Business Ethic ASS2

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[BUSINESS ETHIC]

Table of Contents
I.

Introduction....................................................................................................2

II. Analysis.........................................................................................................2
Task 3.1 Assess the role of the company acting as moral agent........................2
Task 3.2 Analyze the development of mechanisms for achieving employee
involvement and empowerment........................................................................9
Task 4.3 Design a suitable ethical code...........................................................12
Starbucks Code of Ethics.............................................................................13
III.

Conclusion.................................................................................................14

Bibliography.......................................................................................................15

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[BUSINESS ETHIC]

I.

Introduction

According Carroll currently, most of the business is focused towards the affects created by
the business operational activities to the business environment. In result of increased concern
towards the ethical concerns and increase in customer awareness, most of the businesses are
trying to promote their social values, in order ensure about the competitive advantage
(Carroll, 1999) .It is noted that business ethics try to embrace the corporate social
responsibility, along with ethics that associates with the marketing, accounting practices,
human resource management, as well as production. Good working environment depend
most on the ethics of that environment, the rules... and it will help to increase the efficiency
of a company. Besides, I also use case of violation business ethics of Starbucks is one of the
most famous brand in coffee business in the world.

II.

Analysis

Task 3.1 Assess the role of the company acting as moral agent
About Starbucks
Starbucks Corporation, doing business as Starbucks Coffee, is an American coffee company
and coffee

house

chain based

in

Seattle,

Washington.

Starbucks

is

the

largest coffeehouse company in the world, with 22,766 stores in 65 countries and territories,
including 12,802 in the United States, 1,930 in China, 1,409 in Canada, 1,121 in Japan and
825 in the United Kingdom. (Starbucks Coffee Company, 2014)
Starbucks was established in 1971 by three local businessmen to sell high
quality whole beans coffee. In 1981 when Howard Schultz visited the store
he plan to build a strong company and expand high quality coffee
business with the name of Starbucks. Starbucks air is to provide high
quality of coffee to its consumer and aim to achieve product innovation,
retail expansion and provide service quality for long term. Starbucks open
its first coffee store in Seattle, Washington. In 1990 Starbucks expand its
headquarters in Seattle and also build a new roasting plant. In 1990s
Starbucks opens 60 retails shops in United Kingdom. At the end of 2000s
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Starbucks total branches was 3500. Coffee is one of the rapidly growing
industry in this world due to its business strategy. According to national
coffee association, USA 49% of American age 18 and more drink coffee
beverage every day. Coffee industry was in peak of its success at the end
of 1990s. Target market means to select one or more market segment and
product position. Starbucks also focus on consumer habits and share its
speciality of coffee with the buyers. In the end of 20th century there are
many changes in market that helped Starbucks getting successful. The
most important change of the last twenty, thirty years is the changes of
economic policies over the world. Starbucks target market was 18 years to
24 years young professional because they are not yet been loyal with
coffee industry. Starbucks strategy comprises to locate its stores at picky
places such as the first floor of blocks of offices, underground main
entrance and urban areas. Starbucks sales totally depends on company
operate retail stores and certified retail operations, Starbucks sells coffee
and tea products through many others channels like distribution targeting
restaurants, hotels, colleges and universities and other work places.
According to Fleisher & Bensoussan (2002) Starbucks target market was
wealthy, upper class and educated who are agree to pay high prices of
Starbucks due to its high quality and customer service.

Structure

(2015)
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Starbucks has decentralized authority because they created decisionmaking for each manager. There are also lots of stores around the world
and each store has different from the authority, managers, and
customers. So Starbucks will be an organization and its employees to
behave in a flexible way even as the organization grows and becomes
taller. This is the way managers are so interested in empowering
employees: if they work good, they can get good position, and establish
cross-functional teams. They are used to improve communication between
the employee group who is responsible for the product and the group who
provides the specific functional skill. For example Starbucks crossfunctional

teams

could

be

someone

from

one

department

being

responsible to work with an identified person in making to sell the


product: each department within Starbucks will know the details of
business activities in the other departments.

Culture

The anthropological approach toward identifying organizational culture is


shared by many organizational members with reference to status, power,
authority, rewards, friendship and respects (Willcoxson, L and Millett, B,
1999). The organizational culture in Starbucks is focus on its teams. All
the companies have their own teams, teams reflect the organizational
culture. Starbucks believes return for happiness, it means only if the
customers satisfied that they will back for next consumption, only if the
staff works with happiness that can cause client consume in the future.
We can use Starbucks methods in building teams to see how they lead to
return for happiness. (Starbucks Coporation, 2015)

About the ethical case


On 13/5, a social network users posted clips recorded scene girl named
Ruby Chen serves Starbucks staff were verbally abused badly. According
to the share of Ruby Chen, as he walked into the store located on the
Elmhurst, Queens, she was called a Frappuccino cup. While open payment
applications on mobile phones, female employee asked her name but
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Ruby did not hear should not return. Immediately, the staff have voiced
rebuked her badly. Even these women also say: "Go away and never come
back here again" while tugging hand scanner application. Not stopping
there, the female employees also accused Ruby Chen stole a syringe
should ask your colleague to call the police. According to Ruby Chen's
explanation, she took large straws after calling up the map it acceptable.
Witness the spectacle, many outraged customers and to defend Ruby
Chen but were berated staff profusely.
Shortly after recording the clip spread, the online community was really
pressing for employees above. Many voiced support for Ruby Chen and
ordered Starbucks to offer proper treatment measures. However, do not
wait too long, the representative immediately apologized Starbucks did
her Ruby Chen about the incident. The company said the female
employee in video surveillance is just not the store manager. And
immediately after the incident was discovered, Starbucks has fired female
employee. Accompany it, Starbucks transmits a message that the content:
"The fact that customers can not currently experiencing quality of our
service. Managers of us are trying to contact the customer to apologize to
her. "To the Ruby Chen, she also confirmed that Starbucks has formally
apologized and offered her a gift card for $ 100. The company also
promised that similar incidents do not recur (Starbucks, 2015).
Moral agent and Moral agency
A moral agent is a being that is capable of acting with reference to right
and wrong (Moral agnet, 2010). A moral agent is anything that can be
held responsible for behavior or decisions. It is moral agents who have
rights and responsibilities, because it is moral agents whom we take to
have choices and the power to choose (Black Crayon, 2009). If you do
not believe that anything or anyone should ever be blamed or deemed
responsible, then you are going against the idea of moral agency, and
denying the concept of responsibilities and rights.

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Moral agency is an individual's ability to make moral judgments based
on some commonly held notion of right and wrong and to be held
accountable for these actions (Angus, 2003).
How a moral agent act to guarantee moral principles
A moral agent must be a living creature, as they must be able to
comprehend abstract moral principles and apply them to decision making.
They must have self-consciousness, memory, moral principles, other
values, and the reasoning faculty, which allows him to devise plans for
achieving his objectives, to weigh alternatives, and so on (Moral agent,
2015). All of your business's decisions, whether ethical or not, will affect
the world, starting with your employees and your customers and
extending to the larger community. Low wages will likely result in a lowskilled or unhappy work force. A poorly made or dangerous product could
harm a customer. Monitor the short- and long-term effects of your
business decisions to ensure your organization impacts the world in a
positive way. Also, in order to weigh the options in decision making, a
moral agent must attach a positive value to acts that conform to his
moral principles and a positive value to some of the results that he can
achieve by violating his moral principles (Stan Mack and Demand Media,
2015). When a person performs or fails to perform a morally significant
action, we sometimes think that a particular kind of response is
warranted. Praise and blame are perhaps the most obvious forms this
reaction might take (Stanford Encyclopedia of Philosophy, 2014).. For
example, one who encounters a car accident may be regarded as worthy
of praise for having saved a child from inside the burning car, or
alternatively, one may be regarded as worthy of blame for not having
used one's mobile phone to call for help. To regard such agents as worthy
of one of these reactions is to regard them as responsible for what they
have done or left undone. If all of your values could be easily and
immediately be achieved, you would not have to pick between your moral
and non-moral goals, and you could not practice moral agency.
Advantages and disadvantages to becoming moral agent
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Advantages

Business ethics offer companies a competitive advantage. Consumers


learn to trust ethical brands and remain loyal to them, even during
difficult periods. Consumers may let a company take advantage of them
once, but if they believe they have been treated unfairly, such as by being
overcharged, they will not be repeat customers. Having a loyal customer
base is one of the keys to long-range business success because serving an
existing customer doesnt involve marketing cost, as does acquiring a new
one (Brian Hill and Demand Media, 2015). For example, in 1982, Johnson
& Johnson spent over $100 million dollars recalling Tylenol, its best-selling
product, after someone tampered with bottles of the painkiller. The
company followed its credo, a set of ethical organizational values, and the
result was a boost in consumer confidence, despite the contamination
scare. Society benefits from business ethics because ethical companies
recognize their social responsibilities (Judith Rehak, 2002). In addition to
becoming moral agent help the company retains good employees,
talented individuals in organization be compensated fairly for their work
and dedication, career advancement within the organization to be based
on the quality of the work they do and not on favoritism or is become part
of a company whose management team tells them the truth about what is
going on, such as when layoffs or reorganizations are being contemplated
(Brian Hill and Demand Media, 2015). And help company avoid legal
problems, at times, a company's management may be tempted to cut
corners in pursuit of profit, such as not fully complying the provisions of
the law. The resulting negative publicity can cause long-range damage to
the company's reputation that is even more costly than the legal fees or
fines. Companies that maintain the highest ethical standards take the
time to train every member of the organization about the conduct that is
expected of them.

Disadvantage

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Business ethics reduce a company's freedom to maximize its profit. For
example, a multinational company may move its manufacturing facility to
a developing country to reduce costs. Practices acceptable in that country,
such as child labor, poor health and safety, poverty-level wages and
coerced employment, will not be tolerated by an ethical company.
Improvements in working conditions, such as a living wage and minimum
health and safety standard,s reduce the level of cost-savings that the
company generates. However, it could be argued that the restrictions on
company freedom benefit wider society.
Application Moral Agent in Starbucks
From the case above, although the speed of the clip spread fast surface
but also acknowledged that the measures Starbucks also launched smart
handling and quick too. The result is that everything had soon subsided
and the majority of customers are satisfied with how to handle the
situation quickly, equitable of Starbucks and they continue to this chain.
Advantages from the handling of Starbucks build customer loyalty
because having a loyal customer base is one of the keys to long-range
business success because serving an existing customer doesn't involve
marketing cost, as does acquiring a new one. And can help it create a
more positive image in the marketplace, which can bring in new
customers through word-of-mouth referrals. Conversely, a reputation for
unethical dealings hurts the company's chances to obtain new customers,
particularly in this age of social networking when dissatisfied customers
can quickly disseminate information about the negative experience they
had.
Disadvantages: Handling of the employee giving the company a number
of disadvantages such as employees and family members of employees
parking felt an aversion to the company, the company will have to spend
time in handling employee and while the employee was fired employee
positions will be left empty and the company would have to spend the
time and cost to find suitable staff for staff positions have been laid off,
8 Analysis |

[BUSINESS ETHIC]
but although find a new employee in that position the company well to
take costs into employee training in order not to repeat the experience on.
Specific moral agent activities of Starbucks
To become a moral agent company, Starbucks should have two elements:
legal responsibility and moral responsibility.

Legal responsibility

Refers to a companys responsiveness to and compliance with legal


expectations and laws about different standards. It includes both
standards about waste, resources, working conditions, products, services,
packaging, suppliers etc. Hence, the infrastructure of the environment in
which an organization exists. These standards can be validated by various
NGOs, governments and other regulators, with whom a company
cooperates (Starbucks, 2015). The policies and positions of Starbucks
commitment to being a responsible business. They range from global
ethical business standards to our own guidelines for doing business. From
how they buy their coffee to how they ensure the best possible workplace
for their partners, they believe it is important to operate consistent with
their mission: to inspire and nurture the human spirit one person, one
cup and one neighborhood at a time. To better communicate their efforts,
Starbucks adopted a policy in 2010 to provide greater transparency
regarding their corporate political contributions and expenditures beyond
what is required by law. This policy supports Starbucks interests in
promoting public policy issues of concern to the company and educating
elected and public officials about their business, while providing important
information to their partners, customers, and shareholders. (Starucks,
2015)

Moral responsibility

Much of Starbucks moral responsibility has revolved around the aspect of


improving the quality of its products and services to its customer (Flynn,
2008) While analyzing this perspective from a an eco-efficiency viewpoint,
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it can be deduced that Starbucks has strived to remain competitive in the
restaurant and cafes industry by offering good prices, products, as well as
services that seek to improve the quality of life consequently resulting in
enhanced customer satisfaction. Starbucks has continuously embraced a
values-based service towards its customers for many years. From the
companys website, the following passage reflects the true aspiration of
its values-based service: When we are fully engaged, we connect with,
laugh with, and uplift the lives of our customerseven if just for a few
moments. Sure, it starts with the promise of a perfectly made beverage,
but

our

work

goes

far

beyond

that.

Its

really

about

human

connection (Stabucks, 2014).


Starbucks Company has been consistent in handling communication
barriers within its organizational behavior context. Employees are
motivated to make the right decisions by using their skills and knowledge,
and this provided the opportunity for personal growth and development.
The companys chairperson, Howard Schultz, has over time emphasized to
all the employees that they ought to have efficient and sufficient
communications amongst themselves regardless of their differences in
cultural backgrounds. The companys management has continuously
emphasized on the importance of maintaining cohesive dialogue that
makes everyone feel at ease within the work environment. This has been
much enhanced through frequent training sessions that have aimed at
making the employees deal with some of their unfavorable behaviors,
while fostering an improved understanding of relationships amongst
themselves, hence nurturing a positive organizational climate. This has
ensured

that

Starbucks

gains

competitive

advantage

over

its

competitors through work environment design and culture associated with


such human resource practices. The design gives employees the freedom
to be their best selves consistently (Wright, 2007). Starbucks Corporation
has demonstrated its unwavering obligation of developing feasible
environment friendly undertakings. In this context, it has initiated several
programs that assist in the conservation of the environment. Such efforts
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are aimed at enabling the farmers to mitigate climate change impacts on
their respective farms (Stabucks, 2014).
Through these examples, we can affirm that Starbucks is a moral agent.
Task 3.2 Analyze the development of mechanisms for achieving
employee involvement and empowerment
Definition
Empowerment is the concept in management that if employees are
given information, resources, and opportunity while being held responsible
for their job outcomes, they will be more productive and have higher job
satisfaction. (Empowerment in Management: Definition & Explanation,
2015)
Employee involvement can be defined as: The direct participation of
staff to help an organization fulfill its mission and meet its objectives by
applying their own ideas, expertise, and efforts towards solving problems
and making decisions. From this definition, participation can include
representative participation, direct communication, and upward problem
solving. We will focus on the latter two categories because this article is
more about understanding outcomes, tools, and methods (Robert Bullock
and Scontrino-Powell, 2015).
The machanism to enhance employee involvement and
empowerment
About the mechanism to promote the employee involvement and
empowerment in corporates, there are 3 processes: ethical culture, ethical
leader, code of conduct building.

Ethical culture

Ethical Culture is a religion centered on ethics, not theology, whose


mission is to encourage respect for humanity and nature and to create a
better world. Members are committed to personal ethical development in
their relationships with others and in activities involving social justice and
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environmental stewardship. Members join together in ethical societies to
assist each other in developing ethical ideas and ideals, to celebrate life's
joys, and support each other through life's crises. Ethical culture aim at
the employees, it focuses on ethics, encourages the members to show
their respects to each others and company to create a new better working
environment or ethical culture is the empowerment, every employees
must act in responsible ways. (Nysec, n.d.) Working in an ethical culture,
employees are also encouraged to involve in the companys operations
more dynamically and exert their empowerment more confidently.

Ethical leader

Ethical leadership means doing what is right and making good decisions
when in a powerful position. It is more than just obeying the law, it is
living by a personal and professional code of ethics (Ethical systems,
2015). Ethical leadership really has two elements. First, ethical leaders
must act and make decisions ethically, as must ethical people in general.
But, secondly, ethical leaders must also lead ethically in the ways they
treat people in everyday interaction, in their attitudes, in the ways they
encourage, and in the directions in which they steer their organizations or
institutions or initiatives. Ethical leaders are ethical all the time, not just
when someones looking; and theyre ethical over time, proving again and
again that ethics are an integral part of the intellectual and philosophical
framework they use to understand and relate to the world (Ethical Leader,
2015).
Factors affecting work motivation of the staff in Starbucks office most
important is the relationship with superiors (Relations with Supervisor).
This suggests that, employees will be motivated to work better with the
support from superiors and feel satisfied with the work for good relations
with

superiors.

Management

style

seniors

express

high

levels

of

empowerment (empowerment) to employees, bringing to give employees


the opportunity creation, outlined initiatives and decisions, will help
people members find more meaningful work, thereby increasing intrinsic
motivation (intrinsic motivation) in employees (Tuan, 2012). Relations with
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superiors also expressed dimensional communication strong upward
(Upward communication), which is way communication helps employees
can share their difficulties and express knowledge and new skills which
employees hone is (Tuan, 2012).It was afternoon upward communication
will increase the confidence of staff to their superiors and the company
(Tuan, 2012). Relations with superiors as sticking the way communication
from the top down (Downward communication) also strengthened,
threading

feedback

as

well

as

the

praise

and

recognition

are

communicated to employees to help them improve the efficiency of their


work as well as increased motivation to contribute to the organization.

Code of conduct building

A code of conduct is a set of rules outlining the social norms and rules
and responsibilities of, or proper practices for, an individual, party or
organization. Code of conduct is a type of a document which helps people
in making decision. It is meant to clarify an organization's mission, values
and principles, linking them with standards of professional conduct It
clears the mission, vision and core value of a company and integrate them
to a standard ethics (Building Professionals Board , 2015). Based on the
documented code of ethics, employees will be enable to exert their control
power to ensure an ethical behavior of their colleagues and also
companys leader.
Application for Starbuck
Employee empowerment
Studies have shown that employee engagement increases company
moral, employee motivation, efficiency and customer service. When
engagement is done well, employees remain committed to their employer.
Starbucks see their employees as more than just workers but also brand
ambassadors.

Effective employee

eempowerment means

that

employees transition from workers who show up everyday to brand


ambassadors who incorporate the companys mission into their daily work
(Employee empowerment, 2015).
13 Analysis |

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A companys efforts to boost employee empowerment should translate
into

effective

and

service starts

strong
from

customer

service.

within

Effective

an

customer

organization.

Starbucks cares so much about boosting customer service from within,


that they
$35

spent

million

to

send

9,600

store

managers

to

their Leadership

Lad conference and exhibition.


Starbucks

CEO, Howard

Schultz elaborates on

Starbucks employee

empowerment and engagement:Give them reasons to believe in their


work and that theyre part of a larger mission, the theory goes, and theyll
in turn personally elevate the experience for each customersomething
you can hardly accomplish with a billboard or a 30-second spot.We can
use Starbucks methods to see how team building and employee
empowerment can

lead

to

better

customer

service.

(Employee

empowerment, 2015)
To increasing employee empowerment Starbucks was

Treat each store like a small business

Make employees feel like part of the larger mission

Be creative with training sessions

Develop a mission statement that matters

Employee Involvement

In an effort to increase employee involvement, Starbucks has recently


instituted self-managed work teams at its coffee bean roasting plants.
Although plant managers and supervisors are responsible for the initial
organization of the teams, partners are encouraged to take over the dayto-day workings of the teams including decision making (Nelson, 1998).
Cross-functional teams of partners and supervisors are used to make
hiring decisions. Everyone on the team has a voice in the selection
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process and partners are encouraged to offer their views on the
candidates potential compatibility with the company. The companys
"Mission Review Team"comprised of partners from throughout the
companyvisits Starbucks outlets to review the consistency of the stores
operations and the companys guiding principle of providing quality
service and products (Nelson, 1998). Benefit of employee involvement:
empowering, better decisions, better improvement, corrective action,
effective cooperation & communication, loyalty lncreases & floating
population reduces, more money to share.

Task 4.3 Design a suitable ethical code


Definition
Code of conduct is a set of organizational rules or standards regarding
organizational values, beliefs, and ethics, as well as matters of legal
compliance that govern the conduct of the organization and its members.
Organizational members are responsible for adhering to the code of
conduct and will be held accountable for failure to do so. Most large
businesses will have a code of conduct, which are often developed in
response to legislation regulating business activities and behavior or some
sort of ethical scandal (Code of Business Conduct: Ethics, Standards &
Examples, 2015). Code of conduct is a type of a document which helps
people in making decision. It is meant to clarify an organization's mission,
values and principles, linking them with standards of professional conduct
It clears the mission, vision and core value of a company and integrate
them to a standard ethics (Building Professionals Board , 2015).
Code of ethics is a collection of principles and practices that a business
believes in and aims to live by. A code of business ethics usually doesn't
stand alone, it works in conjunction with a company's mission statement
and more specific policies about conduct to give employees, partners,
vendors, and outsiders an idea of what the company stands for and how
it's members should conduct themselves. A code of ethics can help a
business determine its priorities and values. It can also help you down the

15 Analysis |

[BUSINESS ETHIC]
line if one of your employees or vendors drags you into legal trouble
(Spiro, 2015).
Starbucks Code of Ethics
Starbucks Mission: To inspire and nurture the human spirit one person,
one cup, and one neighborhood at a time (Starbucks Coporation, 2015).
Here are the principles of how they live that every day:
Coffee: It has always been, and will always be, about quality. Theyre
passionate about ethically sourcing the finest coffee beans, roasting them
with great care, and improving the lives of people who grow them. They
care deeply about all of this; our work is never done (Starbucks, 2014).
Partners: Theyre called partners, because its not just a job, its their
passion. Together, they embrace diversity to create a place where each of
us can be ourselves. They always treat each other with respect and
dignity. And they hold each other to that standard (Virginia's Community
Colleges, 2015).
Customers: When theye are fully engaged, they connect with, laugh
with,

and uplift the lives of their customers even if just for a

few

moments. Sure, it starts with the promise of a perfectly made beverage,


but their work goes far beyond that. Its really about human connection
(Starbucks, 2014).
Stores: When their customers feel this sense of belonging, their stores
become a haven, a break from the worries outside, a place where you can
meet with friends. Its about enjoyment at the speed of life sometimes
slow and savored, sometimes faster. Always full of humanity (Virginia's
Community Colleges, 2015).
Neighborhood: Every store is part of a community, and they take our
responsibility to be good neighbors seriously. They want to be invited in
wherever they do business. They can be a force for positive action
bringing together their partners, customers, and the community to
contribute every day. Now they see that their responsibility and their
potential for good is even larger. The world is looking to Starbucks to set
the

new standard, yet again. They will lead (Virginia's Community

Colleges, 2015).
16 Analysis |

[BUSINESS ETHIC]
Shareholders: They know that as they deliver in each of these areas,
they enjoy the kind of success that rewards their shareholders. They are
fully accountable to get each of these elements right so that Starbucks
and everyone it touches can endure and thrive. Onward (Starbucks,
2014).

III.

Conclusion

This assignment to understand the main ethical issues in the work place
and how the business could harmonize the ethics and its objectives, and
required by the business in order to consider and learn how the ethical
values development can impact over the behavior of the business. The
report also tries to identify the social implications related to business
ethics for many activities of the business, which create impact over the
company along with the external environment. But this assignment have
focus on the work place like moral agent, mechanism to achieve employee
empowerment and involvement, and also tries to assist the extent to
which all the objectives impact the behavior and even try to ensure that
business objectives are fulfilled.

17 Analysis |

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18 Analysis |

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20 Analysis |

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