Taken For A Ride

Assignment 1 Case study analysis: Taken for a ride

Julie Gilchrist Unitec New Zealand Communication Ethics COMM6534

This report will endeavour to analyse the case study Leslie’s (2000) “Taken for a ride?” to detect if it was ethical for Dan Pallotta, an events entrepreneur, to personally maximise his profit from the AIDS Charity Event hosted by Florida in 1996. Before an ethical issue can be analysed the facts need to be established, which are clarified by providing a brief background on the Pallotta and his company TeamWorks. The facts alone only tell ‘what is’ and not what ‘ought to be’ so an appeal to values is required (Velasquez, Andre, Shanks, & Meyer, 1996, para. 4). Concentrating on a utilitarian theory the values will be evaluated to determine whether they were ethical. Two additional theories; deontology and the “veil of ignorance” will be referred to, to either support or criticise the utilitarian analysis. This report will also discuss the intentions of cause-related marketing, Pallotta, the AIDS charity, and how the Pennsylvanian investigation established their findings. The conclusion of this analysis will determine whether this was an ethical or as it involves fundraising a financial issue.

Pallotta with good motives, having lost several friends to AIDS, sought a way to help AIDS organisations. Founding his charitable event company, Pallota TeamWorks, he created the first multi-day AIDSRide. His company raised over USD$1 million with its first event by soliciting donors to sponsor the participants of the event, this resulted in 73% of the funds going to the charity. The structure of this successful fundraising enterprise paved the way for more AIDSRides around the United States of America, and has since been adopted by numerous other charitable organisations to fight disease and suffering (Teamworks, n.d.). However in 1996 when AIDSRide was hosted by a Florida AIDS group, criticism was made that not enough of the money raised reached the charity. The criticisms lead to an enquiry to examine the deployment of funds; specifically Pallota’s personal share in the course of his causerelated venture.

Cause related marketing (C.R.M.) sits within two contrasting ethical theories; utilitarianism (doing good for a benefit) and deontological aspect (doing good for its own sake) (Nielsen, et al., 2008, p. 9). John Stuart Mill’s utilitarianism is a moral system that takes a teleological approach, claiming “the end justifies the means”. It

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looks at providing the greatest good for the greatest number. This is a pragmatic system which prevails in organisational situations. The contrasting view is Immanuel Kant’s deontology theory; a duty based system proclaiming that the outcome is not of value so long as the person executing the act is morally or ethically correct (Plaisance, 2009). Kant had a clear view of what is right and what is wrong, no background information or the possibility of future wellbeing can sway the imminent moral act (Rachels, 1999).

Whilst utilitarianism has a feel-good factor it can not easily be applied to real world situations as the doing of good is often a matter of an individual’s perspective. Even deontology can struggle as there is no suggested way for creating priorities in conflicting views (Baylin, Cunningham, & Cushing, 1994). To provide a workable model for the real world, John Rawls’ veil of ignorance facilitates a societal observation without prejudice. Rawls’ theory proposes we should ignore any fact that could introduce a self-interested bias. However how the flipside to this theory is how we can ascertain when we have enough information to come to a moral decision that does not reflect our personal bias (Konow, 2006).

To question whether this is a humanitarian issue, the motive of CRM needs to be defined. Rajan Varadrarjan and Aninl Menon define CRM as “a co-alignment of marketing strategy and corporate philanthropy” (as cited in Baylin, et al., 1994). This practice enables a charitable organisation to benefit from the business expertise turning human suffering into a commercially saleable commodity i.e. its half business and half humanitarian. Although this initially does not sound morally correct, if we take a look through the eyes of an utilitarian, the ends (raising vast funds for charity) justify the means (exploiting people’s suffering)(Nielsen, et al., 2008, p. 10). However Kant defines the traditional donation as the proper or more ethically correct way of managing social and global responsibility (Nielsen, et al., 2008, p. 22). How can “right” be determined when individuals are more likely to participate in marketed events that are able to fulfil an ethical duty, such as a fundraiser for a charitable cause (Baylin, et al., 1994). The AIDS charity took the risk to gather more

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funds through commissioning a CRM event, rather than solely relying on a person’s sense of duty to donate out of the goodness of their heart, which is subject to each individual’s opinion on which charity warranted the support.

To validate the event on a utilitarian approach the beneficiaries for the greatest good need to be calculated, This approach can also be supported as deontology act were incorporated. Participants were rewarded by a sense of pride in the effort to raise awareness of the cause and bring in donations through sponsors, who in turn were rewarded by the knowledge that they were able to support a humanitarian cause.

AIDS victims will ultimately receive the tangible benefits of the donations

and their families benefit from experiencing the emotional support shown by the community. The Aids charity received donations from individuals, who would not have traditionally donated had there not been the publicity this event. Lastly Pallotta TeamWorks duty was to utilizing their skill and expertise to maximise awareness, participation, support and donations to help produce the greatest good. The charity and associated individuals received benefits and deontological acts were performed.

Pallotta provides the charities with business expertise, on the marketing of their cause. The intention to promote the company's plight and to raise money for the non-profit organisation ("What is cause-related marketing?," 2009, para. 1).

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motive for C.R.M. business enables profiting from doing good, not profiting from a product or service that inevitably causes harm to humanity. For example; Tobacco companies sell an additive poisonous products, cosmetic companies maximise profits by taking advantage of a woman’s low self esteem, promising them that they will look more beautiful with their product and of course insurance companies gambling on the hope on their clients welfare. Pallotta takes advantage of human suffering to market a way to minimise human suffering.

Nielson, et al (2008) articulate the ethical paradigm of cause-related marketing:

“Campaigns deconstruct the posed juxtaposition of utilitarian business and deontological altruism there by composing or opening up for new relational

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potentials. In other words, what from one perspective might be seen as amoral – i.e. intertwinement of hedonistic pleasure, image management and charity work – becomes part of the solution in relation to handling the global challenges of social responsibility marking a new paradigm of ethics (p. 11).

It would be not fair to reach a conclusion to ascertain whether the profit was ethical solely based on this one event in ride series. The AIDSRide in question was one of the nine events hosted in different cities around the United States of America fundraising for the charity. The Pallotta TeamWorks’ production fee of USD$180 thousand was the same in all but one another event (Teamworks, n.d.). The investigation to establish if Pallotta maximised his profit, was shrouded by a veil of ignorance, looking at only the AIDSRide in Florida as the criticism was received that region rather than series of AIDSRIDEs as a whole. The net amount available to the charity was subject to; the actual riders, the riders sponsored donations, less the marketing, administration expenses and production fee. Unfortunately the people of Florida did not see it as their duty to participate in this event/cause as either a rider or sponsor, hence the lower net amount recieved (30% of funds raised compared to San Francisco’s 64%) for that city. If the more money was raised by this particular event, Pallotta TeamWorks production fee would not have increased, the charity would have received a higher payment.

This leads to the question of whether, in “maximising” his profi,t Pallotta was ethical. Through a utilitarian approach the Pallotta’s motive was not just the improvement in his own welfare, but the potential improvement in the welfare of every other consumer of his product. As described by Kant, “the consequences of an action are of no importance while it is acceptable to gain personal advantages, as long as the general level of welfare is being upheld“ (as cited in Nielsen, et al., 2008, p. 23)

Therefore only one conclusion can be reached. It was not that Pallotta acted without good intentions.

From a Deontology perspective Pallotta intention was in the

interest of the charity, however the end did not meet the expectation of the charity.

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From the utilitarian point the charity did profit, though the means may not have been acceptable in of the charity’s hindsight. Unfortunately the charity’s investment into this event did not maximise the return as hoped for, which turns this into a financial issue not ethical issue. The accountability does not lie within Pallotta’s ethical issues but with the AIDS charity expectation.

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References

Baylin, G., Cunningham, P., & Cushing, P. (1994). Cause-related marketing: Ethical practice or exploitive procdure? The Philanthropist, 12(2), 15-33. Retrieved from http://journals.sfu.ca/philanthropist/index.php/phil/article/viewArticle/201 Konow, J. (2006). Is fairness in the eye of the beholder? An impartial spectator analysis of justice. Retrieved August 23, 2009, from http://mpra.ub.unimuenchen.de/2730/ Leslie, L. (2000). Mass communication ethics. Boston, NY: Houghton Mifflin Co. Nielsen, A., Knudsen, B., Johansen, T., Andersen, S., Stage, C., & Christensen, D. (2008). Responsible Consumers or Consuming Responsibility? Conference Papers -- International Communication Association, 1-28. Plaisance, P. L. (2009). Media ethics : key principles for responsible practice. Thousand Oaks, Calif.: Sage Publications. Rachels, J. (1999). The elements of moral philosophy (3rd ed.). London, UK: McGraw-Hill Publishing Company (ISE Editions) : McGraw-Hill Publishing Company. Teamworks, P. (n.d.). Record of impact 1994-2002. Retrieved August 26, 2009, from http://www.pallottateamworks.com/2003ROI.pdf Velasquez, M., Andre, C., Shanks, T., & Meyer, M. J. (1996). Thinking ethically: A framework for moral decision making Issues in Ethics 7(1). Retrieved from http://www.scu.edu/ethics/practicing/decision/thinking.html What is cause-related marketing? (2009).

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