Table of Contents
Kobe Steel is a well-known steel maker, and is one of the largest companies of its kind in the world “with more than 200 subsidiaries and 62 affiliated companies in Europe, Asia, and North America.” (case study) However, for the last 10 years they have been conducting unethical practices such as falsifying data and selling substandard metal to unknowing consumers. Kobe was supposed to test the quality in their products for certain customers. Unfortunately, many of the tests were not conducted or they would alter the inspection certificates to make it seem like they did the work. Their company culture was dishonesty and selfishness as they did not care about their customers. Various ethical theories including Utilitarian, Aristotle’s theory of virtue, and Kant’s Theory, all support the idea that Kobe Steel was wrong in their business practices.
Ethical Issues
Kobe Steel faces several ethical issues. What they did to their customers is not considered illegal, however, it is considered unethical. There is a fine line between illegal and unethical. Ethical issues are actions that a company or person does that is immoral or shows no regard in how they treat others. Kobe Steel was faced with the dilemma of whether they should be honest with their customers or not and they decided to be dishonest. After many Japanese companies came under fire for quality control issues, they should have been more diligent about testing their products to avoid any more embarrassment for the community. They even went as far as falsifying inspection certificates, and recorded false data to make it seem like their products met the quality control level needed.
This event is an issue because people could get seriously hurt if the products are not up to the standard. They even falsified the tensile strength, which is an important test because it is vital to the resistance of the metal. This keeps the material from breaking and hurting someone. Metal is used to create several modes of transportation, such as cars or airplanes. If the cars and airplanes do not hold up well, then thousands of people could get hurt. Another ethical issue for them is that if the cars or airplanes do not hold up well it could hurt the car or airplane companies that they sold the metal to.
127 our experts are availableright now
Potential Implications for Stakeholders
Many stakeholders were involved in this scandal from the worker bee employees to the executive officers that knew about the issues, and did nothing about the employees falsifying the information. In the case scenario, it is stated that two executive officers knew about the misconduct, but failed to report it to their boss which is the Head of the Aluminum and Copper Business. One executive officer attempted to set policies that was an attempt to stop it, but he still did not report the misconduct.
Many of the former executive officers were involved in the misconduct before they became executive officers. This event set the tone for the whole company being that it was acceptable and condoned.
Role of Corporate Culture
Since these incidences were not carried out by just a few employees but by everyone in the company it is clear that this was their corporate culture. Corporate culture is paramount to how a company operates. Positive corporate culture can benefit a company, but if it is negative then it can negatively affect the company. It was made clear from the top of the company to the bottom that their corporate culture was to lie, deceive and manipulate their customers. Therefore, if there was an employee
that felt like the actions made were unethical, they would be less likely to speak up because they would feel like they would get backlash from their fellow employees or even supervisors. The person that told would be labeled a whistleblower and it could hurt their career.
Utilitarian Viewpoint
In the Utilitarian theory of ethics, the thing that is most important is getting a good result out of an action only if it is for the greater good of the most amount of people. (Nathanson) The end result of an action should be more happier people. In the case with Kobe Steel, Utilitarian theory would not condone their actions because they were solely thinking of themselves and no one else. The ethical choice that they made was to deceive and falsify data. With at least five decades of data fraud,
more than 600 customers were identified as affected by Kobe’s actions. (case study) It was also an issue because it was yet another scandal in Japan that their community did not need. The only positive outcome was the business growth of Kobe’s competitors. The Utilitarian theory would have viewed this decision as unethical.
Aristotle Theory of Virtue
Aristotle Theory of Virtue is a goal of what every person should aspire to be. A person that has acquired these traits is typically an all-around good person. They are confident, they know how to handle tough situations, they are brave and they are generous. A person that does these things can do them without taking it too far. As John Sachs said,” A habit of yielding to impulse can be counteracted by an equal and opposite habit.” (Sachs) For example, they are confident without being cocky, they
are humble. The employees at Kobe Steel are the opposite of a virtuous person. If anything, the employees acted cowardly by not doing the right thing and stopping the company’s dishonest actions. Any of the employees could have stood up and said “no, this is wrong”. But no one did, and that makes them all dishonest and not virtuous.
Addressing the Issues & Behavior
Kant’s Theory is the theory that people that make good decisions based on a moral obligation will always make the right decision. “In his view, the basis for our sense of what is good or bad, right or wrong, is our awareness that human beings are free, rational agents who should be given the respect appropriate to such beings.” (Wescott, 2019) The new CEO will have his work cut out for him to fix the damage that was done at Kobe Steel. One way that he could help his employees is by validating them
and encouraging good, ethical behavior. He should also ease the minds of the stakeholders because I am sure they are weary of trusting Kobe Steel after all the drama with the last CEO. In this theory, the employees were not told why these actions were happening. These choices were made by the CEO and executives and the employees did not question it. If anything, this shows how loyal the employees were even when it probably went against their own moral beliefs.
Conclusion
In conclusion, this case study shows how many companies are unethical in their practices and just because it is corporate culture, does not make it right. Many of the employees in the company had the right to stand up for what was right and yet still decided that they would be unethical. None of them exhibited the traits that the Utilitarian, Aristotle’s Theory of Virtue, and Kant’s Theory would expect from an employee.
