BUS 303 group T

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BUS 303 group T

• Massey Energy Case

Presenters Theresa Chong Chitra
Ramdoyal Kathrene Genosa Brian Harrison Tracy
Leung Kelvin Ling
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agenda

1. Case analysis
2. Underlying issues
3. Concepts
4. Application to the case
5. Alternatives and evaluation
6. Conclusion

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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

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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

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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)

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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

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Stakeholder analysis
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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

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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

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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

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question in case

• Should Massey Energy be held liable or
  responsible for the death of the mine workers?

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ethical issues

• Whistle-blowing
• Rights of employees within a firm
• Equal treatment
• Employee duties
• Unions
• The right to strike

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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

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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.

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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

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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

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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

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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

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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

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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

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whistle-blowing

• Determining moral status of whistle-blowing
• Five conditions that, if satisfied, change the
  moral status of whistle blowing

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workers rights and duties within a firm

• Civil right legal right that entitles each
  person covered by them to certain treatment or
  that guarantee non-interference 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

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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 

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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

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alternatives

• Our solutions are based on the goal of saving
• workers and the community rather than punishing
• the executives because
• corporate personhood (corporation shield)
• it is hard to see who is to blame for what
• ultimately if we hurt the executives then we hurt
  the workers

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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

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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

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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

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alternatives summary

1. Stricter enforcement (MSHA)
2. New regulations and law(government)
3. Change industry culture(union)

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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

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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

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