Ethical Case:

Lorain Products Company

PHI 401, Sec-7, Group-4 (The Titans)

Name ID
S.M. Sazid Sami 1230943030
Setara Nasrin 1221028030
Syed Salman Rahman 1410729030
Khalid Mohammad 1221076030
Zubair
Samsad Sultana Mimi 1320775030
Tammim zahan 1311266630
Mizanur Rahman Khan 1320155030
 LORAIN PRODUCTS COMPANY

• Was co founded in 1936 by Paul Stocker

• The company was known for its revolutionary Sub-

cycle static frequency converter. (Invention by Paul)

• The company gained popularity across United States

and became a recognizable brand by 1960.
 CORPORATE CULTURE ESTABLISHED
BY PAUL STOCKER

The leader displayed the characteristic of a virtuous

man from the inception of the company.
For Example;
• He repaired the initial faulty products at the expense
of the company, knowing that this could bring dire
consequences to the financial state of the company.
• He did not care about the consequence but followed
the moral standard he set for himself & his company.
• He established the open door policy where
employees were encouraged to voice their opinion.
• Developed personal relationships with employees by
MBWA (Management by walking around)
 CORPORATE CULTURE ESTABLISHED
BY PAUL STOCKER

• He exercised a relationship with his employees that

was shared by the respect of equal distinction he
hold due to the belief which he relied upon.
• Developed future safety plans for his employees by
profit sharing and pension plans.
• His management style and practice remained the
same even when the organization became big with
more employees.
 CORPORATE CULTURE ESTABLISHED
BY PAUL STOCKER

What's more, in this way he set an ethical standard and

corporate culture for Lorain Products Company.

Along these lines, Paul Stocker played out the 4

primary ethics of life through his activities;

• Wisdom
• Courage
• Temperance
• Justice
 ACCORDING TO VIRTUE THEORY

• Virtue is acquired through exercise.

• Virtue is established through the examples

set by actions of individuals which resembles
excellence.

• Virtue is passed on from generation to

generation by exercising the historical
examples of excellence.
 ACCORDING TO VIRTUE THEORY

So, if the virtue theory is right, then the corporate

culture of Lorain Products Company which was
established by Paul Stocker would continue to
function if the successors of Paul Stocker can
keep imitating the standards set by Paul.

By telling the stories of Paul to new generations of

employees and by maintaining the same
leadership style which is required to maintain
the culture set by Paul.
 CASE QUESTION

Now the case question is;

• Can the culture of Lorain Products Company be

intact if the circumstances are changed?
For example; If the leadership is changed or if the
company ownership changed?

• Can the culture stay intact despite the Successors

practicing the basic principal of the virtue theory?
 PROBABLE LEARNING OUTCOME OF THE CASE

From the answers, we will conclude that;

Either Strength of virtue theory will be established

in this particular case. (Lorain’s case)

Or, Weakness of virtue theory will be established in

this particular case. (Lorain’s case)
 STAKEHOLDER IMPACT
ANALYSIS
Any changes to the circumstances & corporate culture; the
following stakeholders will be impacted;

Internal Stakeholders
•Owners/Investors- stockholders, Bondholders
•Board of Directors
•Employees

External Stakeholders
•Clients Lorain Products Company.
•Customers.
•Government agencies.
•Civil Society- civilians, media
•Competitors.
 THE CHANGING CIRCUMSTANCES

• In 1973, Lorain Company merged with Reliance Electric.

• Due to health concern, Paul stepped down & Martin Huge took
over the leadership (a change in leadership). Martin huge was
a long term part of the corporate culture set by Paul.
• In 1979, Reliance was purchased by ENCO which was a
subsidiary of Exxon Corporation. (a change in ownership).
• Reliance was again sold to investors from Citicorp & Prudential-
Bache Securities. (another change in ownership).
• Pete Paradissis became the vice president of Lorain Products
(aother change in leadership). Pete was also a long term part
of the corporate culture set by Paul.
 ACTIONS OF THE SUCCESSORS

• Both of Paul's successors Martin huge and Pete

Paradissis were long term part of the corporate
culture set by Paul.

• They were institutionalized by Lorain Products

virtuous culture and they followed the same
ideologies and leadership pattern which they
inherited form Paul Stocks.
Therefore, principals of the virtue theory was
applied.
 CASE ANSWERS

• The Company flourished in Paul's regime despite him

taking risky virtuous decisions against the odds.

• The Corporate culture of Lorain remained intact

Despite the changing circumstances.

• The Corporate culture remained intact despite

successors applying the basic principals of virtue theory.
 LEARNING OUTCOME OF THE CASE

From the answers, we conclude that;

Strength of virtue theory is established in this

particular case. (Lorain’s case)

Which means if virtuous decisions are made and if

virtue is passed on and practiced form generation
to generation, the end result will come positive.
THANK
YOU