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  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
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  • Number of pages: 2

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The ethical stander has been set and follow, both individual and business level, parallel with the performance of the corporation. The Costa Concordia disaster is an excellent example that presented the consequences of doing unethical action. In this case, Captain Francesco Schettino, cruise's crew and Carnival Corporation's top management made unethical decisions exclude what will happen to their stakeholders which hugely damaged the company.

Costa Concordia belongs to Costa Cruises (Costa) which operated under the Carnival Corporation & plc (Carnival). Carnival was famous for running they subsidiary separately and autonomy in every stage from shipbuilding program to marketing and sales. In 13th of January the tragedy of the Costa Concordia happened, where the Italian cruise ship collided to the rock underwater and capsized the ship in Giglio coast. This accident resulted in 32 death and 65 serious injuries which include partial paralysis, amputations, and blindness (Lenaham et al. 2015). Later research and investigation show the shipwreck and procrastination on evacuation are due to several unethical actions were taken by Captain Francesco Schettino and cruise's crew. Also, the way Carnival Corporation handled this incident is highly questionable on ethical perspective.

Captain Francesco Schettino who faces many criticisms of his unethical action which directly leads to the accident and the death of 32 people. The crash happened because Schettino trying to close passing the island pearly rely on sight and experience from precious few attempt. (Lenaham et al. 2015; ). Automatic Identification System further proved that such action happened at least once before (last paper). This means Schettino failed to maintain a professional behaviour by conduct danger close passing without concern of the life of people on board several times. Moreover, both crew and Schettino failed to be honest to the panic passenger about the truth by lied that they only experiences electronic failure and the situation is under control (). However, the most unethical action taken by Schettino was to leave the sinking ship where 100 people still on board and refused to go back despite the Italian Coast Guard ordered him to do so. This is against Italian law where the captain need to remain on the ship to operate the evacuation process (a sinking ship).

After the accident, Carnival's way of handling the problem is deemed to be unethical which shows zero concerns to stakeholders by demonstrating their unwillingness to face and dealt with the incident timely and impersonally. Despite the delay in their response, both Carnival and Costa's official statement were vague as they only stated what happened and blamed Schettino reveals their avoidance to take responsibility. Such statement made not only lead to criticism on their degree of professionals but also questioned their ethical stander since as the “world's most popular cruise line” () Carnival are expected to be accountable for such large incident. However, the CEO of Carnival at that time, Mickey Arison's absence during that period reveals his carelessness attitude towards all the victims and stakeholders got affected by. Although Carnival's reinforced their sadness, nevertheless, such feeling didn't show through their responding. Mickey Arison simply just disappeared and stood away from the incident just like what Carnival did through no further response (). However, Arison's social like is still going on and constantly tweeting his basketball team, deemed to be extremely unethical and pay no respect to both the victim and general publics which were waiting for Carnival's responses and actions to fulfil their responsibility.   

A large amount of stakeholder affect by unethical action taken by both ship staff during the incident including Captain and the Carnival Corporation after the incident include shareholder, the whole cruise industry, Italian people, tourists, insurant company, etc. Due to the incident, Carnival's share price goes down significantly. Although the incident happened under Carnival, it influences the whole cruise industry. Carnival's largest competitor, a day after the incident experienced 6.9% abnormal loss (Stocks in the Rocks: a Costa….). This manmade cruise sinks put Italy and they Schettino's unethical action affected the impression of all Italian. This incident negatively impacted other stakeholders as well which are reflect on the negative consequences of involved parties' unethical action.

Research shows those unethical negatively impacted in both individual and company level. Schettino sentenced to 16 years of imprisonment due to his riskless and selfish (APF in Florence, 2016). Also, five other crew received the non-custodial sentence as the punishment for their unethical act of misdirecting and giving fault information. Arison, who failed to take accountable and avoid taking any action were highly criticised on his ethical stander from the public which lead to him to resign at the CEO but still the chairman of Carnival (a sinking ship). Furthermore, the Carnival's share was hugely impacted where 13.7% od loss occurred after nine days (Stocks on the Rocks). However, other than financial loss Carnival's decision to distant themselves from dealing with the incident damaged their reputation which shows that importance to act ethically.

Both the lecture and this case stressed that ethics is crucial to be a high-performance company. Those unethical actions were deemed as inappropriate, which all resulted in having a negative impact on the business. Without the knowing the consequences I would not value ethics more than the financial benefit. This means, personally I thought that operate ethically is not the primary focus, and the priority is to increase shareholder's value. However, this case emphasises that act unethically will lead to the damage to the company. Therefore, ethical is critical to the company financially and socially.

The unethical action surround by the sinking of Costa Concordia was proved to affect a large number of stakeholders. However, action and decision taken without a thought about stakeholders by the crew including Schettino and Carnival top management especially Arison lead to automatic damage to on both individual and business level. The results show the importance to follow ethical stander when running in the business world.

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