Case Studies LEB 320F Final Exam Questions with Complete Solutions
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Course
LEB 320F
Institution
LEB 320F
*One A Day Multivitamin Gummies* - Answer-> Vitamins are supposed to be good for you, but are these good for you?
> Serving size is 2
> Misleading advertising and labeling
> VitaCraves (craving vitamins??)
> Not regulated by FDA until someone dies
> 5 year olds considered m...
Case Studies LEB 320F Final Exam
Questions with Complete Solutions
*One A Day Multivitamin Gummies* - Answer-> Vitamins are supposed to be good for
you, but are these good for you?
> Serving size is 2
> Misleading advertising and labeling
> VitaCraves (craving vitamins??)
> Not regulated by FDA until someone dies
> 5 year olds considered men on the bottle
*Johnson and Johnson Talc Powder* - Answer-> U.S. talc power trial -- ovarian cancer
> The ingredient in the powder "Talc" made from magnesium, silicon, hydrogen, and
oxygen, is the main cause of cancer.
> Started a series of other lawsuits against J&J
> Key: Punitive Damages (paid way more than what they were sued for)
> Gary M. Reedy, CEO of American Cancer Society; former Head of Global Policy for
J&J
*Tax Shelter* - Answer-> When companies move around money to pay less taxes
> Law firm was paid $50,000 per opinion for opinions on tax shelters
> This was illegal because they were giving fraudulent opinions (telling clients to do
illegal things so the firm can make more money)
> Even lawyers can be responsible for illegal & unethical acts
*Starbucks (May 2016)* - Answer-> Sued for too much ice in drinks
> False advertising
> Transparent (very small problem)
*in both Starbucks and Hostess cases, the maximum economic loss was only $5 which
is impractical
*Hostess (June 2016)* - Answer-> Recalled due to undeclared peanut residue
> Bigger problem b/c life threatening, if someone can die it is unethical
> Lack of transparency, self awareness
*in both Starbucks and Hostess cases, the maximum economic loss was only $5 which
is impractical
*TOMS shoes* - Answer-> Marketed as a good, giving shoes to people in third world
countries
> By donating shoes to different regions, they're taking away from jobs from shoe
makers in those areas
*Formula One* - Answer-> Change from using Grid Girls to Grid Kids
> Socially motivated decision, no legal action
,> F1 wants to change its image (less on sexualizing women)
> Not all Grid Girls liked the decision; some enjoyed the job
> Is it ok for the company to make that assumption for them?
*La Croix* - Answer-> What's in La Croix (flavor = natural flavor)
> "framing game"
> FDA doesn't define the term natural
> Are they obligated to tell us?
> The importance of definitions of words in product descriptions
> Violates moral minimum
*Aetna* - Answer-> Health care provider under investigation after company's medical
director said he had never personally reviewed a patient's medical records when making
decisions about what health care the health care insurer would cover
> Economic incentive to protect themselves
> People will eventually give up; don't want to deal with insurance company anymore
*Outback Steakhouse* - Answer-> Woman fired from restaurant chain after complaining
on social media that a big takeout party (church) didn't leave a tip
> The bill was a $735 take out order
> Outback has a strict policy forbidding workers from posting about customers on social
media.
> Outback reimbursed the church for its order in apologetic fashion
> Should the worker have been fired? (Class discussion)
*Volkswagen* - Answer-> Cheated the system and made a bug that said their diesel
cars are more fuel efficient and meet the emission standards when they actually do not.
> Such a big deal that the German Government came out and gave a public apology.
> Parent company of Mercedes Benz might be guilty in taking part in messing with their
cars as Volkswagen did
*J.M. Smucker Company* - Answer-> An activist started to test dog/cat food because
they were getting complaints
> Low doses of pentobarbital (sole use is to put animals to sleep) were found in the food
> Smucker's is a food conglomerate that owns many food brands such as Jiff Peanut
Butter, Dunkin Donuts, etc.
> If they are this careless with dog/cat food, who knows what they'll do with human food
*Snapchat* - Answer-> People are unsatisfied with Snapchat's new update (too similar
to Instagram)
> They keep losing money
> Kylie Jenner's tweet expressed the same sentiment many people feel → tip of the
iceberg (conformity bias)
> Losing $1 billion is the first step on a slippery sloped to making unethical choices
*General Electric* - Answer-> Lost 40% of stock's value in 2017
, > The SEC is investigating the company and its accounting after $6 billion dollars in
insurance loss
> Many of their chief officers, as well as their board of directors, are either stepping
down or being let go of → plants a seed of doubt about the future of the company
> Is fraud involved regarding this Forbes 500 company?
*Roku and NRA* - Answer-> Roku refuses to drop NRA TV
> A lot of companies make their decisions regarding their relationship with the NRA
based on what their competitors would do
> In situations like this, this is not how it should be
*Valeant Pharmaceuticals* - Answer-> Big pharmaceutical company would buy small
pharmaceutical company and jack up the prices
> People had no choice; either pay the price or die
> Valeant gets a lot of $$
> But their stock plummeted
> Business model is to take advantage of sick ppl
> However this is not illegal
*Net Neutrality* - Answer-> Washington State has passed legislation regarding
regulation of internet access for its residents → all resident of Washington have equal
access
> In December, the FCC allowed AT&T and Time Warner to regulate the traffic on their
servers regarding what their customers can access
> No longer equal free access to the internet (definition of net neutrality)
> similar to recreational marijuana laws within states
> example of why we need case law
*Equifax* - Answer-> Data breach because they failed to protect the data and then
prevented consumers from suing the company through a "accept terms agreement" in
order to see if they were one of the individuals whose information was stolen.
> Then said they had to pay $100 to fix the problem that Equifax caused through locking
their credit report.
*Enron* - Answer-> "Black box" company, but people were happy not asking questions
as long as Enron was making them money.
> Everyone else thought they were unstoppable so they thought so too
> Reported finances on basis of "mark-to-market" accounting (based securities on
current market value rather than book value--essentially predictions) which drove stock
prices up
> Executives sold stock before people caught on
*Uber* - Answer-> CEO mocked MIT research on ride-sharing economics
> Flaw in thought process on CEO's part
> Demonstrates a lack of emotional intelligence
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