Case 1:

 

Part 1:

• Azadirachta indica (Neem) a tree indigenous to India that is sacred

• It is used for medical purposes, food production, toiletries, fuel, and pesticides
• The neem industry in India employs about 100k people
• 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
• Chetan took over his family owned business (of 7 generations) after receiving a high school education
• Chetan employs 60 people in manufacturing, scientific analysis, quality control and sales
• Chetan does not know the exact name of the neem seed extract, Azadirachtin
• Tom Johnson’s company (OOPS) invested $5M to develop neem based pesticides and conduct safety and performance tests over the last decade after he realized its commercial applications from a visit to India
• OOPS has a worldwide patent through the EPA to sell pesticides based off neem
• OOPS made a net profit of $12.5M during his first year of operation
• OOPS wants to begin selling their product in India
• There are economies of scale at play because OOPS is selling product all over the world and will likely put Chetan (and other small businesses) out of business
• OOPS is demanding a royalty from Chetan’s business and other small industries that make neem-based insecticides

 

The only “ethical” dilemma at play is if OOPS is willing to destroy small businesses such as Chetan’s in India by entering the market and charging royalties for their patent. Meanwhile in Chetan’s court, it is important to consider whether he has any rights to stop OOPS domination.

 

Parts 2 and 3:

 

• Chetan
  • Chetan wants his family business to continue unabated by OOPS’ royalties and to continue employing his workers while generating a profit
• OOPS
  • OOPS wants to increase their profit margins and have their intellectual property respected by expanding to the Indian market and charging royalties for the use of pesticides using neem.
• Tom Johnson
  • Tom would like to make a profit and for OOPS to be successful. He may have a desire to give back to Indians as he came in and placed a patent on an indigenous plant being used for generations
• Chetan’s Family
  • Desire for the business’ legacy to continue
• Chetan’s employees (60+)
  • They simply want a stable job to provide them income for their families
• OOPS investors
  • Want the company to act ethically but more importantly ensure they generate as large a profit as possible
• Other small Indian ventures that will have to pay royalties
  • They have the same motivations as Chetan essentially, to continue generating a profit while employing their workers
• Indian People
  • Would like the price of neem based products to be as cheap as possible while ensuring their economy isn’t negatively impacted in any meaningful way

 

Part 4:

 

Potential Situations:

 

There is no clear decision maker in this case, these are potential outcomes/answers to the ethical dilemma posed

 

1. The patent is binding and OOPS has no obligation to bend on its enforcement so they do not. Their products enter the market and edge any small neem based businesses out while lowering the price of neem based products overall.
   1. Pros: Prices for neem based products lower, OOPS’ profit increases
   2. Cons: countless small businesses are shut down and many of their employees are left jobless
   3. Ethical Principle: Consequence Based: OOPS is only interested in their profit margin, as a corporation should be, and so chooses to enforce their intellectual property and expand into the Indian market
2. Chetan and fellow Indians appeal directly to the government to place harsh enough tariffs on OOPS to ensure they cannot enter the market due to unprofitability and/or  to not require respecting OOPS right to royalties
   1. Pros: the Indian based neem industry is protected resulting in thousands of jobs saved
   2. Cons: no increased profit for OOPS, the Indian government angers the US, Decreased efficiency in the economy
   3. Ethical Principle: Duty-based thinking, the Indian government likely views it as their duty to protect their own citizens’ livelihoods over the interests of a foreign company
3. OOPS doesn’t desire negative press and so enters the industry but doesn’t charge royalties to Indian companies who sell neem based pesticides
   1. Pros: the company could be viewed as magnanimous while still enabling themselves to generate a profit and eventually edge the other neem producers out of the market
   2. Cons: Loss of profit for OOPS, setting dangerous precedent not to uphold their own intellectual property
   3. Ethical Principle: Virtue-based, the company may believe quickly removing 100,000 Indians from their jobs is not a desirable image for the company to have and so they present them with the opportunity to have some time before they are ran out of the market

Part 5: 

 

Any class I’ve ever taken has stressed the importance of generating profit by a company and how important intellectual property rights are. Saying companies exist to generate profit is simply stating a fact of capitalism, while IP rights are a way of ensuring there is some sort of order in world financial markets rather than simple robbery.

 

Part 6: 

 

I’m writing what is the most likely situation to occur here in the absence of a direct viewpoint. OOPS is a corporation and therefore exists solely to generate a profit. Therefore, situation 1 will occur where OOPS enters the market, charges royalties for their IP and edges out any competition in the market. Situation 2 is unlikely as the Indian and American governments have close ties, and India would not wish to jeopardize that for so few of its citizens. Meanwhile situation 3 is treating OOPS as a caring entity, which it is not, and therefore will not occur barring some outside factor unmentioned in the case (such as a major scandal requiring brand rehabilitation)

 

Part 7:

 

I’ll write this from OOPS’ perspective.

 

OOPS will generate a substantial economic profit which will allow their business to grow exponentially. As such they will be able to hire new employees and expand operations, including increasing research and development to grow the technological solutions of their business. The expanded growth of neem will impact the environment negatively in unforeseeable ways. The business will be seen as a cold, ruthless corporation that exists to generate their shareholders money, which they are.

 

Case 2: 

 

Step 1:

 

• OOPS launched 6 months ago, crushing the market
• OOPS has over 20 different neem based products being sold in supermarkets 
• Soap is the most successful 
• OOPS wrapper features a photo of Tom Johnson
• Chetans wrapper features a photo of his great grandfather, who is a local legend
• Chetan has tried to confince Tom to leave the market or collaborate
• Tom will not leave the market 
• Tom is open to collaboration if it will make him money
• Chetans business if suffering and he will have to lay off half his staff by the end of the month
• His employees and their families have worked with him for generations
• Chetan and his family will not suffer as much from the declining business because of their well diversified investments
• Chetan’s employees know he met with Tom 
• Some believe Chetan has cut a deal with Tom
• The employees feel cheated and abandoned 
• Some employees are resigned to their fate
• Some are confident Chetan will find a way out 
• Some want to physically want to beat Chetan up 

 

OOPS 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. Chetan needs to find some way to save his business and/or his family legacy.

 

Step 3: 

1. OOPS
   1. They want to keep their business growing and keep control over the market 
2. Tom
   1. He wants OOPS to grow and make more money by providing neem products for indians. 
3. Chetan
   1. His family legacy is on the line and after generations working for his family, he has a duty to his employees to ensure they remain employed
4. Chetan’s family
   1. They don’t want their legacy to be hurt
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:

Potential Solution 1: Chetan closes his business and negotiates with Tom to find jobs for he and his employees at OOPS

• • How does it solve the problem?
  • o Pros: Chetan’s employees have jobs 
  • o Cons: Chetan’s family legacy is dead
• • Implications on relationships
  • o Short-term: Chetan will maintain his relationship with his employees and generate a relationship with Tom and OOPS, his relationship with his family will sour
  • 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, his relationship with his family may not recover
• • Implications on the venture
  • o Short-term: Chetan’s venture as we know it will cease to exist but his employees will retain jobs
  • o Long-term: Same as above

 

Potential Solution 2: Cut a deal with Tom to use Chetans’ business’ image alongside Tom’s to further penetrate the Indian market while associating OOPS with respecting Indian traditions. 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. 
• • 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

 

Potential 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: It eliminates the tension between Tom and Cheetan. Chetan’s employees can find new jobs and provide for their families. At least some of the employees will remain employed.
  • o Cons: Chetan’s legacy dies he loses any chance at a profitable venture
• • Implications on relationships
  • o Short-term: Tom and Chetan likely will have reduced tensions, most of his former employees will hate and distrust him
  • o Long-term: Tom and Chetan will have no reason to continue a relationship, his employees won’t forget and his community will shun him
• • Implications on the venture
  • o Short-term: It dies
  • o Long-term: It’s dead

 

Step 5:

 

In any community, it is important to save face and be respected, especially in one as well established as Chetan’s.

 

Step 6:

 

Doing nothing, as in solution 3, is an incredibly poor option. Although Chetan will still have personal financial support. His employees do not, and in a community as close as his, it would be foolish to simply accept putting people out of work. Solution 1 isn’t as poor, as his employees still retain their jobs, and Chetan still gets to utilize his expertise from within Tom’s organization. However, he will be abandoning his family legacy. Solution 2 is the proper solution for Chetan. OOPS, internationally, may be viewed as crushing small businesses in the Indian market and likely will be looking for some sort of brand rehabilitation that doesn’t cost them money. Chetan can offer his great grandfather’s image to go alongside Tom’s on OOPS’ packaging in exchange for jobs for his employees. In this scenario, both parties will receive what they desire, a positive international appearance for OOPS and Chetan’s continuing family legacy.

 

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

 

Chetan simply should pitch this solution in his negotiations with Tom. OOPS’ manufacturing in India will be expanded or moved to Chetan’s community shortly thereafter and all new products will be produced with both Tom and Chetan’s great grandfather’s image.