Chapter 1 Which The Following Not Question The

Business Ethics, 8e Jennings

59. James Dodgsen is a student in a graduate course in business. The professor in the course has

given Dodgsen and his classmates a surprise quiz in class. Dodgsen did not do the reading for

class that day because he had been grading papers as part of his TA position. He has been

prepared for every other class that semester. As he glances as the quiz questions, he realizes

that he does not know any of the answers. However, he sees that Jane Frampton, the student

who sits next to him, is well prepared and answering the questions with great ease. He can see

her answers because of her large, block-style printing. Dodgsen copies her answers.

60. Which of the following is not a question in the Laura Nash model for resolution of ethical

dilemmas?

61. Into which of the following categories do patent and copyright infringement fall?

62. Which of the following best describes the “Parable of the Sadhu” events?

63. Which of the following does the mountain climb represent in the “Parable of the Sadhu”?

64. Which of the following does the Sadhu represent in the “Parable of the Sadhu”?

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65. Which of the following would be a breach of trust and ethics?

66. An ad contains the following: “Restaurant Critic, Jose Winfrey, on Mama Leone’s Italian Eatery,

‘Mama Leone’s is simply the best. It is a surprising new entrant into the competitive Italian bistro

market and it is a mighty one.’” Jose Winfrey is the cousin of the owner of Mama Leone’s and

knows restaurants, but is not a critic for any publication or other media outlet. The ad:

67. Stephen Ambrose, a popular historian with many books to his credit, admitted that some

segments of one of his recent books had language taken from the books of other historians that

was not in quotes. Mr. Ambrose did footnote the work of authors he relied upon in doing his book.

68. Which of the following ethical theorists subscribes to self-interest?

69. The contractarians are best represented by:

70. Which best describes the Categorical Imperative?

71. Which is Warren Buffett’s test for ethics?

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72. There are no laws that cover cutting in line. However, those who do take cuts in line are viewed

with disdain by others because:

73. Customer A has $250 in his account. Six checks, totaling $325, have come in for payment. One

check is for $257.00, with the remaining five checks making up the difference to the $325 total.

First Bank pays the five smallest checks first, honors the $257.00 with overdraft protection, and

charges the customer one overdraft fee. Second Third Bank pays the largest ($257) check first,

pays the five remaining smaller checks with overdraft protection, and then charges the customer

five overdraft fees. Which of the following is correct?

74. The Graduate Management Admissions Council announced that it was canceling the GMAT

scores of 84 applicants and students. The Council found that the students were active users of a

now shut-down website, Scoretop.com, a site with origins in China that posted live questions from

the GMAT. The site had 5,000 to 6,000 subscribers who paid $30 per month for access, but the

Council is only canceling the scores of those against whom it feels it has an airtight case. Two of

the students whose scores were canceled are currently enrolled at the University of Chicago’s

MBA program and another has already graduated from Stanford’s MBA program. Twelve of the

students whose scores were canceled had posted questions on Scoretop.com and the remaining

72 allowed the site to post their testimonials that they had seen the Scoretop.com questions on

their GMAT. Ten of the 72 students had applied to Stanford but were denied admission. Which

ethical category does the conduct of the students who posted live questions fit into?

75. The Graduate Management Admissions Council announced that it would begin using a “palm

vein” scan to eliminate proxy test taking after the FBI broke up a ring of six test takers who had

taken the GMAT for 590 applicants, for a price of $3,000 each. Which ethical category does the

conduct of the proxy test takers fit into?

76. Which statement best describes the moral of the story in “The Parable of the Sadhu”?

Business Ethics, 8e Jennings

77. The former CEO of Countrywide Mortgage (now a part of Bank of America), offered favorable

loans to members of Congress, Countrywide government regulators, and members of the board

and officers of Fannie Mae, the quasi-government agency that bought Countrywide’s mortgages

in the secondary market. The loans were jumbo loans at below-market rates. Countrywide sold

90% of its mortgages to Fannie Mae. Congress was responsible for the creation, funding, and

policies of Fannie Mae. The members of Congress who received the Fannie Mae favorable loans

sat on House and Senate Banking Committees. Which of the following categories of ethical

breaches, if any, applies to this practice?

78. Former NBA referee Tim Donaghy entered a guilty plea to two federal felony charges in

connection with his bets and tips to others on NBA games. Mr. Donaghy picked teams to win in

games he was scheduled to referee. Experts have said that Donaghy committed the equivalent

of insider trading on Wall Street by providing outsiders with information about games, players,

and referees. He got $5,000 from his tippees for correct picks. Apart from the criminal charges,

what category of ethical breach does Mr. Donaghy’s conduct fall into?

79. Priscilla Ceballos’s 6-year-old daughter is a fan of Hannah Montana and wanted to go to a

Hannah Montana concert. A radio station was offering two tickets to the Hannah Montana

concert for the child who wrote the winning essay. Ms. Ceballos and her daughter wrote an

essay that detailed an account of their husband/father dying in the war on Iraq. The problem was

that their husband/father was not in Iraq and certainly not dead. When the fake essay was

uncovered, Ms. Ceballos said, “We did the essay, and that’s what we did to win. . . We did

whatever we could to win.” The company revoked the prize and the award of the tickets.

Suppose the contest rules did not spell out that the essay had to be based on true and verifiable

facts. What could the radio station rely on in revoking the prize and still have public support for its

decision?

80. LeAnn Rimes, a country western singer, signed a contract at age 12 with Curb Records. Curb

Records is owned by Mike Curb, a long-standing presence in the music industry who began his

career with a group known as The Mike Curb Congregation. Under the terms of that contract as it

Business Ethics, 8e Jennings

originally existed, and as it was signed by Ms. Rimes’ guardians, Ms. Rimes would have been 35

before she had delivered the 21 albums required under the agreement. “At 12, I didn’t understand

everything in my contract. All I know is that I really wanted to sing,” was the explanation Ms.

Rimes offered when she later testified before the California Senate Select Committee on the

Entertainment Industry looking into the labor issues surrounding long-term album requirements

contracts. Which of the following would apply to Curb Records’ conduct with regard to Ms.

Rimes?

81. Minnesota has a statewide smoking ban for public places. However, the state statute includes an

exemption that permits smoking by actors in theatrical performances. In order to take advantage

of the exemption, the Old Clover Inn, located in Vadnais Heights, Minnesota, has begun holding

theater night, every night. The Old Clover Inn has placed its pool tables in an area that is framed

with theater curtains and refers to the pool players as its actors. The Inn also has a stage for its

cribbage players who sit and play cribbage and smoke.

The Inn calls the nightly production, “As the Clover Turned,” and it distributes a playbill that

describes the nightly plays as involving “numerous uncredited actors in the role of bar patrons.”

The Inn distributes buttons for $1 to patrons. The buttons read, “Act Now!”

The Minnesota Health Department has warned the Inn that what it is doing is an attempt to

circumvent the law. Which statement best describes the Old Clover Inn’s approach to ethics?

82. A group of Wachovia (now part of Wells Fargo) customers filed a class action lawsuit against

Wachovia Bank because fraudulent telemarketers had taken money from their accounts and that

the telemarketers did so with the knowledge of bank executives who were aware of the fraud but

did nothing to stop it. Banks executives insisted that they knew nothing about the thefts.

However, internal e-mails released during discovery in the case showed that executives were

discussing the frauds and providing warnings.

“YIKES!!!!”

“DOUBLE YIKES!!!!”

“There is more, but nothing more that I want to put into a note.”

Warning from a Wachovia bank executive to colleagues that the bank had received 4,500

complaints of fraud in two months from customers who had been fleeced of $400 million by

marketing firms who paid the bank large fees for access and on returned checks.

“We are making a ton of money from them.”

What test for resolving ethical dilemmas would have helped the executives at Wachovia reach a

better decision as they debated the issue on their e-mails?

83. The UCLA Medical Center is facing sanctions from California’s Department of Health because

several of its employees viewed records of famous patients, patients with whom the employees

had no contact or care responsibilities. The employees viewed the records of, among others,

Maria Shriver (wife of Governor Arnold Schwarzenegger), the late Farrah Fawcett, and Britney

Spears.

The unauthorized access to the records was uncovered when the story of the late Ms. Fawcett’s

recurrence of cancer was published in The National Enquirer before Ms. Fawcett had disclosed

her health condition to family or friends. Ms. Fawcett’s lawyers then notified the hospital of the

only possible source of the information.

Which category of an ethical breach applies to the conduct of the hospital employees?

84. Which model for ethical decision analysis requires managers to seek additional perspectives on

ethical issues?

85. Matt Walsh, a golf pro from Hawaii, was a video operator for the New England Patriots from

1999-2002. Walsh says that he taped the Patriots’ opponents’ signals, information that he says

was then used by the Patriots when they next met that team. If you know the signals, then you

know what defense has planned. Offense is then a tad easier.

Some quotes emerged from the situation:

From Patriots’ coach, Bill Belichick, “I misinterpreted the rules.”

From Jacksonville Coach Jack Del Rio on the videotaping, “I think all teams do that. That’s been

going on forever.”

From Matt Walsh, “I had always been a big Patriots fan. I wasn’t going to question what they

wanted me to do.”

From Pennsylvania Senator Arlen Specter, “If you can cheat in the NFL, you can cheat in college,

you can cheat in high school, you can cheat on your grade–school math test. There’s no limit as

to what you can do. I think they owe the public a lot more candor and a lot more credibility.”

What rationalization is the Jacksonville coach applying?

86. With respect to #85, what rationalization did Matt Walsh follow?

Business Ethics, 8e Jennings

87. With respect to #85, what is Senator Specter concerned about?

88. Into which group would the students at Stuyvesant High School fall?

89. Which of the following categories does hazing fit into?

90. What rationalization did the students at Stuyvesant High School offer for cheating?

91. What rationalization do most speeders use to justify driving in excess of the speed limit?

92. Which category of ethical dilemma applies to dog walkers who do not scoop up after their pets?

93. Pam purchased a quesadilla at Taco Bell for lunch. She also asked for a water cup, which is free

94. Megyn Kelly, a Fox News Anchor, is interviewing a physician about the impact of Obamacare.

The physician is a partner with Ms. Kelly’s ex-husband.

95. What was the occupation of the author of “The Parable of the Sadhu” piece?

96. Ralph has used all but one day of his personal leave time (PLT). His company‘s policy is that

PLT can be used for illness, family needs, or medical appointments. Ralph has used his PLT

days when he was hung over or when a friend wanted to spend the day with him. Ralph’s

grandmother, to whom he is very close, passed away, and he would like to go to her funeral, but

it will take a day of travel, a day for the funeral, and a day to return. Ralph has asked his

supervisor for additional time off in order to go to the funeral. Which of the following is correct?

97. Lance Armstrong says that he looked up the meaning of the word “cheat” in the dictionary when

he was using performance-enhancing drugs (PEDs). The dictionary defined cheating as “using

an unfair advantage in a competition.” Mr. Armstrong believed that PEDs were used by his

competitors and felt it was ethical to continue using them. Which rationalization did Mr.

Armstrong use?

99. Edward Snowden released classified documents that were stored at his employers’ archives. He

works for a government agency. He released them because he felt U.S. citizens should know

what kind of information their government was keeping about them. Which of the following is a

correct statement?

100. Randy White is the executive director of a non-profit preschool for special needs children. Part of

Randy’s responsibilities include fundraising for the preschool. Because of his experience and

success in operating specialty pre-schools, Randy is sought after as a consultant at locations

around the country to assist in the start-up and operation of such facilities. Randy does so quite

frequently. Randy does not take vacation time for this work, and his consultant fees (which range

from $750 – $1500 per day) are kept by him as personal income. Randy uses his secretary at the

preschool to book his travel arrangements and prepare his consultant reports and bills for these

outside engagements.

101. What was the American Bar Association’s position on enhanced interrogation techniques used

during the Bush administration?

Short Answer/Essay Questions

1. Explain what ethics is. Give a definition here.

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2. List and briefly describe the schools of ethical thought.

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3. List the categories of ethical dilemmas.

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4. Give the ways we avoid facing ethical dilemmas.

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Give it a different label:

Rationalizations:

5. Give a description of the simple tests that can be used to resolve ethical dilemmas.

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6. List the six steps you should follow for analyzing an ethical dilemma.

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7. List those affected when employees cheat on their travel expenses.

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8. Define wi-fi piggybacking and explain why it is an ethical issue.

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Business Ethics, 8e Jennings

9. List those who are affected by wi-fi piggybacking.

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10. Dr. Phil Hayes has received an offer of full funding for his research on a new drug manufactured

by Eli Mentin. The drug would be a competitor for Prozac without the questioned side-effects of

possible violent behavior. Eli Mentin has, however, attached a condition to the funding. That

condition is that Dr. Hayes may not publish his findings until Eli Mentin executives and its

attorneys have had the opportunity to review them.

List the ethical issues Dr. Hayes faces with this offer.

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11. Susan Wade is the president of the Illinois Hospice Organization (IHO). IHO is a state

organization affiliated with a national non-profit organization, the National Hospice Organization.

Both the state and national organizations have members from both for-profit and non-profits

hospices. Susan Wade is the director of a non-profit hospice in Illinois.

A Chicago newspaper has printed a story about hospices and what they do. Susan was

interviewed extensively for the piece. In one quote in the article, Susan expressed her concerns

about for-profit hospices. “It has become the sort of franchise of the decade. They‘re not all bad,

but I think the original spirit of hospice is becoming very adulterated. There’s one time in a

person’s life when he shouldn’t be looked at as a number, as a piece of an actuarial problem. If

your first and last priority is making money, it flies in the face of what hospice is all about. It’s the

end of the health-care chain. It’s the place of last hope for patients. Dollars should not be the

issue here.”

A chief operating officer of a for-profit hospice has written to Susan complaining that her remarks

are libelous and misinform the public about for-profit hospices.

a. Does Ms. Wade have a conflict of interest?

b. Is Ms. Wade properly executing her role as the president of the state organization?

SUGGESTED ANSWER:

13. In 1991, James McElveen fell 30 feet from a waterfall and broke his back. He was employed by a

small business and had no medical insurance. His lifetime friend, Benny Milligan, was with him

when the fall occurred. Benny took James to the emergency room. Moved by his friend’s severe

injuries and pain and suffering and realizing that James did not have insurance, Benny switched

IDs with James in the hospital emergency room. James required surgery to fuse his back to

avoid what doctors said would have been certain paralysis. The cost of the surgery and

hospitalization was $41,107.45. Neither James, employed as a mechanic, nor Benny, employed

as a painter, could have paid for the surgery and follow–up care. Benny’s employer’s insurance

paid for the surgery because the hospital took the information from Benny’s ID found in James’

pockets.

While Benny was contemplating telling his employer, someone notified the insurance company of

the switch. Benny, James, and Benny’s wife, Tammy Milligan, were charged and convicted of

mail fraud, wire fraud and conspiracy. Tammy, because of the Milligans’ three young daughters,

is serving her sentence through home confinement, Benny is serving 9 months and James is

serving 7 months. All three will serve three years on probation and pay restitution.

Benny states, “I know what I did was wrong. But I look back on it, and I feel that I had to do it at

the time. I don’t feel like I’m a criminal in the sense of rapers, muggers and murderers.” Benny

said he did not understand that a hospital has an obligation to treat someone who is dying.

Business Ethics, 8e Jennings

Friends testified that as they were racing James to the hospital they told Benny that hospitals in

the area had routinely refused to provide medical treatment.

Benny said he wanted to tell his employer, but he was afraid he would be fired and then be stuck

with the bill. Tammy adds that the government is right to demand restitution but wrong to

imprison them. James asked the judge if he could go to prison for all three of them, “I would be

lost without my friendship with Benny. I probably would be dead.”

a. Benny and James committed an illegal act. Was it unethical?

b. What punishment is appropriate in the case?

c. If you were Benny’s employer, what would you have done?

SUGGESTED ANSWER:

15. Stanford University medical researchers conducted a study on the correlation between the use of

fertility drugs and ovarian cancer. Their study, published in the American Journal of

Epidemiology, concludes that the use of the fertility drugs, Pergonal and Serophene, may

increase the risk of ovarian cancer by three times. The lead author of the studies, Professor Alice

Whittemore, stated, “Our finding in regard to fertility drugs is by no means certain. It is based on

very small numbers and is really very tenuous.”

FDA Commissioner David Kessler would like the infertility drug manufacturers to disclose the

study findings and offer a warning on the drug packages. He notes, “Even though the

epidemiology study is still preliminary, women have a right to know what is known. We’re not

looking to make more of this than there is.”

If you were a manufacturer of one of the drugs, would you voluntarily disclose the study

information?

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16. Former-President George W. Bush has proposed reforming Social Security by asking those from

ages 18-40 to forego their social security and invest their own funds in a retirement/pension plan.

What ethical theory most applies to this proposal?

17. Applying ethical theories, discuss why you would not take food out in your pockets from an all-

you-can-eat buffet.

SUGGESTED ANSWER:

Business Ethics, 8e Jennings

18. In November 2009, world-class golfer Tiger Woods crashed his escalade into a tree near his

Florida home. One of the windows in his Escalade had been smashed with a golf club. Mr.

Woods’ wife pulled him from the car and he was taken to the hospital, treated for injuries, and

released. A sordid tale emerged over the next few days of a pattern of extra-marital affairs by Mr.

Woods with a resulting separation from his wife and their eventual divorce. Following these

public disclosures, sports writers, golf pros, country club staff members, and even CEOs of

companies said that they were all aware of Mr. Woods’ infidelity and that it was the best kept

widely known secret among and between those who were golf players and/or fans. One said,

“We just had a pact of silence.” When the news of Mr. Woods’ serial infidelity made international

news, some of his sponsors dropped him and others continued with him as a spokesperson. Are

there any ethical issues here? Who faces them? Discuss whether you would have gone along

with the pact.

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19. Discuss norm shifting and speeding.

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20. Explain who is affected when dog walkers don’t scoop up after their dogs.

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21. Susan Wade is the president of the Illinois Hospice Organization (IHO). IHO is a state

organization affiliated with a national non-profit organization, the National Hospice Organization.

Both the state and national organizations have members from both for-profit and non-profits

hospices. Susan Wade is the director of a non-profit hospice in Illinois.

A Chicago newspaper has printed a story about hospices and what they do. Susan was

interviewed extensively for the piece. In one quote in the article, Susan expressed her concerns

about for-profit hospices. “It has become the sort of franchise of the decade. They‘re not all bad,

Business Ethics, 8e Jennings

but I think the original spirit of hospice is becoming very adulterated. There’s one time in a

person’s life when he shouldn’t be looked at as a number, as a piece of an actuarial problem. If

your first and last priority is making money, it flies in the face of what hospice is all about. It’s the

end of the health-care chain. It’s the place of last hope for patients. Dollars should not be the

issue here.”

A chief operating officer of a for-profit hospice has written to Susan complaining that her remarks

are libelous and misinform the public about for-profit hospices.

a. Does Ms. Wade have a conflict of interest?

b. Is Ms. Wade properly executing her role as the president of the state organization?

SUGGESTED ANSWER: