Informative Essay on Business Ethics

Amtrak’s Case Study LS312: Ethics and the Legal Environment Unit 4: Assignment Kaplan University Professor Bill Mulherin January 3, 2013 ? Amtrak’s Case Study Corporate social responsibility can create big problems if corporations do not handle difficult situations properly, especially when there are accidents involved. According to the eGuide to Ethics and the Legal Environment chapter 2, “CSR is a business practice that demands that business organizations look to the effect their decisions have on multiple stakeholders” (eGuide 2013 pg. ). I would have to say after reading The Wreck of Amtrak’s Sunset Limited, the question of “Who was at fault” would be a difficult task to determine. However, I will do my best to break this case study down into elements that will eventually present an idea as to who truly was at fault for the derailment, which was caused by a towboat which was lost in the dense fog and hit the bridge while pushing 6 barges and knocked the track out of alignment.

I will present to you all the stakeholders involved in this derailment, as well as their interests in cleaning up the mess this “normal accident” left in its wake. Next, I will explain the four areas of the corporation's social corporate responsibilities including the economic, legal, ethical, and philanthropic areas. Based on these four areas of corporate social responsibility, I will reveal my final summary of who was responsible for this derailment and provide my justifications and recommendations to each of the businesses at fault.

I will present a brief history of the derailment of Sunset Limited and the accident that took place (Eisenbeis, Hanks & Barrett, 1993). The case study involved several factors that contributed to creating this devastating accident. Amtrak’s transcontinental passenger train, Sunset Limited, was delayed in New Orleans and behind schedule thirty minutes before it left Alabama. The train was cruising on its tracks at seventy-two mph; a towboat that was owned by WGN (Warrior and Gulf Navigation Company) was trying to secure its towboat and six barges, the Mauvilla, to the iverbank on the Mobile River. The railroad and train that it was traveling on was owned by CSX (Chesapeake System Railroads), which in turn was funded by NRPC (National Railroad Passenger Corporation). The Mauvilla was classified under the Code of Federal Regulations Title 46 § 24-28 as an “uninspected towboat of less than 1600 tons,” which meant that it did not require the boat to have navigational equipment while traveling through foggy waters (History Channel, 1993) & (Eisenbeis, Hanks & Barrett, 1993).

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As a result, a reasonable person would have determined from this case study that some violations had already occurred from the start of both parties. The night was with a thick fog that reduced the pilot of the Mauvilla’s vision to the point that he veered off course and never realized the bridge was straight ahead. Coincidentally, this pilot was not as competent as the captain whom should have been guiding the vessel with the pilot in the first place. The pilot mistakenly saw the Big Bayou Canot Bridge as another vessel that would help him secure the Mauvilla, until the fog lifted.

As the Mauvilla went under the bridge, it knocked the support beams off the bridge, which caused the Sunset Limited to derail and plunge several of its cars into the Big Bayou Canot River. According to this case study, “the crash caused the recording of over one hundred personal injuries and wrongful death suits against WGN, the pilot and captain of the Mauvilla, CSX, and Amtrak” for causing 47 deaths, hundreds of personal injuries and extensive property damage (Amtrak Case Study 2013).

There were other companies who were involved, but were not placed in the conflicts of this accident, that should have been (Eisenbeis, Hanks & Barrett, 1993). The stakeholders involved in this accident are the people who was affected by each and every business decision that any person, group, entity, or living thing that has an interest in a business (eGuide pg. 4). This would include every person or entity that was on the train, or on the towboat along with de every person or entity remotely involved with making any decisions pertaining to the passenger train or towboat.

A list of these stakeholders are as follows: Amtrak, employees, consumers on the Sunset Limited, CSX (Chesapeake System Railroads), WGN (Warrior and Gulf Navigation), U. S. Coast Guard, the towboat captain and pilot, NTSB (National Transportation Safety Board), and the Alabama Emergency Response Network (Amtrak 2013). The interests that these stakeholders share in common is how much liability each of them have for the cause of this accident and how much burden they hold on the decisions made by the corporations involved in this accident. The higher ups and the shareholders make most of the decisions in these corporations.

Before a decision is made, there are four areas of social responsibility that should be examined. Even though the consumers in this derailment are a minority of the stakeholders, they are not at fault for this accident and did not make any of the decisions leading up to the derailment. However, the consumers are the ones that paid dearly for this tragedy. Since they paid such a high price, one might say that other interest consumers and other entities that were involved in this accident were to take extra measures to ensure safer travels.

It is important for a business to always plan for the effects their decisions will have on its stakeholders, including looking at all angles and developing a safe plan for everyone who is involved. Safety does not always mean planning for the life threatening emergencies life throws at us. If a business does not anticipate occasional accidents then the risk of experiencing crisis, public criticism, and lower profitability will increase significantly. To gauge out manageable decisions, businesses will need to look at four areas of corporate social responsibility, which are economic, legal, ethical, and philanthropic.

For the purposes of this assignment, the items that need to be discussed are the four areas concerning some of the stakeholders of the businesses involved in the accident (Anaejionu, 2013). First of all, the economic area of social responsibility includes how much money is involved. According to the eGuide case study, all members of the public rely on businesses to contribute to the common welfare and economy (eGuide pg. 4). Amtrak contributes to the public by providing passenger trains to get passengers to their destinations.

They raise money by charging for the train tickets and extra accommodations that are included in the trip. WGN contributes to the public by providing the transportation of imports and exports across waterways, which raise profits by the barter and exchange experience. The bottom line is that money keeps coming in and going out, which keeps the flow within the corporations on a steady range that maximizes their profits (eGuide pg. 4) & (Anaejionu, 2013). The second area is the legal areas of corporations that have to be examined in order to help them stay within the guidelines of legal issues.

This is where the top executives of the stakeholders come into the picture. The state, local, and federal governments enact the towboat regulations to WGN, the U. S. Coast Guard, the Alabama Emergency Response Network, and the NTSB (National Transportation Safety Board); in addition, they enact the bridge regulations because they all three share the responsibility of our nation’s bridges (Amtrak 2013). A decision cannot be made outside of the law (Anaejionu, 2013).

The third area is that decisions have to stand by an ethical code in order to maintain the integrity of the business. Without ethical codes there is no help to guide businesses in the right direction. Ethical codes provide members and other interested persons with guidelines for making ethical choices in the conduct of their work (US Legal, 2001-2013). Amtrak made an ethical decision to place signs in their trains to help passengers locate emergency windows, fire extinguishers, first aid kits, warning lights in case of emergencies that they thought could possibly happen.

The three companies made ethical decisions to create a regulatory agency that helped ensure Amtrak would make ethical decisions concerning safety, but did not make ethical decisions pertaining to the cost of implementing extra safety precautions needed while traveling on bridges. WGN made ethical decisions that concerned safety regulations, but did not make ethical decisions that concerned navigational regulations or requirements that would assist with further safety precautionary measures while traveling in waterways.

The Coast Guard and the Alabama Emergency Response Network made ethical decisions concerning emergencies, but placed lower standards on the evacuation processes and protocols, rather than the higher standards they should have been held against (Chandler, 2009) & (Anaejionu, 2013). The fourth and final area, philanthropy, should be examined when corporations are making ethical decisions in order to keep the corporation in check while achieving and maintaining good public relations.

Personally, I believe businesses should always give back to the community, but for some reason they do not fulfill their duty except for their own benefits such as achieving tax breaks by giving money to the community’s special events. Despite the occasional accidents in the past, Amtrak today “provides intercity passenger rail services to more than 500 destinations in 46 states on a 22,000-mile route system. Amtrak recognizes that greenhouse gas reduction is a multi-dimensional concern, and encourages passengers to take practical steps to reduce carbon emissions whenever possible (Amtrak, . d. ). These are just a few of the ways Amtrak gives back to the communities in today’s world. Concerning this case study, I am sure Amtrak gave back to its communities during the tragic train derailment. Our local, state, and federal governments give back to the people in many different ways; mostly, with tax breaks and grant programs. Every corporation needs to give back to society in one way or another, because money has to be stabilized on a range within a society to ensure its success (Anaejionu, 2013).

Corporations have to review these four areas of corporate social responsibility before they make any final decisions. As the laws change in any given society, businesses will also need change their structures within their own organizations. As this case study demonstrates, a derailment had to occur in order for laws to be questioned on how transportation is to be conducted. If there had been no accident, then there would not have been so many laws and regulations placed on how transportation should be conducted (Anaejionu, 2013).

In this case study, many companies are to blame for this tragic accident. Let’s start with the defendants and research their involvement in this case. The defendants of the wrongful death lawsuit and the personal injury lawsuits are the pilot and the captain of the Mauvilla, Amtrak, WGN, and CSX. The pilot and captain were sued for the towboat crashing into the bridge and the incompetence displayed from the pilot (Amtrak, n. d. ). Amtrak, WGN, and CSX are the ones that own and maintain the trains, tracks and equipment that were used in the accident.

There should have been charges filed against the Mobile Telephone Directory who listed the National Coast Guard’s phone number incorrectly in the phonebook, more than one organization should have been involved with this wrongful death law suit because they should have made sure every number is up to date for emergencies like this. How embarrassing for the people of Alabama to be cited as incompetent because they cannot list telephone numbers correctly, especially for the National Coast Guard. Another point would be the fact that there were no maps or navigation equipment in the towboat.

Even if it were not implied, a reasonable person would ensure that maps or navigation equipment would be available when traversing in unfamiliar territory (Amtrak, n. d. ). As a potential business student, I feel this would be how to present this case to the court with justifications and recommendations for the stakeholders involved looking into eliminating future disasters that might occur. I would have the correct phone number placed in the Mobile directory for the National Coast Guard. The next recommendation that would be to make it mandatory for all towboats to have maps and navigational equipment in their boats at all times.

Then it would be wise to figure out what it would cost to install fog lights on all of the towboats. The way to look at it would be the amount of money involved in installing fog lights is going to be a lot cheaper than a class action lawsuit. In summary, the Amtrak Case Study clearly shows what kind of corporate social responsibility decisions businesses are faced with at any given time. Our chapter 2 eGuide summarizes this type of corporate social responsibility as when a business “judges the effects of its decisions on its multiple stakeholders, and then bases its decisions on the interests and needs of those stakeholders” (eGuide pg. ). In order for corporate social responsibility to thrive in a business, four areas of responsibility first must be covered. These four areas include the economic, legal, ethical, and philanthropic areas all of which should involve the interests of all of the stakeholders. The multiple stakeholders and their unethical decisions in this case study helped prepare a final synopsis to the inevitable question of “Who is responsible. ” The lesson learned in this case study is to never forget random acts of nature and the environment when making decisions, and always make business decisions that cover all of the stakeholders not just some.

References: Anaejionu, R. (2013). What is corporate social responsibility? Retrieved from http://smallbusiness. chron. com/corporate-social-responsibility-11605. html CarbonFree. (2010) Amtrak. Carbonfund. org. Retrieved 14:23 Feb 26, 2012 from http://carbonfund. org/index. php? option=com_zoo=item=2=216. Chandler, D. (2009). The perfect storm of leaders’ unethical behavior: A conceptual framework. Retrieved from http://www. regent. edu/acad/global/publications/ijls/new/vol5iss1/IJLS_Vol5Is1_Chandler (2). pdf Eisenbeis, H. R. , Hanks, S. & Barrett, B. (1993, September 22). The wreck of amtrak’s sunset limited. DOI: Retrieved from Kaplan Portal History Channel. (1993, September 22). Sep 22, 1993: train derails in alabama swamp. Retrieved from http://www. history. com/this-day-in-history/train-derails-in-alabama-swamp The Kaplan eGuide to ethics and the legal environment. Retrieved January 2, 2013 from eGuide_LS312_Chapter 2. pdf US Legal. (2001-2013). Code of ethics law & legal definition. Retrieved January 2, 2013, From http://definitions. uslegal. com/c/code-of-ethics/.

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