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Collins Instructor’s Guide
CHAPTER 4 KEY WORDS
Bribe (p. 97): providing someone with a monetary incentive or object of value to do something
contrary to his or her job description.
Business gratuity (p. 105): a present, gift, hospitality, or favor for which fair market value is not
paid by the recipient.
Caux Principles for Responsible Business (p. 98): a collaborative effort by an international
network of business leaders that articulates seven principles for conducting business in any
nation in the world.
Code of Conduct (p. 92): more extensively describes acceptable behaviors for specific situations
that are likely to arise; provides substance to the Code of Ethics.
Code of Ethics (p. 92): briefly describes broad ethical aspirations – such as respecting all
owners, customers, employees, suppliers, community members, and the natural environment.
Ethical hypocrisy (p. 107): the gap between an organization’s formal ethical proclamations and
its actual heavier; damages employee morale.
Facilitating payments (p. 97): providing someone with a monetary incentive or object of value
to expedite performance of routine government action, such as obtaining permits or loading and
unloading cargo; these are legal under the Foreign Corrupt Practices Act.
Mission statement (p. 101): describes what an organization does and for whom.
Strategic planning (p. 101): integrates an organization’s mission with its vision and provides
clear direction on how the organization will progress from its current situation to a highly desired
future situation.
Vision statement (p. 101): describes what an organization aspires to become in the future.
CHAPTER 4 ANCILLARY MATERIALS
Websites to Explore
Codes of Ethics
oCorporate Code of Ethics examples, available at:
http://www.ethicsweb.ca/resources/business/codes.html and
http://web-miner.com/busethics.htm (Scroll down to “Corporate Codes of Ethics”
for examples).
oSociety for Human Resource Management, available at:
http://www.shrm.org/about/Pages/code-of-ethics.aspx.
oJournalism, available at: http://www.journalism.org/resources/ethics_codes.
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oEngineers, available at:
http://www.onlineethics.org/Resources/ethcodes/21733.aspx.
oCity and County Government, available at:
http://www.mrsc.org/Subjects/Personnel/ethics.aspx.
Code of Conduct
oMicrosoft, available at:
http://www.microsoft.com/About/Legal/EN/US/Compliance/Buscond/Default.asp
x.
oGap, Inc. available at:
http://www.gapinc.com/public/documents/Code_English.pdf.
Caux Round Table “Principles for Business,” available at:
http://www.cauxroundtable.org/index.cfm?&menuid=8.
Ethics Resource Center, “Ethics Toolkit,” available at:
http://www.ethics.org/page/ethics-toolkit.
Vision and Mission Statement Examples, available at:
http://www.samples-help.org.uk/mission-statements/corporate-vision-statements.htm.
Best Place to Work Video
Best Place to Work – Build-A-Bear Workshop, available at:
http://money.cnn.com/video/fortune/2010/01/20/f_bctwf_build_a_bear.fortune/.
Business Ethics Issue Video
“The Card Game,” Frontline, about trying to reform the credit card industry, November
24, 2009, 57 minutes, available at:
http://www.pbs.org/wgbh/pages/frontline/creditcards/view/?
utm_campaign=viewpage&utm_medium=grid&utm_source=grid.
TEDTalks Videos
Predictable Irrationality: Behavioral economist Dan Ariely explains studies examining
the hidden reasons we think it's sometimes OK to cheat or steal, and why we're
predictably irrational; February 2009, 17 minutes, available at:
http://www.ted.com/talks/dan_ariely_on_our_buggy_moral_code.html.
Purpose of Life: Pastor Rick Warren, author of The Purpose-Driven Life, reflects on his
own crisis of purpose and his belief that God's intention is for each of us to use our talents
and influence to do good; February 2006, 21 minutes, available at:
http://www.ted.com/talks/rick_warren_on_a_life_of_purpose.html.
Conversations with Charlie Rose
A conversation with Jon Huntsman, US Ambassador to China, about China; December
17, 2010, 30 minutes, available at: http://www.charlierose.com/view/interview/11357.
A conversation about the ramifications of the BP Oil spill; May 14, 2010, 30 minutes,
available at: http://www.charlierose.com/view/interview/11014.
CHAPTER 4 ETHICAL DILEMMA ANALYSIS
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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 4 ANALYSIS FOR WHAT WOULD YOU DO?
1) Who are all the people affected by the action?
2) What option benefits me the most?
Mixed: Letting Mary replace the money and putting her on notice (#2) allows you to
3) What option does my social group support?
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Tell bank manager and pursue termination (#2): Mary clearly violated policy, committed a
4) What option is legal?
Tell bank manager and pursue termination (#2): It is legal to follow bank policy. Bank policy
5) What option is the greatest good for the greatest number of people affected?
Tell bank manager and pursue termination (#2): Upholding bank policy, particularly to
6) What option is based on truthfulness and respect/integrity toward each stakeholder?
Tell bank manager and pursue termination (#2): It respects your boss, company policies, and
7) What option would a virtuous person do?
Tell bank manager and pursue termination (#2): Moral character is strengthened by holding
all employees to high standards and treating all employees equally in terms of violating
Option Option Strengths Based on
Application of Ethical Theories
Option Weaknesses Based on
Application of Ethical Theories
anti-fraud standard
Option and Value
#1: Tell manager and pursue termination: Honesty & Loyalty to boss and
Chosen Because #1: Tell manager and pursue termination: Mary falsified her balance sheet,
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How Will You
Manage Chosen
#1: Express your sympathy for Mary, but inform her that this is a major
violation of company policy and she should have told you at the end of the
AUTHOR’S RECOMMENDATION: Option #2: Tell bank manager and pursue termination –
This is based on social group relativism, cultural relativism, utilitarianism, deontology, and virtue
ethics. Mary falsified her balance sheet, and was about to commit fraud a second time, clear
violation of banking policies. Other high quality bank tellers can be hired. You are responsible
for holding all employees to high standards and treating all employees equally in terms of
violating company policy. Managers must avoid double-standards in terms of policy violations.
The situation might have been different if at the end of the first day she admitted the shortage,
but instead she lied about it. Hire another high quality teller.
CHAPTER 4 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?
$6.4 million local general contractor (#2): Building costs are contained, and most likely
6) What option is based on truthfulness and respect/integrity toward each stakeholder?
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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
Option and Value
Chosen
#1: $5.6 million outside general contractor: Financial benefits, Honest
costs
Chosen Because #1: $5.6 million outside general contractor: You save $800,000 and you do
not fully trust the local general contractor due to previously being
How Will You
Manage Chosen
#1: Require that the outside general contractor give preference to local
subcontractors; increase local philanthropic contributions
AUTHOR’S RECOMMENDATION: Option 1: $5.6 million outside general contractor: This
option is based on deontology and virtue ethics. It saves you $800,000, demonstrates respect for
honest construction costs and does not give in to bully behaviors. The local general contractor
can create problems for you in the local business community. Require that the outside general
contractor give preference to local subcontractors and increase local philanthropic contributions.
CHAPTER 4 ANALYSIS FOR IN THE REAL WORLD: ENRON
1) Who are all the people affected by the action?
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2) What option benefits me the most?
Mixed: Yes, you earn money and future business for my Investment Bank which makes you
3) What option does my social group support?
4) What option is legal?
Reject the offer (#2) and notify Arthur Andersen (#3): It is illegal to guarantee profits on an
5) What option is the greatest good for the greatest number of people affected?
Notify Arthur Andersen (#3): Fastow’s actions will present a false revenue picture to the
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
Protects my Investment Bank from
legal problems
#3: Notify Arthur
Andersen
Uphold the law
Fastow may seek revenge
Option and Value
#1: Accept the offer: Short-term financial gain. Future deals with Fastow.
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#2: Reject the offer: It’s wrong to break the law, and you don’t want to
How Will You
#1: Trust Fastow and not share this plan with anyone
AUTHOR’S RECOMMENDATION: Option #3: Notify Arthur Andersen – This is based on
cultural relativism, utilitarianism, deontology, and virtue ethics. A Tier 1 investment banker
should reject the offer and notify Arthur Andersen auditors about Fastow’s illegal side
agreements. Document your concerns and present this evidence to your boss in case Enron
eliminates your investment bank from future deals.
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