Business Ethics Case Analysis Issue Identification

Business Ethics Case Analysis
Student Name
Intuitional Affiliation
Business Ethics Case Analysis
Issue Identification
WeWork was founded in 2010 to offer workspaces for small businesses and entrepreneurs. The business model of the company entails taking an entire floor or two of an office building, then partitioning it into smaller spaces. The company then rents out space to individuals who do not mind sharing the space. WeWork has experienced extensive growth over the years such that by 2018 it has 268,000 members in 32 different countries (Hoffman, 2019). In mid-2018, WeWork began to diversify to other business. The company believes in protecting the environment. A new policy of going meatless was announced in July 2018 due to environmental concerns. The company also committed to achieving carbon neutrality in 2023 which is a huge achievement.
The main issue affecting WeWork is its financial ties to Saudi Arabia. Recently, a senior leader within Saudi Arabia has been implicated in the brutal murder of Jamal Khashoggi, a journalist in the Saudi consulate in Turkey. The murder of Khashoggi and its connection with the Saudi Arabian government brought attention to any company undertaking business in or with Saudi Arabia (Hoffman, 2019). The connection of WeWork with Saudi Arabia comes from receiving part of its funding from Saudi Arabia. SoftBank’s Vision Fund provided at least $ 8.4 billion of funding to WeWork. At the formation of SoftBank’s Vision Fund, Saudi Arabia contributed $ 45 billion towards the fund through the Public Investment Fund. The ethical issue here is that while Saudi Arabia has been at the forefront of violating human rights, WeWork is a beneficiary from a fund where Saudi Arabia interests.
The secondary issue is the association of WeWork with a country that has not contributed to environmental sustainability. WeWork has over the years made efforts aimed at protecting the environment. It began by going meatless due to environmental concerns and animal welfare. The company went ahead and made a commitment to carbon neutrality in 2023 (Hoffman, 2019). Despite the efforts, the business has made towards protecting the environment, WeWork has accepted funding from SoftBank’s Vision Fund, where Saudi Arabia has invested heavily. As a producer of oil, Saudi Arabia has contributed to environmental degradation since fossil fuels are a leading source of carbon dioxide. Getting funding from a leading fossil fuel producer like Saudi Arabia raises a moral issue on the commitment of WeWork to protect the environment.
Analysis
* Internal Analysis
Stakeholder Analysis
WeWork has in the past made efforts towards diversification. The company has invested in other businesses in an attempt to gain more market. Diversification has seen WeWork start WeLive, WeGrow, and Meetup.
Due to the rapid expansion, WeWork has been capital-intensive. The company has used the funding to acquire more assets. Because of focusing more on the acquisition of assets, WeWork has faced cash flow problems making it more reliant to investments. In October 2018, the company was yet to make profits. The need for money has forced the company to continue raising more funding. With the need for more funds to sustain the business, it has been challenging for the company to scrutinize the source of funding. In this case, part of the funding comes from SoftBank’s Vision Fund, where Saudi Arabia has already contributed $45 billion through the PIF. Due to the need for more cash, it has become challenging for WeWork to refuse funding from SoftBank’s Vision Fund because of the investments made by Saudi Arabia.
Company Values
WeWork has made efforts towards ensuring a sustainable environment. It has done this through two major ways. Firstly, the management announced in July 2018 that the company will not serve meat anymore or reimburse for meat during company functions. The move is meant to raise awareness of the importance of protecting the environment and animal welfare (Hoffman, 2019). Secondly, the company has committed to carbon neutrality by 2023. WeWork has made a commitment to ensure a sustainable environment in the cities and communities where it operates. While the company is engaged in CSR, it is at the same time seeking to have a third round of funding that will make SoftBank a majority share. Considering that Saudi Arabia has interests in SoftBank’s Vision Fund, WeWork risks giving Saudi Arabia more control over the company.
Ethical analysis
Due to the need for capital, We Work has accepted funding from parties that do not align with the mission of the company. WeWork has been keen to ensure that all its actions are focused on protecting the environment. The mission is clear that ...