978-0470639948 Chapter 8 Solution Manual Part 3

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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