LGST 72193

subject Type Homework Help
subject Pages 19
subject Words 5005
subject Authors Marianne M. Jennings

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The Duke LaCrosse players:
a. Were ultimately found guilty of some criminal charges.
b. Were exonerated by the North Carolina attorney general.
c. Had their charges dropped by Michael Nifong.
d. None of the above
What happened to the suits for wrongful termination?
a. They were dismissed in 2002
b. The employees won damages against Boeing
c. The records in the case were sealed
d. None of the above
Professor Reba McGintry is the head of the Student Conduct Board. Charges have been
brought against 3 students who are also members of the university basketball team. The
charges are based on the criminal charges brought by the local district attorney against
the 3 men for sexual assault. Professor McGintry's husband was one of the staff
attorneys in the DA's office who made the decision to go forward with the prosecution.
Professor McGintry:
a. Can proceed with the hearing because the two matters are unrelated.
b. Can proceed with the hearing because of marital privilege.
c. Must excuse herself from the students' hearing because of a conflict of interest.
d. Has no conflict, but her husband does.
e. None of the above
After reading about the events in the Randi W case, which of the following would be
the best advice you could give a supervisor who is looking for guidance on writing
reference letters for employees who have been fired for cause, but who would like to
avoid litigation against the company?
a. Decline to write the letter or simply confirm employment
b. Give the full story of the employee's termination from your perspective
c. Write a positive letter to avoid defamation issues
d. Turn over the information from the internal investigation on the former employee
Which of the following would be an individual ethical lapse?
a. Shipping out goods early without customer's permission
b. Inflating your travel expenses
c. Following what other competitors are doing
d. Capitalizing ordinary expenses
Who of the following philosophers subscribe to ethical egoism?
a. Ayn Rand
b. Thomas Hobbes
c. Adam Smith
d. All of the above
In the Kelo case, what happened after the court ruled against the homeowners?
a. Their houses were torn down and Pfizer built its facilities
b. The city changed its plans and the houses were not torn down
c. The houses were torn down, but the site remains undeveloped
d. The homeowners appealed again and won the right to keep their homes
"If you think what we"re doing now is bad, you should have seen our actions 10 years
ago," is an example of:
a. A type of rationalization.
b. Comfort language for current activities and decisions.
c. A defense for criminal activity.
d. All of the above
e. Both a and b
Which is Warren Buffett's test for ethics?
a. The Categorical Imperative
b. The Front-Page-of-the-Newspaper test
c. The Wall Street Journal model
d. Ethical Egoism
e. None of the above
You had quite a night last night of partying. Because of excessive drinking, you are
unable to get to work today. When you call your supervisor you:
a. Should just say you have the flu.
b. Should just say you are sick.
c. Should disclose the prior night's activity.
d. None of the above
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
a. Randy's activities are ethical so long as disclosed.
b. Randy is using the time and resources of his employer in an unethical manner.
c. Randy's activities are ethical whether disclosed or undisclosed.
d. There is no conflict of interest in Randy's activities.
Which of the following is an example Albert Carr uses to illustrate bluffing?
a. A job applicant over 40 who dyes his hair.
b. A woman wearing make-up.
c. A job applicant who changes the list of magazines he reads on the job application.
d. Carr uses all of the above examples
Joseph Horne Company, a Pittsburgh department store chain, was the target of a
management leveraged buyout in 1986 and was suffering with the resultant $160
million in debt.
Horne executives were relieved when, in 1988, Dillard Department Stores, Inc., and
mall developer Edward J. DeBartolo agreed to buy Horne's stock for $74 million and to
assume the 1986 buyout debt.
As part of the deal, Dillard's installed data lines and computers in Horne's fourteen
stores to prepare for the consolidation. With the stores hooked into its Little Rock,
Arkansas, headquarters, Dillard's assumed control of Horne's merchandise purchasing.
Dillard's executives wanted financial and purchasing control because the contract price
was contingent upon a finding that Horne's financial statements were accurate. Horne's
CEO, Robert A. O"Connell, voiced his concerns to E. Ray Kemp, Dillard's vice
chairman, about the extent and speed of Dillard's assumption of control. Kemp told
O"Connell, "Trust me, it would take an act of God for this deal not to go through."
Dillard's had been acquiring department stores like Horne's all over the country, adding
196 stores in five years. From 1987-1991 Dillard's earnings had gained 20 percent
through its strategy of taking over financially troubled firms.
In 1990, however, Dillard's deal with Horne's fell through, and Horne sued Dillard's and
DeBartolo for breach of contract and fraud. Horne's suit alleged that Dillard's plan in
taking over the buying and data was to decrease the value of Horne's to get a bargain
Experts in the industry indicate that Horne demonstrated inexperience by allowing
Dillard's rapid infiltration. The contract provided that Horne could veto any proposal for
Dillard activity in Horne's business.
Between the time the contract was negotiated and Dillard's cancellation of the
agreement, Dillard's executives found that some Horne accounting practices were
questionable. But some industry experts and Horne executives said Dillard's often
"nickels and dimes" sellers to bring down the price.
Horne's suit also alleged that Dillard's told 500 employees that their jobs would be gone
after the takeover. Thirty percent of those employees quit before Dillard's and
DeBartolo withdrew. Because Dillard's took over merchandise buying, Horne
maintained, merchandise deliveries were late and the wrong merchandise was ordered
for critical periods, such as the holiday season.
A Pittsburgh National Bank officer testified in his deposition in the suit that a Dillard's
executive told him in 1988 that Dillard's might wait until Horne's bankruptcy to buy the
company. Dillard's denies the statement and the plan. Dillard's and Horne's settled the
suit in 1992.
a. Were the damages Horne's experienced just a consequence of a failed business deal?
b. Did Dillard's take advantage of a debt-ridden company?
c. What financial-disclosure obligations do takeover targets have?
d. Did Dillard's have any special obligations because of its access to Horne's data and
buying power?
e. Is it unethical to take advantage of a naive party in a commercial transaction?
Which of the following were convicted of bank fraud and securities fraud?
a. John Rigas
b. Michael Rigas
c. Ellen Rigas
d. All of the above were convicted
How much of a rebate did the government offer GM Volt buyers?
a. $5,000
b. $7,500
c. $10,000
d. 5%
You work in the finance division of a NYSE company. You have just learned that your
supervisor has been using information on quarterly returns, prior to the time they are
made public, to trade in the company's stock. You:
a. Need not do anything because the SEC will eventually uncover his activities.
b. Need not do anything because only officers are prohibited from trading on inside
c. Must confront the supervisor.
d. Must report the activity in some way.
When did questions about FINOVA's numbers first arise?
a. 1999
b. 2000
c. 2001
d. None of the above
William Aramony:
a. Was convicted of fraud and served a prison sentence.
b. Still received his compensation.
c. Had his pay taken by the federal court.
d. a and b only
e. a, b and c
Jeff Sanders, head of finance for Components, Inc. has just interviewed Laura Dern, an
employee from the finance department of InChip, Components' chief competitor. Laura
has explained that she has been passed over one too many times for a promotion at
InChip and is thus in the job market. As Laura is leaving she whispers to Jeff, "Look, I
have no contract at InChip that obligates me in anyway. I can begin immediately.
Further, I have been able to obtain copies of our newest computer chip designs. You"ll
have them before InChip even begins production."
a. Jeff should hire Laura on the spot without any worries about ethical breaches since
Laura is not under contract.
b. Jeff's hiring of Laura may constitute an ethical breach, but would not constitute
illegal conduct.
c. Jeff should not hire Laura, and must analyze the issue of whether to disclose Laura's
conduct to InChip.
d. Jeff should not hire Laura and need not worry about Laura's conduct and its impact
on InChip.
What was the basis for suits against Subway for their 12-inch claims about sandwiches
that were only 11 inches long?
a. Fraud
b. Deceptive advertising
c. Consumer fraud
d. There is no basis for litigation
Why does John Mackey believe many people go into business?
a. To maximize profits
b. To lift wages of employees
c. To offer a service or product that meets a need
d. For personal wealth
What was the standard Lavery imposed for changing the supplier?
a. If there was any question as to whether the apple juice was fake
b. If the employees could prove in a court of law that the concentrate was adulterated
c. If other companies stopped using the concentrate
d. If employees felt uncomfortable with the supplier
The SEC and Bank of America reached a settlement over charges the SEC brought
related to Bank of America's acquisition of Merrill Lynch:
a. That resulted in no fine to Bank of America.
b. That resulted in a $150 million fine paid by Bank of America.
c. That resulted in the dissolution of Bank of America.
d. That required Bank of America to cancel its acquisition of Merrill Lynch.
Who said, "I considered [quitting] on a number of occasions. I was very well
compensated. I didn"t have the nerve to quit"?
a. Sherron Watkins
b. Lea Fastow
c. Paula Reiker
d. David Delainey
Lee Iacocca, chairman and CEO of Chrysler Corporation, announced on January 27,
1988, that the automaker would be closing its Kenosha, Wisconsin, plant. Iacocca and
his board of directors were under significant pressure from shareholders due to
Chrysler's continuing poor financial performance. Chrysler had acquired the Kenosha
plant when it purchased American Motors Corporation in 1987. In his announcement,
Iacocca blamed national trade policy for Chrysler's declining sales and resultant
earnings problems.
At the Kenosha plant, which manufactured the Dodge Omni and the Plymouth Horizon,
5,500 of the 6,500 workers were to be laid off and production moved to a Detroit plant.
Kenosha, a city of 77,000 on the shores of Lake Michigan, depended heavily on
Chrysler's presence.
The announcement of the closing came at a critical time. Chrysler was negotiating to
renew its contract with the United Auto Workers (UAW). Also, the Kenosha plant
carried a history of union financial assistance. The UAW had loaned American Motors
over $60 million to keep the Kenosha plant running, and Chrysler had assumed the loan
obligations as part of the acquisition. Also, Wisconsin had paid $5 million for job
training at the Kenosha plant in 1987 after Chrysler promised that the plant would build
Omnis and Horizons for at least five more years.
Peter Pfaff, a member of the UAW Local 72 of Kenosha and an employee at the plant
since 1972, said: "I was there. We"ve got it on tape and in writing. They said they"d
stay. Greenwald (then Chrysler Motors chairman) keeps saying Chrysler never said that,
but I was there when he said it."
The Kenosha local threatened to delay negotiations on renewing the national contract
with 64,000 workers. After the threat, Iacocca announced that Chrysler would establish
a $20 million trust fund to aid the 5,500 Kenosha workers through housing payments
and educational funding. This fund would be in addition to severance pay, extended
unemployment benefits, and repayment of the UAW loans. While denying that Chrysler
was setting a precedent, Iacocca declared it had a "moral obligation" to Kenosha.
Wisconsin threatened to sue Chrysler over the job training program but agreed to hold
off in exchange for Iacocca's promise to extend production at the plant for several
months into the fall of 1988.
Iacocca stated that Chrysler was "guilty as hell of being cockeyed optimists. Blame us
for being dumb managers, for spending $200 million to put two old cars (the Chrysler
Fifth Avenue and the Dodge Diplomat) in an eighty-six-year-old plant, but please don"t
call me a liar when I"ve got to close it sooner than I thought." Iacocca sought
congressional support for converting the Kenosha plant to defense work by Chrysler.
Chrysler and the UAW negotiated a contract that provided additional unemployment
benefits for the 5,500 laid-off workers and more job security for the 1,000 workers who
would transfer to other Chrysler operations. Ultimately, the plant closing resulted in
3,700 layoffs.
By mid-1990, Kenosha was enjoying unprecedented economic growth. At a July 1990
ceremony in which engineers detonated explosives to destroy the 250-foot-high
smokestack of the Chrysler plant, dignitaries and former workers cheered. Kenosha
resident T. R. Garcia said at the blasting, "I think it's about time they got rid of it. What
we need to do is develop the lake front, and this thing is the last to leave." City planner
Ray Forgianni, Jr., added, "The community's image is probably the best it's been in 100
years. The closing was almost like a catalyst. The handwriting was on the wall-the
economy needed to diversify."
a. Did Chrysler have a moral obligation to the Kenosha workers and Wisconsin, or was
it just responding to pressure?
b. Do arrangements like Chrysler had with the UAW loans and Wisconsin interfere with
the ability to make business decisions? Review Iacocca's quote on business mistakes as
you evaluate the issue.
c. Were the shareholders required to pay twice for the closing - once in severance pay
and again in extended benefits?
d. Was Chrysler simply putting its duty to shareholders above its duty to Wisconsin,
Kenosha, and its workers? Is this proper? Is it ethical?
e. Was Chrysler's action just a catalyst for needed economic development?
f. Iacocca, after having stepped down as chairman of Chrysler, made a takeover offer
for Chrysler in 1995. What would Chrysler's ethical culture be like if Mr. Iacocca had
succeeded in his takeover bid?
What past changes had Time Warner made based on public protests on content?
a. Withdrew Madonna's book
b. Withdrew Last Temptation of Christ
c. Corrected Porky Pig's stutter
d. All of the above
Ben Small, a sole practitioner, has just decided to form a law partnership with his
lifetime friend, Harvey Steptoe. They agree to name the firm Steptoe and Small and to
split all profits. Ben is also a director for a publicly-traded telecommunications firm,
NewVector, Inc. Ben has just learned that Harvey is lead counsel is a lawsuit against
NewVector. Ben continues to serve as a board member and participates in sensitive
discussions about the lawsuit. Ben does not disclose that Steptoe is his partner. Ben's
feeling is that he and Harvey are as honest as the day is long and neither would
compromise their duties to NewVector and client, respectively.
a. Ben has a conflict of interest and must either resign as a director or leave the
b. The pledge of both Ben and Harvey is sufficient to cover the ethical issues on
c. It is Harvey's obligation to take action, not Ben's.
d. None of the above
Robert J. Stein was hired as the CFO for the American occupation effort in Iraq. As
someone who had the authority to award lucrative contracts to companies seeking
portions of the reconstruction efforts there, Mr. Stein wielded a great deal of power. Mr.
Stein had served time for felony fraud in the 1990s, but either the background check
was not completed or his criminal activity was deemed irrelevant for this position of
Mr. Stein and his wife have been accused of being involved in the following
Philip H. Bloom, the owner of several U.S.-based construction companies seeking
Iraqi business wired $140,000 to allow Mr. Stein to purchase real estate in North
Other contractors spent $65,762.63 to purchase cars for Mr. Stein and his wife (a
Chevrolet and a Toyota).
One contractor gave $44,471 for home improvements for the Steins' home.
$48,073 for jewelry paid for from funds totaling $258,000 that had been transferred
into the Bragg Mutual Federal Credit Union account begun by the Steins.
A donation of $7,151.58 to the Steins that was used by Mr. Stein's wife to purchase
a "towing service".
Ironically, $200 of the credit union fund was transferred to the clerk of a Federal
District court for restitution payment for his earlier conviction.
Mr. Bloom was awarded a significant number of contracts in Iraq. Which of the following
best describes the conduct of Mr. Bloom and Mr. and Mrs. Stein?
a. The conduct is not a violation of the FCPA because Mr. Stein is a U.S. government
official and Mr. Bloom owns a U.S. company, but the two may have violated U.S. laws
that prohibit bribery
b. The conduct is a violation of the FCPA because the money and gifts were given with the
idea of being awarded contracts
c. The conduct is a violation of the FCPA because the money and gifts related to
transactions in international operations
d. The conduct, while ethically dubious, is perfectly legal
Two male students fired guns off the balcony of Linda's apartment. The police were
able to see which apartment it was by counting floors and windows. While the police
run to Linda's apartment, her two friends run out her door and disappear into the crowd
of students out and about on a Friday night. When the police question Linda she refuses
to tell them who her two friends with the guns were. "I would never rat on a friend," is
Linda's statement. One of the police officers tells Linda she could be charged with
obstruction of justice. Linda still refuses. Which school of ethical thought would best
suit Linda?
a. Moral relativists
b. Utilitarians
c. Ethical egoist
d. Virtue
Another name for large-charge restructuring is:
a. Big bath.
b. Spring-loading.
c. Cookie jar reserves.
d. All of the above
As a result of the Goldman "trading huddles":
a. Auction-rate securities are now illegal.
b. There are now new regulations of analysts.
c. Investment banking houses can no longer employ analysts.
d. The definition of sophisticated investors has been changed.
"We all don"t share the same ethics" fails to consider common values that do exist in
Your supervisor has had a calendar with pictures of naked women on the inside panel of
his desk for several months. A secretary spotted the calendar and commented to your
supervisor that it was not appropriate for an office. Your supervisor took down the
calendar and has asked you to back him up if any complaints are filed. He has asked
you to say that you never saw the calendar. It would not be unethical for you to do as
your supervisor requests because he has removed the calendar.
"The lawyers have okayed this," is a signal that the decision/action is legal and ethical.
Taking your current employer's customer list to a prospective employer is a breach of
Milton Friedman supports social spending by businesses if they can show a benefit to
the shareholders.
The mayor owns property next to one of the proposed sites for the city's new baseball
stadium. The mayor has a conflict of interest and should not vote on the location of the
stadium when the city council takes action on the site.
Discuss norm shifting and speeding.
Employers cannot impose restrictions on office romances.
No officers at Royal Dutch were aware of the reserves overstatements.
Describe which ethical models would help auditors and financial officers as they work
to prepare fair and accurate financial statements.
Some employees remain silent about issues they see and simply continue working at the
If my supervisor asked me to cover for him by lying about his whereabouts, I should
agree to do it but remind him that I can't make it a habit.
Dumping a product that has been outlawed in the U.S. in other countries is ethical.
The WorldCom stock frenzy is unique in business history.
Most ethical lapses are sudden and not foreseen.
The American Medical Students Association has taken no position on perks from
pharmas for docs.
A member of the city council who is employed by a waste management firm would
have a conflict of interest in voting on the city's award of a contract for the handling of
the city's waste.
The mayor owns property next to one of the proposed sites for the city's new baseball
stadium. The mayor has a conflict of interest and should not vote on the location of the
stadium when the city council takes action on the site.
List and explain three schools of ethical thought.
Employers cannot monitor employee e-mails.

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