978-0470639948 Chapter 11 Solution Manual Part 4

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Collins Instructor’s Guide

CHAPTER 11 KEY WORDS

Americum (p. 287): any group of 350 million people living an American lifestyle.

Cap and Trade (p. 289): an emissions trading system which combines federal controls that limit

the amount of pollution permitted with the establishment of a market where businesses can trade

licenses to pollute.

Carbon offsets (p. 307): paying another organization to reduce greenhouse gas emissions on the

company’s behalf.

Climate change (p. 286): The rise of the Earth’s temperature by 1.4 degrees Fahrenheit since the

Industrial Revolution.

Dow Jones Sustainability Index (p. 291): created in 1999 as a way to track the financial

performance of leading sustainability-driven companies, companies are assessed according to

triple bottom line criteria: economic, environmental, and social performance.

Earth Day (p. 287): held every year on April 22, the day was established by Senator Gaylord

Nelson in 1970 to further educate students about the need to preserve natural resources and unite

environmental organizations around a common cause.

Environmental Management System (EMS) (p. 301-302): a document that describes how the

organization conducts environmental policy development, environmental planning,

environmental implementation, environmental monitoring and corrective actions, and

management review.

European Union’s Packaging and Packaging Waste Directive (p. 305): A European Union

law passed in 1994 regulating the recovering and recycling of all product packaging.

Global Reporting Initiative (GRI) (p. 307): general guidelines for sustainability reporting that

allows for some environmental performance comparisons between organizations.

Green Tier (p. 290): A program initiated in 2006 in Wisconsin that provides regulatory

flexibility, permit streamlining, and other incentives for businesses that implement an

Environmental Management System (EMS)

Kyoto Protocol (p. 289): an international agreement signed by many countries, but not the

United States, that established a goal to reduce worldwide greenhouse gas emissions five percent

below the 1990 level by 2012.

Leadership in Energy and Environmental Design (LEED) (p. 305): a rating system

established by the United States Green Building Council for certifying building construction and

remodeling as being environmentally friendly.

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Montreal Protocol (p. 289): an international agreement signed by President Ronald Reagan in

1987 that phased out the use of chlorofluorocarbons (CFCs) because they eroded the Earth’s

ozone layer.

Sustainable products checklist (p. 300): a comparative evaluation process for determining

which supplier products are the most environmentally friendly.

The Natural Step (TNS) framework (p. 304): a conceptual tool for environmental analysis that

attributes the root causes of environmental problems to four issues: removing too many

substances from the Earth’s crust, producing too many synthetic compounds that are difficult for

nature to break down, manipulating the ecosystem, and inefficiently and unfairly meeting human

needs worldwide.

Transcendentalists (p. 287): a movement in the 1800s influenced by Ralph Waldo Emerson and

Henry David Thoreau that emphasized the importance of individualism and that an ideal spiritual

state transcended physical existence.

Triple Bottom Line (p. 284): an organizational performance approach that assesses three

performance factors: economic performance, social performance, and environmental

performance.

Waste equals food (p. 293): central theme of eco-friendliness where one organization’s waste

becomes organization’s resource input.

CHAPTER 11 ANCILLARY MATERIALS

Websites to Explore

Newsweek “Green Rankings,” available at:

http://www.newsweek.com/feature/2010/green-rankings.html.

Fortune, “The Business of Green,” available at:

http://money.cnn.com/magazines/fortune/greenbiz/.

White House, Energy and the Environment, available at:

http://www.whitehouse.gov/issues/energy-and-environment.

Union of Concerned Scientists, available at: http://www.ucsusa.org/.

Climate Crisis (Al Gore), available at: http://www.climatecrisis.net/.

Business and Sustainable Development: A Global Guide, available at:

http://www.iisd.org/business/.

Environmental Statistics

oInternational Energy Agency, available at: http://www.iea.org/stats/index.asp.

oU.S. Energy Information Administration statistics, available at:

http://www.eia.gov/.

oU.S. Department of Commerce, National Climatic Data Center, available at:

http://www.ncdc.noaa.gov/oa/ncdc.html.

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Green Tier, Wisconsin Department of Natural Resources, available at:

http://dnr.wi.gov/org/caer/cea/environmental.

Dow Jones Sustainability Index, available at: http://www.sustainability-index.com/.

Green Guide, available at: www.thegreenguide.com.

Wal-Mart Sustainability, available at: http://walmartstores.com/Sustainability/.

The Natural Step, available at: http://www.naturalstep.org/.

U.S. Green Building Council, available at: http://www.usgbc.org/.

Global Reporting Initiative, available at: http://www.globalreporting.org/Home.

Best Place to Work Video

Best Place to Work – Mayo Clinic, available at:

http://money.cnn.com/video/fortune/2008/01/22/bpw.mayo.fortune/.

Business Ethics Issue Video

“Heat,” Frontline, about America’s energy landscape; October 21, 2008, 120 minutes,

available at: http://www.pbs.org/wgbh/pages/frontline/heat/view/?

utm_campaign=viewpage&utm_medium=grid&utm_source=grid.

TEDTalks Videos

Cradle-to-Cradle Eco-Friendly Design: Green-minded architect and designer William

McDonough asks what our buildings and products would look like if designers took into

account “all children, all species, for all time”; February 2005, 20 minutes, available at:

http://www.ted.com/talks/william_mcdonough_on_cradle_to_cradle_design.html.

Climate Change: Al Gore presents evidence that the pace of climate change may be even

worse than scientists recently predicted; March 2008, 28 minutes, available at:

http://www.ted.com/talks/al_gore_s_new_thinking_on_the_climate_crisis.html.

Conversations with Charlie Rose

A conversation with Shai Agassi, CEO of Better Place about his plans for an electric car

infrastructure; December 1, 2010, 25 minutes, available at:

http://www.charlierose.com/view/interview/11323.

A conversation with author Thomas L. Friedman about his book Hot, Flat, and

Crowded: Why We Need a Green Revolution–and How It Can Renew America;

September 9, 2008, 53 minutes, available at:

http://www.charlierose.com/view/interview/9249.

CHAPTER 11 ETHICAL DILEMMA ANALYSIS

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).

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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 11 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?

4) What option is legal?

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5) What option is the greatest good for the greatest number of people affected?

Mixed. The magnitude of this one purchase to improving the environment is minimal, yet it

6) What option is based on truthfulness and respect/integrity toward each stakeholder?

Neither: Purchasing eco-friendly products respects the environment and contributes to the

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

cabinets

Green committee credibility

Option and Value

#1: Purchase eco-friendly cabinets: Loyalty to policy and environment

Chosen Because #1: Purchase eco-friendly cabinets: Improves environment and purchasing

How Will You

Option Weaknesses

#1: Work with local supplier to offer more eco-friendly products

AUTHOR RECOMMENDATION: Option 2: Purchase from local supplier – This is based on

partial support form utilitarianism, deontology, and virtue ethics. The local supplier has provided

high quality goods for 30 years and is struggling through a recession. Buying locally can also

have a ripple effect within the local business community. Educate the local supplier about the

company’s new product checklist and work with the supplier as needed to locate eco-friendly

products for future purchases.

CHAPTER 11 ANALYSIS FOR LET’S BUILD A BUILDING

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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?

Unknown: If you don’t test soil the apartments available on time and general contractor is

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

Uphold loyal

Option and Value

#1: Not test soil: Economic well-being

Chosen Because #1: Not test soil: Apartments will on time at an affordable price,

environmental risks overstated.

How Will You

#1: Monitor environmental health of building on a regular basis

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AUTHOR RECOMMENDATION: Option 2: Test soil and lose the student leases. This is based

on cultural relativism, deontology, and virtue ethics. The land might have environmental

contamination. If the general contractor is correct and that the health risk is really harmless, then

that can be determined during the testing stage. Otherwise you are putting the well-being of

people’s lives at risk and open yourself up to future litigation.

CHAPTER 11 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?

5) What option is the greatest good for the greatest number of people affected?

$1.2 million noted by executive team: If you tell the truth, shareholders will sell the stock and

probably incur large losses. About 20,000 employees could lose their jobs and their pension

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

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#3: $1.2 billion

noted by team

Supports executive team

Dishonest, illegal and results in jail

Option and Value

#1: $7 billion: Honesty and accountability

Chosen Because #1: $7 billion: Legal obligation that conveys truth to all shareholders

How Will You

Manage Chosen

#1: Quickly develop public relations campaign to minimize losses, major

restructuring of executive team, including resignation of Lay and Board

AUTHOR’S RECOMMENDATION: Option 3: $7 billion – This is based on cultural relativism,

deontology, and virtue ethics. As CEO, you have a fiduciary duty to convey honest information

to shareholders and be held accountable for your actions. First meet with the SEC and other

regulators prior to the quarterly announcement and explain the problem. Obtain their advice on

ways to protect against Enron’s total financial collapse following the announcement. Maybe the

government would be willing to provide a loan if you and your board of directors resign and

fully cooperate with the ensuing federal investigation into Fastow’s SPE schemes.

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