978-0078023866 Chapter 2 Internet Exercise and Supplements Part 2

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Chapter 02 – Business Ethics

Answers to ‘Practicing Ethics: Bribe the Terrorists?’ Questions (p. 79)

1. Chiquita’s general counsel claimed that the bribes were morally proper to save lives. Originally, the

payments had been lawful, and Chiquita argued they were not voluntary and were a response to

Law.com asked experts about how the episode should have been handled:

As for handling the payments to the AUC: Robert Litt, says his client [former Chiquita general

counsel Robert Olson] acted appropriately. “If your child is kidnapped by terrorists who demand

She sees the Chiquita tale offering an important lesson for other companies struggling with moral

dilemmas. People of integrity often feel entitled to respond in kind when they think someone else

2. Prosecutors’ particular concern was whether Chiquita executives had ignored the law in continuing

to make payments for nearly a year after they had first reported the bribes. Prosecutors

Answers to ‘Retaliation’ Questions (p. 80)

1. The students could have a discussion based on this question.

2. The students could have a discussion based on this question.

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Chapter 02 – Business Ethics

Answer to ‘Assuring an Ethical Culture at Raytheon’ Questions (p. 81)

1. Students’ opinions will vary. Some of them may say that ethics training is likely to have a

2. Students’ answers will vary. Some of them may say that companies with reputations for high

Answers to Chapter Questions (p. 81)

1. Mary could find other ways to help the high school find the necessary funds. Are there other

corporate sponsors or community funds available? Could she plan a school fund-raiser, or help

the school apply for a government grant? Alternatively, Mary could seek out other sales prospects

a. The students could have a discussion based on this question.

b. Students’ answers may vary. Some of them may agree with their conclusion. Twenge says

that the blame should be placed on American parents who say that every child is “special,”

a. A survey of nearly 3,000 undergraduate business students from 58 universities and colleges

in 32 states was conducted. It was regarding certain general ethics-related attitudes and the

b. In the same survey, participants who report being very religious are slightly but significantly

more ethically inclined than survey participants who are less religious.

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Chapter 02 – Business Ethics

a. The students could have a discussion based on this question.

b. The students could have a discussion based on this question. Bok argues that unmarked

c. The students could have a discussion based on this question.

5. The students could have a discussion based on this question.

a & b. Yes. Other factors most often mentioned were productivity, achievement, and life

c. A consensus approved testing without informed consent on persons was judged to be

d. The average human life is worth $28,000.

7. The students could have a discussion based on this question.

8. The students could have a discussion about the ethical responsibilities of the pharmacist:

9. The executive response was as follows:

10.

a. In one survey, about 60% of employees and executives said they believe taking office

b. In the same survey, 40% of employees believed their employers are committing a serious

11.

a. According to one commentator, what it means is that “we are a nation of lascivious

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Chapter 02 – Business Ethics

b. “The real engine at work here, for better or worse, is the profit motive. If this patently obvious

point is absent from the complaints of social conservatives, it is because the truth of the

12. The students could have a discussion based on this question.

13. According to one survey, honesty and integrity ranked as the most critical quality in a job

14.

a. Students’ answers will vary. Cakic rejects the idea that drugs would give users an unfair

b. Students’ answers will vary. Cakic says that the drugs are very attractive to students and

virtually impossible to ban. He recommends studies to enhance the safety of drug use.

15–17. The students could have discussions based on these questions.

18. Several studies conclude that lying is commonplace in sales practice. A 1997 survey of sales

managers found 49 percent of those managers reporting that their salespeople had lied on a

An SMM/Equation Research survey of 316 sales and marketing executives found 47 percent of

19. The students could have a discussion based on this question.

20.

a. Philosopher James S. Fishkin, The Limits of Obligation (New Haven: Yale University Press,

1982) discusses the famine relief problem and explains the need for a “cutoff for heroism”

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Chapter 02 – Business Ethics

b. Students’ opinions will vary.

Supplementary Materials

I. Practicing Ethics: Deans’ Quiz

The Wall Street Journal reported the results of a scholarly survey of 291 business-school deans:

Here’s a pop quiz for business-school deans: Would you admit a clearly unqualified student to

your school just because the candidate’s family donated $1 million? Forty-eight percent of the

291 deans… answered yes.

How would you respond to some of the other questions asked of the deans: (1) What if the potential

student’s father was just a friend and not a donor? (2) Would it be ethical for a dean to remove an

honor code violation from a student’s record in exchange for a $1 million donation to the school? (3)

Would it be ethical for a dean to personally accept a $500,000 bequest that was meant for the school

but was mistakenly willed to the dean?

Answer: 25.6% of the deans said they would admit the student if the father was just a friend and not a

II. Practicing Ethics: Clean Up Accounting

A Crusade to Clean Up Accounting

According to The Chronicle of Higher Education: “Lawrence A. Ponemon quit his first

accounting job after just one year. A manager asked him to underreport his hours, he says,

and when he wavered, his time sheet was fudged anyway.”

Ponemon, now an accounting professor at the State University of New York at Binghamton,

says that in his first auditing job with Deloitte Haskins & Sells (now Deloitte & Touche), he put

in 88 hours, but reported only 41. “I was pressured to do that,” he says “to the point where my

senior auditor erased my time sheet hours.” Ponemon says that underreporting is rampant

because it makes accounting managers look efficient and it keeps clients happy by avoiding

overtime charges. A spokesman for Deloitte & Touche said that underreporting “wasn’t the

norm then, and it isn’t the norm now.”

Assume you are in Ponemon’s position as a beginning auditor and your boss instructs you to

underreport your hours and says, “This makes us all look better. Nobody gets hurt.” What would you

do?

Answer: This episode is drawn from Ben Gose, “A Crusade to Clean Up Accounting,” The Chronicle

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Chapter 02 – Business Ethics

of Higher Education, Nov. 30, 1994, p. A8. Clearly, an employee should not violate company policy.

However, Professor Lynn Paine Sharpe of the Harvard Business School reminds us: “Students aren’t

prepared for the difficulties with what appear to be simple ethics issues. It seems an easy matter to tell

III. Practicing Ethics: Destroy All Girls

Galyan’s Trading Co. is a Plainfield, Indiana subsidiary of The Limited, Inc. A Galyan’s customer in

Minnesota complained when she saw a slogan on a Galyan’s shirt saying, “Destroy all girls.” How

would you respond if you were the Galyan’s CEO? The Associated Press details the company’s

decision:

A maker of in-line skating equipment thought it could attract aggressive young male buyers

with a simple slogan: “Destroy all girls.” An offended retailer came up with an equally forceful

response—ending all sales.

Galyan’s Trading Co. announced Monday it sent back the fall line of T-shirts, sweatshirts, pants, and

boxer shorts made by Senate, a private company based in Huntington Beach, Calif. The slogan was

carried on the apparel’s laundry-instruction tags. Galyan’s said it is also returning Senate’s wheels,

bearings, and other skating gear carried at its nine sporting goods stores in Indiana, Ohio, Minnesota,

and Kansas. Senate said the slogan was not meant to be taken literally. “The tag was supposed to

say, ‘Kill your parents,’ but some people thought that was too extreme. Go figure,” said Arlo Eisenberg,

one of the five partners who founded Senate three years ago.

In your opinion, was Galyan’s making a principled decision, a practical decision or both? If the product

were a video, book or compact disc with the same “destroy all girls” message, should the retailer

remove it from the shelves?

Answer: The argument that it was a principled decision is that individuals and businesses should not

sell items likely to be offensive or incite violence against segments of the population. The argument

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Chapter 02 – Business Ethics

IV. Practicing Ethics: Public Policy Issues

Banker’s Fetal Position

Tim Williams is using his skills and connections as a businessman to fight what he regards as

a sin against God: abortion. The assistant vice president and trust investment officer at First

National Bank of Dayton (Ohio) belongs to Financial Professionals for Life. The group of about

fifty bankers, stockbrokers and insurance agents shares information about abortion and

supports boycotts against companies that give to Planned Parenthood. “Basically, we want to

carry the life ethic into our professional lives,” said Williams. “The object of corporate charity is

to create good will. Why make such a controversial gift? It’s not doing the company or the

shareholders any good.”

Financial Professionals for Life has joined a long list of groups that oppose abortion, including

Life Decisions International, which has spearheaded boycotts against corporate donors to

Planned Parenthood. A number of corporations, including AT&T, have cut off support to

Planned Parenthood when the issue was raised or boycotts threatened. “My wife is reminding

me all the time which products we shouldn’t buy or restaurants we shouldn’t go to,” said

Williams, a father of four children with a fifth on the way.

Financial Professionals is now looking to target insurance companies that pay for abortions.

“Do you want to make a premium payment to an insurance carrier that pays for—and thereby

encourages—abortion?” Williams asked. He added that insurance companies my have an

economic reason to cover abortions because the medical costs are less expensive than

carrying a baby to term. “They lose in the long run. The baby that gets aborted doesn’t get to

buy insurance.” Williams said that the Dayton bank where he works does not contribute to

Planned Parenthood, though some of his coworkers are pro-choice. “We agree to disagree,”

he says. Jeffrey Zack, “Ethics in the News,” Business and Society Review, No. 83 (Fall1992),

p. 4. Reprinted with permission of the copyright holder, Business and Society Review.

Questions that can be explored with students include: In dealing with ethics-public policy questions

such as abortion, should managers strictly divide their private and professional lives? Do you have an

ethics-public policy cause to which you are so committed that you will practice it as an active part of

your professional life? Should Williams be dismissed from his job if his anti-abortion activism hurts his

employer? Should First National Bank of Dayton deal differently with Williams if he were, for example,

a white supremacist or the leader of an anti-gay organization? Should Williams decline to do work for

his employer where that work assists a company that he knows to be a contributor to Planned

Parenthood?

Selected Bibliography

Daniel Akst and Lee Berton, “Accountants Who Specialize in Detecting Fraud Find Themselves in

Great Demand,” The Wall Street Journal, February 26, 1988, p. 17.

Ronald E. Berenbeim, “The Corporate Ethics Test,” Business and Society Review, Fall, 1987, p. 22.

Lee Berton, “Audit Firms are Hit by More Investor Suits for not Finding Fraud,” The Wall Street

Journal, January 24, 1989, p. A1.

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Chapter 02 – Business Ethics

Michael Brody, “Listen to Your Whistleblower,” Fortune, November 24, 1986, p. 77.

Jose De Cordoba, “White-Collar Inmates Find that Tennis and Good Food do not a Prison Unmake,”

The Wall Street Journal, June 9, 1987, p. 35.

Editorial, “Handcuffs for Corporations,” The Wall Street Journal, February 11, 1991, p. A10.

Daniel Hausman, “Are Markets Morally Free Zones?” Philosophy and Public Affairs, Fall 1989, p. 317.

Arthur Levitt, Take on the Street: What Wall Street and Corporate America Don’t Want You to Know

(Pantheon Books 2002).Los Angeles Times, “Study: Campus Cheaters Prosper,” Des Moines

Denise K. Magner, “Students Urge Graduate Business Schools to Emphasize Ethical Behavior and

Require Courses in Standards,” The Chronicle of Higher Education, March 29, 1989, p. A31.

R.H. Morrison, “Nothing Succeeds Like an S.O.B.,” Business and Society Review 28, Winter 1978-79,

p. 69.

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