1. SOSC 111 - Science Technology and Society Today: Lesson 17 Ethics, Engineering and Business October 30, 1998 Dr. Vincent Duffy - IEEM http://www- ieem.ust.hk/dfaculty/duffy/111 email: vduffy@ust.hk 1

2. Overview for today n View videotape ‘Think before you leap’ n segment 2: ‘Blowing the whistle’ n Discuss Rational Technique n Compare to the Ethics Plus Model n QOTD 5

3. Questions of the Day n Q1. What is the meaning of whistle blowing? n Q.2. What is the difference between the ‘ETHICS-PLUS model and the ‘Rational Technique’? n Q.3. What is the significance of the sunshine test? Why do we worry about company business being discussed openly since it is private? n Q.4. Who are the stakeholders in the Pepsi case? Who is at fault? 6

4. rational technique n define the problem u recognize the problem and collect information n consider the options u generate alternatives and compare u who benefits or suffers - how much? n make a decision u select option based on conformity w/laws, code of ethics, etc. u implement - think about what is missing? 10

5. What would you do? n facts? Tang gave her promotion n problem was brought to her attention n ethical issue? u ‘whistle blowing’ 11

6. What would you do? n alternatives? u conspire (to cheat) w/Alex u pretend not to know u verify Alex claim about Tang u if false? consult w/Tang & senior management u if true? seek employment elsewhere &/or.…whistle n these actions by Alex/Tang can not survive ‘Sunshine test’ u if malpractices are discovered by public her career prospects will be poor both inside and outside company 12

7. What is the meaning of ‘whistle blowing’? u whistle blowing is what someone might do to get the authority’s attention F to tell (in chinese) u in the old days, policemen used to blow a loud whistle if they needed assistance from other police u in the case of Sandra’s office, (Think before you leap-video) F money from a client account was used by her co-workers to trade securities for their own benefit u Sandra was to decide whether or not to get the attention of ‘authorities’ F either outside her company or in her company u She was trying to decide whether or not to ‘blow the whistle’ to get the authorities attention

8. What is missing from Rational Technique? n Feedback- u nothing built in to show that perception of the implementation by others will affect the outcome u remember sunshine test? F can the decision stand the light of day? F can the issue be discussed openly and discussed w/out problem? 13

9. Recall: Ethics-Plus Model n ETHICS - Establish relevant facts n Take stock of ‘stakeholders’ involved n Have assessment of positions & likely responses n Identify viable alternatives n Compare & evaluate consequences of alternatives n Select appropriate course of action n PLUS - Professional conduct n Legal requirements n Uncompromisable values eg. integrity, loyalty, honesty n Sunshine test - can the issue and decision be discussed openly? 8

10. Q3. What is the significance of ‘sunshine test’? n Why do we worry about company business being discussed openly, since it is private? n Though the matters are private (company), F it should be considered how the public would react if they find out the actions, because F it is possible that someone will find out F maybe by chance F maybe from a ‘whistle blower’ or F maybe just newspapers asking questions

11. New case n Today: discuss Pepsi u science technology and society u a ‘computer problem’ causes a situation where a difficult decision has to be made

12. ex. Pepsi Cola-Philippines n sales have been running a distant 2nd to Coke n Pepsi launched ‘Number Fever’ campaign in Feb.92. Numbers printed on the underside of cap and winning numbers announced each day n Prizes up to $1M pesos, $300k HKD n Ads in newspapers, radio, TV, saying ‘today you could be a millionaire’ n Promotion successful, extended 5 more weeks n most won 100 pesos ($30HKD)

13. n Victoria Angelo, unemployed mother of 5, lives w/family in tin-roofed shack in Manila n husband, Juanito, earns $30 HKD / day n began drinking pepsi, every meal, snack n each day prayed to get winning number n gather around small TV w/neighbors to see n May25, #349 flashed winner

14. n ‘we are a millionaire’ to children ‘you can finish school and go to college’ to husband ‘you can buy passenger jeep’ to self ‘we can buy a real house’ n a dream come true n unfortunately, Pepsi realized mistake, thousands of people were demanding payment n realizing the mistake could cost Billions of $ n Pepsi refused to pay

15. n Riots broke out, Pepsi delivery trucks were stoned, torched, overturned n homemade bombs were thrown at Pepsi plants and offices n in one case, fragmentation grenade tossed at a parked Pepsi truck bounced off truck n killed 5 year old girl, schoolteacher and wounded others

16. n The violence frightened the company officials and they offered then $50 HKD to the winners n more than 480,000 winners claimed the prize n if paid in full more than $50Billion HKD n Violence resulted in 30 burned trucks, 6000 people filed civil suit for damages n 5000 criminal suits charging fraud (false advertising) n Pepsi claimed it was started by a ‘computer error’

17. QOTD - Q4 - Pepsi a ‘computer problem’ n n In the Pepsi case, who are ‘stakeholders’? n n Were any ethical principles violated? n n Was Pepsi justified? n n What should they have done differently? n n When? n n Would the result have been similar or different in Hong Kong?