Case 3

Everyone Does It

The ethical problem is caused by various factors. On the one hand, the satellite
imagery industry is a highly attractive and fast-growing market, so all
participating companies heavily rely on acquiring and keeping their clients to be
able to compete. On the other hand, all companies depend on venture capitalists
who provide the financial means for the companies’ projects. Due to current
negotiations with a Japanese client, Jim has to decide of whether to act ethically
correct or rather in favour of the company.
According to scenario 1, Jim discloses the information about the delayed
completion date. Consequently, further negotiations with the Japanese would be
cancelled and the advance contract would be made with a competitive company.
The second alternative, described as scenario 2, would be to withhold the
information from the customer. As a major consequence, ISI would probably
get the contract and the financial future of company would be secured for the
moment. As possible negative consequences, the company's reputation could be
damaged and possible contract conditions could result in compensation claims
of the Japanese company. However, the company is prepared to take this risk
than to lose the contract to one of ISI’s competitors. In the best case, the
contract will be signed and the delay will be tolerated

Recommendation
It is recommended that ISI should conceal the delay of the launch date and to
use the published one. By doing so, the company will be secured at the moment,
which is the most important thing as far as we concerned

*case questions:
1. What are sources of the factors which created the ethical dilemma?

There are several Internal forces include:

 Jim Willis VP Manager, Fred Ballar President
Prior approval is needed to disclose company information
The financial stability of the company and its existence.
2. Is it ever appropriate to withhold negative information from the
client?

Ethically, it is not accepted publish misleading information to our clients,

but in some situation can withhold negative information (keep silent)
unless the information affect directly our client, but in this case it is a
must to disclose the full information about the expected delivery date as
it will affect customer negatively

3. What should ISI do?

ISI should delayed negotiations and emphasis on alternative short term

solution to complete satellite camera project and if there is no way else,
they have to disclosed the negative information to HTC.

4. What is meant by the term, “industry practice”? Is this an example of

moral relativism?

Industry practice: We believe that a certain action is commonly

accepted practice in an industry and competitors behave in the same
unethical practice. Yes, we think it is a social group relativism and
argues that a decision is considered legitimate if it is common
practice, regardless of other considerations (“everyone’s doing it”).

5. In what level of moral development is Jim Willis? His boss, Fred

Ballard?

Jim: Conventional Level As he is concerned his actions are justified by

an external code of conduct.

Fred: Principled Level As he justified his action by an individual at this

level looks beyond norms or laws to find universal values or principles
and adherence to an internal moral code.
 6. Would a code of ethics have prevented/resolved this ethical
dilemma? What should be in a code of ethics? What if ISI had a Code
of Ethics which stated that proprietary information could not be
disclosed to anyone outside the company and allowed no
exceptions?

*YES, prevent only but not resolve,

*Disclosure of full information in respect to company reputation and
its position in the market.
*It will affect company reputation and mutual trust

7. What would the utilitarian approach to ethical behaviour say about

full disclosure vs. withholding? Individual rights approach? Justice
approach? Kant’s categorical imperatives?

According to Utilitarian approach: The company should have full disclosure as

it will have negative consequences on the clients. According to Individual
Rights: Fred may not disclose the full information in case he considered that
the future contracts is the right to his company According to Justice Approach:
The full disclosure is must to give the other competitors who can finish it.