BMGT 496 Business Ethics
Purpose: In the first assignment, you have the
opportunity to see how ethics can play out in a real world
scenario. You will read the case scenario and answers the
questions in a narrative format. Use headings for each
question. Headings are not the question. You are
required to use the course material to support your reasoning and
the conclusions made.
Outcomes met by completing this project:
1. identify ethical issues that arise in domestic and global
business environments using an understanding of ethical concepts
and of legal and business principles
Case Scenario:
Pacific Gas and Electric Corporation (PG&E) that supplies
electricity and natural gas to 16 million people, owns
the transmission lines attributed to causing
the November 2018 California “Camp Fire” that killed 85
people and destroyed thousands of acres of land
including wildlife and the town of Paradise,
California. Facing more than $30 billion
in liability costs, the company has filed for bankruptcy
protection.
Recent investigations including documents obtained under
the Freedom of Information Act, reveals disturbing
historical facts about the company’s knowledge and management of
its infrastructure. The information shows that
the company knew of 49 steel towers needing replacement long before
the November fire (WSJ, 2019). Built in the early 1900s,
much of PG&E’s original equipment remained in service including
towers with a life expectancy of 65 years but kept in operation up
to 108 years (WSJ, 2019). More than 2500 towers in the
system were installed in the 1900s and 1910s, and an additional
6900 towers were kept in operation without knowing their
age (WSJ, 2019).
According to Federal Regulatory findings
PG&E repeatedly delayed upgrades to the older equipment,
opting instead to spend billions on projects like sub-station
upgrades. California’s rules for electrical transmission
are a simple three sentences stating that each utility
company must come up with its own procedures and follow
them.
The danger was exacerbated in 2013 when historic drought
dried up California land. In 2017 the company
acknowledged in its internal documents that a plan was needed to
prevent structural failure and ground fires. State
officials concluded that equipment failure on the Caribou-Palermo
line, built in 1921 was the cause of the deadly California
fire.
According to an attorney representing victims in a lawsuit
against PG&E, the company spent money from customers to boost
corporate profits and compensation, rather than infrastructure
maintenance and safety (CNBC, 2018).
The lawyer further stated that while other utilities
routinely shut power lines down when windy conditions prevailed,
PG&E’s pattern was to remain in service. He
attributed this to management bonuses that were tied to
customer complaints, rather than safety adherence (CNBC,
2018). On June 18, 2019 PG&E agreed to pay the town of
Paradise $569.5 million in settlements to help rebuild the
destroyed community (KRCR, 2019). Other lawsuits are
ongoing and pending without final rulings.
PG&E stated it has begun repairs and spot fixes to the
most severe problems and has closed the Caribou-Palermo
line all together. Its website dedicates a page to
reorganization under Chapter 11 including specific infrastructure
and safety measures. PG&E’s CEO and President,
William D. Johnson is supported by a host of vice presidents
including a Chief Ethics and Compliance Officer and a VP
of Community Wildfire Safety (PG&E website).
How to Set Up the Paper
Create a Word or Rich Text Format (RTF) document that is
double-spaced, 12-point font. The final product will be
between 4-6 pages in length excluding the title page and
reference page. Write clearly and concisely.
Instructions:
Course Material
For this project, you are required to use the case scenario
facts and the course material. External sources are not
permitted. You are not researching on the Internet or using
resources from outside the course. You are expected to answer
the requirements identified below showing the connection between
the case scenario facts and the course material. Using
course material goes beyond defining terms and are used to explain
the ‘why and how’ of a situation. Avoid merely making
statements but close the loop of the discussion by explaining how
something happens or why something happens, which focuses on
importance and impact. In closing the loop, you will
demonstrate the ability to think clearly and rationally showing an
understanding of the logical connections between the ideas
presented in a case scenario, the course material and the
question(s) being asked. Using one or two in-text citations
from the course material throughout the entire paper will not earn
many points on an assignment. The use of a variety of course
material is expected consistently supporting what is
presented. The support must be relevant and applicable to the
topic being discussed. Points are not earned for mentioning a
term or concept but by clearly and thoroughly explaining or
discussing the question at hand.
NOTE: If external sources are used, what is presented will
not count and a penalty for following instruction will apply.
Project 1: News Event
(Your Name)
BMGT 496 (section number)
(Instructor’s Name)
(Please do not use pictures or images on the Title Page –
remove from your final copy)
Introduction
(Write an Introduction paragraph. The Introduction paragraph
is the first paragraph of the paper and will be used to describe to
the reader the intent of the paper explaining the main points
covered in the paper. This intent should be understood prior
to reading the remainder of the paper so the reader knows exactly
what is being covered in the paper.)
(Write the introduction last to ensure that all of the main
points are covered.)
Ethical Issue(s)
(Identify and discuss the ethical issue(s) related to Pacific
Gas and Electric Corporation.)
Stakeholders Implications
(Identify the stakeholders involved in the Pacific Gas and
Electric Corporation ordeal)
(Discuss the potential implications of the company’s actions
on each stakeholder or stakeholder group. Give examples.)
Utilitarianism Viewpoint
(Explain how a utilitarian would view Pacific Gas and
Electric’s actions.)
Kantian Viewpoint
(Explain how Kant would view the actions of Pacific Gas and
Electric Corporation.)
Moral Responsibility
(Discuss whether Pacific Gas and Electric had a moral
responsibility to be honest with customers even when doing so may
reduce company’s profits? Why or why not?)
Conclusion
(Write a concluding paragraph that is brief and summarizes
the main points. Provide specific information related to the
major topics discussed in the paper.)
References
(The reference page is on a separate page from the report.
The reference page is completed according to APA with each
reference left-justified with hanging indentation for subsequent
lines. References are completed in alphabetical order. Please see
the module, Learn to Use APA to ensure references are in APA
format.)
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