is also found at this location. o Case 10.1, Chapter 10, Question 4 (pp. 413–414): Changing Jobs and Changing Loyalties o Case 10.2, Chapter 10, Question 1 (pp. 414–417): Two Who Made Waves for the Navy Submit your assignment to the Dropbox, located at the top of this page. For instructions on how to use the Dropbox, read these step-by-step instructions. See the Syllabus section “Due Dates for Assignments & Exams” for due date information. CASE 10.1: Changing Jobs and Changing Loyalties Cynthia Martinez was thrilled when she first received the job offer from David Newhoff at Crytex Systems. She had long admired Crytex, both as an industry leader and as an ideal employer, and the position the company was offering her was perfect.œIt’s just what I’ve always wanted, she told her husband, Tom, as they uncorked a bottle of champagne. But as she and Tom talked, he raised a few questions that began to trouble her. “What about the big project you’re working on at Altrue right now? It’ll take three months to see that through, Tom reminded her.œThe company has a lot riding on it, and you’ve always said that you’re the driving force behind the project. If you bolt, Altrue is going to be in a real jam. Cynthia explained that she had mentioned the project to David Newhoff.œHe said he could understand that I’d like to see it through, but Crytex needs someone right now. He gave me a couple of days to think it over, but it’s my big chance. Tom looked at her thoughtfully and responded,œBut Newhoff doesn’t quite get it. It’s not just that you’d like to see it through. It’s that you’d be letting your whole project team down. They probably couldn’t do it without you, at least not the way it needs to be done. Besides, Cyn, remember what you said about that guy who quit the Altrue branch in Baltimore. “That was different, Cynthia responded.œHe took an existing account with him when he went to another firm. It was like ripping Altrue off. I’m not going to rip them off, but I don’t figure I owe them anything extra. It’s just business. You know perfectly well that if Altrue could save some money by laying me off, the company wouldn’t hesitate. “I think you’re rationalizing, Tom said.œYou’ve done well at Altrue, and the company has always treated you fairly. Anyway, the issue is what’s right for you to do, not what the company would or wouldn’t do. Crytex is Altrue’s big competitor. It’s like you’re switching sides. Besides, it’s not just a matter of loyalty to the company, but to the people you work with. I know we could use the extra money, and it would be a great step for you, but still¦ They continued to mull things over together, but the champagne no longer tasted quite as good. Fortunately, she and Tom never really argued about things they didn’t see eye to eye on, and Tom wasn’t the kind of guy who would try to tell her what she should or shouldn’t do. But their conversation had started her wondering whether she really should accept that Crytex job she wanted so much. Discussion Questions 4. What does loyalty to the company mean, and how important is it, morally? Under what circumstances, if any, do employees owe loyalty to their employers? When, if ever, do they owe loyalty to their coworkers? CASE 10.2: Two Who Made Waves for the Navy Zeke Storms, a fifty-two-year-old retired Navy chief, began his career as a whistle-blower when he wrote Congressman Charles Pashayan to protest proposed cuts in the federal budget.59 Storms had been employed as a civilian repairing flight simulators at the Lemoore Naval Air Base station near Fresno, California, since his retirement ten years before. Now he was suggesting that instead of supporting reductions in the civil service pay scale, Pashayan ought to take a closer look at Navy procurement practices. Enclosed in the letter was a list of spare parts showing that defense contractors were charging $435 for ordinary claw hammers and $100 or more for such electronic spare parts as diodes, transistors, and semiconductors, which cost less than $1 each. He also charged that the Navy paid $100 apiece for transistors that it could have obtained through the federal supply system for 5 cents apiece. Storms’s letter prompted Pashayan to query the Defense Department, which in turn kicked off an interservice investigation of military procurement practices. The Defense Department inspector general’s office reported that the Navy had indeed failed to determine the most economical manner to acquire the spare parts Zeke Storms had listed. It also suggested that the spare-parts-overcharge problem was more widespread than at first thought. The investigative body left no doubt that the Navy was wasting millions of dollars annually. In the wake of this report, the Secretary of Defense ordered a tightening of procurement procedures to ensure the lowest price for spare parts. Meanwhile, Navy Secretary John Lehman ordered contractors at Lemoore to refund $160,000 in overcharges. He also gave Storms a $4,000 award. But Storms wasn’t about to lay down his muckrake. He suggested that Defense Department auditors review overpayment for jetaircraft support equipment in the base shops. The auditors did and discovered overpayment of $482,000, most of it spent on four spectrum analyzers. Had the items been bought through the federal supply system, they would have cost $47,500. Storms then discovered that the Navy had engaged private contractors to operate its flight simulators for a new aircraft.œI got mad, he says.œ[The Navy] had spent $1 million training their own people to do the work, then they just scrapped that and turned the maintenance over to the contractor. The contractor in question apparently was demanding $785,000 to maintain the simulators, which worked out to about $100,000 per person per year.œI showed them that we [a team of Navy and civil service technicians] could do it for one-fourth that cost, so the contract was dropped to $411,000, says Storms. That $411,000 was still more than Storms believed the Navy had to pay, especially since the Navy had been maintaining its own simulators for two decades. So he took his case directly to Lehman, arguing that Office of Management and Budget (OMB) regulations required the Navy to do comparative cost studies to ensure the most cost-effective means. Lehman balked at Storms’s proposal, saying that such studies would cost $45,000 each. That was too high a price to payœto indulge Mr. Storms’s eccentricities, the Secretary said in a letter to Congressman Pashayan. Evidently deciding it was time to quiet the querulous Storms, Lehman then sent nine Navy brass to Lemoore. In the two-hour session that ensued, Storms did most of the talking. In the end, a commodore, four captains, two commanders, and two lieutenant commanders could do nothing to divert Storms from his course. It was shortly thereafter that the ex-Navy chief did theœunpardonable. He accused Secretary Lehman andœhis admirals of lying. He said he had turned over to OMB officials Navy documents showing that Navy admirals willfully ignored requirements to do cost studies for private maintenance work. One of the documents included a message from Vice Admiral Robert F. Schoultz, the commander of naval forces in the Pacific. Addressing Admiral James D. Watkins, then commander of the Pacific Fleet, Schoultz wrote:œIt is our intention to contract out all major training device maintenance.…. [However] under the [contract] program our objective is hindered with cost studies that would yield inappropriate results. Schoultz’sœinappropriate results apparently was an allusion to the report by the fleet’s top training officer, who estimated that the Navy’s own people could do for $7 million the same work for which private contractors would charge $28 million. In response to Storms, N. R. Lessard, officer in charge of the flight training groups for whom the ten-year Lemoore veteran was working, informed him thatœyour recent comments concerning senior Navy officials¦ constitute unacceptable employee conduct. To which Storms replied in a way most befitting a tobacco-chewing old salt:œ[The Navy is] covering up, goddammit. I’ve got the facts, and they know it. By contrast, Aaron Ahearn isn’t an old salt, and he doesn’t chew tobacco. But when the environmentally conscious, twenty-year-old sailor blew the whistle on the Navy’s practice of dumping trash at sea, he made waves almost as big as Storms’s.60 Ahearn was a fireman’s apprentice assigned to the scullery aboard the USSAbraham Lincoln, the world’s largest nuclear-powered aircraft carrier. As part of his duties, Ahearn was supposed to dispose of the ship’s garbage by tossing overboard up to two hundred bags of plastic and other trash—some of it alleged to be toxic waste—every day. A surfer who loves the ocean, Ahearn says that his conscience was troubled by what he had to do. He also reports seeing sailors dump broken desks, chairs, and computers into the ocean. When Ahearn’s request for a change of assignment was denied, he jumped ship. Environmentalists contend that plastic trash kills thousands of marine turtles, birds, and mammals annually and that it litters the beaches and wrecks boat propellers. Although private vessels can be fined up to $500,000 for dumping plastic debris, federal law specifically exempts the Navy. For its part, the Navy has always claimed that it can’t avoid dumping plastic garbage because its ships house up to 5,500 sailors and spend months at sea. Meanwhile, Ahearn, who had left the Abraham Lincoln on a weekend pass, went into hiding for two months, spending the time living with his girlfriend and surfing in the beach town of Santa Cruz, California. Eventually he decided to turn himself in. Before doing so, he received counseling from the Resource Center for Nonviolence and went to the media, saying his conscience would not allow him to pollute the ocean as ordered. He also announced that he wanted conscientious objector status on environmental grounds. Ahearn’s story gained national coverage and focused pressure on the Navy to conform with international law governing plastic and trash disposal at sea.œWhat he did was commendable and brave, says Jil Zilligen of the Center for Marine Conservation in San Francisco.œI don’t think many people realized this was going on at all. Instead of battening down the hatches in response to the storm that Ahearn’s allegations stirred up, the Navy announced that it would stop dumping plastic from all its surface ships and proposed a timetable for full compliance with the relevant international laws. What about Ahearn? Although environmental groups called him a hero, the Navy court-martialed him as a deserter who used his pollution allegations to cover up his unauthorized absence and as an excuse to leave the Navy. The ship’s skipper, Navy Captain Ray Archer, contended that Ahearn told friends that he was going to jump ship to visit his girlfriend and would use his environmental concerns to justify it. And the Navy prosecutor, Lieutenant Tony Viera, said that Ahearn simply did not like his duty and needed toœgrow up. The scullery is hot and sweaty, Viera remarked, and everybody hates working in it. But instead of sticking it out, Ahearn ran away and went surfing. Ahearn and his attorney, Robert Rivkin, denied those charges, but the issue was never officially settled. In fact, at the court-martial, there was no mention at all of the environmental issues Ahearn had raised—except for the sloganœPack Your Trash tattooed across the back of his neck above the collar of his dress white Navy uniform. Instead, as part of a plea bargain, Ahearn pleaded guilty to unauthorized absence and to missing a ship’s movement and was fined $500 and sentenced to thirty-five days in the brig.œOverall, commented his attorney,œit was a pretty good deal. It is a fair and reasonable sentence for what he did. Vicki Nichols, executive director of Save Our Shores, a marine conservation group, added,œI can’t imagine that the Navy would ever admit a sailor who went AWOL has had any positive impact. But he did. Discussion Questions 1. Do you think Storms and Ahearn qualify as whistle-blowers? What do you think their motives were?

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