Transcript Massey
Massey Energy Case BUS 303 GROUP T Presenters: Theresa Chong Kathrene Genosa Tracy Leung Chitra Ramdoyal Brian Harrison Kelvin Ling AGENDA 1. 2. 3. 4. 5. 6. Case analysis Underlying issues Concepts Application to the case Alternatives and evaluation Conclusion INTRODUCTION Company: Massey Energy Founded in 1920 by A. T Massey and started as a coal brokering business in Richmond, VA produces, processes and sells coal Competitors: Arch Coal, CONSOL Energy and Peabody Energy Known for several lawsuits, bad environmental record and poor mine safety. Past cases: deaths of miners waterway pollution in Kentucky and West Virginia mine placement near schools INTRODUCTION Upper Big Branch: Massey Coal Mine Located in Raleigh County, West Virginia In production for Coal mining is one of the key industries in West Virginia Don Blankenship, CEO responsible for this case CASE ANALYSIS Event April 5, 2010: Mine explosion disaster at UBB mine 29 workers killed Greatest mine disaster since 1970s Company is being sued for homicide (federal and state) Prior to explosion Signs of danger Wrong direction of air flow of deadly gases and coal dust Workers told “not to worry” Whistle blowing was not present Internal environment Vertical structure, hierarchy Workers conform to rules and regulations (‘loyal’) STAKEHOLDER ANALYSIS Don Blankenship Massey President, CEO and Chairman (since 1992) Recently stepped down December 30, 2010 Money and profit goal orientated 1100 safety violations in the past three years "If any of you have been asked by your group presidents, your supervisors, engineers or anyone else to do anything other than run coal you need to ignore them and run coal. This memo is necessary only because we seem not to understand that coal pays the bills." - Don Blankenship STAKEHOLDER ANALYSIS STAKEHOLDER ANALYSIS Everett Hager Superintendent Told Massey workers “not to worry about the unsafe conditions” Possible involvement with company politics Terry Moore Mine Foreman Felt unsafe about the mine conditions brought issue to superintendant Almost internal whistleblower wanted to remain loyal consequences of losing his job STAKEHOLDER ANALYSIS Workers/Miners Without a union Psychological instinct pressure to obey instructions Community Successful local business owners Coal is the only thing that brings money into the area Did not do much to raise issue about poor working conditions, assuming: lack of knowledge of conditions in the mind did not want to lose those jobs Frame of reference: sustainability, economic ties STAKEHOLDER ANALYSIS MSHA Safety governmental agency Flagged Massey Energy Co. for not obeying standards Frame of reference: politics Shareholders Investors of the company Interested in revenues, profits QUESTION IN CASE: Should Massey Energy be held liable or responsible for the death of the mine workers? ETHICAL ISSUES Whistle-blowing Rights of employees within a firm Equal treatment Employee duties Unions The right to strike UNDERLYING ISSUES Changes in society which partially caused this problem The economic downtown which causes the town to depend on the mines as a major source of income. there has been a lack of internal whistle-blowing since employees did not want to risk loosing their jobs due to this economic downturn The MSHA did not want to lose a section of the major source of income of the West Virginia state, the coal industry Massey sued MSHA because they needed better ventilation MSHA confuted by saying that the equipment Massey wanted to use for ventilation only increased coal production which Harvey denied EMPLOYEE DUTIES Workers have rights, but also have tasks they were hired to do Varies for every job position but there are basic obligations that apply to every worker For example, morally obligated to follow moral law, and legally bound to civil law Employees must think about the good of the company that they work for. For example, should not work/leak secrets to the competitor Often, workers are told more often what they must do rather than their rights so workers learn their expectations quicker than knowing when their rights are violated. WORKER OBEDIENCE "No one is morally obliged to do what is immoral" Corporations expect that workers are obedient and follow orders as they are told to. But limits to which orders to follow - moral or immoral? However, habitual obedience occurs often. Possibility why miners at the Upper Big Branch mine obeyed orders even though they knew that their safety was compromised RIGHTS OF UNIONS Stems from the rights of individuals to attain their own goals and rights to associate with others to achieve common ends Unrestricted membership for workers to a union Morally obligated to protect the interests of members Prioritizes good for all workers before good of society UNIONS IN MASSEY ENERGY CASE Almost no mention of the miners' union, United Mine Workers of America, in the Upper Big Branch articles Unions should have renegotiated until working conditions have been improved for the miners in the Upper Big Branch mine Possibility of corruption within the union, threats and intimidation RIGHT TO STRIKE Freedom to refuse employment under certain conditions Exceptions: for example, national army draft Two moral restrictions: Respect for valid contract Consideration of rights of general public to necessities of life RIGHT TO STRIKE Striking employees run the risk of being replaced Techniques to ensure that employees are not replaced • For example, solidarity of workers Ceasing mining would not be life-threatening Non-public sector industry WHISTLE-BLOWING Varying definition depending on moral values and point of view Several types: Internal Personal Governmental Non-governmental, impersonal, external Popular references to whistle blowing: Erin Brockovich WHISTLE-BLOWING Determining moral status of whistle-blowing Five conditions that, if satisfied, change the moral status of whistle blowing: 1. The firm will do serious and considerable harm to employees or to the public if left to their own devices 2. The employee has reported the problem in question to his immediate superior 3. The superior has not been effective and no other alternatives are internally available 4. The employee has strong and valid evidence of the case 5. The employee believes that by whistle-blowing, it is worth taking the risk so that necessary changes are made for successful implementation WORKER’S RIGHTS AND DUTIES WITHIN A FIRM Civil right: legal right that entitles each person covered by them to certain treatment or that guarantee noninterference in their acting in certain ways Moral right: does not have to be based on law, but a moral right may also be a civil right. "If you have construction jobs at your mine that need to be done to keep it safe or productive, make every effort to do thos jobs without taking members and equipment from the coal producing sections that pay the bills" - From Don Blankenship's memo RIGHTS OF EMPLOYEES WITHIN A FIRM Employees only have rights and duties that they negotiate with their employers as conditions of employment. However, This can be misleading bounded not only by law but by by moral obligations and other conditions such as local custom and existing social circumstances in which the contract is made Rights of employees who are more skilled than others- they demand certain rights and privileges APPLICATION TO CASE The Central Ethical Dilemma Negligence about miners' safety- money over safety? Miners' safety at the workplace is a moral right even if it is not explicitly mentioned in the conditions of employment By whistle-blowing, we are ensuring that these rights are protected Internal whistle blowing occurred but was ignored even though it was permissible and morally justified "When questioned, Terry Moore, mine foreman, said he knew of [the] condition and that he asked Everett Hager, superintendent, about it and he was told not to worry about it ALTERNATIVES Our solutions are based on the goal of saving workers and the community rather than punishing the executives because: 1. corporate personhood (corporation shield) 2. it is hard to see who is to blame for what 3. ultimately if we hurt the executives then we hurt the workers ALTERNATIVES – STRICTER ENFORCEMENT MSHA use power to enforce existing regulations: More frequent & detailed inspections increase budget Surprise checkups MSHA in closer contact with miners MSHA reps working at company to act as + support whistle blowers ALTERNATIVES – NEW REGULATIONS OR LAWS Change the mentality of the company Help subsidize the proper safety equipment Harsher laws and greater penalties Give incentives to change Meetings/mine tours every quarter Improve Law system Shorten the appeal process ALTERNATIVES – CHANGE INDUSTRY CULTURE Unite miners across to prevent another tragedy Annually/semi annually conference with union reps from all over the country Closer ties to union (UMWA) Increase exposure of current issues Ads Social media ALTERNATIVES SUMMARY 1. 2. 3. Stricter enforcement (MSHA) New regulations and law(government) Change industry culture(union) RECOMMENDATION Industry evolution (union) There is limit of what MSHA and Government can do Miners should take charge over their own health and safety Correspond to the key ethical issues Focuses on the whole industry CONCLUSION Address the dependency of community balance between economy and safety issues Case is an on-going process Ethical issues in this cases apply to other businesses as well Employees have to step up against immoral actions