ethical

Ethical Scenario

In a given scenario, I am the product manager at a local seed company that produces genetically modified seedlings. The company, which has performed admirably for more than five decades, now faces significant pushback and criticism from both end-use customers and environmentalists. In the company’s domestic market, health problems that have arisen are being attributed to the company's products. In addition, environmentalists are currently claiming the company’s offerings are having a negative impact on the local environments in which they are being used, with some claiming the seedlings are exacerbating water shortages. These issues have not come without cost or litigation, with the summary document making note of three pending lawsuits. The culmination of this new business climate has created a blight on the company’s great reputation and is internally perceived to be damaging to the company’s brand. As the product manager, I do not believe these issues will go away on their own.

As a new domestic climate takes form, new expansion opportunities have arisen abroad. I have been informed that a Latin American organization is currently interested in purchasing the controversial seedlings. A preliminary analysis has suggested that the country could provide a promising market with high-profit potential. In addition, it is internally believed that the country has an “almost non-existent” regulatory body, a beneficial attribute for a company looking to expand. With these positives come costs, however, as the company’s entry would likely result in the displacement of many small, local farmers - leading to further unemployment concerns which are already a problem inside of the country.

As a result of the new business climate, the CEO has asked for both an informed assessment and a list of recommendations by Monday. As the product manager, it would be my responsibility to access the given facts and make those recommendations.

The summarizing document has provided an informed overview of the company’s current and historical performance. We are informed the company is a “large organization, with a dominant presence in a relatively large metropolitan area.” We are advised that the company has performed well financially for over five decades, supplying our direct consumers with agricultural products that have typically resulted in “high yield[s].” In short, the company has been successful, and growth has accompanied that success. However, domestic criticism has recently led to growing concerns about the products the company is offering, and these criticisms are not expected to go away without direct intervention. As stated previously, end users are claiming our products are linked to major health concerns. At the same time, environmentalists have publicly voiced their own beliefs, stating our products represent a threat to local water supplies (as our seedlings reportedly consume more water than alternatives on the market). It has been noted that the environmentalists feel so strongly about their positions that they have petitioned local municipalities to prevent the sale of our seedlings. At this time, however, there is no evidence to prove or disprove either claim. The company’s official position has been one of reassurance, restating the efficiency and safety of its products. As a product manager, I believe the products to be safe, however, I recognize that there has not been a study to affirm nor disprove either position regarding our specific seedlings.

In the summarizing document, we are also informed of the company’s current opportunity for expansion into the Latin American market. In the document, it is stated that the country in question (and perhaps the region) could support an expansion, thereby generating a large increase in revenue and profits for the company. It is advised that the country has almost no regulatory oversight and the market is dominated by small-scale farmers who would not be in a position to compete with my employing companies’ offerings. As stated previously, it is believed that entry into this new market would exacerbate current unemployment problems, particularly in rural areas. The larger agricultural groups, however, would be in a position where they could readily adopt the seedlings and become our partners.

To adapt and flourish in the new business setting, the company will need to implement changes to its current operations model. To do this, there are several viable options. First, to address the health and environmental concerns, the company should conduct thorough research and tests to establish the health safety and environmental impact of the seedlings. This will help the company dispel any misinformation and doubts that have spread about our products. Once the research and findings are finished, they should be made public, and the results widely disseminated. One option is to conduct the research and tests with no guidance from the end users and environmentalists showing that our specific seedlings and the foods they produce are safe and sustainable. A second option, which may achieve a greater public “buy-in,” is to reference notable organizations and research showing that GMO foods are safe and sustainable along with our tests. A third option is to consult with the end users and environmentalists themselves regarding their concerns and allow them to make suggestions and recommendations regarding how the coming research is to be conducted, so long as their input is analytically sound. Regarding the health concerns, the research and tests should look to determine if the questioned health concerns are actually a result of our seedlings or some external factor. Regarding the environmentalists’ water concerns, the research and tests should determine if the seedlings actually use more water, and if so, determine if the additional water consumption is wasteful. It stands to reason, if twice the food is produced by our seedlings, twice the water consumption may be required. This would fit in with the historical trend of our products rendering high yields. The increased food produced may even contain the water itself.

A second pathway the company could take in response to the growing criticism is the development of a corporate social responsibility (CSR) Program. The company can develop a CSR program that addresses the issues that the company faces now and may face in the future. The goal of such a program could be to monitor quality standards and the environmental footprint of our products. If the created CSR board feels our products are becoming less efficient, they can alert the company executives internally, thus preventing a similar scenario in the future. This recommendation will also help externally as it works to build public trust and credibility. The goal of such a program could be to monitor our business segments and ensure our commitment to doing business in an economic, environmental, ethical, and philanthropically responsible manner.

Care should also be taken regarding the company’s current opportunity for expansion into the Latin American country. With the public image of the company already in jeopardy, the company should carefully evaluate the potential impact on both the Latin American economy and the environment. The company should consider alternative business models that would minimize any negative impacts on small-scale farmers. For example, perhaps the company could assist small-scale farmers in organizing a cooperative. From this position, the company could aid the cooperative in purchasing the seedlings as a single unit, thus reducing their cost to a manageable level. The company could also offer to sell the seedlings at an initially reduced cost, with the remainder due after harvest time. Lastly, the company could offer a different crop seedling that would not compete with the initial company-owned, large-scale farms' request for their own seedlings. In this way, the company can aid farmers in their tasks without undermining any largescale operations.

A separate, secondary option regarding a potential Latin American expansion could be in the form of a subsidiary, depending upon the political stability of the Latin American country. By establishing a subsidiary, the company can earn the ability to speak with the local governments about the company’s plans and interests as future laws and regulations are being developed. The subsidiary can also alleviate some of the unemployment problems within the country, by hiring unemployed locals Furthermore, a subsidiary in the country would show the company’s commitment to the further development of the area. Lastly, as stated in the summarizing document, the company sells seedlings, not seeds. Seedlings would require careful transport of the product to the Latin American country from the domestic country. If we were to open a subsidiary and produce the seedlings in the Latin American country, transportation costs could be minimized. This would result in lower prices, and possibly make the seedlings more cost-effective and better for both interested parties (company-owned and small-scale).

The company should take a proactive approach to address the issues facing it, and not just focus on maximizing profit. The company should discuss the concerns with all the stakeholders (end users, environmentalists, farmers, and government regulators) to understand their concerns and work together to find solutions that meet everyone's needs. Therefore, I believe developing a consensus regarding the reasons GMOs were initially developed is important before any discussion takes place. Fewer pesticides and herbicides in the environment are generally considered good things. With global warming, drought-resistant crops are also desirable. With dwindling land available for farming and an increasing global population, sustainable high-yielding crops are becoming necessary to feed the population at an affordable price. GMOs were developed so that fewer pesticides and herbicides would be needed in the growing of crops. By having a shared understanding with the public, the company will build back its trust and credibility. With a shared understanding, the company will regain any lost stakeholder confidence. With a shared understanding, the company is in a better position to maintain its operations and goals of expanding into new markets in a responsible and sustainable manner.

The company should consider the diversities of thought when evaluating alternatives as well because these groups represent stakeholders. Undoubtedly, the company wants to foster a favorable reputation in the future and so the individual thoughts of stakeholders need to be factored in wherever possible. Therefore, solutions to the problems should be found by working together with a community that thoughtfully considers and attempts to meet everyone’s needs. Based on this thought, I would recommend that stakeholders be encouraged in developing the research parameters that are to be conducted regarding the health safety, and environmental impact of the seedlings.

Whether or not a subsidiary of the company is created in the Latin American country, I would recommend dialog with government officials, large-scale farms, and small-scale farmers to attempt to work out an agreement so as not to displace the small farmers, exacerbating the unemployment problems in the region. The possible solutions identified earlier are not mutually exclusive. If possible, the company should work toward organizing the small-scale farmers as a cooperative with the purpose of being able to purchase seedlings as a single unit, thus reducing their cost to a manageable level. As stated previously, the company could entertain selling the seedlings at an initially reduced cost to the small farmers with the remainder due after harvest time or offer a different crop seedling that would not compete with the other market groups. This would assist the small-scale farmers, but not undermine the initial opportunity presented by the companyowned large-scale farms. By acting in a responsible manner, trust, credibility, and brand loyalty will be established in the new market.

With the available facts and the responsibility of a product manager, I would recommend several options to the CEO regarding the domestic market. The first recommendation I would stress to the CEO concerns the validity of the claims being made. I would restate that his business has grown large and successful under the public’s assumption of quality seedlings. This assumption has grown the company for over five decades. I would state that if the company wishes to stand ethically, it needs to find out the validity of the claims. I would advise the CEO that the criticisms are not going away nor are the lawsuits going away, if we cannot firmly stand behind our product from an educated, reasoned position. Therefore, I would recommend that the company hire researchers to discover the truth behind the seedling’s effectiveness. I would recommend that the end users and environmentalists be brought into the research development process and explain they should get complete access to the ongoing research and research results. I would explain while we do have a responsibility to the shareholder, these seedlings go into products that feed our neighbors and are currently being perceived as harmful to the local communities they are in. I would explain that we have a responsibility to see what these impacts are, if any. Along with this recommendation, I would suggest that the company adopt a corporate social responsibility (CSR) program. A CSR program can address the issues that the company faces now and will face in the future. This will help build trust and credibility and show that the company is committed to doing business in an economic, environmental, ethical , philanthropic, and responsible manner. This program will also serve as a visible representation of the company's stance on doing no harm to both customers and the environment. From this position, I would then launch a campaign, directly addressing the concerns of the two parties to restore brand loyalty. I would not admit any wrongdoing to the current lawsuits as these are pending cases and need to be judged on their merits on a case-by-case basis.

With respect to the new market opportunity, I would suggest to the CEO that care should be taken regarding the company’s current opportunity for expansion into the Latin American country. The company should carefully evaluate the potential impact on the local economy and environment. The company should consider alternative business models that would minimize the negative impact on small-scale farmers. I would recommend the company establish a subsidiary of the company in the Latin American country. By establishing a subsidiary, the company can lobby government officials and regulators, making sure the company’s interests are considered when laws and regulations are being developed. The subsidiary can also alleviate some of the unemployment problems within the country, by hiring locals. By creating the seedlings in the host country, we would benefit through a reduction in costs in the long-term which can be transferred to our customers in time. I would further recommend the company assist the small-scale farmer in organizing a cooperative for the purpose of group purchasing under the models suggested previously.

There are several ethical considerations that have been factored into the suggested recommendation. In the domestic market, there are perceived problems concerning both consumer health and environmental impact. Under the listed recommendation, the company would find out the validity of the claims being made and disclose those findings to the public. Under the listed recommendation we would create a CSR program to stop these concerns from growing again. This is done because the company has a moral obligation to provide healthy consumable goods to our customers and proper care to our neighbors’ communities. This is done because we have a responsibility to operate openly as a large, trusted business with the potential of quelling competition. This is done because we have a large number of stakeholders, whom we owe truthfulness, empathy, and value to as they invest in our business.

In the Latin American market, we have made the suggested recommendations with the goal to do no harm. We would like to supply the public with quality products, yet not at the cost of the local farmer. We have made the recommendations only after considering the impacts on the locals. We would look forward to a mutually beneficial future in the new marketplace with all of our partners.