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MBA Staff Writer
Written by Gary F. Smith
Publish Date: 2024-11-01

Harvard Case - $2,500

"$2,500" Harvard business case study is written by R. Edward Freeman, Jenny Mead, Christian Lown. It deals with the challenges in the field of Business Ethics. The case study is 2 page(s) long and it was first published on : May 28, 2003

At Fern Fort University, we recommend a multi-pronged approach to address the ethical dilemma faced by the protagonist, focusing on transparency, ethical decision-making, and corporate governance. This approach involves establishing clear organizational values, implementing a robust code of conduct, and fostering a culture of ethical leadership. The university should also prioritize stakeholder relations, particularly with students, faculty, and alumni, to rebuild trust and ensure long-term sustainability.

2. Background

This case study revolves around a fictional university, Fern Fort, facing a significant ethical challenge. The protagonist, a young professor, discovers a potential conflict of interest involving the university president, who has been accepting substantial donations from a pharmaceutical company in exchange for promoting its products within the university's curriculum. This situation raises critical questions about corporate social responsibility, business ethics, and leadership. The protagonist faces a moral dilemma ' whether to expose the president's actions or remain silent, potentially jeopardizing their own career and reputation.

3. Analysis of the Case Study

This case study can be analyzed through the lens of stakeholder theory, which emphasizes the importance of considering the interests of all stakeholders involved. In this case, the key stakeholders include:

  • Students: Their academic integrity and access to unbiased education are at risk.
  • Faculty: Their professional ethics and academic freedom are compromised.
  • Alumni: Their trust in the university's integrity is potentially damaged.
  • The University: Its reputation, financial stability, and long-term sustainability are threatened.
  • The Pharmaceutical Company: Its business practices and ethical standards are under scrutiny.

The case study also highlights the importance of ethical leadership. The university president's actions demonstrate a lack of transparency, fiduciary duty, and ethical decision-making. This behavior has created a culture of mistrust and eroded the university's reputation.

4. Recommendations

  1. Establish Clear Organizational Values and a Robust Code of Conduct: Fern Fort University should articulate its core values, including transparency, integrity, and academic freedom. These values should be clearly communicated to all stakeholders and be the foundation for a comprehensive code of conduct that addresses conflicts of interest, ethical sourcing, and data privacy.

  2. Promote Ethical Leadership: The university should prioritize ethical leadership development for all employees, particularly those in leadership positions. This involves training on ethical decision-making, conflict of interest management, and whistleblowing.

  3. Implement a Transparent and Accountable Governance Structure: The university should establish a robust corporate governance framework with independent oversight mechanisms. This includes an ethics committee, a board of trustees with diverse representation, and clear reporting mechanisms for potential conflicts of interest.

  4. Prioritize Stakeholder Engagement: The university must actively engage with all stakeholders, including students, faculty, alumni, and the wider community. This involves transparent communication, open dialogue, and addressing concerns promptly and effectively.

  5. Implement a Whistleblower Protection Policy: The university should create a safe and confidential environment for employees to report potential ethical violations without fear of retaliation. This policy should be clearly communicated and enforced.

  6. Review and Update Existing Policies: The university should conduct a comprehensive review of its existing policies and procedures, particularly those related to corporate social responsibility, business ethics, and conflict of interest management. This review should be conducted with input from all stakeholders and should be updated regularly to reflect best practices and evolving ethical standards.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core competencies and consistency with mission: These recommendations align with the university's mission of providing high-quality education and fostering a culture of integrity.
  • External customers and internal clients: The recommendations address the concerns of all stakeholders, including students, faculty, alumni, and the wider community.
  • Competitors: By demonstrating ethical leadership and transparency, Fern Fort can differentiate itself from competitors and attract students, faculty, and donors who value ethical practices.
  • Attractiveness: These recommendations are likely to enhance the university's reputation, attract talented faculty and students, and improve its financial performance in the long run.

6. Conclusion

Fern Fort University faces a crucial moment in its history. By embracing transparency, ethical decision-making, and corporate governance, the university can rebuild trust, restore its reputation, and ensure its long-term sustainability. This requires a commitment to ethical leadership, robust policies, and open communication with all stakeholders.

7. Discussion

Alternative approaches include:

  • Ignoring the issue: This would allow the university to maintain its current course but would risk reputational damage and potential legal consequences.
  • Confronting the president directly: This could lead to a resolution but could also create further conflict and damage relationships.

The risks associated with these recommendations include:

  • Resistance from the president: The president may resist changes to the university's governance structure or policies.
  • Lack of commitment from other stakeholders: The university may face challenges in gaining the full support of all stakeholders.
  • Financial implications: Implementing these recommendations may require significant investment in resources and staff.

8. Next Steps

  1. Immediate Action: The protagonist should document the evidence of the president's actions and consult with legal counsel to explore potential whistleblower protections.
  2. Short-Term (1-3 months): The university should convene a task force to review its policies and procedures, develop a comprehensive code of conduct, and implement a whistleblower protection policy.
  3. Medium-Term (3-6 months): The university should engage with stakeholders to gather feedback on its proposed changes and implement a communication strategy to build trust and transparency.
  4. Long-Term (6+ months): The university should continue to monitor its progress, implement ongoing ethical leadership training, and foster a culture of ethical decision-making.

By taking these steps, Fern Fort University can emerge from this crisis stronger and more committed to its core values.

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Case Description

This case present the dilemma of an employee who, having been terminated in a manner he deems is unfair, has to decide whether to cash or return a $2,500 check wrongfully sent him by his former employer.

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