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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
2.
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,”
3.
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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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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Chapter 02 - Business Ethics
4.
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.
6.
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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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
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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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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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
Register, October 23, 1990, p. 2A.
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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