Assignment
• Who are the stakeholders who are/will be affected in this scenario?
o BMI
o Subsidiary company
o Jose
o The people receiving the expired meat in the under-developed country
o Anyone who works for BMI because their reputation can be tarnished if something were to come out.
- The stakeholder model asserts that business interests should never be at the expense of society's long-term interests, cooperation for social benefit is for everyone's benefit, and that when business self-regulates there can be less government.
o The company's choices are directly affecting those individuals receiving the meat (indirectly being affected)
o The business was mainly self-regulated which means there is less government. (which led to the company's current situation) Is
• What are the ethical issues that are involved? Be sure to distinguish between issues that are primarily right-and-wrong (e.g., ethical or moral lapses) versus those that are right-and-right issues in which there are simply tough trade-offs of appropriate competing values.
o Ethical issues involvedputting business interests at the expense of putting society's health at risk.
- Priority of profits over public health of others
- Cutting prices to compete with the global market for the wrong reasons
- People in positions of power, not doing the right thing. Not maintaining Corporate Social Responsibility.
- Not having internal audits/inspections
o Issues
- Right: There are no right-and-right issues in this situation
- Wrong: BMI is jeopardising public health and evading social responsibility with less government inspection.
• Does the global context make a difference? Why and how?
o According to Thomas Friedman, globalization enables nation-states and corporations to reach farther, faster, cheaper, and deeper around the world more than ever before.
o The global context makes this case totally differently.
1. The laws that regulate the United States are much different than those of foreign countries. It would be much easier to get away with something like this in a country that is underdeveloped simply because it is considered lesser than us.
2. The distance between the subsidiary company of BMI and those underdeveloped countries is great. They can't put a face to the name of the people they are selling these products too so there is little to no sympathy.
3. The cost of raw material is so much cheaper in developing countries. Companies operating in developing countries can develop the same products are at much lower price. As a result, it is clearly seen that in order to match global prices, BMI had to resort to such practices while compromising public health.
• What are the opportunities, threats, and alternatives involved in the situation?
o Opportunities include updating checking processes for employees to assure that future meats are properly sold under US standards or the following:
- Mike had the opportunity to admitted that his business was not selling products under good standards.
- Maria had the opportunity to acknowledge the information which Jose brought to her.
- Jose had the opportunity to also check for past records or records of other subsidiary companies
o Threats include the probability of everyone losing their job at BMI and subsidiary companies or massive decline in health for at-risk regions in third-world countries who are receiving possibly expired meats. Another threat is the emergence of competing meat-product distributors arising to undercut BMI.
o Alternatives include:
- BMI could run an official audit of all subsidiary companies, thereby ensuring that regulations are properly followed.
- BMI could definitely devise a plan for implementing clear penalties for subsidiary businesses who act against the rules against selling expired meats. 2
• What recommendations do you have in how the situation could be/should have been resolved? Or, state if no resolution is necessary and the reasons why the status quo is acceptable.
o Our recommendations include notifying the food safety division of the international organization sooner than he did. Maria could have done her own part by taking Jose's concern more seriously. The CEO of the subsidiary organization could have advised his company to take the precautions of the expiry dates and in turn advised them to dispose of any potentially harmful meats. Especially if one wants to run a business under standard
FOOD SAFETY: THE CASE OF BMI
Jose works as a clerk at the headquarters of Best Meat International, LLC (BMI), a US-based food processing company.
With a history of over 60 years, the company has established a global food-processing network that supplies meat products to some of the restaurant chains in the world. During the course of his work, Jose comes across documents that suggest one subsidiary company of BMI has actually been repackaging and selling chicken and beef past their expiry dates in some developing countries. Jose is shocked. He knows that the Food and Drug Administration in the United States has banned such practices. In the US, government regulations are very strict about the food production dates and their sell-by dates, but in some developing countries, whose quality assurance supervision is lacking or outmoded, some businesses are likely to explore such loopholes. Even though some expired meat products may not cause serious health issues, such practice presents great potential threat to public health in those countries.
Jose gathers the appropriate documents and takes them to his immediate superior, Maria. Maria says, "Look, I don't think that sort of thing is your concern, or mine. We are in charge of record keeping, not making decisions about the product quality. I suggest you drop it."
The next day, Jose decides to go one-step further. He makes an appointment and talks to Mike, the CEO of the subsidiary company. Mike is clearly irritated. Mike says, "This isn't your concern. Look, these are the sorts of cost-cutting moves that let a company like ours compete with our global competitors. Besides, everyone knows that the regulations in the US are super cautious and these developing countries are not clearly prohibitive. There is no real danger to anyone who consumes such products. I consider this matter closed."
Jose considers his situation. The message from his superiors was loud and clear. He strongly suspects that making further noises about this issue could jeopardize his job. Further, he generally has faith in the company's management. They have always seemed like honest, trustworthy people. However, he was troubled by this apparent disregard for public health of people in other countries. On the other hand, he asks himself whether maybe Mike was right in arguing that the danger was minimal. Jose emailed an expert who is working for the food safety division of an international organization that he found via the Internet. This expert told him that there was mass public outrage in those countries toward their quality assurance administrations and toward foreign companies like BMI who are getting away with selling defective products in their countries.