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MGT610 Business ethics GDB Solution Fall 2013

Learning objective:

1. To make the students learn about the harmful business techniques for eco system.
2. To make the students learn about the impact of profit orientation on society.

Learning outcomes:

1. Students learn about the use of utilitarian approach in a cognitive dilemma.
2. Students would learn about the drawbacks of a business technique for society.

Context

Blast fishing or dynamite fishing is a fish catching technique used to artificially kill the bulk quantity of underwater fish for commercial purpose. In this technique, small scale underwater dynamite blasts are used to kill fish for easy collection of bulk quantity fish. This is a large scale technique used in different parts of the world. Although it is an illegal technique in most of the countries but still it is in use due to weak regulatory system in some countries. Many fish farms and fishermen use this technique for making easy money with less cost and time. On the other side of it, negative impact of blast fishing on eco system and human health is yet unexplored to a large extent.

Case

Mr. Nadeem who is the manager of a fish farm near the bank of river Jhelum is in a cognitive dilemma whether to use eco friendly fish catching techniques or to use blast fishing technique for making quick profit. Financial returns of the firm may significantly increase if Mr. Nadeem starts using this technique of blast fishing. He has often observed fishermen and fish farms in the surrounding areas using this technique. There is no significant regulatory check on sea life protection in Pakistan although laws are there along with some foreign funded NGO’s working for wild life protection.

Now from financial perspective, Mr. Nadeem wants to use blast fishing technique. But his understanding about the usefulness of an ethical business approach is causing doubt in his mind. He has started thinking about the after effects of blast fishing for surrounding population in particular and for society in general. After some brainstorming, he has decided to use utilitarian approach for making a final decision in this regard.

Question

Do you think that the utilitarian approach should be used in this situation for making a final decision on blast fishing? What kind of drawbacks a fish farming business may have with the use of such blast fishing technique?

The Utilitarian Approach is an ethical theory holding that the proper course of action is the one that maximizes the overall happiness. It is thus a form of consequentialism, meaning that the moral worth of an action is determined only by its resulting outcome, and that one can only weigh the morality of an action after knowing all its consequences.

Utilitarianism is a theory in normative ethics holding that the proper course of action is the one that maximizes utility, usually defined as maximizing happiness and reducing suffering. Classic utilitarianism’s two most influential contributors are Jeremy Bentham and John Stuart Mill. John Stuart Mill in his book Utilitarianism, stated, “In the golden rule of Jesus of Nazareth, we read the complete spirit of the ethics of utility. To do as one would be done by, and to love one’s neighbour as oneself, constitute the ideal perfection of utilitarian morality.” According to Bentham and Mill, utilitarianism is hedonistic only when the result of an action has no decidedly negative impact on others. It is now generally taken to be a form of consequentialism, although when Anscombe first introduced that term it was to distinguish between “old-fashioned utilitarianism” and consequentialism.[2] In utilitarianism, the moral worth of an action is determined only by its resulting outcome, although there is debate over how much consideration should be given to actual consequences, foreseen consequences and intended consequences. In A Fragment on Government, Bentham says, “it is the greatest happiness of the greatest number that is the measure of right and wrong” and describes this as a fundamental axiom. In An Introduction to the Principles of Morals and Legislation, he talks of “the principle of utility” but later prefers “the greatest happiness principle.

For example, in a situation involving the distribution manager of a supermarket chain sending lower-quality cuts of meat and vegetables to lower-profitability stores in disadvantaged neighbourhoods, one can see how this approach might be defended.

The manager rationalizes that as long as the meats and vegetables are above some minimally acceptable quality level, it is in the best financial interest of the supermarket chain to take whatever action it can to enhance overall operations.

With respect to shops located in the least affluent areas of the city, economic advantage is maximized by systematically discriminating against these less profitable stores. Alternatively, management may also calculate (quite reasonably) that the marginal value of the inner-city store can be maintained only by offsetting the impact of higher insurance and security costs and lower sales volume per square foot with other cost-cutting measures.

This reasoning may also be combined with recognising the need to provide higher quality to customers in more affluent areas that may also present the greatest threat from competitors. When compared with the alternative of closing an otherwise unprofitable store (with the ‘external’ costs of unemployment and less service to that neighbourhood), the current practice may be the most ethical in a utilitarian sense.
Drawback of Blast fishing technique:

Researchers believe that destructive fishing practices like blast fishing are one of the biggest threats to the coral reef ecosystems. Blown up coral reefs are no more than rubble fields. The long-term impact associated with blast fishing is that there is no natural recovery of the reefs. Coral reefs are less likely to recover from constant disturbance such as blast fishing than from small disturbance that does not change the physical environment. Blast fishing destroys the calcium carbonate coral skeletons and is one of the continual disruptions of coral reefs.In the Indo-Pacific, the practice of blast fishing is a main cause of coral reef degradation. As a result, weakened rubble fields are formed and fish habitat is reduced.

The damaged coral reefs from blast fishing lead to instant declines in fish species wealth and quantity. Explosives used in blast fishing not only kill fish but also destroy coral skeletons, creating unbalanced coral rubble. The elimination of the fish also eliminates the resilience of the coral reefs to climate change, further hindering their recovery. Single blasts cause reefs to recover over 5–10 years, while widespread blasting, as often practiced, transforms these biodiverse ecosystems into continuous unstable rubble.

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