Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Collins Instructor’s Guide
CHAPTER QUESTION 6: WHAT ARE THE BENEFITS OF OFFERING PROFIT
SHARING AND STOCK OPTIONS, AND CREATING AN EMPLOYEE STOCK
OWERSHIP PLAN AND COOPERATIVES? DESCRIBE EACH OF THESE
TECHNIQUES FOR EMPOWERING EMPLOYEES.
oProfit sharing, where companies share profits with employees, is very ethical, motivating,
oStock options give an employee the right to purchase a specific number of company shares
oSome privately-held companies, whose stocks are not sold on the open market, offer
oUnder an employee stock purchase plan, employees request to have deductions taken out of
oEmployee Stock Option Plans (ESOPs) take stock options one step further in empowering
oProducer, consumer, and employee cooperatives are an alternative communal way to govern
a business and raise capital.
oEmployee cooperatives are organizations owned by the employees and democratically
governed—one vote per employee-owner. Employee cooperatives can be found in a
FOR DISCUSSION: Ask students if they were a CEO, would they limit profit sharing plans
to executives or make available to all employees. Discuss the pros and cons of both
possibilities.
CHAPTER 10 KEY WORDS
Abraham Maslow (p. 257): developmental psychologist who differentiated five categories of
hierarchical needs every individual has: physiological, safety, social, self-esteem, and
self-actualization.
Appreciative Inquiry (p. 271): team-based management technique that focuses on the strengths
of both the employee and the organization to achieve superior performance.
1-1
Collins Instructor’s Guide
Bullying (p. 261): a repeated verbal abuse or abusive conduct that is threatening, humiliating,
and intimidating, and interferes with work.
Cooperatives (p. 276): an alternative communal way where producers, consumers, or employees
jointly own a business.
David McClelland (p. 258): differentiated three types of human needs – affiliation,
achievement, and power – that can be rated on a high, moderate, low scale.
Employee engagement (p. 256): an emotional bond or attachment an employee has to the work
task, organization, and its members.
Empowerment (p. 264): giving employees decision-making authority, which can be further
solidified with an ownership stake in the organization.
ESOPs (p. 275): refers to an Employee Stock Option Plan where all full-time employees are
given the opportunity to have a significant equity stake in the company.
Frederick Herzberg (p. 259): differentiated job satisfaction factors or “motivation factors”
which include achievement, recognition, work itself (doing a complete job), responsibility,
advancement, and growth from job dissatisfaction factors or “hygiene factors” which include
company policies and administration, quality of supervision, relationship with boss, working
conditions, base wage or salary, and relationship with peers.
Meaningful work (p. 261): spending time at work to achieve something that is personally
desirable and engages an employee’s entire intellectual, physical, and emotional energies in the
work that needs to be done because it is what he or she feels destined to do.
Open Book Management (p. 270): technique whereby managers share relevant financial and
operational information with nonmanagement employees so that they can better understand the
organization’s financial situation and operational issues, and make better decisions.
Organizational justice (p. 260): fair treatment of employees in terms of decision-making
procedures, information conveyance, treating each other, and distribution of work outcomes.
Pinch theory (p. 269): conflict resolution technique where a person being treated unfairly
engages the person contributing to the conflict in developing a solution.
Scanlon-type gainsharing plans (p. 273): technique to empower employees by delegating
institutional responsibility and accounting in improving operations to employee teams that elicit,
evaluate, and implement continuous improvement suggestions and receive financial rewards for
surpassing historical standards.
Stock options (p. 275): an option given to employees that provides them the right to purchase a
specific number of company shares at a fixed price by a particular future date, typically 10 years.
1-2
Collins Instructor’s Guide
Team problem-solving process (p. 270): an eight-step process that accesses each team
member’s unique knowledge to generate solutions with the highest likelihood of achieving
superior performance.
CHAPTER 10 ANCILLARY MATERIALS
Websites to Explore
“100 Best Companies to Work For” winners, Fortune, available at:
http://money.cnn.com/magazines/fortune/bestcompanies/.
Top Small Company Workplaces, available at:
http://www.winningworkplaces.org/topsmallbiz/index.php#2010.
Appreciative Inquiry, available at: http://appreciativeinquiry.case.edu/default.cfm.
The National Center for Employee Ownership, available at: http://www.nceo.org/.
U.S. Federation of Worker Cooperatives, available at: www.usworker.coop.
Workplace Bulling Institute, available at: http://www.workplacebullying.org/; Stop
Workplace Bullying, available at: http://bullyfreeworkplace.org/.
Best Place to Work Video
Whole Foods’ CEO John Mackey on “Conscious Capitalism,” available at:
http://www.youtube.com/watch?v=CYJl3DOMGM8&feature=related.
Business Ethics Issue Video
“College, Inc.,” Frontline, about for-profit universities; May 4, 2010, 55 minutes,
available at: http://www.pbs.org/wgbh/pages/frontline/collegeinc/view/?
utm_campaign=viewpage&utm_medium=grid&utm_source=grid.
TEDTalks Videos
Motivation and Your Internal Drives: Tony Robbins discusses the "invisible forces" that
motivate everyone's actions; February 2006, 22 minutes, available at:
http://www.ted.com/talks/tony_robbins_asks_why_we_do_what_we_do.html.
Pursuing Your Dreams: At his Stanford University commencement speech, Steve Jobs,
CEO and co-founder of Apple and Pixar, urges us to pursue our dreams and see the
opportunities in life's setbacks; June 2005, 15 minutes, available at:
http://www.ted.com/talks/steve_jobs_how_to_live_before_you_die.html.
Conversations with Charlie Rose
A conversation about President Obama's speech on Wall Street marking one year since
the fall of Lehman Brothers and the global economic recovery plan; September 14,
2009, 60 minutes, available at: http://www.charlierose.com/view/interview/10604.
A conversation with author Jonathan Zittrain about his book The Future of the Internet
and How to Stop It; May 13, 2008, 31 minutes, available at:
http://www.charlierose.com/view/interview/9081.
CHAPTER 10 ETHICAL DILEMMA ANALYSIS
1-3
Collins Instructor’s Guide
Each chapter contains three real-life ethical dilemmas: (a) What would you do? (all scenarios
provided by my students), (b) Let’s Build a Building (all scenarios provided by a construction
consultant), and (c) In the Real Word: Enron (more in-depth explanations available in Denis
Collins (2006) Behaving Badly: Ethical Lessons from Enron).
Have students apply Exhibit 5.11 “Critical Thinking Decision-Making Process Table” to analyze
these ethical dilemmas (instructions below). By doing so, students develop a habit for analyzing
decisions that take into consideration ethical concerns.
Step 1: Write the decision options in the appropriate column below.
Step 2: Apply the seven “Applying Ethical Theories to Decision Making” questions to the
decision to obtain relevant ethical information.
Step 3: Insert the ethical strength and weakness revealed by each of the seven ethical questions in
the appropriate column below.
Step 4: Review the option strengths and insert in the options column what “value” supports the
option (i.e., honesty, loyalty, efficiency, respect, job security, profits, etc.)
Step 5: Given the strengths and weaknesses, choose a decision option, explain why that option
and value were chosen rather than the alternative options, and determine how to manage the
weaknesses associated with the option chosen.
NOTE ON ETHICAL DILEMMA ANALYSES AND AUTHOR RECOMMENDATION – The
“author” (me) is stating his best judgment. All the ethical dilemmas are difficult and involve
tradeoffs, some more so than others. As noted throughout the textbook, everyone has a different
moral intuition and those reasoning at the same level of moral development can disagree about
the right thing to do. In addition, everyone has a different level of risk comfort (my risk comfort
is rather high). The teacher can use my recommendation as grounds for student agreement or
disagreement.
CHAPTER 10 ANALYSIS FOR WHAT WOULD YOU DO?
1) Who are all the people affected by the action?
2) What option benefits me the most?
3) What option does my social group support?
1-4
Collins Instructor’s Guide
4) What option is legal?
5) What option is the greatest good for the greatest number of people affected?
Inform the Vice President (#2): The Vice President has the authority and responsibility for
6) What option is based on truthfulness and respect/integrity toward each stakeholder?
Inform the Vice President (#2): The Vice President needs to be made aware that Tom is not
7) What option would a virtuous person do?
Inform the Vice President (#2): Moral character is strengthened by contributing to
Option Option Strengths Based on
Application of Ethical Theories
Option Weaknesses Based on
Application of Ethical Theories
#2: Inform Vice
President
Loyalty to organization Upset boss
AUTHOR’S RECOMMENDATION: Option 2: Inform the Vice President – This is based on
utilitarianism, deontology, and virtue ethics. Your boss is undermining the Vice President’s
likelihood of product success. The Vice Presidents needs to be made aware of the status of her
product’s progress. Share your concerns with your boss in hopes that he can initiate a new
discussion in terms of product priorities. At the very least, the Vice President’s product idea must
be given the best opportunity to succeed.
1-5
Collins Instructor’s Guide
CHAPTER 10 ANALYSIS FOR LET’S BUILD A BUILDING
1) Who are all the people affected by the action?
2) What option benefits me the most?
3) What option does my social group support?
4) What option is legal?
5) What option is the greatest good for the greatest number of people affected?
6) What option is based on truthfulness and respect/integrity toward each stakeholder?
7) What option would a virtuous person do?
Option Option Strengths Based on
Application of Ethical Theories
Option Weaknesses Based on
Application of Ethical Theories
Minimal hassles
future donations
Holds general contractor
accountable
Option and Value
#1: Pay $70,000: Efficiency, economic interests
Chosen Because #1: Pay $70,000: Future donations likely to exceed this amount
How Will You
#1: Pay $70,000: Ensure that future donations are forthcoming
1-6
Collins Instructor’s Guide
AUTHOR’S RECOMMENDATION: Option 2: Refuse and lose future donations – This is based
on cultural relativism, deontology, and virtue ethics. The general contractor is committing a
fraud, one that most likely happened in the past and will happen in the future. Hold the general
contractor accountable for behaviors. Contact other general contractors for future contracts and
fundraising activities.
CHAPTER 10 ANALYSIS FOR IN THE REAL WORLD: ENRON
1) Who are all the people affected by the action?
2) What option benefits me the most?
3) What option does my social group support?
4) What option is legal?
Cancel the meeting with Lay and wait (#1): You are legally obligated to follow orders if they
5) What option is the greatest good for the greatest number of people affected?
Continue your own investigation and meet with Lay as scheduled (#2): You don’t trust that
6) What option is based on truthfulness and respect/integrity toward each stakeholder?
Continue your own investigation and meet with Lay as scheduled (#2), and confidentially
notify Arthur Andersen (#3): It is essential to investigate these concerns. Continue your
7) What option would a virtuous person do?
Continue your own investigation and meet with Lay as scheduled (#2), and confidentially
notify Arthur Andersen (#3): Moral character is strengthened by insisting on meeting with
1-7
Collins Instructor’s Guide
Option Option Strengths Based on
Application of Ethical Theories
Option Weaknesses Based on
Application of Ethical Theories
The CEO must be well-informed on
the matter
Option and Value
Chosen
#1: Cancel Lay meeting and wait to hear from lawyers: Loyalty to
chain-of-command
#2: Continue investigation and meet with Lay: Loyalty to profession,
Chosen Because #1: Cancel Lay meeting and wait to hear from lawyers: You’ve been
instructed to. You have informed all those you should.
#2: Continue investigation and meet with Lay: You want to make sure that
How Will You #1: Document your efforts in case things worsen.
1-8
Collins Instructor’s Guide
Manage Chosen
Option Weaknesses
#2: Inform Lay that you’ve been told by in-house lawyers to cancer your
meeting but didn’t agree with their direction; document everything
AUTHOR’S RECOMMENDATION: Option 2: Continue your own investigation and meet with
Lay as scheduled, and Option 3: Confidentially notify Arthur Andersen – This is based on
deontology and virtue ethics. Continue your investigation and meet with Ken Lay as planned.
The CEO must be fully informed on behalf of the shareholders. Also inform Arthur Andersen to
see if they can provide you with additional support. Document as much information as you can,
including your own performance reviews in case Fastow retaliates. If dissatisfied with the
reaction of Lay and Arthur Andersen then you must blow the whistle to the SEC or the Wall
Street Journal.
1-9
