Face of Mirror (Social Entrepreneurship)


 

3…2…1…go

            Every society possesses a wide array of socio-economic issues, even those that the government proves incapable of fixing. Charities provide aid, and a means to an end, but sometimes an issue requires maximum man-power, to the degree of movement, in order to facilitate change towards a solution. Continue reading

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ALL IS FAIR IN LOVE AND WAR? An ethical analysis of “Price Wars” and predatory pricing strategy


Companies nowadays are facing a major challenge to cut costs, remain efficient, and maintain customer loyalty and retention simultaneously. Not only the pricing power of internet and discount retailers are growing, but the recent Great Recession also make consumers pay close attention to their spending habit and everybody seems to be going to shopping with pay-less state of mind. Unfortunately for sellers, price can be a double-edge sword: it can be an excellent strategic weapon in a highly competitive market while it can also destroy profits and hurt consumers at the same time. Continue reading

Paper #2 – The ethics (or lack thereof) of the United States Congress


The United States Congress is arguably the most powerful legislative body in the country, responsible for financial and budgetary policy, national defense, and the oversight of the Executive Branch. And in August of 2012, its approval rating amongst Americans was 10% (Gallup 2012), a thirty-eight year low. Yet despite this appallingly low rating, members of Congress have historically been re-elected over ninety percent of the time (Congress of the United States 2012). Such a dichotomy seems absurd- if the American people are so thoroughly disgusted with their government representatives, why have they continued to re-elect them? And with such widespread public disapproval centered on Washington, why have those representatives not altered their behavior?

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Rating the Rating Agencies


Rating the Ratings: How Rating Agencies Dismiss Kantian Ethics

                 The Miracle Formula

Last week in the Wall Street Journal, there was an article about how bonds of Exxon Mobil and Johnson and Johnson are trading with yields below those of comparable Treasurys. This is an indication that investors believe these Exxon and J&J bonds are safer than US Treasurys. The article indicated that if this trend continues, the country could face its second credit-rating downgrade following Standard & Poor’s cut below triple-A last year (McGee). After reading this article, I began questioning how credit rating agencies evaluate credit scores. How ethical and reasonable is this process? I understand that value of having a letter rating to give investors’ confidence in what securities they are about to involve themselves with, but how does one define that security of debt by a simple letter? I will research the history and background of credit-rating agencies and identify the ethical reasoning of these scores with Kant’s deontological theory.

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The Challenger Explosion:

Organizational Ethics

Joe Velli

Professor Comas

Bus Gov Soc

November 11th, 2012

On January 28th, 1986, families across The United States of America witnessed a public tragedy which took the lives of six astronauts and a school teacher. The Challenger launch, broadcast live on television, was an important and well publicized event. Americans all over the country anxiously sat in front of the television to watch this historic moment, only to find themselves horrified as they observed this incredible tragedy in its place. The shuttle exploded seventy-three seconds after launch, taking the lives of the entire crew and sending the 3 billion dollars worth of machinery plummeting back to Earth (Kosmos Business). After careful review, engineers discovered the exact cause of the explosion and the American public demanded an explanation. President Ronald Reagan organized an independent commission to create a “Report to the President” to determine all direct and indirect causes of the events that took place on January 28th. The Rogers Commission investigated the tragedy and generated suggestions for the improvement of the National Aeronautics and Space Administration (NASA) program. The commission determined that the explosion was caused by an O-ring failure, at the technical level, and miscommunication, at the management level. The resulting deaths of the seven crew members onboard are forever seared into American history as another tragic event that could have been avoided.

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Paper #2 – Target: Hitting the Ethical Bulls Eye?


 

 

For my second paper, I decided to examine Target’s recent practices from an ethical perspective, specifically involving Donaldson’s/Shue’s correlative duties.  Enjoy!

INTRODUCTION

As a member of Ethisphere’s “Most Ethical Companies” list for the past six years, Minneapolis-based Target Corp. is clearly doing something right.  Target’s corporate responsibility website lists the following three things under the heading, “What We Stand For”: a legacy of giving and service; strong, healthy, safe communities; and a great place to work. Fortune’s 2012 World’s Most Admired Companies list honored Target for its efforts, which seems to indicate that it has experienced some success in achieving these goals.  By examining both the criticism and praise of Target, and by taking into account Shue and Donaldson’s correlative duties, I will determine whether the company has truly acted in an ethical way in recent years and whether it has lived up to the duties these two ethicists outline.

CRITICISM 

Over the past decade or so, Target has found itself at the center of a multitude of complaints.  In 2004, Target joined other large retail companies (e.g. Home Depot and Best Buy) in banning Salvation Army from soliciting on its premises.  In a report by NBC News, Target claimed that by banning SA, it was only enforcing existing rules against solicitation.  This ban was company-wide and was taken into effect at all 1,300 Target stores in the United States.  This move by Target produced a lot of backlash.  Restricting a charitable organization from seeking donations was seen as heartless and unethical by many, a sentiment made only worse by the Salvation Army’s claim that the ban would cost it $9 million in donations over that year.  These critics threatened to – and in some cases, decided to – boycott Target stores.  Although Target executives and officials remained relatively quiet about the decision and its obvious effects, they did issue a statement pointing out that their organization gives about $100 million annually to various charities – one of which is the Salvation Army.

In August 2010, Target’s popularity suffered an even larger blow when the company donated $150,000 to MN Forward.  This group had run an ad supporting Tom Emmer, a candidate in the Minnesota governor race who had openly opposed gay rights.  By supporting MN Forward, it appeared that Target was indirectly – yet openly – supporting Emmer’s message.  This apparent support infuriated proponents of gay rights and led to very vocal dissent from the community.  In light of the negative response, Target CEO Greg Steinhafel was forced to make a public apology and swore that he would review any future political campaign contributions much more closely.  Interestingly enough, according to a Huffington Post article, Target continued to donate to politicians who were openly against gay rights even after Steinhafel’s apology.  Among these politicians were those whom the company had already been criticized for supporting.  According to Target’s Political Action Committee (PAC), the corporation “recorded $41,200 in federal election activity. Of that total, $31,200 went to anti-gay rights politicians or PACs supporting those candidates” (Linkins).  There were additional questionable donations made, including one made to Spencer Bachus – who voted against same-sex adoption – and Michigan’s David Camp – who supported a Constitutional Amendment banning same-sex marriage and voted against protecting gays from job discrimination based on their sexual identity.  These political affiliations were significant blemishes on the record of Target’s seemingly pristine record.

The final incident for which Target received a lot of criticism involved Andrew Pole, who was a statistician for the corporation.  He was challenged with finding out a way to determine whether a female customer is pregnant before she wants anyone to know.  Now, as the New York Times piece that broke this news reported, collecting customer data was not a new practice for Target (or many other large corporations, for that matter).  In fact, each shopper who entered a Target store is given a Guest ID.  Linked to this Guest ID is a range of information, from demographic classifications to payment method.  In addition to this information, Target has the opportunity to purchase even more information from external parties that it cannot collect on its own.  Andrew Pole was responsible for analyzing all of this data. He was able to find approximately 25 products that, when considered as a group, allowed him to assign shoppers a “pregnancy prediction” score that quantified the likelihood of that shopper being pregnant.  He was able to apply this information to every shopper in Target’s database.  About a year after Pole began implementing his model, a man walked into a Target store outside of Minneapolis.  He was infuriated because Target had been sending his daughter coupons for items such as baby clothes and cribs.  In his opinion, Target was encouraging her to get pregnant.  After apologizing that day, the manager called back a few days later to apologize again; he was met, however, with an apology on behalf of the father who had found out that his daughter was indeed pregnant.  Pole’s model had worked.  When the Times released this story, it was met with significant disapproval.  Many customers felt as though Target’s marketing efforts were invasive and overly intrusive.  They felt that Target was invading their private lives and was attempting to bolster sales in an unethical manner.

APPROVAL 

Along with the criticism it has received over the past decade, Target has also received plenty of praise.  The Target website lists the following as the corporation’s areas of commitment: education, environment, health & well-being, team members, responsible sourcing, safety & preparedness, and volunteerism.  Along these lines, in 1997, Target established the School Fundraising program, through which it makes semi-annual donations to K-12 schools.  Target has continued to act through this program and, according to its website, donated more than $100 million for education in 2011.  The company’s goal is to give $1 billion for education by the end of the fiscal year 2015.  With a current total of $679 million, Target is well on its way to meeting its goal.  This attention to the community was likely part of the reason behind Ethisphere’s decision to name Target to its list of the most ethical companies. Overall, Target has largely been praised for its attention to diversity.  As Knowmore.org reports, since 1999, Target has had an Employer’s Pledge that outlines basic standards by which the work environment at Target must abide.  This accurately represents its commitment to the team members’ happiness.  Additionally, Target has a non-discrimination policy that includes sexual orientation.  This apparent attention to gay rights directly contradicts with its later payment of political candidates, but nonetheless Target was recognized for its efforts in 2004 when it received a score 86 on the Human Rights Campaign 2004 Corporate Equality Index.  This measure rates companies on their policies that deal with gay, lesbian, bisexual, and transgender direct stakeholders.  In regards to the environment, Target uses sustainable practices across many sectors of its business and continues to focus on improvement in this realm.  The other aspects of Target’s commitment continue to garner focus as well.

ETHICAL ANALYSIS

Taking into account all of Target’s recent actions, both those that drew criticism and those that drew praise, I reason that Target has not fulfilled its corporate obligations as outlined by Donaldson.  In accordance with Shue, Donaldson outlines three correlative duties that all individuals and corporate entities have: “the duty to avoid depriving people of their rights…the duty to help protect people from such deprivation…[and] the duty to aid those who are deprived” (Hartman 163).   He then goes on to argue that a fourth category of correlative duty exists: the duty of “avoiding helping to deprive” (Hartman 165).  This is more of an indirect duty, but Donaldson argues that it is just as important as the other three categories.

In regards to the first duty, Target has both shone and failed.  Nowhere in its history has Target actively deprived a group of its basic rights.  Even in the case of the Salvation Army solicitation ban, Target has a right to decide who may or may not be present on its premises; thus, by banning Salvation Army it was not depriving the charity of any of its basic rights as is commonly believed.  In other aspects of its business, Target has consistently fought to ensure people have their basic rights, as evidenced by its non-discrimination policy.  Donaldson would find that, in some respects, Target has acted perfectly in accord with its first correlative duty.  Similarly, through the efforts of Pole and Target’s marketing team, people are (in a sense) being deprived of their right to privacy.  By so closely examining consumers’ purchase behavior and buying habits, Target is inserting itself into people’s lives in a way in which it had not previously been welcome.  It consumers have no say in this matter; therefore, they are being deprived of their basic rights.

The second correlative duty – the duty to help protect people from deprivation – was not as clearly carried out by Target.  By donating to politicians who were openly anti-gay rights, Target was not protecting those in the LGBT community from discrimination.  On the other hand, it could be argued that Target was funding their discrimination.  By supporting the campaigns of candidates who did to support gay rights, Target was voicing its preference for that candidate.  In other words, Target wanted these candidates to win so that its investments were not in vain.  If those candidates were to win, then gay rights would not be enforced; thus, Target was in no way helping to protect the general population from deprivation.

Target’s success in following the third duty is relatively evident.  On one hand, Target has programs in place, such as its School Fundraising program, to aid those who are less fortunate.  It is clearly concerned with aiding those who need it. Target is a very charitable company and has only proven so in recent years with its continued attention to community relief.  The corporation as a whole has constantly demonstrated its intent to aid those who are deprived.

Target runs into some problems when looking at the fourth duty.  Target’s ban of Salvation Army solicitation goes directly against Donaldson’s fourth correlative duty.  Despite the fact that Target donates money directly to Salvation Army each year, by banning the charity from soliciting additional donations outside of Target stores, Target (as previously mentioned) is depriving SA of a significant amount of money.  Thus, it can be argued that Target is not avoiding helping to deprive those people that the Salvation Army serves.

CONCLUSION

All in all, Target has experienced its fair share of ups and downs in recent years.  When taking those things that the public has frowned upon and those things that the public has encouraged into account, one can examine the behavior of Target using Donaldson’s correlative duties and find that there is a bit of a mixed verdict.  Target has done things to both follow and go against these duties; however, I think Donaldson would argue that the magnitude of the ways in which Target has gone against its duties far outweighs the magnitude of the ways in which Target has carried out its duties.  As outlined above, in cases where the company seems to have done things that both support and contradict its duties, the ways in which Target has shirked its duties seem to occur at a worse degree.  Donaldson would say that Target has failed to carry out its obligations and corporate responsibility.

Works Cited

Duhigg, Charles. “Psst, You in Aisle 5.” The New York Times. The New York Times, 19 Feb. 2012. Web. 11 Nov. 2012. <http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=1&gt;.

Hartman, Edwin M. “Donaldson on Rights and Corporate Obligations.” Multinational Corporate Responsibility (n.d.): 163-72.

Linkins, Jason. “Target Continues To Make The Political Donations They Had Previously Apologized For Making.” The Huffington Post. TheHuffingtonPost.com, 21 Dec. 2010. Web. 10 Nov. 2012. <http://www.huffingtonpost.com/2010/12/21/target-continues-political-donations_n_799950.html&gt;.

Target.com

Teague, Don. “Target Bans Salvation Army Solicitations.” Msnbc.com. Msnbc Digital Network, 13 Dec. 2004. Web. 10 Nov. 2012.