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BSB111 - Business Law & Ethics Assessment 1

Lecturer - Nathan Lindemann 22 January y

Scenario - Tesla Company Defies Coronavirus Shutdown Orders

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Morally Indifferent CEO Ethical issues occur when moral conflicts and the moral standard is in question and must be addressed (Anon, 2020). The Morally Indifferent CEO scenario is a case in which follows the moral and belief system that is in contrast with the organisational view, which has ultimately created an ethical dilemma. Elon Musk is the CEO of Tesla, an American electric vehicle and energy company with a large group of stakeholders that work in different areas of the business. In this case, the CEO is indifferent to the pandemic and ethically has contrasting views to the organisation and law systems. Ethically the organisation, including employees, are willing to abide by the law of protecting the public during quarantine which is necessary for the conservation of community health. This has caused a conflict because the CEO's views are to continue to produce products in contrast to the workers who are uncomfortable continuing in the current environment.

The CEO publicly announcing the factory's reopening has caused great confusion for the workers and the legal requirements announced by the authorities. This case was chosen for the apparent discrepancy between the CEO’s views and the state's views for the working conditions in the business. With Tesla being based in California, America, the statistics show that 60% of companies in California closed to abide by new laws that were brought in to protect its citizens (Sandaram, 2020). This puts the CEO in an ethical dilemma by choosing to continue all work against instructions announced to protect the public. The following frameworks, Utilitarianism, Kantian and Aristotle's Virtue Ethics, will assist in analysing the situation, and a course of action will also be made to address the ethical dilemma.

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Utilitarianism The first framework includes Utilitarianism which narrows the moral theory that everyone will be treated equally without prejudice to personal views (James, 2017). This is known as an outcome action where the goal is to improve the lives who may be affected and increase well-being (James, 2017). Challenges associated with this framework can include the consequences to not take all aspects both present and future, both personally and externally into account, which could have Utilitarianism devolve into egoism (James, 2017). This ethical decision would not only affect the CEO himself but, the employees, consumers and the greater public.

Elon Musk as CEO is put in a position to reopen the operation as an individual who wants to have employees remain working and not be forced into lockdown regardless of health advice. His choice to publicly announce the reopening against legal advice could ultimately harm the business in terms of stakeholders who do not wish to open the company early. The circumstance of reopening the business early could see Mr Musk scrutinise his lack of ethical leadership and willingness to follow legal guidance.

The employees are in a position of conflict, where their place of work is opening, jobs and income are not being compromised and offers to work from home are being so-called being arranged. However, with most company jobs, this has proven to not be the case, social distancing and lax enforcement on masks and sanitation are being overlooked. Workers who originally were offered to work from home are given termination notices for not returning to work (Siddiqui, 2020).

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This response to the pandemic has overlooked the ethics of the situation and has proven to be a detriment to all staff. Ultimately having employees not return to work and feels like the workplace has let the company and public down.

This ties in with the Californian community having a company not abide by the law and disregarding the need for important health and safety measures. This sees the community then put at greater risk to their health, potentially harming the company’s brand as they could be perceived as having unprincipled priorities and uncaring attitudes towards their employees.

Lastly, the consumers have a significant impact on the performance of the business, and the opinions and views could be tainted by the ethical decisions made by the CEO. If they are not satisfied with the procedures in place and the decision to reopen, could ultimately see consumers shop elsewhere or lessen their opinion on the brand.

Agrees with reopening the company early

Disagrees with reopening the company early

7

-6

Employees

-5

7

Greater Community

-4

7

Consumers

-2

4

Total

-8

12

CEO

The Utilitarianism theory can determine the best course of action would be to not re open the factory early as this action can produce the most pleasure.

Kantian Ethics

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The second framework, Kantian Ethics is where moral reasoning can only be correct if the maxim can be applied universally (Shaw, H., & Barry, V., 2010). To be more specific, the two categorical imperatives are used to effectively apply Kantian ethics.

The first reformulation that is used as an alternative to the categorical formulation states; “Always act in such a way that you can also will that the maxim of your action should become a universal law” (BBC, 2014). The principle for this scenario would be Elon Musk stating “I will work through the pandemic and continue all operation because Americans should not be forced into lockdown”. The formula wholly looks on the universal application, and in this instance, the maxim would be “All companies and businesses should reopen their production because Americans should not be forced into lockdown”. If this principle was used for all businesses, then the country would have no control or adequate health system in place to protect the citizens from an uncontrollable threat.

Following this, the second reformulation formula states; “Act so that you treat humanity, both in your own person and in that of another, always as an end and never merely as a means” (BBC, 2014). If Mr Musk was to recommend all follow his steps to reopening their businesses as a protest to being forced into lockdown, this would be globally defying all efforts to protect its citizens. With Elon Musk being a global name and Tesla being a global brand, this would indicate the company to be unethical and irrational. Both formulas conducted together in this situation are essential, and it would be recommended for the brand's image that the business be closed and to adhere to the law.

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Aristotle's Virtue Ethics Virtue Ethics looks at good quality and characteristics of a doer and the actions associated in decision making (Stewart, 2009). Aristotle's Virtue Ethics can be approached in three separate aspects: 1. Function, goals and the good 2. Flourishing 3. Virtues.

By applying Aristotle's virtue ethics, the initial step is function. In this scenario, Mr Musk has the maximum power and influence on the company; the function of his role is to lead and influence all connected to create high-quality products and drive revenues. To be a good CEO, he must consider all aspects of the business in order to be a team and work efficiently and effectively. To achieve the flourishing step, he is to work in accordance with work virtues.

Virtues are emotional responses, and morally principled people have virtues valued for good that have been cultivated over time to become more prevalent during life experiences. Moral and intellectual virtues are the two types used within Aristotle's Ethics. If Elon Musk is willing to close down the worksite, his morals will show respect for the employees and. the greater public by adhering to legal advice. In this situation, his intellectual virtues would be listening and cooperating with legal advice for all involved health and safety wise. Recommendation and Conclusion To conclude, with the three frameworks used to analyse the current situation with the CEO of Tesla choosing to reopen its workplace against national laws. The recommended course of action for Mr Musk to consider closing the workplace and reframing from opening until it is safe to do so to protect the greater public, his employees, and consumers. Choosing to put many groups at risk and not adhere to health and safety laws could ultimately put the company in a difficult

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position moving forward. For most stakeholders, it would be recommended to not continue to work on-site but enforce work from home where productivity can be maintained in the safety of their own home.

Bibliography Anonymous. (2020). What are Ethical Issues?. My Accounting Course. https://www.myaccountingcourse.com/accounting-dictionary/ethicalissues

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BBC. (2014). Duty-based ethics. BBC. http://www.bbc.co.uk/ethics/introduction/duty_1.shtml#h3 James, N. (2017). (aucm) business law and ethics 2e custom for Queensland university of technology wlyetx. ProQuest Ebook Central https://ebookcentral.proquest.com

Siddiqui, F. (2020). Tesla gave workers permission to stay home rather than risk getting covid-19. Then it sent termination notices. Washington Post. https://www.washingtonpost.com/technology/2020/06/25/teslaplant-firings/ Shaw, H., Barry, Vincent E. (2010). Normative theories of ethics. Moral issues in business, (11th ed), 56-110. https://content.talisaspire.com/qut/bundles/5ba0608469df5038425b9b3 4

Stewart, N. (2009). Virtue Ethics, in Ethics: an introduction to moral philosophy. Ethics; an introduction to moral philosophy, pp 54-74. https://content.talisaspire.com/qut/bundles/5ba05c0369df5025275b9b3 4 Sundaram, A. (2020). Yelp data shows 60% of business closures due to the coronavirus pandemic are now permanent. CNBC. https://www.cnbc.com/2020/09/16/yelp-data-shows-60percent-ofbusiness-closures-due-to-the-coronavirus-pandemic-are-nowpermanent.html

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Appendix -

Tesla CEO Elon Musk has publicly announced he will be re-opening the California factory in violation of government orders to remain at home due to the outbreak of coronavirus.

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This has caused concern to the workers who have felt uneasy about returning back to work and the decided to take unpaid leave in order to protect family and friends.

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Following this choice to do so, workers have been issued termination notices for not returning back to work, this has caused conflict between the fear of losing their jobs or contracting the virus.

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With those who have returned to work in the factory have mentioned a lack in social distancing and lax rules on mask wearing and sanitation. Complaints have also been made about the lack of transparency on the cases contracted and the response to how these will be managed.

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His response was from his view on the lock down restrictions being a form of fascist power and the disapproval of taking Americans freedom.

Siddiqui, F. (2020). Tesla gave workers permission to stay home rather than risk getting covid-19. Then it sent termination notices. Washington Post. https://www.washingtonpost.com/technology/2020/06/25/teslaplant-firings/ ABC NEWS. (2020). Elon Musk defies coronavirus shutdown orders, risking arrest by reopening Tesla plant in US. ABC News. https://www.abc.net.au/news/2020-05-12/elon-musk-ready-for-arrest-astelsa-reopens-us-plant-coronavirus/12237306

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