MAASAI MARA UNIVERSITY
REGULAR UNIVERSITY EXAMINATIONS
2019/2020 ACADEMIC YEAR
FOURTH YEAR FIRST SEMESTER
SCHOOL OF BUSINESS AND ECONOMICS
BACHALOR OF BUSINESS ADMINISTRATION
COURSE CODE: BCM 4109
COURSE TITLE: BUSINESS ETHICS AND VALUE
DAY: 9TH DECEMBER 2019 TIME: 1430-1630 HRS
INSTRUCTIONS TO CANDIDATES:
Answer Question ONE and any other THREE Questions
Read the case study below and answer the Question 1
In 2008, a great number of babies in China, having consumed the milk powder produced by
Sanlu Group, were discovered to have suffered from kidney stones. Later, its milk was
found to contain melamine, an industrial chemical, which can result in a heightened
protein content value in tests and yield greater profit for milk farmers. Adding melamine to
the milk may boost its market value, yet long-term ingestion of melamine would create
problems for the urinary system, resulting in kidney stones and even cancer. According to
statistics, up until 21 January 2009 nearly 50,000 infants sought medical consultation and
was treated and recovered as a result of having ingested the problematic milk powder; 6
died as a result. There were also confirmed cases in Hong Kong and Macau. After the
General Administration of Quality Supervision announced the examination report
regarding the presence of melamine in the baby powder produced by numerous major
manufacturers, the scope of incident was revealed – the presence of melamine was
discovered in the milk powder of many major manufacturers in China. The event also had a
disastrous impact on the reputation of China-made goods, with many countries banning
the import of China-made milk products.
Later, it was revealed that in as early as 2007 there have been customer complaints about
the quality of Sanlu’s milk powder. The company only covered up the incidents and it was
not until August 2008 when cases began to mushroom all over the country that Sanlu
reported to the Shijiazhuang Municipal Government and the Xinhua District Government
and announced the public about the presence of melamine in the milk powder. A recall was
subsequently conducted but there was already a surge in occurrence of kidney-stones in
infants. Many infants suffered kidney problems, and some did not survive; later the
government announced that they would treat infants freely.
The Shijizhuang Municipal Government later arrested near 20 individuals working
separately at the ranches, milk cows rearing communities, operators of milk halls, and
illegal sellers of the chemical. The Provincial Government ordered Sanlu to cease
production. The company was declared bankrupt and the persons responsible were
punished.
Question One.
a) Define and explain the scope of business values and ethics [3 Marks]
b) Using the theory of stakeholders to comment on the Government’s
severe punishment of the senior management of Sanlu and the involved
milk farmers, and liquidation of the company [7 marks]
c) Basing your answer on the case study evaluate ethical issues that
managers must deal with in production and Marketing [10 marks]
d) Describe how the ethical issues in the Sanlu case reflect the Kenyan
business situation [5 marks]
Question Two.
a) Describe the issues related to infringement of consumer rights using a
company of choice in Kenya [8 marks]
b) Evaluate the Ethical considerations a firm must keep in mind when
deciding advertising strategies [7 Marks]
Question Three.
a) Explain the common immoral issues in business ethics that managers
and employees deal with in organizations: [7 Marks]
b) The role of Whistle blowing as a value should not be underestimated;
however, a whistle blower must take due diligence to understand the
consequences of his/her actions, therefore, explain the steps that
should be taken into consideration by the whistle blower before whistle
blowing [8 marks]
Question Four.
Codes of ethics set a high standard of behavior within an organization but has
limitations: discuss [15 marks]
Question Five.
Corporate social responsibility (CSR) should not be a form of charity but as a
duty of the corporation as a moral entity. There has been a lot of debate for
and against CSR. From your knowledge of business ethics discuss whether
corporations should practice CSR. [15 marks]
