BMGT 496 Business Ethics
Purpose: In the first assignment, you have the opportunity to see how ethics can play out in a real world scenario. You will read the case scenario and answers the questions in a narrative format. Use headings for each question. Headings are not the question. You are required to use the course material to support your reasoning and the conclusions made.
Outcomes met by completing this project:
1. identify ethical issues that arise in domestic and global business environments using an understanding of ethical concepts and of legal and business principles
Pacific Gas and Electric Corporation (PG&E) that supplies electricity and natural gas to 16 million people, owns the transmission lines attributed to causing the November 2018 California “Camp Fire” that killed 85 people and destroyed thousands of acres of land including wildlife and the town of Paradise, California. Facing more than $30 billion in liability costs, the company has filed for bankruptcy protection.
Recent investigations including documents obtained under the Freedom of Information Act, reveals disturbing historical facts about the company’s knowledge and management of its infrastructure. The information shows that the company knew of 49 steel towers needing replacement long before the November fire (WSJ, 2019). Built in the early 1900s, much of PG&E’s original equipment remained in service including towers with a life expectancy of 65 years but kept in operation up to 108 years (WSJ, 2019). More than 2500 towers in the system were installed in the 1900s and 1910s, and an additional 6900 towers were kept in operation without knowing their age (WSJ, 2019).
According to Federal Regulatory findings PG&E repeatedly delayed upgrades to the older equipment, opting instead to spend billions on projects like sub-station upgrades. California’s rules for electrical transmission are a simple three sentences stating that each utility company must come up with its own procedures and follow them.
The danger was exacerbated in 2013 when historic drought dried up California land. In 2017 the company acknowledged in its internal documents that a plan was needed to prevent structural failure and ground fires. State officials concluded that equipment failure on the Caribou-Palermo line, built in 1921 was the cause of the deadly California fire.
According to an attorney representing victims in a lawsuit against PG&E, the company spent money from customers to boost corporate profits and compensation, rather than infrastructure maintenance and safety (CNBC, 2018).
The lawyer further stated that while other utilities routinely shut power lines down when windy conditions prevailed, PG&E’s pattern was to remain in service. He attributed this to management bonuses that were tied to customer complaints, rather than safety adherence (CNBC, 2018). On June 18, 2019 PG&E agreed to pay the town of Paradise $569.5 million in settlements to help rebuild the destroyed community (KRCR, 2019). Other lawsuits are ongoing and pending without final rulings.
PG&E stated it has begun repairs and spot fixes to the most severe problems and has closed the Caribou-Palermo line all together. Its website dedicates a page to reorganization under Chapter 11 including specific infrastructure and safety measures. PG&E’s CEO and President, William D. Johnson is supported by a host of vice presidents including a Chief Ethics and Compliance Officer and a VP of Community Wildfire Safety (PG&E website).
How to Set Up the Paper
Create a Word or Rich Text Format (RTF) document that is double-spaced, 12-point font. The final product will be between 4-6 pages in length excluding the title page and reference page. Write clearly and concisely.
For this project, you are required to use the case scenario facts and the course material. External sources are not permitted. You are not researching on the Internet or using resources from outside the course. You are expected to answer the requirements identified below showing the connection between the case scenario facts and the course material. Using course material goes beyond defining terms and are used to explain the ‘why and how’ of a situation. Avoid merely making statements but close the loop of the discussion by explaining how something happens or why something happens, which focuses on importance and impact. In closing the loop, you will demonstrate the ability to think clearly and rationally showing an understanding of the logical connections between the ideas presented in a case scenario, the course material and the question(s) being asked. Using one or two in-text citations from the course material throughout the entire paper will not earn many points on an assignment. The use of a variety of course material is expected consistently supporting what is presented. The support must be relevant and applicable to the topic being discussed. Points are not earned for mentioning a term or concept but by clearly and thoroughly explaining or discussing the question at hand.
NOTE: If external sources are used, what is presented will not count and a penalty for following instruction will apply.
Project 1: News Event
BMGT 496 (section number)
(Please do not use pictures or images on the Title Page – remove from your final copy)
(Write an Introduction paragraph. The Introduction paragraph is the first paragraph of the paper and will be used to describe to the reader the intent of the paper explaining the main points covered in the paper. This intent should be understood prior to reading the remainder of the paper so the reader knows exactly what is being covered in the paper.)
(Write the introduction last to ensure that all of the main points are covered.)
(Identify and discuss the ethical issue(s) related to Pacific Gas and Electric Corporation.)
(Identify the stakeholders involved in the Pacific Gas and Electric Corporation ordeal)
(Discuss the potential implications of the company’s actions on each stakeholder or stakeholder group. Give examples.)
(Explain how a utilitarian would view Pacific Gas and Electric’s actions.)
(Explain how Kant would view the actions of Pacific Gas and Electric Corporation.)
(Discuss whether Pacific Gas and Electric had a moral responsibility to be honest with customers even when doing so may reduce company’s profits? Why or why not?)
(Write a concluding paragraph that is brief and summarizes the main points. Provide specific information related to the major topics discussed in the paper.)
(The reference page is on a separate page from the report. The reference page is completed according to APA with each reference left-justified with hanging indentation for subsequent lines. References are completed in alphabetical order. Please see the module, Learn to Use APA to ensure references are in APA format.)
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