Note to instructors.

Introduction

The case Can This Business Be Rescued? focuses on two issues: the process of entrepreneurial decisions and the ethics of these decisions. The events of the case occur in Belarus, a country with some despotic characteristics where inspections and investigations of business enterprises are the main instruments utilized to keep them under tight government control. In this example the powerful investigative organization pressures a small company to "reveal" all illegal operations and corrupt relations with its partners. The company's operations may be considered legal from one point of view and illegal from another because of indeterminate changes in the country's law. The owner of the company must assuage the investigators while minimizing risks for his business and protecting his personal relationships with his commercial partners.

Key Issues for Discussion

The case describes an ethical dilemma for its focal actor. Each option is a viable consideration depending on the perspective through which it is considered his role as an individual, his role as a member of social networks, and his role as a business executive. Conflicts among these roles create the entrepreneur's defining moments "that ask us to step forward and, in the words of the American philosopher John Dewey, 'form, reveal, and test' ourselves" (Badaracco, 1998, p. 116). Students learn how an entrepreneur's choices relate to the specifics of business environments, to the entrepreneur's multiple social roles, and to his or her personal values. Students learn to evaluate each option and to make difficult decisions. To evaluate the ethics of each option, students apply ethical theories (i.e., Van Gerwen, 1996) along with cultural relativism (Ferrell, Fraedrich, & Ferrell, 2005; Rodrigues, 2001).

Potential Audience and Uses

The case is most appropriate for ethics or decision-making classes in the courses of organizational behavior, leadership, or international management. The case is most effective in continuing or graduate education, but also can be used for undergraduate students late in the term, when students are aware of debate techniques.

Suggested Teaching Approach

This case can be used for the following pedagogical objectives:

* To study and apply the concept of defining moments (Badaracco, 1998) and intrapersonal conflict (Bazerman, Tenbrunsel, & Wade-Benzoni, 1998; O'Connor, De Dreu, Holly, Bruce, Terri, & Bazerman, 2002) as well as their roles in the manager's choices.

* To analyze and discuss the issue of business ethics in the context of a hostile business environment

* To acquaint students with the peculiarities of business and cultural environments in a country with a transition economy.

The following questions can be used to lead the students' discussion of the case: (1) Decide which position Anton should present at the meeting; (2) Discuss Anton's options from the perspective of managerial defining moments (Badaracco, 1998); and (3) Evaluate Anton's options using Van Gerwen's (1996) methods of applied ethics. Take into consideration the Belarus business environment of 2003.

Three small groups of students may analyze Anton's three defining moments. The first group focuses on the issue of Anton's personal identity and raises the manager's question, Who am I? The second considers both the values of the groups that Anton involved in this situation and Anton's role as a group member and leader. It raises the question, Who are we? The third group of students discusses Anton's defining moment as he determines his company's role in society. It raises the question, Who is the company? Each group may discuss two study questions: What option should Anton choose? How ethical is that choice? The follow-up discussion examines the options recommended by each of the three student groups. After the discussion, the instructor can share the Epilogue as an illustration of how the ethical dilemma was actually resolved.

Anton's Options From the Perspective of Managerial Defining Moments

Intrapersonal conflict is not new to psychological research. Lewin's (1935) theoretical analysis of multiple-goal conflicts, Higgins's (1987) review of different dimensions of the self, as well as works of Argyris (2001/1966), Erikson (1963/1950), and Rogers (1961) have all established the conceptual background for further studies. Contemporary research continues this inquiry into the conflict between "should" self, "would" self, and "want" self (O'Connor et al., 2002); mixed motivation (Dewitte & De Cremer, 2001); negotiation with yourself (Bazerman et al., 1998); and others. Badaracco (1998) believes that three kinds of defining moments occur most commonly for managers: defining moments as individuals, as representatives of their people, and as representatives of their businesses. Table 1 represents Anton's main options as an individual, as a member of his network, and as his company's chief executive.

Two options initiate the sharpest intrapersonal conflict for Anton. The first is complete cooperation with the State Control Committee. Anton would never do this as an individual or as a member of the business network, but he is aware that this is the right thing to do as an executive. The second is appearance on Russian media. Individually, Anton would love doing this, but it would be a foolish action from his executive point of view. Asking Badaracco's (1998) questions--Who am I? (What are the entrepreneur's personal values and feelings?), Who are we? (What would the employees and partners think about the decision? How would the decision affect them?) and Who is the company? (How would the decision affect the position and stability of the business? How would it relate to the role of the firm in society?)--might become a student guide for resolving the entrepreneur's internal conflict and defining moments.

Evaluation of Anton's Options

The ethics of each option is one more important consideration. Van Gerwen (1996) offers a useful framework for teaching applied ethics in the classroom, where three methods emerge as dominant ways of conceiving ethics. The first method is the model of a legal code, when students appeal to the laws and norms within the particular domain. The second is the case method, when students consider the situation from the perspective of a particular agent and reflect their own agreement or disagreement with the agent's chosen line of conduct within the given circumstances. The third method is institutional analysis by "paying attention to the specific social and cultural setting, the particular ethos or the corporate culture of a firm" (Van Gerwen, p. 188). Instructors and students can apply any other ethical approaches (e.g., utilitarian theories, deontology, a theory of justice). However, in analyses of international cases like "Can This Business Be Rescued?" the classic theories of ethics should be applied along with cultural relativism, "the concept that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures" (Ferrell et al., 2005, p. 220). As with most philosophies, cultural relativism falls along a continuum between one polarity that claims that only one culture defines ethical standards for the whole globe, and another polarity that claims that there is no relevant ethical standard but the one belonging to the culture where the business operates. Both extremes have their backfires, and students should discuss an appropriate combination of universal principles, cultural settings, and specifics of the particular case.

Following the model of a legal code, students can recommend complete cooperation with the state agency as a right choice for a pivotal actor. First of all, cooperation with the State Control Committee is legal. It also can be considered as moral from the officially declared values of formal "equity" of all the members of society (as it used to be in the Soviet Union) and prevention of any unfair advantages of one group toward other groups. (1) The Chemical Product Trade Company did use its "unfair" connection within the Chemical Plant and probably did evade government regulations (e.g., related to currency exchange, prices, and the activities of an intermediary firm). "Voluntary" donations are also acceptable: they are legal and they serve society. Bribery is illegal. Contacts with Russian media and sharing negative information about relations between businesses and the Belarus government contradict the official priorities of the state.

At the same time, Rodrigues (2001, p. 40) claims that "many cultures establish informal ethical principles or moral standards that define 'right' and 'wrong' conduct," and Van Gerwen (1996) points to the specifics of a particular situation in the particular social and cultural setting. The case's Appendix presents information that helps the students evaluate Anton's choices within the particular environment of Belarus.

Epilogue

Anton went to the meeting. He decided to avoid any contact with the Russian media. Anton offered a significant donation for an ongoing and officially supported project. The investigators clarified that it was an appropriate initiative, but that there was no relation between the donation and the investigation. Anton avoided discussing specifics regarding his ties inside the Chemical Plant (such as the names and positions of particular managers) and the nature of the cooperation between his firm and the plant; he didn't directly confirm or deny anything. The investigators gave him a relatively short list of problems they had found, assigned a high fine, and said that ChemProTrade would be under strict control and observation until the next investigation (that was promised soon). Anton and Elena deliberately reduced ChemProTrade's operations in Belarus, opened another company in Russia, and eventually moved all their main operations there. They still work with the Chemistry Plant, but they have other suppliers as well. Several key employees of ChemProTrade moved to Russia to work in the new company.

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