Ethical Issues At Energy Star

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Ethical Issues at Energy Star


This paper is based on a case study that involves Energy Star, an automobile manufacturing firm, specializing in producing electric cars. For some time, the company is facing ethical concerns regarding the use of sub-standard parts, which are deemed as a clear violation of prevailing industry standards. This paper will provide suggestions on how to tackle this particular issue.


Concern with the effects of business activity on the environment is now a focus of managerial ethics. The first step in environmental stewardship occurred when businesses realized that there were huge cost savings in waste and energy reduction. Although great progress has been made here, the international traveler cannot help but notice that the United States is behind other industrialized countries in taking easy steps to reduce stress on the environment (Weaver, Trevino, Cochran, 41). The real challenge for managerial ethics involves business decisions that help the environment and perhaps even profits in the long run but that hurt profits in the short run. The most acute example here is in the automobile industry. Car makers, especially Energy Star (in this case), make the best profit margins on electric cars and have marketed these cars very successfully (Weaver, Trevino, Agle, 313). However, these vehicles have low gas mileage and other problems. Should Energy Star have even produced the Hummer—a monster gas guzzler? Do the automobile companies have a duty to educate consumers about the cost to the environment when purchasing electric cars? One of the great challenges for managerial ethics is in developing a business strategy that is both profitable and environmentally responsible (Weaver, Treviño, 113).

Ethical manufacturing is a concept that brings together social and environmental issues in operations management. It treats these concerns as part of the manufacturing system and does not separate operations from social concerns. It embraces the developments in compliance and standards but goes further than product specifications, health, and safety within the manufacturing company (Trevino, Weaver, Gibson, Toffler, 131). It demands attention to working conditions, labor rights and trading conditions throughout the supply-chain. It cannot be separated from wider issues such as industrial ecology, climate change, and sustainability. How products are designed and manufactured has to include attention to the ecological footprint. Implementation of the cradle-to-cradle concept can reduce the amount of waste—of material resources, of energy, and of poisons allowed to pollute our environment (Paine, 106).


Business does not take place in a vacuum. It is contextually located in a community or communities, which in turn are located in the natural environment. There are those who say that a business provides jobs—the very lifeblood of a community (Heineman, 100). It also usually pays taxes to the community just as individuals do. As a result, there is no further obligation to the community—in the form of charitable giving or in the form of helping to resolve social problems. Indeed, those who follow the view of Milton Friedman believe that it is morally wrong for managers to assist in these ways (Feldman, 395).

Despite the view ...
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