978-0470639948 Chapter 3 Solution Manual Part 4

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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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