Week 4 Assignment: Elaborate on the effects of Ethical Behavior

Week 4: The Effects of Ethical Behavior
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Introduction
The legal obligation a company has with regards to its customers is significantly different from its moral obligation. In essence, the moral behavior that a firm exhibit determines what the public will think of its image as well as its customer relationships. Ethical behavior means that a firm looks at the interest of its customers over the protocols and procedures of policy implementation (Velasquez, & Velazquez, 2002). Ideally, big firms that are under the control of the state are always in a dilemma between effectively serving their clients and sticking to the procedures and policies provided by the government. This is to say, there is always a conflict between the legal obligation and the moral obligation a company has with regard to its customers (Velasquez, & Velazquez, 2002). Fulfilling the two may be a problem considering the diverse and rigid nature of the moral obligation. In fact, in an attempt to fulfill these tasks, a firm might find itself entangled in cases of immoral or unethical conduct. This scenario was well represented in the case of Folole Muliaga where Mercury energy was widely criticized for its actions to disconnect the electricity supply for Mrs. Muliaga who was terminally ill and relied on the home oxygen machine for her breathing. In this regard, this paper seeks to analyze this case by assessing the outcome and consequences of Mercury energy’s actions, elaborating whether the actions by Mercury Energy were illegal and immoral, analyzing the police and the Coroner’s decision with regards to this case and finally determining the reforms that were adopted as a result of this tragedy.

Summary of the case
Mrs. Muliaga, a 45-year-old Samoan woman and her son were in their home, in Auckland, on May 29, 2007, when Mercury Energy, the largest energy distribution company in New Zealand, contracted a contractor to disconnect Mrs. Muliaga’a electricity supply on the basis that she was in arrears worth $120. Mrs. Muliaga had very serious health complications and was relying on the oxygen machine for breathing (Matenga, 2008). In fact, the doctors discharged her from the hospital because her condition was not treatable. Her family was also in debts as a result of the hospital bills. When the contractor went to her home to disconnect the electricity, her children tried to be rational with him informing him the importance of continued supply of electricity in the house which the contractor did not listen to. In fact, he even saw the oxygen pipe in Mrs. Muliaga’s nose and ignored it. Mrs. Muliaga died three hours after as a result of the disconnected power supply which she relied on for the operation of her oxygen machine. When Mercury Energy was informed of the incident, they responded by saying that they acted within their legal rights and had done nothing morally wrong. This case led to numerous debates with regards to the behavior and actions of Mercury Energy. The main question was whether their action was morally wrong or whether this was an ideal type of a case of business ethics.
Assessment of the Consequences/Outcome
As a result of the power disconnection, Mrs. Muliaga had a premature death. Even though the doctors projected that she would live for just 1 to 3 years, she defied the odds and lived for 5 years until this incident happened. When this news went viral, accusations were laid against Mercury Energy saying that they were employing capitalist principles during its operations (Eweje, & Wu, 2010). This means that the company was profit-driven and did not consider the consequences their actions would bring. In this regard, Mercury Energy disconnected Mrs. Muliaga’s power without considering the causal issues concerning the delay in the payment of the electricity bills. As such, the firm was accused of behaving unethically by sticking to their policy of disconnection at the expense of the terminally ill customer.
Also, Mercury Energy was disdainful, having strongly denied liability for Mrs. Muliaga’s premature death. Their brand name severely suffered a blow after the incident went viral. Being a company owned by the state and funded by money from the taxpayers, the expectations of the taxpayers was to consider Mrs. Muliaga’s family as one of the taxpayers and act considerately. The disconnection was not in good faith and led to a person, taxpayer, losing her life.
The Legality and Morality of Mercury Energy Actions
Based on the policies and laws that govern the supply of electricity, Mercury Energy’s actions were within the law. In essence, there was no illegality with regard to their action. However, their action was morally wrong. Acknowledging that he had seen the oxygen machine in Mrs. Muliaga’s house, the contractor went ahead and disconnected the power supply leading to the breathing difficulties for the customer. The most important fact that Mercury Energy ignored, in this case, was that their actions would subsequently endanger the life of a customer. In essence, they ignored the fact that cutting the electricity supply would lead to life threatening consequences which in this case resulted to death.
Despite the efforts by a third to make the payments and make known Mrs. Muliaga’s both financial and health condition, the company refused to listen and instead adhered to the privacy act and their electricity policies (Eweje, & Wu, 2010). Further, considering the family were a family suffering from financial crisis, and not actually intentional defaulters, Mercury should have listened to the third party, Mr. Muliaga, and consider the welfare of their customer before making such a decision. Also, the contractor should have engaged the company and consulted on the need disconnect the power after seeing oxygen machine. Considering the family was making an argument that was a matter of life and death, the decision of the contractor, on behalf of the company, should have been made out of reason and compassion rather than stick and staying rigid to the policies and regulations of the company. As such, the decision by the company to disconnect the supply of electricity despite the underlying conditions and consequences was morally wrong even though it was within the laws and policies. In essence, the decision was legal but morally wrong.
The Police and Coroner’s Decision
First, I strongly disagree with the findings of the police but agree with the decision of the police to investigate the incident. The investigation process unveiled a lot of facts with regard to the incident including the information that Mr. Muliaga tried to negotiate with the Mercury Energy for partial payments of Mrs. Muliaga’s bills and even informed them of her health and financial condition. Despite this, the police, on 12 June, reported that it had not found any connection between Mrs. Muliaga’s death and the disconnection of the electricity by Mercury Energy. I strongly disagree with this finding considering the facts of the case. Mrs. Muliaga had survived the disease for 5 years which was against the odds placed by the doctors that discharged her from the hospital. Within three hours of the disconnection, Mrs. Muliaga died of birthing difficulties which was caused by the interrupted supply of oxygen form the oxygen machine which was reliant on electricity to operate.
Also, I strongly disagree with the Coroner’s ruling saying that Mrs. Muliaga’s death was as a result of natural causes overlooking the role of electricity disconnection on Mrs. Muliaga’s death (Bridgeman, 2010). Aside from the natural causes, the Coroner’s also attributed stress of losing electricity and the financial problems for her demise. The fact that the Coroner’s also admitted that Mrs. Muliaga had a life-threatening condition negates their argument of natural causes because this would mean that her oxygen supply was to stay stable without being interrupted. As such, there was a direct connection between the electricity disconnection and Mrs. Muliaga’s death.
The Reforms adopted after the incident
The most important reform that was adopted as a result of the incident was the policy that considered the hardship and medical situations with regard to payment of electricity bills. This came after Mercury Energy became aware of the real logistics of the incident and admitted that the actions resulted in serious consequences. This policy was adopted to make the Mercury Energy more understanding by inviting any person with the information about a family that depends on of the electricity-reliant medical devices. The notification and the complaints were to be accompanied by certified documents from credible health facilities (D’Amato, Henderson, & Florence, 2009). As such, this notification and information were aimed at helping the company to reflect on the facts surrounding the case reported and give room for negotiations of payment terms which was strongly denied in the above case.
Lastly, this reform was very important for the relationship between Mercury Energy and its customers. After the case went viral, most customers lost trust on Mercury and the change in policies was a good call to salvage the situation. In essence, crisis management requires immediate measures (Trevino, Hartman, & Brown, 2000). Even if the policies compromise the profitability of the company, there is need to restore the trust of the customers by well-thought crisis management strategies; in this case, the change of policies and regulations was the most logical way to manage the crisis and regain the trust of the customers.
Conclusion
The difference between moral obligation and legal obligation has for a long time caused confusion to a number of companies. In fact, not all companies adhere to the business code of ethics which require businesses to consider the welfare of the customers first before considering their interests. As seen in this case, an action can be legal yet morally wrong and when an action of a company is morally wrong, it is likely to lose the trust of its customers. Moral obligation is very important in any business dealings which make it necessary and essential for business managers to consider the external impacts of their decisions before acting in accordance with their policies and regulations. As such, it is important for companies to consider the eventual effects of their decision before proceeding to implement the decision. This is extensively demonstrated in the above case thus explaining the effects of unethical and ethical behaviors in a business setting.
References
Bridgman, T. (2010). Beyond the Manager’s Moral Dilemma: Rethinking the ‘Ideal-type’ Business Ethics Case. Journal of Business Ethics, 94(2), 311-322.
D’Amato, A., Henderson, S., & Florence, S. (2009). Corporate Social Responsibility and Sustainable Business. A Guide to Leadership Tasks and Functions. Greensboro: Center for Creative Leadership, North Carolina.
Eweje, G., & Wu, M. (2010). Corporate Response to an Ethical Incident: The Case of an Energy Company in New Zealand. Business Ethics: A European Review, 19(4), 379-392.
Matenga, G. (2008). Findings of the Inquest into the Death of Folole Muliaga. Office of the Coroner, 19.
Trevino, L. K., Hartman, L. P., & Brown, M. (2000). Moral Person and Moral manager: How Executives Develop a Reputation for Ethical Leadership. California Management Review, 42(4), 128-142.
Velasquez, M. G., & Velazquez, M. (2002). Business Ethics: Concepts and Cases (Vol. 111). Upper Saddle River, NJ: Prentice Hall.