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Harvard Case - Schmidt Press and Mekkanischer Wahnsinn

"Schmidt Press and Mekkanischer Wahnsinn" Harvard business case study is written by Andrew Wicks, Jenny Mead. It deals with the challenges in the field of Business Ethics. The case study is 3 page(s) long and it was first published on : Jan 6, 2017

At Fern Fort University, we recommend a comprehensive approach to address the ethical and legal challenges facing Schmidt Press, prioritizing transparency, ethical leadership, and stakeholder engagement. This involves a multi-pronged strategy that focuses on building a robust code of conduct, implementing whistleblowing mechanisms, and fostering a culture of ethical decision-making throughout the organization.

2. Background

This case study revolves around Schmidt Press, a family-owned printing company facing a crisis of corporate responsibility. The company's founder, Karl Schmidt, has built a successful business based on innovation and quality, but his son, Thomas, has introduced a new product line, 'Mekkanischer Wahnsinn,' that raises serious ethical concerns. This line features products with potentially harmful and illegal components, putting Schmidt Press at risk of legal repercussions and reputational damage.

The main protagonists are Karl Schmidt, the founder and CEO, who prioritizes tradition and ethical business practices, and Thomas Schmidt, his son, who represents a new generation with a focus on profit and market share. The case study highlights the conflict between their differing values and the potential consequences for the company's future.

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, including employees, customers, suppliers, investors, and the community.

Stakeholders and their concerns:

  • Employees: Concerned about job security, potential legal ramifications, and the company's ethical reputation.
  • Customers: Concerned about the safety and legality of the 'Mekkanischer Wahnsinn' products.
  • Suppliers: Concerned about potential legal repercussions and damage to their own reputation.
  • Investors: Concerned about the financial impact of potential legal action and reputational damage.
  • Community: Concerned about the potential environmental and social impact of the 'Mekkanischer Wahnsinn' products.

Ethical dilemmas:

  • Conflicts of interest: Thomas's personal gain from the 'Mekkanischer Wahnsinn' line conflicts with the company's ethical obligations.
  • Corporate social responsibility: The company's decision to pursue profits at the expense of potentially harmful products raises questions about its social responsibility.
  • Business ethics: The case highlights the importance of ethical decision-making in the face of pressure to maximize profits.
  • Transparency: The company's lack of transparency regarding the 'Mekkanischer Wahnsinn' line raises concerns about accountability and trust.
  • Leadership: Karl's leadership style and his ability to address the ethical concerns are crucial to the company's future.

4. Recommendations

1. Establish a Clear Code of Conduct:

  • Develop a comprehensive code of conduct that explicitly outlines ethical principles, including sustainability, fair trade, and labor rights.
  • Ensure the code of conduct is communicated effectively to all employees and stakeholders.
  • Implement a system for monitoring compliance and addressing violations.

2. Implement a Robust Whistleblowing Mechanism:

  • Establish a confidential and anonymous whistleblowing system to encourage employees to report unethical behavior.
  • Provide clear guidelines for reporting and investigate all allegations thoroughly.
  • Protect whistleblowers from retaliation.

3. Foster a Culture of Ethical Decision-Making:

  • Provide ethics training to all employees, focusing on ethical decision-making frameworks and conflict of interest management.
  • Encourage open discussion and debate on ethical issues.
  • Create a culture where ethical behavior is valued and rewarded.

4. Enhance Transparency and Accountability:

  • Publicly disclose information about the company's products and manufacturing processes.
  • Implement a system for tracking and reporting on the company's environmental and social impact.
  • Establish an independent board of directors to oversee corporate governance and ethical practices.

5. Engage with Stakeholders:

  • Establish open communication channels with all stakeholders, including employees, customers, suppliers, investors, and the community.
  • Actively listen to their concerns and address them transparently.
  • Seek their input on ethical and sustainability initiatives.

6. Address the 'Mekkanischer Wahnsinn' Line:

  • Conduct a thorough legal and ethical review of the 'Mekkanischer Wahnsinn' line.
  • Discontinue production and distribution of any products that violate ethical principles or legal requirements.
  • Offer a public apology for any harm caused by the 'Mekkanischer Wahnsinn' line.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core competencies and consistency with mission: The recommendations align with Schmidt Press's historical commitment to quality and ethical business practices.
  • External customers and internal clients: The recommendations address the concerns of all stakeholders, including customers, employees, and suppliers.
  • Competitors: The recommendations help Schmidt Press maintain a competitive advantage by demonstrating ethical leadership and commitment to sustainability.
  • Attractiveness: The recommendations are likely to improve the company's reputation, attract investors, and enhance employee morale.

6. Conclusion

Schmidt Press faces a critical juncture in its history. By embracing ethical leadership, promoting transparency, and engaging with stakeholders, the company can navigate this crisis and emerge as a stronger and more responsible organization.

7. Discussion

Alternatives:

  • Ignoring the ethical concerns and continuing to produce the 'Mekkanischer Wahnsinn' line. This carries significant risks of legal action, reputational damage, and loss of customer trust.
  • Selling the 'Mekkanischer Wahnsinn' line to another company. This could shift the responsibility but may damage the company's reputation and create ethical concerns for the new owner.

Risks:

  • Resistance from employees and stakeholders to change.
  • Difficulty in implementing and enforcing a new code of conduct.
  • Potential for legal action from customers or regulatory bodies.

Key Assumptions:

  • The company is willing to prioritize ethical principles over short-term profits.
  • Employees are willing to embrace a culture of ethical decision-making.
  • Stakeholders are willing to engage in constructive dialogue and support the company's efforts to improve its ethical practices.

8. Next Steps

Timeline:

  • Month 1: Establish a task force to develop a code of conduct and implement whistleblowing mechanisms.
  • Month 2: Conduct ethics training for all employees.
  • Month 3: Initiate public communication about the company's ethical commitments.
  • Month 4: Conduct a full review of the 'Mekkanischer Wahnsinn' line and make decisions about its future.
  • Month 6: Begin reporting on the company's environmental and social impact.

By taking these steps, Schmidt Press can demonstrate its commitment to ethical business practices and build a sustainable future for the company.

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Case Description

The owner of the small Berlin-based Schmidt Press encounters a dilemma when she is given the opportunity to publish a novel about a Muslim woman who attempts to lead an underground movement to take control of the Kaaba, the holy sanctuary at Mecca. Given the events of the prior 25 years - such as the angry fallout after Salman Rushdie's novel The Satanic Verses, the 2001 terrorist attacks on the United States, the upheaval in many Middle Eastern countries - publishing the novel presents a host of various ethical dilemmas, including whether Schmidt should put her staff at risk. This case discusses the ethics of a free press and challenges to the profit motive in the face of political and religious world affairs.

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