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Collins Instructor’s Guide
CHAPTER 3 KEY WORDS
Affirmative action (p. 68): plan to remedy past discriminatory behaviors by actively seeking,
hiring, and promoting minority group members and women to equalize opportunities previously
limited to Caucasian males.
Attraction-Selection-Attrition Cycle (p. 65): highlights how individuals are attracted to
organizations that reflect their values and goals, organizations select applicants with personal
attributes that “fit” the work culture, and then individuals depart (attrition) if the fit is
inappropriate.
Conscientiousness (p. 75): Big Five personality trait that describes a person who is responsible,
dependable, and hard working; correlates highly with ethical behavior.
Disparate impact (p. 67): occurs when members of a protected class rarely make it through all
the job-screening filters, suggesting that one of the decisions rules could be unintentionally
discriminatory.
Equal Employment Opportunity Commission (EEOC) (p. 67): created in 1965 to oversee
provisions of Title VII of the Civil Rights Act.
“Four-fifths” rule (p. 67): method applied by the EEOC that consists of determining the
acceptance rate for two groups of job applicants and, if nondiscriminatory, the acceptance rates
would be within 80% of each other.
Integrity tests (p. 73): tests that gather information about the job candidate’s behaviors and
attitudes toward unethical workplace activities, such as theft.
Organizational Citizenship Behavior (p. 75): refers to work-related helping behaviors that go
beyond normal job requirements.
Polygraphs (p. 82/83): collects data on at least three physiological systems associated with
honesty and lying: respiration, sweat gland activity, and blood pressure; detects nervousness, not
lying.
Protected classes (p. 67): the groups that cannot be discriminated against according to Title VII.
Realistic Job Preview (p. 81): an honest description of daily work activities that highlights both
the exciting and tedious aspects of the job.
Social Dominance Orientation (p. 78): the belief that an individual’s particular group
membership (defined in terms of race, gender, religion, or ethnicity) is superior to membership in
other groups; usually associated with racism and sexism.
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Title VII of the Civil Rights Act of 1964 (p. 67): federal law that prohibits business from
discriminating among job applicants based on the person’s race, color, religion, gender, or
national origin; later extended to cover age, pregnancy, and physical and mental disabilities.
Unaccredited diploma mill (p. 72): business that provides credentials without taking courses.
CHAPTER 3 ANCILLARY MATERIALS
Websites to Explore
U.S. Department of Labor, Employment Law Guide, available at:
http://www.dol.gov/compliance/guide/index.htm.
Disparate Impact Calculator, available at:
www.hr-software.net/EmploymentStatistics/DisparateImpact.htm.
Diploma Mills, available at: http://www.thecb.state.tx.us/apps/consumerinfo/notx.cfm;
Accreditation verification, available at: http://ope.ed.gov/accreditation/Search.aspx.
Personality Measures
oFive-Factor Personality Model, available at:
http://ipip.ori.org/newBigFive5broadKey.htm.
oOther Personality Scales, available at:
http://ipip.ori.org/newBroadbandAppAB5CKey.htm.
oMMPI, “Questions to Ask,” available at:
http://www.falseallegations.com/mmpi-bw.htm.
Sex Offender Websites
oU.S. Department of Justice, available at:
http://www.nsopw.gov/Core/Conditions.aspx.
oFamily Watchdog, available at: www.familywatchdog.us.
Best Place to Work Video
The Ben & Jerry’s Story told by co-founders Ben Cohen and Jerry Greenfield, 10
minutes, available at: http://www.youtube.com/watch?v=FU0Eg0sv3Lk.
Business Ethics Issue Video
“The Madoff Affair,” Frontline, about Bernie Madoff $65 billion ponzi scheme; May 12,
2009, 55 minutes, available at: http://www.pbs.org/wgbh/pages/frontline/madoff/view/.
TEDTalks Videos
Nice People Becoming Bad: Philip Zimbardo shares insights on how easy it is for nice
people to turn bad and how easy it is to be a hero; February 2008, 24 minutes, available
at: http://www.ted.com/talks/philip_zimbardo_on_the_psychology_of_evil.html.
Human Commonality: Geneticist Spencer Wells talks about how his Genographic Project
will use this shared DNA to figure out how we are -- in all our diversity -- truly
connected; June 2007, 21 minutes, available at:
http://www.ted.com/talks/spencer_wells_is_building_a_family_tree_for_all_humanity.ht
ml.
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Conversations with Charlie Rose
A conversation about WorldCom and business ethics in corporate America, 60 minutes,
June 27, 2002, available at http://www.charlierose.com/view/interview/2484.
A conversation with Arthur Levitt, the former chairman of the Securities and Exchange
Commission, about reform in the accounting profession and greater fiscal accountability
in corporate America, 60 minutes, October 18, 2002, available at
http://www.charlierose.com/view/interview/2326.
CHAPTER 3 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).
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.
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CHAPTER 3 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?
Fire Tim (#1): Establishes HR department’s authority; lying and other types of fraud are
4) What option is legal?
5) What option is the greatest good for the greatest number of people affected?
Fire Tim (#1): Establishes HR department’s authority throughout the organization; lying and
6) What option is based on truthfulness and respect/integrity toward each stakeholder?
Fire Tim (#1): It is unfair that Tim may have been chosen due to the fraudulent internship
7) What option would a virtuous person do?
Both: Moral character can be strengthened by firing Tim, which holds him accountable for
his fraud (#1). Next time maybe Tim would confess immediately rather than waiting. Moral
Option Option Strengths Based on
Application of Ethical Theories
Option Weaknesses Based on
Application of Ethical Theories
This is your first hire, it
demonstrates to your willingness to
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Option and Value
#1: Fire Tim: Department anti-fraud reputation and fairness
Chosen Because #1: Fire Tim: He falsified his resume and lied about it, need to avoid
How Will You
#1: There is a second qualified job applicant, and new ones may surface
AUTHOR’S RECOMMENDATION: Option #1: Fire Tim – This is based on egoism, social
group relativism, cultural relativism, utilitarianism, deontology, and virtue ethics. Tim is your
first major hire. Firing Tim demonstrates to your boss and other company employees your
willingness to uphold high standard, maintain consistent standards, and admit a hiring mistake. It
enforces the company’s anti-fraud policy. Although Tim is highly qualified, there is a second
applicant who is highly qualified and, if not available, a new search may find other highly
qualified candidates. Tim is being punished, but he did lie to you and if hired his reputation
within the company can be suspect.
CHAPTER 3 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?
Your general contractor (#2): The Construction Management Association of America
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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?
Your general contractor (#2): Your general contractor provided initial support for your project
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
Provided initial help on the project
Option and Value
#1: Developer’s general contractor: Economic benefits
Chosen Because #1: Developer’s general contractor: Can save $300,000 over ten years in
How Will You
Manage Chosen
#1: Although unfair, bid shopping is legal in this situation; ensure that the
developer’s contractor provides same high standard materials and work
AUTHOR’S RECOMMENDATION: Option 2: Your general contractor – This option is based
on social group relativism, cultural relativism, utilitarianism, deontology, and virtue ethics. It
upholds high standards for the construction industry because bid shopping provides unfair
advantages to those who receive a copy of the competitor’s bid. Many times this results in lower
quality materials or work to reduce the bid. Meet with your general contractor and explores ways
to reduce costs. If none available, then embark on a fundraising campaign to raise the extra
$300,000.
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CHAPTER 3 ANALYSIS FOR IN THE REAL WORLD: ENRON
1) Who are all the people affected by the action?
2) What option benefits me the most?
Appeal the SEC rejection (#2): Enron’s performance, for which you are accountable, is being
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?
Appeal the SEC rejection (#2): Mark-to-market accounting system will most likely result in a
6) What option is based on truthfulness and respect/integrity toward each stakeholder?
Mixed: On the one hand, Skilling has argued that mark-to-market will provide a more honest
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
SEC initial rejection stated that this
is the best method
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Likely to increase stock price, thus
performance issues
Option and Value
#1: Keep traditional system. Tradition
Chosen Because #1: Keep traditional system. SEC already rejected mark-to-market, and
How Will You
#1: Be more patient and continue to improve Gas Bank operations.
AUTHOR RECOMMENDATION: Option #2: Appeal the rejection – This is based on egoism,
cultural relativism, utilitarianism, and virtue ethics. Fighting for an accounting system that does a
better job of honestly valuating Gas Bank operations is admirable, benefits the organization, and
increases shareholder wealth. Arthur Andersen, one of the most renowned accounting firms in
the world, agrees that a change to mark-to-market is appropriate for the Gas Bank. The idea may
have been too radical for the SEC to initially understand. Appealing the rejection provides
another opportunity to argue the case on behalf of shareholders. Some costs will be incurred, but
they will be relatively minor compared to the financial benefits for shareholders if the appeal is
accepted. Make sure that Arthur Andersen invests the necessary time and skills to monitor that
the new accounting system is not being manipulated.
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