Case 1:

 

1: Facts of situation:

The 14 million trees in India have been used extensively over the past 2,000 years for medicinal purposes, food production, toiletries, fuel, and pesticides

Azadirachta indica (Neem) is a tree indigenous to India

Neem is sacred

Neem is used for medical purposes, food production, toiletries, fuel, and pesticides

India employes about 100k people and used in pesticide industry

Pesticides are used widely across India

Chetan lives in Agra, India and operates a small business of neem tree products including pesticides, skin creams, contraceptives, lamp oil and many other products

Family-owned business

Chetan has a high school education

Chetan employs 60 people

Does quality control reference 

Chetan does not know the exact name of the neem seed extract, Azadirachtin

He has cultural knowledge but not a lot of knowledge in the science end

Tom Johnson is developing neem seed pesticides (affiliated with OOPS)

Johnson’s co-invested $5 million to conduct safety and performance tests over last decade

Tom’s company has certification (patent) through the EPA to sell pesticides (worldwide patent)

Tom has made profit of 12.5 million during his first year

OOPS wants to set up a business in India

Economy of scale at play because OOPS selling all over world will likely put Chetan out of business

OOPS is demanding a royalty from Chetan’s business and other small industries that make neem-based insecticides

 

What rights does Chetan have and is it ethical for the US company to uphold their patent rights? 

 

Define problem and stakeholders Motivations

• Chetan
  • Professional- Chetan wants to maintain his business without the royalties charged by OOPS ruining his venture and he wants to see his family’s generation-long venture continue
  • Personal – it can be assumed that Chetan would struggle supporting his family members if his co. collapses bc royalties
• OOPS
  • Prof: They want the business to work in India. they want to provide effective organic solutions to pesticides so people do not get sick and that they can protect the patent
  • Personal:  their professional is their personal. 
• Tom Johnson
  • Prof: Tom wants money and he wants his business to be successful. He wants to tap into the market in India and make as much money as he possibly can. 
  • Personal: He might want to give back.. I.e. help Indians
• Chetan’s Family
  • Personal: Wants to see the family business grow. Distrust for westerners. They know the market very well. They hold the plant sacred and might be suspicious of the westerners who do not know of its sacred purposes and merely want to exploit it. 
• Chetan’s employees (60+)
  • Personal: They have been in the business for a long time and so have their relatives so they want it to continue. Same distrust of western influence as Chetan’s family. 
  • Professional: Want a stable job that gives them income to provide for their families. 
• OOPS investors
  • Personal: n/a
  • Professional: Want the company to be as successful and profitable as possible. They also want the company to act ethically so that there are no scandals. 
• Other small Indian ventures that will have to pay royalties
  • These ventures will be charged royalty by OOPS on products that are tied to their patent. This would negatively impact their ventured greatly and may put them out of business
• Indian People
  • Professional: want the product to stay the same price or go down because as consumers, they want the best prices. 
  • Personal: some may care about the history and context of a business and want something more personal to them rather than a big western corporation.

 

Alternate Solutions (3)

1. Legal way (Patent binding) – Tom obtained the patent so Chetan pays the royalty
   1. ethical principle: consequentialism because it is the easiest way for Tom to grow his business in India and sell his products without worrying about competition.
      1. Pros: Tom earns a lot of money and he is successful 
      2. Cons: Tom puts people out of business and he is disliked by many people. The local neem businesses might even gather to rebel against him and get commoners on their side. 
2. Something in between: Tom Johnson and OOPS understand that entering the Indian market and collecting royalties from Chetan’s business will put Chetan out of business. To compromise, OOPS hires Chetan and his employees for a standard working wage but Chetan’s local business will not be able to function on its own. 
   1. ethical principle: this is a virtue-based solution because a good person wouldn’t want to just leave the local business employees to go homeless for the sake of your business prospering.
      1. pros: while working together, Chetan can work his way up as he pitches good ideas for marketing neem products and just new uses of neem. Also, this way, the workers in Chetan’s business are not displaced and they are still able to provide for their family.
      2. cons: Chetan does not have full autonomy over how his products are used and sold and how the business is run. He is not equal to Tom so he must abide by his rules. Also, this still doesn’t solve the issue of Chetan’s family business dying.
3. OOPS buys Chetan’s company
   1. ethical principle: consequence-based solution because if Tom just wants to get his business running without problems from local competitors, he should just buy Chetan’s company.
      1. Pros: Chetan and his employees already know how to make neem-based products and can stay in the workforce. Chetan and his employees retain a job. 
      2. Cons: Wages under OOPS might not be the same as the wages Chetan and his employees were making independently. Also, Chetan and his employees won’t have the same freedom that they had working independently. 

Best course of action

I would go with solution 3. While Chetan and his employees may not have complete freedom and endure new rules under the brand name of OOPS, at least the family business is still running. They’ll still have their same logo and everything but just with the association to OOPS. Everyone would be able to keep their jobs and Tom doesn’t have to face competition from a famous family business.

Implications

Overtime, there could be complications between Chetan and Tom as business partners. They have different cultural values and while Tom is more educated in the business field, Chetan is not and he is especially not familiar with western businesses. Tom may enforce rules that Chetean and his employees feel are unfair and there could be tensions there.

Case 2: 

 

Step 1: Determine the facts in the situation – obtain all of the unbiased facts possible

• OOPS launched 6 months ago and they are dominating the market
• 20 different products
• neem based soap – most successful 
• OOPS wrapper features a photo of Tom Johnson
• Chetans wrapper features a photo of the founders great grandfather
• Chetan has tried to convince Tom to leave the market or collaborate
• Tom will not leave the market 
• Tom is open to collaboration if it will make him money
• Chetan’s business is suffering and he will have to lay off half his staff
• Employees and their families have worked with him and his family for centuries
• Chetan will not suffer as much from the declining business because of his investments
• Chetan’s employees know he met with Tom and believe Chetan has cut a deal with Tom/OOPS
• Employees feel cheated and abandoned
• Some employees have resigned to their fate
• Some are confident Chetan will find a way out

Step 2: Define the problem and the stakeholders – those with a vested interest in the outcome

• Problem: Tom is dominating the neem product industry and small business owners like Chetan and his employees are in danger of going bankrupt and want Tom to leave the market or collaborate. 
• Stakeholders 
  • OOPS 
  • Tom
  • Chetan
  • Chetan’s family
  • Chetan’s employees 
  • Employees’ family
  • Neem customers
  • Other small neem product businesses
  • Neem growers/gardeners

 

Step 3: Determine and distinguish between the personal and professional motivations of the

Stakeholders.

1. OOPS
   1. Personal/professional: want to keep business growing and keep control over the market 
2. Tom
   1. Personal: He wants to be the top dog
   2. Professional: wants OOPS to grow bigger and make more money. Provide neem products for Indians. 
3. Chetan
   1. Personal: family legacy is on the stake. Employees are friends and he doesn’t want to seem like a bad friend by betraying them. 
   2. Professional: don’t want to go out of business and don’t want to lay off their long term loyal employees
4. Chetan’s family
   1. Personal: family legacy. They’d feel sad if they have to fire employees who are also their friends. Also don’t want to feel financially unstable when invested money later decreases too low. 
5. Chetan’s employees
   1. Personal: they’re long term employees and so are their relatives so it’s a personal business to them. 
   2. Professional: they need the money to make a living so they can’t be fired. 
6. Employees’ family
   1. personal/professional: they need their breadwinners to make money to provide at home otherwise they could starve and die. 
7. Neem customers
   1. Personal: Desire to get neem products at the cheapest price
8. Other small neem product businesses
   1. Professional: Continue making money/grow profits
   2. Personal: Keep their employees’ jobs
9. Neem growers/gardeners 
   1. persona/Professional: want to make money selling neem 

 

Step 4: Formulate (at least three) alternative solutions – based on information available, to have a win-win situation for your relationship and your venture. Approaches [1/2/3: repeat for every action]

• Solution 1: Chetan leaves his business and negotiates with Tom to find jobs for his employees at OOPS

• • How does it solve the problem?
  • o Pros: Chetan’s employees have jobs and are able to provide for his family
  • o Cons: Chetan’s business ends up going bankrupt and the family legacy will end. The employees may also feel bitter about leaving a company that they have so much history and memories with. 
• • How does it save face of those involved?
  • Tom won’t have to deal with a guilty conscious since Chetan’s employees are still able to provide for their family. It sucks that Chetan’s business will die but he will get over that quickly and he knows that Chetan is financially stable even without the business.
• • Implications on relationships
  • o Short-term: Chetan and Tom probably won’t have a good relationship since Chetan will feel defeated for having to sacrifice something with sentimental value. workers may also dislike Tom for making Chetan’s neem business go bankrupt
  • o Long-term: honestly, these tensions will probably fade and everyone will be fine. 
• • Implications on the venture
  • o Short-term: Tom will have to invest some more moneny to give Chetan’s employees standard living wages and he’ll probably have to train them to work under the standard OOPS guidelines. 
  • o Long-term: in the long run, everyone will probably be fine. The workers will be able to provide for their families. Chetan will be fine because he has enough money, although his children will have to go find something else to do since there is no family business to inherit. 

 

• Solution 2: Cut a deal with Tom to use Chetans’ business’ image and brand name to further penetrate the Indian market, Chetan receives compensation from this deal (for using his brand) and his employees receive jobs.

• • How does it solve the problem?
  • o Pros: Chetan gets to continue employing his workers, and his family’s legacy will continue on 
  • o Cons: Will likely have to surrender business capital and/or oversight. Chetan won’t have much of a say in how the business is run. 
• • How does it save face of those involved?
  • Chetan will be able to continue employing the same families and continue to generate a profit. Tom will grow his business and profit margin.
• • Implications on relationships
  • o Short-term: Chetan will maintain his relationship with his employees and generate a relationship with Tom and OOPS
  • o Long-term: Chetan’s relationship with his employees may remain strong, but as his business and Tom’s continue to dominate the market, there could be increased tensions with other Indian Neem businesses and their employees
• • Implications on the venture
  • o Short-term: No layoffs will occur, management will likely change
  • o Long-term: the employees’ jobs will be safe, the overall business structure will be permanently altered, they will edge out other small Neem businesses

 

• Solution 3: Chetan and Tom do nothing. Chetan will help his employees find jobs (letters of rec). 

• • How does it solve the problem?
  • o Pros: Chetan’s employees can find new jobs and provide for their families and maybe even find a new passion outside of producing and selling neem. Tom won’t be bothered by Chetan’s family business anymore. 
  • o Cons: Chetan’s family legacy dies. Employees may not be able to find a job because Chetan is not guaranteeing them one. 
• • How does it save face of those involved?
  • Tom won’t be bothered if he doesn’t collaborate and if he gets rid of his competition
  • Chetan won’t feel too bad since he’s still helping his employees but at least he isn’t cheating them and going behind their back to collaborate with Tom without giving them benefits.
• • Implications on relationships
  • o Short-term: Chetan will probably hate Tom. Employees might dislike Chetan for not fighting harder. 
  • o Long-term: in the long run, everyone will find their own ways and be fine. 
• • Implications on the venture
  • o Short-term: OOPS will continue running without interruption, at least from Chetan’s business. 
  • o Long-term: bye Chetan’s neem business. Tom will continue dominating the industry. If the employees try hard enough, they’ll all probably find some kind of job. some may find better ones and others may find worse ones. 

 

Step 6: Select the best course of action – that solves the problem, saves face and has the best short term and long-term implications for your relationship and venture. Explain reasoning and discuss your solution vis-a-vis other approaches discussed in class.

I honestly think that solution 3 is the best course of action. Chetan may be his employees’ friend but he is not obligated to secure them a job. It isn’t his fault that Tom came in with better resources and is dominating the neem market in India. He can do his best to increase their chances of getting another job but he doesn’t have to go beyond that. Chetan and Tom won’t have to interact anymore and there won’t be tension. If Tom and his employees are really friends, then they should be able to get over it after some time.

Step 7: List the sequence of actions you will take to implement your solution.

1. Chetan helps his employees search for other jobs
2. he helps refer them to the employers
3. he closes his neem business