Business Ethics - Homework help!!?

Question

This is the assignment, but I have no idea how I'm supposed to answer this ...

The Johns-Manville Corporation was a profitable company that made a variety of building and other products. It was a major producer of asbestos, which was used for insulation in buildings and for a variety of other uses. It has been medically proven that excessive exposure to asbestos causes asbestosis, a fatal lung disease. Thousands of employees of the company and consumers who were exposed to asbestos and contracted this fatal disease sued the company for damages. In 1983, the lawsuits were being filed at a rate of more than 400 per week.
As a response, the company filed for reorganization bankruptcy. It argued that if it did not, an otherwise viable company that provided thousands of jobs an served a useful purpose in this country would be distroyed, and that without the declaration of bankruptcy, a few of the plaintiffs who first filed their lawsuits would win awards of hundreds of ..read below.

dollars, leaving nothing for the reaminder of the plaintiffs. Under the bankruptcy court's protection, the company was restructed to survive. As part of the release from bankruptcy, the company contributed money to a fund to pay current and future claimants. The fund is not large enough to pay all injured persons the full amount of their claims.
Was it ethical for Johns-Manville to declare bankruptcy? Did it meet its duty of social responsibility in this case? If you were a member of the board of irectors of the company, would you have voted to place the company in bankruptcy? Why or why not?



I am very confused about this assignment and have no clue how to answer it.

Answer 1

the company does not exist to make the public rich, it exists to make it's shareholders money and in that capacity, it was obligated ethically to do whatever it took to remain viable

Answer 2

I wrote a paper on this very problem. I can go into extreme detail on this subject. The ethics of proper business practices stem from following laws and standards set up by governmental legislatures and industry standards. The problem of the asbestos class action law suite was the initial aspect of directing the responsibility towards the largest and more visible firms such as Johns Manville, WR Grace, US Gypsum, Armstrong and other building product manufacturers. Johns Manville (JM) took a large brunt of the settlement action similar to a scapegoat. JM applied precedent practices to restructure its using the long established laws under the bankruptcy code. Those codes were established for that very purpose to allow someone or a business in some trouble a way to regroup. The lawsuit and compensational trust fund adapted to JM’s action by adding every product manufacturer that the trail lawyer could find that introduced asbestos into our society and spreading out the burden to compensate the victims of this problem. Summary…JM acted in good business ethic standards by taking actions to survive and also they took steps to place in proper proportion of their responsibility to compensate the injured. I can go on about this...like I said I just research this situation myself.

Answer 3

Some points to consider:

Did they use the asbestos not knowing it would lead to asbestosis? Is different than if they knowingly exposed their workers to a hazard?

Did the bankruptcy help to protect (provide financial renumeration) to more litigants/potential litigants versus no bankruptcy?

Does allowing the company to continue operating serve a useful societal purpose (they now protect their workers from asbestos; if allowed to continue to operate, would more money be available to the litigants; the business contributes to the economic fabric of the community...)?

Is an early litigant entitled to more money than a more seriously injured litigant who filed later?

Of course these questions base the ethical questions on our notion of Western consumer based economies --- that is the notion that a hurt (asbestosis) can be compensated for by $$$$.

Answer 4

You should be having trouble as "business ethics" is an OxyMORON!

Most large awards are changed by downsizing them from the court!

Companies generally file Bankruptcy when the lose large suits for crimes they commit!!

Currently, however, some can't hide criminally behind incorporation papers and some are being charged criminally!

Many of the rich and those who commit crimes that cost people their lives don't want to be sued, or they want to limit jury awards to ridiculously measly amounts! Then we get to pay for all their illnesses!