Case Notes All Case Notese from Case notes
1-20 for Business Ethics Ethical Decision
Making and Cases, 13th Edition By O. C.
Ferrell, John Fraedrich, Ferrell
Business Ethics — Cases 1–10
CASE 1 — Patagonia
From the Outside In: Corporate Social Responsibility at Patagonia
Main topic
Corporate social responsibility (CSR), sustainability, environmental responsibility, and
stakeholder management.
1. Case overview
Patagonia is an outdoor-apparel company that has built its identity around environmental
responsibility. The case examines the tension between operating a profitable business and
encouraging customers to consume more responsibly.
2. Main ethical problem
The central issue is:
How can Patagonia remain profitable while reducing the environmental damage
associated with producing and selling clothing?
3. Stakeholders
• Customers
• Employees
• Suppliers
• Owners/investors
• Local communities
• Environmental groups
, • Government
• Future generations
• The natural environment
4. Ethical issues
• Environmental sustainability
• Responsible consumption
• Sustainable sourcing
• Corporate responsibility
• Transparency
• Long-term versus short-term profit
• Stakeholder interests
5. Possible alternatives
A. Focus primarily on profit
This could lower costs but potentially weaken Patagonia's environmental commitments.
B. Put environmental goals above profitability
This could produce greater environmental benefits but could threaten the company's
financial sustainability.
C. Combine profitability and sustainability
Patagonia can continue operating as a profitable company while incorporating
environmental considerations into products, sourcing, marketing, and operations.
6. Best answer
Alternative C is the strongest ethical choice.
A company needs financial sustainability to continue serving stakeholders. At the same
time, Patagonia has a responsibility to reduce foreseeable environmental harm.
7. Ethical analysis
From a stakeholder perspective, Patagonia should consider customers, employees,
owners, suppliers, communities and the environment.
,From a utilitarian perspective, decisions should maximize benefits and minimize
environmental and social harm.
From a rights perspective, stakeholders should not be deceived or exposed unnecessarily
to harmful practices.
8. Model answer
Patagonia should continue integrating environmental sustainability into its business
strategy while maintaining sufficient profitability to remain financially viable. Its CSR
approach is ethically defensible because it recognizes that a company's
responsibilities extend beyond shareholders to employees, customers, communities
and the environment.
9. Exam question
Why is CSR important to Patagonia?
Answer: CSR is important because environmental responsibility is central to Patagonia's
identity and stakeholder relationships. Responsible environmental practices can reduce
harm, strengthen trust, differentiate the company and support long-term sustainability.
CASE 2 — Tesla
Tesla Accelerates the Transition to Sustainable Energy
Main topic
Sustainability, innovation, safety, corporate governance and stakeholder responsibility.
1. Case overview
Tesla's business model is closely associated with electric vehicles, renewable energy and
technological innovation. The ethical challenge involves pursuing rapid innovation while
addressing safety, environmental, labor, regulatory and investor concerns.
2. Main ethical problem
How should Tesla balance rapid technological innovation with safety, transparency
and responsibility toward stakeholders?
3. Stakeholders
• Vehicle owners
, • Employees
• Investors
• Suppliers
• Regulators
• Communities
• Other road users
• Environment
4. Ethical issues
• Product safety
• Environmental impact
• Truthful communication
• Workplace practices
• Regulatory compliance
• Corporate governance
• Innovation risk
5. Alternatives
A. Maximize speed of innovation
Advantage: faster technological development.
Risk: increased possibility of safety or regulatory problems.
B. Slow innovation substantially
Advantage: more time for testing.
Risk: reduced competitiveness.
C. Maintain innovation while strengthening safety and oversight
This provides the best balance.
6. Best answer
1-20 for Business Ethics Ethical Decision
Making and Cases, 13th Edition By O. C.
Ferrell, John Fraedrich, Ferrell
Business Ethics — Cases 1–10
CASE 1 — Patagonia
From the Outside In: Corporate Social Responsibility at Patagonia
Main topic
Corporate social responsibility (CSR), sustainability, environmental responsibility, and
stakeholder management.
1. Case overview
Patagonia is an outdoor-apparel company that has built its identity around environmental
responsibility. The case examines the tension between operating a profitable business and
encouraging customers to consume more responsibly.
2. Main ethical problem
The central issue is:
How can Patagonia remain profitable while reducing the environmental damage
associated with producing and selling clothing?
3. Stakeholders
• Customers
• Employees
• Suppliers
• Owners/investors
• Local communities
• Environmental groups
, • Government
• Future generations
• The natural environment
4. Ethical issues
• Environmental sustainability
• Responsible consumption
• Sustainable sourcing
• Corporate responsibility
• Transparency
• Long-term versus short-term profit
• Stakeholder interests
5. Possible alternatives
A. Focus primarily on profit
This could lower costs but potentially weaken Patagonia's environmental commitments.
B. Put environmental goals above profitability
This could produce greater environmental benefits but could threaten the company's
financial sustainability.
C. Combine profitability and sustainability
Patagonia can continue operating as a profitable company while incorporating
environmental considerations into products, sourcing, marketing, and operations.
6. Best answer
Alternative C is the strongest ethical choice.
A company needs financial sustainability to continue serving stakeholders. At the same
time, Patagonia has a responsibility to reduce foreseeable environmental harm.
7. Ethical analysis
From a stakeholder perspective, Patagonia should consider customers, employees,
owners, suppliers, communities and the environment.
,From a utilitarian perspective, decisions should maximize benefits and minimize
environmental and social harm.
From a rights perspective, stakeholders should not be deceived or exposed unnecessarily
to harmful practices.
8. Model answer
Patagonia should continue integrating environmental sustainability into its business
strategy while maintaining sufficient profitability to remain financially viable. Its CSR
approach is ethically defensible because it recognizes that a company's
responsibilities extend beyond shareholders to employees, customers, communities
and the environment.
9. Exam question
Why is CSR important to Patagonia?
Answer: CSR is important because environmental responsibility is central to Patagonia's
identity and stakeholder relationships. Responsible environmental practices can reduce
harm, strengthen trust, differentiate the company and support long-term sustainability.
CASE 2 — Tesla
Tesla Accelerates the Transition to Sustainable Energy
Main topic
Sustainability, innovation, safety, corporate governance and stakeholder responsibility.
1. Case overview
Tesla's business model is closely associated with electric vehicles, renewable energy and
technological innovation. The ethical challenge involves pursuing rapid innovation while
addressing safety, environmental, labor, regulatory and investor concerns.
2. Main ethical problem
How should Tesla balance rapid technological innovation with safety, transparency
and responsibility toward stakeholders?
3. Stakeholders
• Vehicle owners
, • Employees
• Investors
• Suppliers
• Regulators
• Communities
• Other road users
• Environment
4. Ethical issues
• Product safety
• Environmental impact
• Truthful communication
• Workplace practices
• Regulatory compliance
• Corporate governance
• Innovation risk
5. Alternatives
A. Maximize speed of innovation
Advantage: faster technological development.
Risk: increased possibility of safety or regulatory problems.
B. Slow innovation substantially
Advantage: more time for testing.
Risk: reduced competitiveness.
C. Maintain innovation while strengthening safety and oversight
This provides the best balance.
6. Best answer
