1. Assignment Cover Sheet
Given name John
Surname McMahon
Student number 17642143
Email john.mcmahon@student.curtin.edu.au
Unit name Fundamentals of Management
Unit code MGMT 1000
Assignment title Final Essay
Date submitted 02/10/2016
Workshop day Tuesday
Workshop time 12pm
Group Number 3
Tutor’s Names Desmond Tutu
Carla Martella
Word Count 1643

2. John McMahon 17642143
As Dateline (2016) described, Zika, a mosquito-bourne virus, has been linked to
Microcephaly in developing embryos. Some athletes preparing for Rio have concerns
that Zika will affect children conceived after the Olympics. These athletes wish to
revoke their contracts and avoid the normal financial penalties; the head coach has
requested full penalties apply. Contradictions like this create ethical dilemmas.
Resolution of these ethical quandaries is essential to any managerial role. Managers
evaluate possibilities using ethical modelling, to identify ethically superior choices.
This paper will evaluate Zika issue using three ethical models: Moral Rights,
Utilitarian and Justice (Waddell, Jones and George 2013, 133; Fritzsche and Becker
1984, 167). After considering each model, the paper will conclude by explaining the
Justice model recommendation, that athletes should incur a token financial penalty
should they wish to withdraw for this reason. The inquiry begins with the unique
perspective of the Moral Rights model.
The Moral Rights model states that every individual has fundamental rights that
should never be violated: freedom, life, safety, privacy, free speech and freedom of
conscience (Fritzsche and Becker 1984, 167; Waddell, Jones and George 2013).
The advantage of Moral Rights lies in its unambiguous stance on ethical matters,
allowing for the prompt application of this model to issues. Unfortunately, the benefits
of this monochrome approach, are countered by a fundamental limitation in scope;
any lasting impacts from these decisions are disregarded to pursue ideals. More
significantly, divergent opinions over the definition of fundamental rights may result in
misapplication by individuals employing personal interpretations of this model.
The application of Moral Rights concludes that athletes must be allowed to withdraw
without penalty. Refuse of the athletes’ wish to withdraw violates their right to
freedom and safety. This decision does benefit some stakeholders: the athletes’
fundamental rights are upheld, the risk of Microcephaly is minimised, the athlete’s
families avoid unnecessary social and financial costs due to Microcephaly and
medical institutions avoid additional pressure for services. There are groups
negatively impacted by this decision as well: the lost finite time, energy and morale
for the coaches; wasted sponsor and government funding; sporting organisations
losing reputation and respect leading to lower future participation; spectators sacrifice

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watching the finest athlete competing; future athletes may suffer reduced support as
an indirect consequence of these athletes withdrawing without penalty.
The fast application to issues that Moral Rights model permits is excellent, however,
the oversimplification caused by this model when applied in isolation will likely also
result in unintentional persistent costs. These costs limit the benefits provided by this
model, eliminating its suitability for application exclusively. Theoretically, managers
could exploit the strengths of this model to identify key issues early to supplement the
other models.
The Utilitarian model, described by Fritzsche and Becker (1984, 167; Fok, Payne and
Corey 2016, 265; Cavanagh, Moberg, and Velasquez 1981), considers ethical
outcomes solely by their results, endorsing decisions seen to provide the greatest
benefit to the most people overall. There are two subtypes of the Utilitarian model:
Act and Rule. Each subtype will be reviewed separately, being with Act Utilitarianism
as different outcomes are possible using these approaches.
Act Utilitarianism considers each issue in isolation, seeking the maximum direct
social benefit from each individual decision. This model on a theoretical level appears
to be the perfect model, however, fundamental limitations affect its usability when
applied practically. The Act model concentrates solely on immediate and direct
benefits, ignoring any indirect or lasting consequences.
This model would require the athletes pay the full penalty to withdraw. The only
stakeholders to immediately benefit from the athletes withdrawing without penalty are
the athletes themselves and their families. The preferred outcome for the other
stakeholders is if athletes compete as planned, applying full penalties gives this
outcome the greatest chance of occurring.
The first issue explained by Boyd (1999, 106) is inconsistent decisions will erode law
integrity; the resulting instability causing undesirable consequences over time. The
second consideration discussed by Kang (2003, 97) is minor benefits to many will
usually provide greater absolute utility than substantial benefits to minorities.
Therefore, an inadvertent externality of this model is that it encourages a conformist

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agenda by actively discriminating against minority groups. As the minority in this
situation, the significant benefit of allowing the athletes to withdraw is ignored in
favour of minor short-term benefits to the stakeholders mentioned previously.
The Rule Utilitarian approach judges ethical action solely on its adherence to the
law. This approach assumes that absolute obedience to the rule of law will produce
optimum results over time. The inefficiency of any individual decision is considered
acceptable collateral to safeguard the strength of these rules. The ethical strength of
this approach is dependent entirely on the ethical quality of the laws; ethically lax
laws or loopholes permit exploitation; complex laws causes inefficiencies and makes
compliance more challenging.
When evaluated by the Rule Utilitarian model, athletes face full penalties for
withdrawing. In accordance with the law, all athletes signed contracts agreeing to
accept fees for withdrawing from the Olympics for personal reasons. The purpose of
a legal contract is to maintain trust between the athletes and supporting stakeholders
by explicitly outlining each parties’ respective expectations and duties. As conditions
for withdrawal are already outlined by the contract, invalidating the contract would be
unethical according to this model, regardless of reasoning. The rationale that
maintaining contract integrity surpasses any potential benefit from bending rules for
one specific case. Future contracts could include exclusion clauses to deal with these
issues, but that wouldn’t influence this decision.
As the Rule Utilitarian model recommendation, in this case, mirrors the advice of the
Act Utilitarian model, likewise the consequences to stakeholders will be identical.
Justice model as described by (Bonnycastle 2011, 268-172; Fritzsche and Becker
1984, 167; Waddell, Jones and George 2013; Cugueró-escofet and Fortin 2014, 435-
445) considers ethics through the allocation of costs and benefits amongst
stakeholders. The model stems from the idea that any benefit for one group is
acquired at the expense of another, and therefore deserves fair compensation.
Distribution of outcomes can be determined using a few methods; each one will be
reviewed briefly before focusing on the chosen method. Firstly, absolute even

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distribution amongst stakeholders; this method simplifies decisions, but unfairly
allocates costs to stakeholders that are absent of benefits. Secondly, distribution
according to need; this method is functionally similar to Act-based Utilitarianism,
which has been already discussed in depth. Lastly, Proportional distribution based on
contribution; this method appears to favour stakeholders with larger resources when
considering outright contributions, however, when priority is given to groups with the
greatest relative commitment, then the stakeholders at greatest risk are protected.
For this recommendation, the contribution based distribution Justice model using
relative contribution will be applied.
The advised outcome is allowing athletes to withdraw while incurring a minor
financial penalty. The rationale behind this decision assesses each of the
stakeholders based on the relative significance of their commitments and relative
costs to each of the stakeholders depending on the outcome.
The athletes and their families have the most to gain or lose from the decision. The
enduring cost to the family of raising a child with Microcephaly will vastly exceed the
immediate penalty for withdrawing under normal conditions, however, athletes unable
to bear the cost may be forced to participate unwillingly. Similarly, doctors and
medical institutions must support additional pressure for services should a child be
born with Microcephaly; these resources can be redistributed elsewhere if the
athletes are allowed to withdraw.
The government will suffer losses irrespective of the outcome, nevertheless, the
immediate impact of an athlete withdrawing is insignificant when compared to the
additional costs to subsidise support programs and medical services. The preferred
outcome for the government supports allowing athlete withdrawal.
Sponsors in absolute terms have a large stake in the outcome. The financial
investment in these athletes will be predominantly wasted should the athlete
withdraw. This may result in lower sponsorship in future, especially if advertising the
athlete was the intent behind the initial investment. The sponsors stand to gain from
the athletes’ participation in the Olympics and have minimal incentive to allow the

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athletes to withdraw. It is important to note that the relative commitment from some of
these companies is very small, even if in absolute terms the investment is large.
The coaches have finite time and energy to utilise their knowledge and skills, to
maximise their impact they restrict themselves to a select group of athletes.
Therefore, when an athlete withdraws, the coaches’ efforts are squandered.
Alternately, if the athletes are pressured to participate, reduced morale will impact
performance and may influence the other athletes. Leading the coaches to prefer that
the athletes compete, however, either outcome may ultimately be undesirable for the
coach.
The sporting organisations face the unique set of problems where they have a
significant investment in the athletes chosen and opinions about the athletes’
withdrawal will result in mixed responses irrespective of the outcome. The
organisation will face a backlash from sponsors, competing athletes, benched
athletes and face public criticism regardless of the decision.
The final major stakeholder is the spectators. This group have the lowest relative
investment as they wish to watch the best athletes in the world compete. As a result,
the decision whether to allow the athletes to withdraw has minimal bearing on the
spectators as there are many other athletes in attendance.
To summarise, each model presented provides formal structures for solving ethical
dilemmas, with each offering a unique focus: Utilitarian, maximum benefit; Moral
rights, safeguarding fundamental rights; Justice, balancing costs and benefits to
stakeholders. The Justice model provided the final recommendation, allowing the
athletes to withdraw with minor penalties. This model prioritises the athlete’s safety
while respecting the legal and financial impacts to other stakeholders. Ethical
decisions result from mutual understanding between stakeholders; achieving
mutually beneficial outcomes, enhancing trust, respect and providing consideration
for future dealings.

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