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Chapter 04 - Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking
V. ANSWERS TO PROBLEMS AND PROBLEM CASES
1. First you find the facts that will help you make the right decision. At the very least, you want
to discover why she has missed work and is distracted. She may have a problematic
pregnancy or other health problems. Does she have other children? Does her husband work
2. You should be concerned about the certainty of the “facts” presented regarding Crowler’s
decision to expand its plant in Texas and/or move to Indonesia. Do we have all the facts we
need? How confident are we of our profit projections? Will we have the productivity and
quality in Indonesia that our fixtures require? Have we considered the impact on all our
3. A rights theorist will probably consider whether it is appropriate to lure people into debts that
they will have difficulty repaying on terms that the people may have deceived themselves
into believing would not change. In other words, a rights theorist would consider whether
NationalOne should protect its customers from themselves. Do the customers have a right to
be protected by the very person who contracts with them to lend money to them by not
4. These four scenarios combine to help students address a highly topical issue, one that has
become important in the sports business. In addition to the Donald Sterling and Jerry
Should an employee lose his job because he has committed an unlawful, violent or abusive
act? How severe must the act be? Does it matter whether the act was committed on the job
or away from work? Is it appropriate for a firm to fire an employee and yet expect that it is
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 04 - Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking
5. There are enough conflicting facts in this problem to permit either decision. A rights theorist
might (we don’t know for sure, because we’re not talking fundamental rights here, so ranking
the rights is hard to do) argue that the mother’s rights to bond with the child and have a
6. This decision is clear for a profit maximizer: it is illegal to use DDT, so Eartho won’t
manufacture it. However, Eartho may argue for the law to be changed, using utilitarian and
rights theory arguments. A utilitarian argument is that the environmental costs of using DDT
7. Ira Glass chose to air a special edition of “This American Life” to expose Daisey’s deception
and the show’s role in failing to uncover the deception and prevent the airing of the
8. The facts of this real-world example are the inspiration for the recently Oscar-nominated
film, The Wolf of Wall Street. This problem case shows how greed infects not only the
9. By threatening a Senate hearing, Senator Spector is making an argumentum ad baculum (if
you don’t discipline the Patriots more, we’ll consider legislation that will be harmful to the
NFL). By equating Goodell with a kindergartner, Spector is engaging in argumentum ad
10. This is a classic example of overconfidence. The CAO believes that everything will work out,
that future earnings will increase to make up for any overstatement in a current quarter.
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 04 - Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking
There is also a failure to understand the complexity of the decision. Will it be that easy to
turn profitability around? Will it be easy to justify the “managing” of earnings? Finally, and
To resist the CAO’s request to manage earnings, you should have started many years ago.
First, you should have a peer support group. One source of members of the group is the
group of employees who are your age and at your professional level in the firm. Second, you
should have a mentor who is sufficiently experienced to give good advice and be a valuable
sounding board and who is well connected in the firm and can protect you. Third, you should
11. You will want to lead ethically by being ethical yourself, communicating the firm’s code of
ethics to your staff, relating the code of ethics to the work your staff will be doing (including
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
