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Collins Instructor’s Guide
CHAPTER 8 KEY WORDS
Assist lines (p. 214): previously referred to as “ethics hotlines,” provide a channel of
communication where employees can anonymously and confidentially report ethical
wrongdoings or receive clarification on an organization’s ethics policies.
Authoritarian leaders (p. 206): people who expect absolute loyalty from subordinates and
consider taking suggestions or advice from subordinates, no matter how essential, as a leadership
weakness.
Chaplains (p. 213): members of a religious clergy trained in providing spiritual advice.
Employee empowerment (p. 207): refers to employees possessing the authority to make
decisions affecting themselves and their work.
Employee silence (p. 204): refers to an employee who observes ethical misconduct at work but
does not discuss the matter with the person engaged in the ethical misconduct or someone else in
the organization with authority.
Ethics & Compliance Officer (p. 209): a high-level employee responsible for managing ethical
performance.
False Claims Act (p. 217): initially passed in 1863 during the Civil War, allows an employee to
independently sue his or her employer for fraud against the government and receive between
15–30 percent of the total recovery amount plus attorney fees and related costs and expenses for
successful lawsuits.
Ombudsperson (p. 212): an organizational person who receives complaints about unethical
behaviors, guarantees employee anonymity, and investigates and attempts to resolve the
complaints.
Qui tam (p. 217): provision where citizens can sue the fraudulent supplier on behalf of the
government and be rewarded a percentage of the financial recovery.
Whistle-blower Reward Program (p. 218): IRS program that pays whistle-blowers 15% to
30% of the unpaid taxes recovered for reporting an individual or corporate tax fraud.
Whistle-blowing (p. 216): refers to contacting someone outside the organization about potential
or actual nontrivial misconduct inside the organization.
CHAPTER 8 ANCILLARY MATERIALS
Websites to Explore
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oEthics & Compliance Officer Association, available at: www.theecoa.org.
oInternational Ombudsman Association, available at: www.ombudsassociation.org.
oMarketplace Chaplains USA, available at: http://mchapusa.com/.
oEthicsPoint, available at: www.ethicspoint.com.
oWhistle-blowing
oU.S. Office of Special Counsel (OSC), available at: www.osc.gov/wbdisc.htm.
oNational Whistle-blowers Center, available at: http://www.whistle-blower.org/.
oThe False Claims Act Legal Center, available at: http://www.taf.org/.
oProject on Government Oversight, available at: http://www.pogo.org/.
oIRS Tax Fraud Whistle-blower, available at:
http://www.irs.gov/compliance/article/0,,id=180171,00.html.
Best Place to Work Video
Best Place to Work – NetApp, available at:
http://money.cnn.com/video/fortune/2009/01/21/fortune-bctwf-netapp.fortune/.
Business Ethics Issue Video
“Flying Cheap,” Frontline, about the impact of airlines outsourcing flights to regional
carriers; February 9, 2010, 57 minutes, available at:
http://www.pbs.org/wgbh/pages/frontline/flyingcheap/view/?
utm_campaign=viewpage&utm_medium=grid&utm_source=grid.
TEDTalks Videos
Happiness: Dan Gilbert, author of Stumbling on Happiness, challenges the idea that we’ll
be miserable if we don’t get what we want and how our "psychological immune system"
lets us feel truly happy even when things don’t go as planned; February 2004, 22
minutes, available at:
http://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy.html.
Lessons Learned from Presidents: Historian Doris Kearns Goodwin talks about what we
can learn from American presidents, including Abraham Lincoln and Lyndon Johnson;
February 2008, 19 minutes, available at:
http://www.ted.com/talks/doris_kearns_goodwin_on_learning_from_past_presidents.html
.
Conversations with Charlie Rose
A conversation with journalist Rick Stengel on WikiLeaks; November 3, 2010, 25
minutes, available at http://www.charlierose.com/view/interview/11325.
A conversation with Brian Ross about his book "Madoff Chronicles, The: Inside the
Secret World of Bernie and Ruth;" October 27, 2009, 60 minutes, available at
http://www.charlierose.com/view/interview/10692.
CHAPTER 8 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 8 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?
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Maintain double standard (#1) or ban salespeople from giving gifts (#2): Some competitors
4) What option is legal?
5) What option is the greatest good for the greatest number of people affected?
Ban salespeople from giving gifts (#2): Gifts are given as an extra incentive beyond product
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
to receive gifts
Enhances purchasing agent morale
Option and Value
#1: Maintain double standard: Competitive advantage, minimizes
#2: Ban salespeople from giving gifts: Policy consistency, minimizes
#3: Allow purchasing agents to receive gifts: Policy consistency, employee
Chosen Because #1: Maintain double standard: Enhances revenue and protects your
#2: Ban salespeople from giving gifts: Prevents salespeople from
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How Will You
#1: Offer purchasing agents some other perks as a substitute for lost gifts
AUTHOR RECOMMENDATION: Option 2: Ban salespeople from giving gifts – This is based
on social group relativism, utilitarianism, deontology, and virtue ethics. The trade association
recommends banning purchasing agents from receiving gifts. For consistency sake, this means
that salespeople should not tempt purchasing agent with gifts. Such a ban minimizes industry
corruption and establishes price, quality, and service as the basis of competition.
CHAPTER 8 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?
Remain quiet (#1): Project is on time; illegal workers earn income for families. The decision
6) What option is based on truthfulness and respect/integrity toward each stakeholder?
Replace the illegal workers (#2): Legal workers will be hired and law abiding construction
7) What option would a virtuous person do?
Replace the illegal workers (#2): Moral character is strengthened by being accountable for
construction worker rights. Unethical laws can be violated, but nobody is questioning the
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Option Option Strengths Based on
Application of Ethical Theories
Option Weaknesses Based on
Application of Ethical Theories
Option and Value
#1: Remain quiet: Efficiency, economic interests
Chosen Because #1: Remain quiet: Saves money and job is completed on time
How Will You
Manage Chosen
#1: Hope there is no investigation; plead ignorance and let general
contractor incur punishments
AUTHOR’S RECOMMENDATION: Option 2: Replace illegal workers – This is based on
cultural relativism, deontology, and virtue ethics. You are now fully aware that the general
contractor is violating the law and must be accountable for your knowledge. Legal construction
workers cannot find employment due to illegal immigrant hirings. The general contractor has
obtained the job under false pretenses.
CHAPTER 8 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?
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Exempt Fastow (#1): Enron’s financial performance will benefit by granting the exemption,
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
check on transactions
Maintains highest integrity by
upholding GAAP
Option and Value
#1: Exempt Fastow: With safeguard, it’s greatest good for shareholders
Chosen Because #1: Exempt Fastow: Generates wealth for all shareholders
How Will You
#1: Ensure that KPMG monitors every transaction very closely
