Achmad Faizal Azmi (361160)

Case 1: Slavery in the Chocolate Industry?

1. What are systemic, corporate, and individual ethical issues raised by this case?
The first systemic issue is related to the legal aspect of slavery in the chocolate industry.
Actually, slavery on farms is illegal in the Ivory Coast but the law is rarely enforced.
Open borders, a shortage of enforcement officers, and the willingness of local officials to
accept bribes from membersof the slave trade all contribute to the problem. then, other
systemic issues raised by this case is related to the economic sytems. Price for cocoa
beans in global markets have been depressed most year since 1996. With low prices,
farmers turned to slavery in order to cut the labor cost for surviving in this kind of
situation.
The corporate issue raised by this case is related with the middlemen that buy the beans
from the Ivory Coast, grind and process them, and then sell the processed cocoa to the
chocolate manufacturers. These middlemen certainly know the slavery problem in cocoa
farm. Moreover, the middlemen argued that slave-free label would not only hurt their
sales, but in the long term could hurt african cocoa farmers by reducing their sales and
lowering the price of cocoa.
Lastly, there are some individual ethical issues that raised in this case. Cocoa farmers are
the one who responsible for individual ethical issue in this case Because they use child
slavery labor and it is illegal. Moreover, it is immorally wrong to take someone
unwillingly. The second issue is the consumers who knows the problem and continue to
use product from Ivory Coast cocoa farmer who do slavery. Consumers should take into
account about it, because with every chocolate they buy, they contribute the continuation
of the slavery in chocolate industry.
2. In your view, is the kind of child slavery discussed in this case absolutely worng no
matter what, or is it only relatively wrong, i.e., if one happens to live in a society (like
ours) that disapprove of child slavery? Explain your view and why you hold it
The answer for this kind of question is varies in relative to the culture within the society.
However, in my opinion, child slavery is absolutely unacceptable. Children are
kidnapped, sold and forced into harvesting. Farmers are beating them. From may point of
view, children should not be used for labor. They should have aright to choose their
lifestyle. They should have education and then contribute the countryseconomy and
welfare.
3. Who shares in the moral responsibility for the slavery ocurring in the chocolate
industry?
In my opinion, African cocoa Farmers, middlemen of cocoa, American chocolate companies,
consumers and people who certainly know the real condition of Ivory Coast cocoa farms,
shares in the moral responsibility for the slavery occurring in the chocolate industry. African

cocoa farmers use child slavery labor. While, African government dont enforce the rules
about slavery (caused by bribe, shortage of enforfecemenrt officer, and etc). Middlemen buys
cocoa beans from African farmers who use slavery labor. American chocolate companies
already know that African farmers use slavery labor but they still continue to buy from them.
If we know the company names and continue to buy chocolate from them, we also share
morally responsibility for the slavery occuring in the chocolate industry.
4. Consider the bill that Representetive Engle and Senator Harkin attempted to enact into
a law, but which never became a law because of the lobbying efforts of the chocolate
companies. What does this incident show about the view that to be ethical it is
enough for bussinesspeople to follow the law?
In this case study, it was stated that the companies do know that there is child slavery
happening even before a documentary was made. The ethical action would be to think of
ways to stop it and there are numbers of ways to do it. But even after finding out the
situation, nothing was done, nothing at all. It may be because they can purchase cocoa beans
for a really low price, therefore it is considered as beneficial for them. Or it may also be due
to the fact that taking actions would cost a lot of money, time and manpower. When U.S.
Representative Eliot Engel sponsored a bill that aims to ensure that the chocolates purchased
by the consumers, majority voted in favor of it. This was later followed by the introduction of
the same bill by Senator Tom Harkin. But before the Senate could consider this bill, the
companies Mars, Hershey, Kraft Foods, and Archer Daniels Midland and with the help of
lobbyist Bob Dole and George Mitchell, they mounted a major lobbying effort to fight the
slave free labelling system. They argued that slave-free label would not only hurt their
sales, but in the long term could hurt african cocoa farmers by reducing their sales and
lowering the price of cocoa. This incident really show that to be ethical it is enough for
bussinesspeople to follow the law

Case 2: Aaron Beam and the HealthSouth Fraud

1. Which of the obstacle to moral behavior do you see at work in Aaron Beams
behavior and thinking? In Scrushys?
Under the first step, leading to ethical behavior Recognizing or becoming aware that we
are faced with an ethical issue or situation. The first obstacle was that Beam saw this
issue as a business issue rather than a legal issue. He thought it would hurt people if he
did not adjust the books and helped the figures, and he was certain that he was going to
do it only this one time. This caused him to not considered this fraud as ethical.
However, it didnt start here. It started the first time he adjust the ledgers to look better.
He rationalized his behavior by using the utilitarian view on the matter and justified the
process by doing what he thought would better the largest amount of people. Beam
diffuses the responsibility to Scrushy. He feels as though he doesnt have enough of a
backbone to stand up to Scrushy even though he persuaded others to follow them and he
himself only had to be persuaded the first time, even stating that it got easier the second
time. In the second step leading to ethical behavior making a judgment about what the

ethical course of action is, Beam has a biased theory of the world in that his thinking is
that the adjustments are so small that no one would notice. However, he did not think
about the FBI and what would happen to those involved, especially the investors, when
they did get caught. Beam showed a willingness to obey Scrushy even though he did
know what they were doing was wrong. Whether he considered it ethical or not he still
knew that it wasnt exactly right and did not have enough moral character to object.
2. Explain how Aaron Beam might have used the loyal agents argument to defend his
actions. Do you think that in Aaron Beams situation the loyal agents argument
might have been valid? Explain
Under the loyal agents argument Aaron Beams defense would be that Scrushy had
ordered him to manipulate the accounting records or more specifically the general
ledgers. He was seen as reluctant to comply, but was pressured by Scrushy and a bit
intimidated by him to the point at times of fear. We dont believe Aaron Beam could have
actually used the loyal agents argument. The information shows that Scrushy and
Beam already knew. From the beginning Scrushy and Beam both knew that the company
had to appear profitable to satisfy investors and lenders and to later succeed in issuing and
selling the company stock to the public. Therefore, Beam had to know Scrushy would be
asking or ordering him to make it happen. Based on Beams reluctances, it could be
argued he knew this to be wrong but he did it anyway.
3. In terms of Kohlbergs views on moral development, at what stage of moral
development would you place Aaron Beam? Explain. At what stage would you place
Richard Scruchy?
In terms of Kohlbergs views on moral development, Aaron Beams moral development
would be a Level Two stage three which is Interpersonal Concordance Orientation. This
stage explains about good behaviour that is living up the expectations of those for whom
the persons feels loyalty, affection, and trust such as family and friends. At this stage, the
young person wants to be liked and thought well. Aaron Beams in this stage because he
knows right and wrong both conventionally and what the law says. He haas to follow the
Scruchy decision which is he have to manipulate the general ledgers of account. Aaron do
this because he is in awe of Scruchy, and appears to want to please him as a person in
authority, and shows his loyalty to after all Scruchy picked Beam to start the company
with.
4. Was Aaron Beam morally responsible for engaging in the aggressive accounting
method he used? Explain. Was his responsible mitigated in any way? Explain. Was he
morally responsible for changing the clinic reports to increase the companys
earnings? Was his responsibility for his mitigated? Explain. Were those who
cooperated in his actions morally responsible for those actions? Was their
responsibility mitigated? Do you think Richard Scrushy was morally responsible for
the accounting fraud? Explain.

Yes, Aaron Beam is morally responsible for engaging in the aggressive accounting
methods he used to change financial reports so the net profit look larger. The decision is
from himself even someone force him to do something was wrong such Scrushy told him
to do whatever he could to make their financial reports look even better. In this case
Beam not responsibility mitigated in any way because he continued to commit fraud
when the company revenue fall short by 50 million dollar in 1996, then again fall short
by about 70 million dollar and until he retired in 1997. But he must responsibilities with
the other Owens, Martin, Livesay and a few others to alter the financial reports.
However, he was not morally responsible for changing the clinic reports in order to
increase the companys earnings. At this point his responsibility was mitigated due to the
fact that he himself was not involved at this point, there were other employees who were
also involved in such activities which they called themselves as a family. Therefore, All
those people who were co-operated to increase the companys earnings were morally
responsible.
Yes. I think that Richard Scrushy was morally responsible for the accounting fraud. It is
because, even though he did not work in the financial department, but he is the boss, he
is the people that responsible to the cases why Beam becomes unethical in work. He is
fully aware of the consequences and directed Beam to make adjustment to the financial
report.