Business Ethics

 

Tom Cooke is the chief executive officer (CEO) of Butterfly, Inc., a company that buys life insurance policies at
a discount from terminally ill persons and sells the policies to investors. Butterfly pays the terminally ill patients
a percentage of the future death benefit (usually 65%) and then sells the policies to investors for 85% of the
value of the future benefit. The patients receive the cash to use for medical and other expenses, and the
investors are “guaranteed” a positive return on their investment. The difference between the purchase and sale
prices is Butterfly’s profit.
Cooke is aware that some sick patients may obtain insurance policies through fraud (by not revealing their
illness on the insurance application). An insurance company that discovers such fraud will cancel the policy
and refuse to pay. Cooke believes that most of the policies he has purchased are legitimate, but he knows that
some are probably not.
Answer the following questions in paragraph form:
In a few words, explain principle of rights. Would a person who adheres to the principle of rights consider it
ethical for Cooke not to disclose the potential risk of cancellation to investors? Why or why not?
In a few words, explain categorical imperative. Under the categorical imperative, are the actions of Butterfly
ethical? Why or why not?
In a few words, explain utilitarianism in ethics. Under utilitarianism, are Cooke’s actions ethical? Why or why
not? If most of the policies are legitimate, does this make a difference in your analysis?
In a few words, explain the IDDR approach. Using the IDDR approach, discuss the decision process Cooke
should use in deciding whether to disclose the risk of fraudulent policies to potential investors.
What are other ethical concerns that Cooke may be facing? Explain why they are concerns.

Sample Solution

aucasus region. On June 22, 1941 Operation Barbarossa was underway and the German-Soviet Nonaggression Pact was quickly forgotten. “Having torn up yet another ‘scrap of paper’ and shown once again how worthless his word, Hitler has plunged Nazi Germany into another adventure—The colossal and incalculable adventure of an assault on Soviet Russia.” headlines the Western Daily Press. Quickly, Nazi Germany, alongside Romania, Italy, Hungary, and Croatia, began their offensive against the Soviet Union. In its opening weeks, the nearly three million German forces contained within 150 divisions lined up and delved deeply into Soviet territory. Victories at key areas like Smolensk and Minsk heightened Nazi morale and weakened the Soviets. Despite the victories, the Germans suffered important losses at Moscow in the winter of ‘41-‘42. As summer rolled back around for the Germans during Operation Barbarossa, Hitler set his sights upon the industrial capital and namesake of Joseph Stalin: Stalingrad.

As the German Operation Barbarossa continued throughout the Russian Steppes and Caucuses, the themes of triumph and tragedy were ever-more-present. The quiet, yet influential triumph of the Soviet Army at Moscow was an echo of what was to come on the Volga River at Stalingrad. However, not only was the victory echoed, the loss of life was as well. By this point in the war, 600,000 Soviet Soldiers were already captured by the Nazi Army and casualties surmounted 1,000,000 casualties from both the offensive and defensive infantries.

Because Operation Barbarossa was considered a failure, Adolf Hitler decided that a new plan of attack needed to be formed. Hitler named this plan Operation Blue. Much to the dismay of his war generals, who wanted the target of Operation Blue to once again be Moscow, Hitler decided to focus on the oil fields in the Caucasus region. He did this for two very important reasons. The first was that without oil, the Soviet army would eventually collapse. The second was that with access to Soviet oil, it would only be a matter of time before Germany conquered Soviet Russia.

Heart of the Story

July 17, 1942, Germany and Adolf Hitler’s Sixth Army, led by General Paulus, reaches the gates of Stalingrad perched upon the Volga River. After trekking through the muddy trails and roads throughout the Russian Steppes and Caucuses, German forces unknowingly begin the bloodiest an

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