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SECTION 1A – DEFINING ETHICS
This unit begins with a personal look at ethics: what ethics are and how to resolve ethical dilemmas. This
section also includes an introduction to the credo – something the students should be working on as they
study the materials in the text and throughout their course. Use PowerPoint Slide 1 to introduce the
notion of the credo.
READING 1.1 – YOU, YOUR VALUES, AND A CREDO
A. Need to answer two questions – Use PowerPoint Slide 1
1. Who are you? Define yourself by something other than your job, your salary, your title, your car,
etc.
2. What things would you never do to get a job? To keep a job? To win a client? To keep a client?
To meet your numbers?
B. Use the examples on PowerPoint Slides 2, 3, and 4.
C. Have the students try and think of some things they would never do.
Note: There may be resistance because people are reluctant to say never when they are relativists.
And most young people between the ages of 18 and 22 are moral relativists. They believe that all
ethical decisions are contextual.
Answers and Key Discussion Items
Your credo takes on a different and longer-term perspective if you are focused on what people think of
you over the long term and what your legacy will be.
“How do I want to be remembered?” is another way to examine yourself and your credo. This question
has a way of giving us a longer perspective – What will be our mark? How will people think about us and
our actions?
READING 1.2 – THE PARABLE OF THE SADHU: PRESSURE, SMALL WINDOWS
OF OPPORTUNITY, AND TEMPTATION
Bowen “Buzz” H. McCoy
Mr. McCoy’s poignant experience and piece force students to see the parallels between organizational
ethics and his experience. No one in the mountain parties saw himself or herself as being responsible for
the Sadhu’s problems or fate. They all did a little bit to help, but no one assumed accountability. So it is
in companies. All the employees do a little bit of the conduct that results in harm, but no one is ultimately,
or feels ultimately, responsible for what happens. Everyone designed and manufactured the car, but no
one is responsible for what happened to those who purchased and drove the defective car.
Mr. McCoy also points out that achievement of the goal (in his story, it was reaching the top) often blinds
us and our values during the journey or climb to that goal. He was so determined to make his goal that
he was unwilling to be side-tracked by the needs of another human being in desperate straits. The
parallels to business are obvious. In the quest for the goal of sales quotas, quarterly profits, etc.,
business people often fail to pause and retain their personal values. In fact, they may take ethical and
legal shortcuts to get to the goal. As Mr. McCoy notes, sometimes stepping back from the linear path to
the goal is the best decision a business person can make. He points out that the times when he could not
continue his climb, but was forced to sit in the village, he had a wonderful time and a rich cultural
experience that he seems to recall far more than the climb to the top. Students should be challenged with
questions about the achievement of success and their lives along the way. Do they take time for family?
Do they take time to do volunteer work? Do they take time to help others at work?
Answers and Key Discussion Items
1. The mountain is rugged and unforgiving. Some would say that business competition is the same and
that you have to do what is necessary to survive. Others would say that you still have to consider the
basic values of human life or, in business, honesty, not taking advantage of others. Clearly, from the
differing conduct of the hikers, attitudes differ when we are in the pressure of the mountain or
business moment. The questions Mr. McCoy asks forces us to visit why we have certain attitudes,
2. No one made sure the Sadhu was fine because there was so much at risk. So much was on the line
in terms of pressure and meeting goals. To make sure the Sadhu was fine, they would have had to
3. Some will argue that the rules of the mountain are life or death and therefore different. But, others
maintain the value of human life no matter what the pressures. Students can put this discussion in
4. Mr. McCoy was feeling some guilt and the writing was his form of introspection after a misstep. Mr.
McCoy had a new book in Fall 2007 that provides more background and detail on this experience as
READING 1.3 – WHAT ARE ETHICS? FROM LINE-CUTTING TO KANT
A. The Example of the New York City Marathoners Taking the Subway – Use PowerPoint Slide 5
B. Other Examples
1. Tiger Woods and his infidelity; no criminal charges for serial cheating
C. Conduct May or May Not be Criminal
D. What are Ethics?
1. A higher standard than law; non-statutory standards
4. Unwritten rules for behavior
a. E.g., Those who cut in line
5. Other examples
a. Adultery
E. Philosophical Groundings of Ethics – Use PowerPoint Slides 7 and 8
1. Divine Command Theory
a. Resolve dilemmas based on religious beliefs
2. Ethical Egoism Theory
a. Act in our own self-interest
b. Ayn Rand’s: The Fountainhead and Atlas Shrugged
i. Acknowledge self-interest
c. "Hobbesian" Self-Interest and Government: Thomas Hobbes
i. Ethical egoism a central factor in all decisions
d. Adam Smith
i. Self-interest vs. selfishness
ii. The Theory of Moral Sentiments (often called The Moral Sentiments of Markets)
aa. Humans are rational
iii. Force of long-term self-interest keeps markets moral
iv. Temporary chaos until adjustment or shunning of fraudulent behaviors
3. Utilitarian Theory
a. Jeremy Bentham and John Stuart Mill
b. “Greatest Happiness Principle”
4. Categorical Imperative: Immanuel Kant
a. Do not use others in such a way as to obtain a one-sided benefit
b. One ought to act only in a way that you would find comfortable if it became a universal law
5. The Contractarians and Justice
a. John Locke and John Rawls
b. Theory of Justice or the social contract
6. Rights Theory
a. Robert Nozick
b. Everyone has a set of rights
7. Moral Relativists
a. No absolutes
b. Decisions and behaviors are dictated by circumstance
8. Virtue Ethics: Plato and Aristotle
a. Can only resolve ethical dilemmas by developing virtue
(1) Ability
(2) Acceptance
(3) Amiability
(4) Articulateness
(5) Attentiveness
(6) Autonomy
(7) Caring
(8) Charisma
(9) Compassion
(10) Coolheadedness
(11) Courage
(12) Determination
Answers and Key Discussion Items
1. Point out to the students that this was a real case in Arizona. In order to raise money for themselves,
DMV employees were selling drivers licenses, expediting lines for people, engaging in all manner of
DMV services for profit.
a. Divine Command Theory: Religious beliefs would dictate that doing the right thing (not stealing)
would be an act of faith that would produce the necessary medical care by some other means.
b. Ethical Egoism: It’s all self-interest, baby (Rand). Take the money and do what helps you.
However, there is the constraint that there is a violation of the law (Hobbesian dilemma). Adam
Smith – if you did it once, your reputation would be affected.
2. This would be an example of self-interest. Make your decisions in a way that benefits you. In addition,
the issues that cause employer cutbacks in employees and employee hours are government forces
that are trying to provide health care and other benefits for the population.
On the other hand, there is the social contract – do we all agree to work to support ourselves, using
the social programs as a safety net when we cannot work? Or did we agree to work only under
certain conditions? Is there an obligation to find another full-time job if employers cut hours not
through any fault of the employees?
Consider what would happen if everyone made the choice of these employees – sooner or later there
would not be sufficient government resources to pay the unemployment benefits currently available.
Asking, “How does my conduct affect others?” is a good question to ask in ethical analysis.
There is a 20-second-scene in the fine movie, “Cinderella Man” that provides a contrast to the attitude
of these employees with our attitudes in the early 20th century. Russell Crowe played the role of the
The author wishes that she could have shared this brief clip to this tripartite of employees schooling
and being schooled in our country’s new ethical norms. ”Relief” is no longer a stigma for we have
3. Affleck sees ethics as a set of rules. We don’t violate the law through forgery, embezzlement, etc.
Pollack, on the other hand, is a sort of Robin Hood. He would be a moral relativist – the good that he
does with the money he obtains justifies his actions in taking from others. However, Pollack’s theory
4. The problem with this philosophy on reporting earnings, as will be discussed in several units of the
text to follow, is that no one can really be sure of the true financial condition of the company if
everyone is making decisions based on their own rules as opposed to the general rules of
accounting. Investors, employees, shareholders, creditors and others cannot rely on financial
READING 1.4 – THE TYPES OF ETHICAL DILEMMAS: FROM TRUTH TO
HONESTY TO CONFLICTS
Use PowerPoint Slides 14 and 15 – “Types of Ethical Dilemmas” – to cover the categories of ethical
dilemmas.
1. Taking things that don’t belong to you
2. Saying things you know are not true
3. Giving or allowing false impressions
4. Buying influence or engaging in a conflict of interest
5. Hiding or divulging information
6. Taking unfair advantage
7. Committing acts of personal decadence
8. Perpetrating interpersonal abuse
9. Permitting organizational abuse
10. Violating rules
11. Condoning unethical actions
12. Balancing ethical dilemmas
Answers and Key Discussion Items
We have these categories so that we can recognize and anticipate issues and dilemmas. This is a list
that will help as you study the cases throughout the book. Ask yourself – What type of ethical dilemma is
this? Also, the list provides some absolutes to follow. Encourage students to think about all cases in a
way that finds them classifying the ethical dilemma. It is a way of seeing the ethical dilemma if you
require yourself to classify it.
1. a. The issue is balancing ethical dilemmas. Mr. Mickelson was faced with a dilemma that is typical
for most people once they have a family. They are torn between the need to be at work and earn
a living and their family needs. They feel the tug of providing their employers with good job
b. The dilemma falls into the category of organizational abuse. The manager is not treating his
c. Yes, Jack has an ethical issue. His duty to his employer conflicts with desire for the trip from the
supplier. The trip clouds his judgment on the contract. It also compromises the perception of him
2. Use PowerPoint Slide 16 in discussing this question. Mr. Hayes said, “I pretty much knew at that
point that I was going to be disqualified.” It was a mistake, and Mr. Hayes doesn’t know how the
prototypes remained in his bag. Players generally make certain that they eliminate those issues
before the round. But it happened, and Mr. Hayes was left with a choice. Mr. Hayes put a year of his
3. The ethical category if Ivan had claimed the race would have been taking unfair advantage – there
was a mistake on the part of Mutai as to where the finish line was and he had actually won the race.
READING 1.5 – ON RATIONALIZING AND LABELING: THE THINGS WE DO THAT
MAKE US UNCOMFORTABLE, BUT WE DO THEM ANYWAY
Use PowerPoint Slides 17 - 19 – “How We Avoid Ethical Dilemmas” and "Watch the Language!" – to
cover the language students can watch for to help them in spotting an ethical dilemma.
A. Calling It By a Different Name
1. “Peer-to-Peer File Sharing” vs. “Copyright Infringement”
2. “Smoothing Earnings” vs. “Cooking the Books”
B. Rationalizations – Use PowerPoint Slide 20
You could also have them look for this language in newspapers so that they can see how often these
labels and rationalizations creep into the quotes from business people who are experiencing the
fall-out from an ethical lapse or have been questioned about their companies’ behavior.
1. “Everybody else does it.”
2. “If we don’t do it, someone else will.”
3. “That’s the way it has always been done.”
Answers and Key Discussion Items
1. The towel swipers would use the following:
“It doesn’t really hurt anyone.”
“Who’s to find out?”
2. The truckers are using these rationalizations:
“Everybody else does it.”
“It doesn’t really hurt anyone.”
This is a classic shifted norm.
3. The statements are dismissive; they do not examine the issues at hand, the parties affected or the
consequences of the behavior. He’s rationalizing with a bit of a twist – “I’m not the one who made the
4. The father is balancing a dilemma. However, there is much more to the issue. Perhaps they could
help Uncle Ted with candor? Discuss with the students graciousness, confrontation, white lies and
the wisdom, merits and needs of both. Another alternative is for the child to say nothing about the
CASE 1.6 – “I WAS JUST FOLLOWING ORDERS”: THE CIA, INTERROGATION,
AND THE ROLE OF LEGAL OPINIONS
Use PowerPoint Slide 21 – "I was just following orders."
Answers and Key Discussion Items
1. The biggest rationalization is in the case title, “I was just following orders,” and add to that, “If it’s
legal, it’s ethical.”
2. The following is an excerpt from a state bar magazine article by the author:
What do John Yoo, Jay Bybee, and Ira Sorkin have in common? The obvious answer is that they are
all lawyers. Another answer is that they have been all over the news. One more layer is that they
have been vilified because they represented widely unpopular clients. Mr. Yoo and Mr. Bybee offered
the legal opinions on interrogation techniques during their years in the Justice Department. Mr. Sorkin
The challenge in any ethical dilemma, whether the issue is the role of counsel or whether to disclose
the hairline crack in the engine block of the used car you are trying to sell, is that the ethical standard
should be the same. Of course you would want to know about the hairline crack, and commerce
There is yet another ethical issue here – whether those who have represented certain clients in the
past should be barred from some counsel positions in the future. The ethical principle underlying that
question is that we are always prepared to accept the consequences of our actions and decisions.
Some decisions do preclude us from future activities. No one disputes the right to counsel in ALL
There is a distinction between representing Bernie Madoff and representing a member of al Qaeda.
Bernie is a once-in-a-generation felon whose wrongs heaped misery on thousands. But Bernie’s
Ponzi cause does not live on through disciples. In fact, as in most of these situations, those who
worked for Bernie were more than willing to throw him and others under the bus in exchange for a
The same singular client quality does not exist for the nine lawyers currently serving on the law
enforcement side of the table after stints representing detainees. The battle going forward involves a
network, a syndicate, an ongoing effort to which their former clients and current detainees remain
committed. Indeed, it is clear that they remain in communication with each other. Worse, we have at
least one lawyer (Lynne Stewart) who helped her client (WTC 1993 bomber Sheik Omar
The lawyers who have represented the detainees in their prior professional lives should be willing to
acknowledge the potential conflicts without taking umbrage at those who raise the question. It ain’t
your clients we’re fretting over – it’s your inability to see the issues in your new role and acknowledge
yet another cornerstone of legal ethics: you don’t represent a new client when it conflicts
with the interests of a prior client. Underlying that rule is a body of wisdom and years of legal
3. The other cases have involved personal gain and conflicts, primarily. However, this case involves an
underlying philosophical issue: Which is the greater need – stopping a terrorist attack or adhering to
This question is the great philosophical question and brings the students around to the discussion
and analysis questions: Who is affected by your decision? Would you be willing to live in a world that
COMPARE & CONTRAST
Toes to the line legality is present in both cases. We find fault with Goldman, but may be willing to go
along with Woo on his toes-to-the-line interpretation. This is a difficult question for students to analyze
because emotions run so high.
READING 1.7 – THE SLIPPERY SLOPE, THE BLURRED LINES, AND HOW WE
NEVER DO JUST ONE THING
Discuss with the students how the characters evolve from the clear line – “This is not your money!” to,
“Well, maybe we can take it.” This line, once crossed, results in a series of decisions to protect their initial
decision, which was flawed.
Answers and Key Discussion Items
1. Discuss Ms. Jones’ initial decision to inflate her résumé with the three degrees; discuss how difficult it
became to retract that as she progressed in her rank and did quite well at her job; emphasize that the
2. Have the students think about the background expert’s thoughts and discuss that the truth does have
CASE 1.8 – HANK GREENBERG AND AIG, AND STEVE COHEN AND SAC
CAPITAL
An excellent topic for discussion in this case is whether folks turn into bad apples in companies because
of the pressures of meeting goals or if they always had the propensity to shave the tree tops before they
went into business. This story illustrates that Greenberg was able to find a way around the rules that was
not technically a violation of the rules. However, his conduct certainly violated the spirit of the recreation
and rules for the soldiers. Compare the discussion of Cohen and his history of previous violations where
he seemed to skirt by and still find himself landing on his feet in the security industry.
Answers and Key Discussion Items
1. There are always laws and rules that do not close every loophole. We can find loopholes and
capitalize on them. Those in charge have indeed missed something in their drafting of the rules, not
anticipating that there would be soldiers who would find a way around the good intentions and
2. Mr. Greenberg is a self-interest type of person, but, interestingly, he often fails to consider the
long-term consequences of his actions. His behavior at AIG may have set the company up for the
3. Mr. Greenberg demonstrated in his youthful action with the playbill that he was willing to take
4. The rationalizations are “Everybody lies about their age” and “It doesn’t really hurt anyone.” But,
when young people lie about their ages to others, there are consequences such as the presence of
