Assignment:
Data-Mining Ethics and Company Growth Square Off. SupplyCo. is a supplier to a number of firms in an industry. This industry has a structure that includes suppliers, manufacturers, distributors, and consumers. Several companies are involved in the manufacturing process-from processed parts to creation of the final product-with each firm adding some value to the product. By carefully mining its customer data warehouse, SupplyCo. reveals a plausible new model for manufacturing and distributing industry products that would increase the overall efficiency of the industry system, reduce costs of production (leading to greater industry profits and more sales for SupplyCo.), and result in greater sales and profits for some of the industry's manufacturers (SupplyCo.'s customers). On the other hand, implementing the model would hurt the sales and profits of other firms that are also SupplyCo.'s customers but which are not in a position (due to manpower, plant, or equipment) to benefit from the new manufacturing/distribution model. These firms would lose sales, profits, and market share and potentially go out of business. Does SupplyCo. have an obligation to protect the interests of all its customers and to take no action that would charm any of them, since SupplyCo. had the data within its warehouse only because of its relationship with its customers? (It would betray some of its customers if it were to use the data in a manner that would cause these customers harm.) Or does it have a more powerful obligation to its stockholders and employees to aggressively pursue the new model that research reveals would substantially increase its sales, profits, and market share against competitors? (Cooper text, #4, page 51)
a. What are the most prudent decisions SupplyCo. Can make about its responsibilities to itself and others?
If we consider the sales with the new model
b. What are the implications of those decisions even if there is no violation of law or regulation?
There is an answer
a) if supply co drives some of its customers out of business then it could potentially hurt itself. However, if the over all sales with the new product exceeds any losses, then it is a business decision. If on the other hand, a way could be found via license or distribution agreement for these other customers to sell the product under a private lable perhaps then it could benefit a broader range of consumers. From a company perspective they must manage the business to produce the best return for the investors while striking a good balance to benefit the consumer population. (Social Consiousness). The betrayal of customers is contrary to this.
b) as indicated in the last line, one wants to maximize profits but not at the cost of social consiousness. If this occurs, then you get an Enron or World Com debacle.