Ethics Assignment: Issues In Loot Boxes Model

Question

Task: You should look at the following cases of businesses that have attracted attention due to some aspect of practice. You should choose the ONE of these that interests you and complete the following: Part 1
a) You are required to write a brief report for senior managers at the case of your choosing. This report is written from the perspective of a middle manager tasked to outline the ethical dimensions of the issues from the case. You will need to explore a number of factors including - Why should this be explored as an ethical question? How might the company want to think about the role of business in society? You will also need to outline who the key stakeholders are and in what way they are affected. You should include research into examples of how ethical choices impact on other companies (e.g. where is there research that shows good choices benefit companies and bad choices have a negative impact?). Finally, you should conclude with some recommendations for what the company should do
This part of your assessment should be written as a report, but should be referenced in the normal academic way using Harvard citations and referencing.

b) For this part you should again use your chosen case study – but this time choose TWO ethical theories and demonstrate that you can apply these to the case to show how your chosen theories lead you to a view on the ethics of the case. This is written as an academic paper.

Your choices for cases are:
1. EA Games: Fifa, Loot boxes and whales
2. The gender pay gap: what the median pay gap says about your company
3. Ladbrokes: The online way to save your job
4. Johnson and Johnson: Taking the pain away?
5. Supply chains and human rights abuses: This doesn’t smell right- warnings to tuna companies
Each of these is on Moodle and is linked to an article related to the story.

Part 2
Part 2 is NOT related to the case study. This section requires you to discuss what makes an ethical leader and how you would, as an ethical manager, manage your business and/or others to a high ethical standard.
You will need to think about personal ethics, about the conditions that bring about unethical organisations and practices, about organisational values and methods of compliance. This part can be written in a more reflective style

Answer

Part 1 a) Report writing
Introduction to the case scenario of ethics assignment
With the excessive dependence on the internet and the technologies, there are varied aspects of the businesses and otherwise, that has changed considerably. One such aspect that has changed significantly is the field of online gaming. The gaming of the present times is substantially different from the traditional games in terms of the technologies used, the interface and the designs, the scale of the revenues and the involvement of the individuals. One of such an important and distinctive feature of the modern times gaming is the “Loot Boxes,” which forms a key part of the business model of the games. However, there are many ethical concerns surrounding the usage of such loot boxes as a means of the revenue generation for the entities.

The aim of the following report on ethics assignment is to assist the managers to develop an understanding of the ethical issues involved in the loot boxes model and the significance of the same for the businesses. The report on ethics assignment would include the assessment of the stakeholders and the research about the impacts of the different choices of the businesses in light of the games and revenue sources.

Ethics and Loot Boxes
One of the essential components of businesses is the consideration of ethics and moral values. With the widespread awareness in the recent times among the stakeholders and the legal guidelines, it is the duty of the business organisations to conduct the business transactions in a manner that leads to the ethical and satisfies the interests of the stakeholders. This is applicable to the businesses of the gaming companies as well. It is evident in the ethics assignmentthat the loot boxes or the virtual mystery box can be purchased by the gamers either using the specific virtual currency or through the real money. These boxes comprise of the items that appear by chance in the games with the odds of the items as required by the players. The presence of the loot boxes attracts controversy when the same are bought in exchange of the real world money and lead to the advantages against the opponents, and thereby making the games addictive for the users (Drummond and Sauer, 2018). Recently there have been numerous debates as to the legitimacy of such loot boxes, and the varied countries have disregarded it stating that these are in the nature of gambling. While the gambling is an illegal activity, the question to be researched is whether the loot boxes are illegal and in nature of the gambling and thus harmful for the users including the children and adolescents. Thus, the issue is significant for the company as it highlights the responsibility of the businesses in the society, and one such ethical responsibility is not to indulge into acts that are against the moral principles and the public policy.

The analysis of the issue of the loot boxes in the gaming done in the ethics assignment has led to the observation that there are numerous stakeholders involved in such business of online gaming. The primary stakeholder group is that of the customers or the players, as there is no age restriction on most of the games. Thus, while an adult can analyse the worth of a loot box rationally in terms of the expenditure of the real money, a child or an adolescent may not be able to do so (Zendle, Meyer and Over, 2019). Some of the instances that are worth noting in this regard are listed as follows, to enable the managers of the company a comprehensive understanding of the impacts of the unethical policies of the company on the lines of the loot box usage for the customers. In an instance involving a family of Hampshire, suffered an expenditure of £550 in three weeks as the player packs are purchased by four children (Kleinman, 2019). This relates to the Fifa football video game where the loot boxes lead to the purchase of the players and thus giving an upper hand to the one who purchases the loot box. The ethical concern presented hereinethics assignment is that while the parent did not take full precautions regarding the usage of the Nintendo account, from where the purchases were made, there were no warning signs from the bank as well, in light of the continuous transactions. Thus, the usage of the loot box in the business model encourages gambling activities, which is further associated with mental health issues. This is because the activity becomes addictive. Many countries have officially formulated legislations for the watch of the encouragement activities in the children, and the same has been regarded as a significant public health concern.

Some of the ethical concerns raised by the usage of the loot boxes in the business model are when the businesses fail to give the warnings in relation to the potential risks and the threats with the frequent usage of the loot boxes. The researches have led to the pieces of evidence that the colourful animations, sounds and other effects in the loot boxes encourage the behaviour of the gambling among the players (King and Delfabbro, 2019). This, in turn, may lead to the regulators targeting the game developers and manufactures to either pay the damages, filling of the lawsuits or orders to refund the amounts of the loot box purchases. This is accompanied by the loss of the goodwill of the company, as well as the customers, as most of the players of the games are the children and the younger generation. The seriousness of the impacts on the businesses can be highlighted with the help of the following incident surrounding the technology giant Apple Inc. the research on ethics assignment illustrates that a few years back, the company Apple Inc. was asked by the Federal Trade Commission to pay an amount of whopping $32.5 million on lines of the damages to the parents and guardians of the children who had purchased in the applications without the permission (Dredge, 2014).In the words of the CEO Tim Cook, it was a double failure for the company, as it has already promised to the affected parents to refund the amount, but now it had to pay not only the refunds but the damages as well. It has been noted that along with the company Apple, the regulators have been consistently warning the tech giants such as Amazon, Microsoft and more to take reasonable steps to ensure warnings and restrictions on the usage of such games and applications by the children. Thus, this highlights the graveness of the issue at the end of the businesses, as it leads to financial as well as no financial impacts.

Recommendations
The following section under ethics assignment elaborates a set of recommendations that can be undertaken by the entities to ensure that their interests are preserved as well as the business is conducted on the lines of the ethical and moral principles. The first step that can be taken in the loot box business model is to embed the parental restrictions, where each time the games are opened, warning flashes to ensure the identity of the players. The second recommendation is to educate the guardians and parents, about the emails to be used (so that the payment notifications are not missed), the application permissions and other such procedures that can ensure the safety of the payments. Thirdly, there must be embedded a security lock on the in-game and app purchases to avoid accidental purchases.

Conclusions
The discussions conducted in the previous parts of the ethics assignment lead to the conclusion that ethical and moral principles lie at the centre of the conduct of the business activities, even in the game developing companies. The report on ethics assignment highlighted the significance of the issue as well as the importance of the issues from the business organisation’s point of view. It has been observed in the ethics assignment that the organisations can have to bear financial as well as non-financial losses due to the unethical business policies and practices. Lastly, the recommendations have been provided to address the issues identified such that the businesses are carried on in a more efficient manner.

Part 1 b) Application of the ethical theories to the case study
The term “Ethics”explored in the segments of ethics assignmenthas been denoted to as a set of the moral beliefs that helps an organisation or an individualto assess their behaviour and accordingly plan their actions. It is imperative to note that the present business environment is complex as well involves numerous global transactions and stakeholder. As a result, there have been instances of increased incidences of the unethical conducts in recent times, which make it crucial for the entities to be mindful of their actions. There have been prescribed various ethical theories with an aim to apply the same on a given situation of ethics assignmentand assess whether an act or a transaction is ethical or not.

What is the role of ethical theory of utilitarianism in the current case of ethics assignment?
The first ethical theory that has been used to analyse the facts of the given case within the ethics assignment is the ethical theory of utilitarianism. This is one of the most fundamental theories of ethics that is based on the simple fact that the interests of all the stakeholders associated with an act must be considered. Thus, as per the utilitarianism ethical theory, anaction or a policy or a business transaction can be regarded as ethical if the same leads to overall utility or the happiness to various stakeholders of an entity (DesJardins, 2019). Thus, for the acts of an organisation to be regarded as ethical acts, the same must be carried on in a manner that is beneficial to not just for the entity but also other associated such as the regulators, investors and others. The following points mentioned in the ethics assignment are noteworthy when the utilitarianism ethics are applied to the FIFA, Loot boxes and other payment based online games. While the loot boxes are an innovative way to increase the revenues of the game developers and thus useful for the entities; the same is not the case of one of the sections of the consumers that are the children players. This is because the children are not rational enough to evaluate the worth of the purchase, and moreover, such loot boxes lead to addictive gaming behaviour. Such an addictive behaviour is not only harmful to the physical and emotional health of the children but also of their parents, whose connected payment methods are at risk. Further, it has been observed in the ethics assignment that such online games are loaded with the paid as well as other advertisements. The users often tend to click these and might land up in the websites wherein their private data and other details may be leaked. Again, there cannot be seen an utility of the loot boxes and other such tactics for the customers, as the sole purpose of the entity has been identified as the increase in the revenues of the entity itself, by encouraging addictive behaviour in the customers.Hence, based on the ethical theory of utilitarianism, the acts of the loot boxes are not be considered as ethical, as the benefits are limited to the game developers only.

Ethical theory of Deontology
The second theory that has been chosen to analyse the said case study of ethics assignment is the Kantian theory of ethics also referred to as the theory of Deontology. While the utilitarianism ethical theory was based on the consequences of the actions, the ethical theory of deontology is focussed onthe manner of the conduct of the actions (Pagallo, 2017). Thus, the rationale behind the Kantian ethics is that all theduties must be adhered to while the business operations are performed as stemming from the moral, legal and ethical frameworks. Thus, if there is abidance to the legal guidelines and other applicable frameworks, the related acts would be considered as ethical. Thus, the entities must be mindful of the fact that the moral principles are considered at every stage of an act. It is to be noted in the ethics assignmentthat the theory of deontology regards humans as the centre of custombuilding philosophies. Thus, the duties of humans are of prime significance.The yet another critical duty in which the theory is based is thatthe others must not be harmed. This duty includes the protection of the physical as well as the mental wellbeing of the individuals. On the application of the above theory provided in the ethics assignment, it has been assessed that the game developers have to ensure that they warn the adults of the usage by the children and strict parental controls are suggested in the game. If such restrictions or the identity assessments are not done as to who is playing the game from a device, the acts of the organisations would be termed as unethical. It is the duty of the entities to preserve the physical and emotional health of the users who are below the legal age and do not possess sufficient rationality to examine the monetary transactions.

Thus, on the application of the ethics, it has been assessed in this section of ethics assignment that the acts of the companies with the inclusion of the loot boxes with no justifiable warnings for the use by the children would be regarded as unethical.

Part 2) Reflection on the role of the ethical managers and application of ethics in the management of an organisation
According to me it is stated in the ethics assignment that an ethical leader is one who gives equal weightage to the interests of the different stakeholder groups as that of the organisational interests. This is because an organisation is composed of different stakeholders that provide different resources for the conduct of the business operations (Koslowski, 2013). Hence, it is the moral duty carry on business in such a way that their interests are satisfied too. Some of the chief characteristics of the ethical leaders are elaborated as follows. The first key trait is that they lead ethically from the front. It is a well-known fact that the culture of an organisation is highly influenced by the conduct and the working styles of the leaders at the top. Thus, it is imperative for the leaders to define their personal ethical framework in a manner that is based on the ethical guidelines, legal guidelines, as well as the professional guidelines (Sison, 2015). He has to ensure that his professional duties are discharged with utmost care and diligence, in the capacity of the agents of the stakeholders, and thus the conflict of personal interests must be avoided. The next trait that makes a leader as an ethical leader is to be able to analyse a business situation from a wider perspective and not just business interests. This means he may be faced with several dilemmas while leading an entity wherein a business decision may be fruitful from one point of view but not others. Thus, ethical leaders must be able to analyse a situation as a rational person and not driven by the expectations of the shareholders or the key management persons in the entities. The rationale analysis is vital because sometimes the business decisions ought to be taken even when not as much profitable, as the same could lead to improved goodwill, or enhanced base of the customers or other non-quantitative factors (Gini and Marcoux, 2011). Further, it is imperative for ethical business managers to be open to criticisms and feedback. This is crucial so that the different stakeholder groups can put their interests and concerns forward freely. This will serve as the base for future policy formations for the enterprise. When it comes to applying such principles, according to me the best way is to devise a code of ethical conduct within an entity that is applicable to all the members of an organisation including the leaders. It is important that the roles and responsibilities are clearly defined along with the disciplinary actions that could be undertaken if the unethical or the immoral conducts are found to be taking place. In order to implement successfully the above ethical guidelines, it is important that there is an increased awareness among the employees regarding the concept of ethics. Hence, based on the overall discussion on ethics assignment, if am given a chance to lead an entity, I would educate and train the employees regarding the significance of ethics, and how the alignment of the individual goals with the ethical principles can lead to a long time professional success. In addition, I would consider it as my duty to building organisational values as well as the long term relationships in the business environment. This is because, in order to be successful in the long term, these serve as key basics. Thus, as per the discussion conducted as above within the ethics assignment, it can be stated that being respectful of the interests of others is a key feature of the ethical businesses, and it is the duty of the businesses to lay back to the society through ethical business policies and acts.

References
DesJardins, J. (2019) An introduction to business ethics (6th ed).Ethics assignment New York: McGraw-Hill Education.

Dredge, S. (2014) Who is responsible for kids and in-app purchases: Apple, developers or parents? [online] Available from: https://www.theguardian.com/
technology/2014/jan/17/kids-in-app-purchases-apps-parents [Accessed on: 01 August 2020].

Drummond, A. and Sauer, J.D. (2018) Video game loot boxes are psychologically akin to gambling. Nature Human Behaviour, 2(8), pp. 530-532.

Gini, A. and Marcoux, A. (2011) The ethics of business: A concise introduction. Rowman& Littlefield Publishers.

King, D.L. and Delfabbro, P.H. (2019) Video game monetization (eg,‘loot boxes’): a blueprint for practical social responsibility measures. International Journal of Mental Health and Addiction, 17(1), pp. 166-179.

Kleinman, Z. (2019) The kids emptied our bank account playing Fifa[online] Available from: https://www.bbc.com/news/technology-48908766 [Accessed on: 01 August 2020].

Koslowski, P. (2013) Contemporary economic ethics and business ethics. UK: Springer Science & Business Media.

Pagallo, U. (2017) When morals ain’t enough: Robots, ethics, and the rules of the law. Minds and Machines, 27(4), pp. 625-638.

Sison, A. G. (2015) Happiness and virtue ethics in business. UK: Cambridge University Press.

Zendle, D., Meyer, R. and Over, H. (2019) Adolescents and loot boxes: links with problem gambling and motivations for purchase.Ethics assignmentRoyal Society Open Science, 6(6).