Jayce Writer

Nicole : Insider trading raises a few ethical dilemmas. The ethical issue of fairness arises as some people privately benefit from knowledge that is not available for public view in the market (Schulman, 2012). This makes the playing field unleveled. Those who have access to such information can use it to make strategic investment moves in the market. This is unfair to those who do not have access to the information.

I feel a good example would be eBay bidding. Have you ever bid on a product and a few hours before the item ends, some mysterious user has just increased the bidding exponentially? The secret is that the seller may have another account and uses it to increase the pricing of the item to try to get the most out of you.

There are rules that are enforced against insider trading, but some feel as though they are not ethical. Those against these rules think that insider trading contributes to price efficiency in the markets (Schulman, 2012). The same people suggest that the cost for enforcement against insider trading is expensive.

Schulman, M. (2012). Insider Trading Enforcement. Markkula Center for Applied Ethics. Retrieved from

http://www.scu.edu/ethics/practicing/focusareas/business/insider-trading-enforcement.html

Richard: Insider trading is one of those most troubling ethical issues that happen all too often. In fact until recently I believe that our Congress could use insider information unavailable to the rest of us in order to buy stocks and others securities and many of them have made significant profits doing such. A year ago, President Obama signed the STOCK Act, that Bans Members of Congress from Insider Trading, banning this previous benefit to congress (White House, 2012).

This is nothing but an ethical issue because many individuals have information that the normal citizen would not have. These individuals run across a wide band of various company executives, directors’ employees and many others who are aware of some event that will either benefit the stock value or hurt it. And by acting on this inside information, they leverage this by performing a transaction that has the timing of these actions reviewed by the SEC and become part of an investigation. These type of actions do undermine consumer confidence in the markets and in the long run hurts the overall market.

It should be illegal for any person to be involved in any type of trade where they may their job be associated with having knowledge of certain securities. A typical financial person at a large investment house would certainly have access to information telling them trends and actions that would tip them off to some action they can take to benefit them. I am not sure how you manage such a situation but it does seem slanted towards those professionals, where ordinary people like myself are limited by a lack of information. When you look at the example of the Hedge Fund managers who made $60 million dollars, they were completely out of line and were caught red handed, but how many of these are not discovered.

References:

White House. (2012, April 4). FACT SHEET: The STOCK Act: Bans Members of Congress from Insider Trading. Retrieved November 18, 2013, from The White House Web site: http:/​/​www.whitehouse.gov/​the-press-office/​2012/​04/​04/​ fact-sheet-stock-act-bans-members-congress-insider-trading

 

Case Memo
1

Final Project

Sodelva Moodie

BMGT496

TO: The Board of Directors

FROM: Mr. Con Fused

RE: The Plumpy Nut Controversy

DATE: November 23, 2013

INTRODUCTION

It is a well known fact that Nutriset, the French based company which manufactures Plumpy’ Nut, plays a very crucial role in ensuring that children are sufficiently nourished as it has facilities in various countries in the world; for instance, Kenya, Malawi and even Niger, to mention but a few (Mills, 2006). UNICEF is also known to be one International Children’s Organization which purchases about 90% of Nutriset’s production capacity in order to further aid in the facilitation of proper child nutrition (Shaw, 2010). The fact that Nutriset’s production capacity is nowhere near the capacity needed in order to ensure the adequate combating of the ever increasing global epidemic of children malnutrition, it plays a very integral role in partnering up with and also facilitating projects in Africa. This would not be achievable however, if the United States is able to beat Nutriset’s patent (Jhingran, 2001).

FACTS SUMMARY

Nutriset is at the moment facing immense ethical dilemmas, for instance, if the US beats their patent, it will mean that many people in the respective countries in which Nurtiset carries out its projects will have to lose their employment. In this case, if Nutriset loses its patent rights, many children who were benefiting from the various projects which were being undertaken in their respective countries will have to literally go back to the drawing board as the problem of malnutrition will not be fully and efficiently addressed (West, 2004). On the other hand, if Nutriset does not lose their patent rights, it will mean that other children will also suffer from malnutrition, in this sense one might argue that, if Nutriset’s production capacity issue is not addressed or sufficiently increased in order for it to meet the much needed capacity capable to fully combat the global malnutrition epidemic, many children will also be affected due to this fact (George, 2009).

ETHICAL DILEMMA

An ethical dilemma, also referred to as a moral dilemma, is a situation in which one is given a choice to make between two distinct options, neither of which tends to resolve the specific situation in an ethically acceptable manner (Mills, 2006). Numerous organizations and companies today are facing numerous ethical dilemmas in which they need to make decisions that will not necessarily affect their companies’ reputation or destroy the already existing relationship between them and their clients. Under such situations, societal as well as personal ethical guidelines do not provide satisfactory results for the one to choose. An ethical dilemma makes the assumption that the chooser will adhere to the societal norms such as religious teachings or codes of law in order to make the particular choice ethically impossible (Shaw, 2010). Nutriset is no different from other companies currently facing ethical dilemmas. As stated under Facts Summary, the company is experiencing a few ethical dilemmas where it has to choose between doing what is right by the company itself and doing what is right by the general society.

Looking at the ethical dilemma where the Company is deciding on whether or not to lose its patent rights to the United States, it would be a positive move in that the latter would be in a better position of producing sufficient Plumpy nut thus saving millions of children around the world from malnutrition issues. On the other hand, by defending their patent rights and instead trying to manufacture more of their products, it will be able to adequately provide for malnutritioned children. The dilemma is now whether or not Nutriset will live up to their task should they opt for the latter.

ETHICAL ISSUES

Ethical issues are also ethical dilemmas faced by individuals and organizations at large. Nutriset is considered the only food company that fully dedicates itself to nutritional issues in developing countries, particularly in African nations. From what has been discussed previously, the company is currently facing a few ethical issues that arise from ethical dilemmas. One ethical dilemma that has been pointed out is whether or not to lose its patent rights to the United States. Three most significant ethical issues, related to, and arising from, the ethical dilemma are:

·
Decision-Making issues

The relevant associated fact under this ethical issue is the Company, Nutriset, choosing whether or not to lose their patent rights to the US and whether or not they can increase their production capacity if they do not lose their patent rights (Jhingran, 2001). Ethical decision making processes tend to concentrate on protecting both the employee and customer rights, protecting the common good, ensuring all business activities are fair and just, and ensuring individual values as well as beliefs of employees are also protected (West, 2004). This is an ethical issue for the Company because by losing its patent rights, it would mean loss of jobs for some of its employees, which would also mean that their rights as workers will no longer be protected. Again, if Nutriset was to lose its patent rights to the US, it would mean that the various stakeholders it associates itself with, such as WHO and UNICEF, will no longer purchase as much of its production capacity from the Company’s facility as it previously did (George, 2009). A direct resolution of this particular issue would be to investigate on other possible alternatives for instance, if it can, instead of losing its patent rights to the US, it may partner with the US companies which intend on winning the patent rights.

·
Fundamental issues; and

The most fundamental ethical issue that any given business must undergo are integrity and trust. Whenever customers suspect that a company or organization is portraying an unwavering commitment to ethical business practices, a high degree of trust tends to develop between the business and the individuals seeking to serve (Mills, 2006). By possessing these particular patent rights Nutriset has in the recent past maintained customer trust as it has been solely committed to providing Plumpy nut products to countries all around the world, especially the developing nations. However, should it lose its patent rights to the US, this would mean that it also loses its credibility where its clientele is concerned. Nutriset is also aimed at helping malnutritioned children and losing its patent rights would mean that it also loses its integrity (Shaw, 2010). These are some of the reasons why this issue is an ethical one and would most likely also affect the company’s stakeholders.

·
Compliance and Governance issues

It is expected of every business to fully comply with environmental laws, state and federal safety regulations, as well as all other applicable civil rights laws. As a company, Nutriset is also expected to observe the laws of the land in which it operates, specifically in the countries in which it operates its franchise in (Jhingran, 2001). If Nutriset does not abide by the respective laws, it will mean that it is not in compliance with the governance issues in question, therefore, it may be liable to license revocation by the respective countries. This will or may cause potential ethical issues to arise (West, 2004).

ALTERNATIVES

One possible alternative or solution to address and resolve the particular ethical dilemma together with each ethical issue discussed above would be to partner up with the rival US companies which want to acquire the patent rights of Plumpy Nut. It has been observed that when it comes to determining a set of rules or guidelines to adhere to in the business world, majority find it rather difficult for everyone to agree on one following the complexities of dealing with human nature (George, 2009). According to the Utilitarian Theory, an action is seen as being right or wrong founded on the results of the actions as well as its effects on majority of individuals. An action is ethically correct when it produces more advantages as compared to disadvantages. The Company should thus take into consideration the few alternatives it has and the kind of outcomes they can result in, and whether or not such alternatives will help the maximum amount of stakeholders (Mills, 2006).

RECOMMENDATION

From the three alternatives that have been previously mentioned above, I would recommend partnering with the US companies that intend on having the patent rights as the most suitable recommendation. This would be positive in that by partnering with the US companies, Nutriset will attain the required production capacity and also maintain the initial profits it was making prior to the patent rights issue (Jhingran, 2001). The recommendation will address the ethical dilemma and ethical issues in that it will not pull out from its current position and therefore workers will still maintain their employment and malnutritioned children will be catered for. It will also be advantageous in that more job opportunities will be forthcoming (Shaw, 2010). The Company management should consider incorporating the Utilitarian Theory in implementing this particular recommendation as it will focus on the general public.

FUTURE IMPLICATIONS FOR RECOMMENDATION

Some of the potential implications arising from the recommendations for the company would be retaining its credibility and integrity as it will still concentrate on helping the malnutritioned children while providing employment. Other businesses within the industry will also be positively affected as Nutriset will still allow the awarding of free patenting rights to the relevant companies (West, 2004). On the other hand, Nutriset will force or rather create awareness for other industries to take notice of the malnutritioned children all around the world, and desire to make their own contributions to the cause.

CONCLUSION

As we have discussed above, it has come to light that if Nutriset considers the idea of partnering with the rival or interested US companies which have the intention of beating their patent rights, then it will stand to gain in the long run as it will not relinquish its patent rights. Nutriset will also still maintain its key stakeholders, therefore making it more credible and moreover boosting its integral stand point. If Nutriset maintains the vehement defense of their patent rights and do not improve on their production capacity, it would mean that they are, after all, not that serious in respect to helping the malnutritioned children around the globe.

REFERENCES

George, R. (2009). Business Ethics. New Jersey: Prentice Hall.

Jhingran, S. (2001). Ethical Relativism and Universalism. New Delhi: Motilal Banarsidass.

Mill, J. (2006). Utilitarianism: Easy Read Large Edition. Sydney: ReadHowYouWant.

Shaw, W. (2010). Business Ethics: A Textbook with Cases. Connecticut: Cengage Learning.

West, H. (2004). An Introduction to Mill’s Utilitarian Ethics. Cambridge: Cambridge University Press.