TERM 2 2001-02 EXAMINATION

APRIL 2002

LGST001 Ethics and Social Responsibility

INSTRUCTIONS TO STUDENTS
1

The time allowed for this examination paper is three (3) hours.

This examination paper comprises Section A, Section B, and Section C and

consists of four (4) pages.

This is an open book examination. As always, the Code of Academic Integrity

will be applicable. You are not allowed to send or receive any emails while you
are in the examination room.

You are required to answer all questions. Each sub-question in Sections A and B
and the question in Section C carries 20 marks.

5.

The questions are premised on the KC Ang organization, the fictional group
that has been the subject of class presentations. You are advised to write clearly,
identify the ethical and/or social responsibility issues involved, consider
different solutions, apply ethical and/or social responsibility principles that you
think are relevant, and generate a conclusion.

-1-

LGST001

You are the founder and chief operating officer of Ethics and Integrity Consulting Pte. Ltd.,
a Singapore consulting firm that advises companies both in Singapore and in the rest of the
Association of Southeast Asian Nations (ASEAN) about ethics and social responsibility
issues. KC Angs (KCA) has hired your firm to advise on the following matters relating to
gift giving, SA 8000 accreditation, and the international environment as follows:
SECTION A
1.

Gift Giving
Please provide a short memorandum to Mr. Ang analyzing the ethical and
social responsibility issues raised by the following two scenarios and your
reasoned conclusions:
a)

The KCA subsidiary in ASEAN X has submitted a bid to install a

computer system in Bank Aspara, a privately owned bank that will shortly
be taken over by the Government of ASEAN X because of gross
mismanagement and non-performing loans. The KCA subsidiary is
confident that it can put in place a state of the art computer system and is
willing to back up the installation with a service contract on terms that are
favorable to Bank Aspara. However, the son of the Bank Aspara president
who effectively runs the Bank (his father is recovering from a stroke in a
hospital in Houston) has told the KCA manager in ASEAN X that KCA
must demonstrate its goodwill to his family by depositing US$1 million in
a numbered account in a Swiss bank if it wants the contract. The KCA
manager feels that the sum asked for is a relatively small price to pay in
order to gain an entry into the lucrative computer systems market in
ASEAN X. The son has told the KCA manager that if KCA doesnt
comply with his request, the contract would be awarded to a local ASEAN
X company that the manger knows will overprice the contract and do a
substandard after-sales job.

b) The KCA megamall in ASEAN Y generates several metric tons of different

types of waste every week. These include plastic products, biodegradable
matter from the various restaurants, paper and cardboard products and e-waste
including used printer cartridges and discarded computers and peripherals.
ASEAN Y has a state of the art recycling and waste management law that was
written by a foreign consultant and is largely ignored by everyone in ASEAN
Y. Under this law, waste must be sorted out and put in different containers that
will be taken to disposal sites appropriate to the type of waste such as recycling
for paper products and landfill for plastic. Complying with the law will add
about US$500K per year to KCAs operating costs in ASEAN Y. The Director
General of the Department of Environment and Sanitation of ASEAN Y has
asked the KCA manager to give him a waiver fee of US$ 50K per year
which will be used to supplement the meager salaries of the Department
employees. The KCA Manager knows that all of KCAs competitors pay this
waiver fee and that in fact it is distributed among the underpaid government
servants. The law of ASEAN Y does not authorize the waiver fee. Would
your answer be different if KCA does comply with the law but pays the
amount requested in order to avoid the loss and delay caused by the harassment
of inspection by the Department officials of each weekly disposal?
-2-

LGST001

SECTION B
2.

SA 8000 Accreditation
Prior to seeking SA 8000 Accreditation facilities, KC Angs has hired you to
evaluate the practices of the organization and suggest changes designed to
secure the enlightened self-interests of the KC Angs organization as well as
meet the SA 8000 requirements. Bearing this in mind, please advise whether
the following two scenarios are SA 8000 compliant:
a)

In a KCA garment factory in ASEAN X, the manager who is a fitness

freak has devised an extensive physical fitness regime that includes
swimming two laps in the Olympic size swimming pool in the factory
complex every Monday morning. Employees are required to wear
company supplied swimsuits that come only in the medium and small
sizes. The manager videotapes the exercises and at monthly meeting
plays the tapes on a large screen and comments on the techniques of the
swimmers. Some male employees make lewd comments and catcalls
when pictures of their female colleagues are shown without reproof
from the manger as this is regarded by the manager as harmless fun and
a bonding exercise. Twenty female workers who refused to participate
in swimming exercises because they claimed that wearing a swimsuit in
public violated their modesty have been dismissed by the manger who
says that this is a lame excuse given by the females who are actually
ashamed of being grossly overweight and are too lazy to exercise.

b)

At the KCA glass factory in ASEAN Y, a senior foreman has earned a

reputation for being a political firebrand. He has been known to talk
about the injustices and corruption of government officials and the need
for a just and equitable society in ASEAN Y. The foreman makes his
views known only to those at his table in the canteen and he does not
allow his political views to interfere with his work. However, his
comments have come to the attention of the governor of the province
where the glass factory is located. The governor has delivered an or
else ultimatum to the manager of the glass factory. Either let the
foreman go in your next downsizing or else be prepared for major
harassment of your factory by my regulators.

-3-

LGST001

SECTION C
3.

International Environment
The Government of ASEAN Z has awarded a project to the KCA group to
build and manage a 500 room tourist and convention hotel on a plot of
beachfront property in a community that has the following features. The sea in
front of the hotel contains a reef that is vulnerable to deterioration because of
extensive dynamite and cyanide fishing conducted by fishermen from the
adjoining village. The villagers are poor and depend on fish caught from the
area for their protein needs. The Government of ASEAN Z has awarded the
KCA group exclusive fishing rights in the area so that fresh seafood could be
sourced by the proposed hotel. Although not authorized by law, the ASEAN Z
government will also ban vendors of handicrafts and souvenirs from the beach
and will also prohibit villagers from using the beach. It is envisaged that the
hotel would offer para-sailing and jet-ski facilities to hotel guests.
In a short memorandum to the KCA group, advise the group of any ethical and
social responsibility issues raised by the proposed project and your proposals
for reducing or eliminating any problems that may be raised by such issues.

- END OF PAPER -

-4-