The document discusses options for Nicolo Pignatelli, the owner of Gulf Italia, regarding getting government authorization to begin production at an oil refinery. The three main options discussed are: 1) Play it straight and try to gain legal authorization, which may take a long time but is the most ethical approach. 2) Hire a consultant who may use bribes, which would absolve Pignatelli of direct fault but still raises ethical issues. 3) Claim that bribes are a common practice in Italy, but this does not justify their use given Pignatelli's need to comply with government permissions and protect the company's reputation. The document analyzes the situation from several ethical and business perspectives and

1. Christine Nguyen
Professor Mclaughlin
Management 05
20 April 2010
Nicolo Pignatelli and Gulf Italia Closing Case
1. Although all of the options he had in mind are in some sort of a burden and risk, Pignatelli
should just play it straight and try to gain government authorization. It may be a difficult task and
may take up to many months, or years even making the production go on standby and losing
millions as time goes on, but it would be beneficial for him in a long term perspective to where
eventually he would be able to compensate for all the months and years he has missed and not
risking misconduct. I would definitely pick this option as well because I’m viewing this case
from the moral rights approach, and that the first option of playing it straight and abiding by
government authorization is the most ethical out of the other options that were considered. It is
not certain that Mobil would be able to influence the government, and bribing the government is
just building a negative character of a company that will be viewed as mistrusting, unreliable,
and incompetent.
2. Pignatelli decisions of potentially hiring a consultant who might use part of the money for
bribes, would still absolve Pignatelli as fault, even if he didn’t directly pay the bribe. From what
the efficiency prospective has covered, it seemed as though Pignatelli is the owner and the agent
while his consultant would be the stakeholder and for this scenario, the manager of control for
now. Friedman mentioned about managers maximizing the return to the shareholder, where the
manager’s are in charge of the control, returning back to the shareholder, and only following
their desire. I emphasize their desire because it was Pignatelli that hired the consultant to get his

2. operation running, no matter it takes and without elaboration of how he was going to do. The
consultant is the stakeholder and Pignatelli is the shareholder and they have full responsibility
regardless.
3. According to the moral rights approach, even though bribes are illegal Italy, but it is a
common practice, it doesn’t justify paying them because. I look at this situation, balancing the
positive and negative consequences. Yes, everyone does it, but what it doesn’t work with
Pignatelli because he’s working on permission from the government? Or, yes everyone does it,
but how would that make the company look as a whole when working/partnering up with other
companies? Or yes everyone does it, but is it the proper procedure that will ensure stability?
4. Technically, Pignatelli does not have the responsibility to Italian citizens to build an
environmentally friendly refinery above and beyond what the law requires. Also, it isn’t
appropriate for Gulf to spend this extra money and take it away from the shareholder because it
isn’t their decision to make. Pignatelli’s decision to Italian citizens really depends how he might
view operations through certain perspectives and decision making approaches. If Pignatelli was
follow his operation under the Social Responsibility Perspective he is taking into consideration
about the amount of reasonable returns to his stakeholders (in this case, the Italian citizens who
may also be his customers), as oppose of only focusing the maximum return to himself under the
Efficiency Prospective. His decision making approaches would be a combination of moral rights
and universal because, well, it’s just the right thing do to be environmental friendly. Lastly, he
would be viewed as an Anticipator, owing to society to anticipate and avoid troubling actions
and abiding the government law.
5. I honestly would lost respect and not feel secure working in a company that granted the
government’s permission through bribery because it shows mistrust, manipulation, and lack of

3. commitment. I feel as a lower-level employee, I don’t have any obligations to this decision. This
is something that should be presented to the boss first, but I feel as though the situation still
wouldn’t change because what’s been done is done. If there is lack of compassion to what I or
any other lower-level employees have to say about this situation than it should be reported to the
media.