978-0470639948 Chapter 4 Solution Manual Part 3

Unlock access to all the studying documents.

View Full Document

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.

1-1

Collins Instructor’s Guide

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

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

1-2

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 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?

1-3

Collins Instructor’s Guide

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,

1-4

Collins Instructor’s Guide

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?

1-5

Collins Instructor’s Guide

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?

1-6

Collins Instructor’s Guide

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.

1-7

Collins Instructor’s Guide

#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.

1-8