Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
Instructor Manual
Chapter 1: Unethical Behaviors in Organizations and Human Nature
Chapter 1 LEARNING OBJECTIVES AND END OF CHAPTER QUESTIONS
After reading this chapter, you should be able to
1.1. Identify common types of unethical behaviors in the workplace.
End of Chapter Question 1: What are the most common types of unethical
behaviors in organizations?
1.2. Describe how unethical behaviors can be very costly to organizations.
1.4. Describe different theories of human nature as related to ethics at an
individual’s time of birth.
End of Chapter Question 4: What are the four beliefs about human nature as
related to ethics at the time of birth?
1.5. Explain the stages of moral development.
CHAPTER 1 OVERVIEW
Businesses significantly improve the quality of life by providing goods and services that fulfill
consumer needs. Service to others, one of the most admirable ethical standards, is at the heart of
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
This chapter discusses why appropriately managing ethics is essential for every
organization. The prevalence and costs of unethical behaviors at work can be substantial. In
addition, appropriately managing ethics provides ethical organizations with many competitive
CHAPTER 1 LECTURE OUTLINE
Suggested Time: 2 to 3 hours of class time is recommended to present this chapter.
I. Chapter Question 1: What are the most common types of unethical behaviors in
organizations?
Daily Occurrence of Ethical Issues
II. Chapter Question 2: How do unethical behaviors increase organizational costs?
Legal Costs
III. Chapter Question 3: What are the competitive advantages of creating and
sustaining an ethical organization?
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
It may improve financial performance
IV. Chapter Question 4: What are the four beliefs about human nature as related
to ethics at the time of birth?
Born With Prior Knowledge of Right and Wrong
V. Chapter Question 5: What are the six stages of moral development?
Cognitive Development
VI. Chapter Question 6: Why do good people occasionally behave unethically?
Unintended Unethical Behaviors
CHAPTER 1 SUPPORTING MATERIALS
Textbook Inserts
Ethical Dilemma Analysis
• What Would You Do: Billing for Services Rendered
Tables and Figures
• Table 1.1: Five Common Unethical Behaviors
Self-Assessment (in Vantage only)
Instructor Resource
Collins, Business Ethics 3e
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• Self-Assessment 1.1: Moral Identity
Thematic Boxes
CHAPTER QUESTION 1: WHAT ARE THE MOST COMMON TYPES OF
UNETHICAL BEHAVIORS IN ORGANIZATIONS?
We will talk a lot about well-managed organizations throughout the book because the book
offers many examples of best practices.
What is a “well–managed organization”? (Ask students for their answer, and then write
this on board.)
Definition: A well-managed organization is a community of people on a common mission
What people matter in well-managed organizations?
Stakeholders
Definition: A stakeholder is any person or organization that is affected by, or could affect an
Next we need to ask: What Is Ethics?
ETHICS DEFINED
DISCUSSION ACTIVITY
Ask students to write down his/her definition of ethics.
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
Have several students share his or her answers.
Find commonalities and differences.
Then share definition from the textbook.
When an organization employs someone, that individual brings to work not only unique
job skills, but also his or her ethics.
What Is an Action Sequence?
ACTION SEQUENCE
Ethical analysis takes into consideration all aspects of an action sequence. An action sequence
consists of the motivation behind the act, the act itself, and the consequences of the act.
Decisions are initiated by motives and result in consequences: Are the motives and intentions
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
Sometimes, good motives can generate bad consequences. Trying to help a colleague
perform one task, for example, might distract the person from meeting an important
favorable consequences.
DISCUSSION ACTIVITY
Ask students to think about interactions they had with other employees and customers today or
yesterday. Now ask the following:
1. When did you tell yourself (or think to yourself) that what the employee or customer did was
right or good?
2. When did you tell yourself (or think to yourself) that what the employee or customer did was
wrong or bad?
* Describe the situation.
How often do employees experience ethical dilemmas?
DISCUSSION ACTIVITY
Have students write down when (how long ago) was the last time they faced an ethical dilemma.
Tell them you don’t want to know what the situation was, just how long ago it happened.
Instructor Resource
Collins, Business Ethics 3e
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* Within the past 6 months, remain standing, otherwise sit down.
* Within the past month, remain standing, otherwise sit down.
* Within the past week, remain standing, otherwise sit down.
DAILY OCCURRENCE
People experience ethical issues/dilemmas at work every day. Just about every
decision made during a day has ethical ramifications. The decision can be based on good-
bad motives and result in good-bad consequences.
Examples of daily ethical dilemmas are:
• Should you arrive at work early, on time, or late?
• Should you submit adequate work that meets a deadline, or submit the highest
quality work possible and miss the deadline?
EXTENT OF UNETHICAL BEHAVIORS AT WORK
Every organization is confronted with ethical and unethical behaviors. The Ethics Resource
Center survey about work-related ethical issues reports:
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• Approximately 41 percent of the more than 6,420 for-profit employees observed at
least one type of major ethical misconduct in the workplace during the past year
MOST COMMON UNETHICAL BEHAVIORS
Table 1.1 Five Most Common Unethical Behaviors
1. Misuse of company time. Altering time sheets, covering up for someone who shows up
late, and conducting personal business on company time.
3. Employee Theft. Taking products, not recording sales to friends, and manipulating expense
reimbursements.
2019 Global Ethics Survey respondents who observed misconducts, the most common types:
• Conflicts of Interest: 27%
• Abusive Behaviors: 25%
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In a 2019 Gallup poll, two-thirds believe corruption is widespread in business.
Professions with “very high” ethical standards:
• Nurses: 85%
• Bankers: 28%
PROFESSION AND INDUSTRY ISSUES
Every profession and industry experiences ethical problems.
In the accounting/auditing profession:
• falsifying reimbursement or time reports
• working slowly without concern for budget limits
In the legal profession, along with accountants and auditors: billable hours. One
egregious case involved a lawyer charging a client 3,500 billable hours for 1 year’s work,
which averages out to almost 10 hours a day, 7 days a week, every week of the year.
In the construction industry, 84 percent of survey respondents reported that they
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Collins, Business Ethics 3e
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Public relations and sales professions: According to a survey of 1,700 public relations
executives:
• 25 percent lied on the job.
Government agencies: According to the 2007 Ethics Resource Center survey, on
whether the responded observed at least one form of ethical misconduct within the
previous twelve months:
• 52 percent of federal government employees did.
Sexual Harassment
• 2018: 13,055 sexual harassment submissions to Equal Employment Opportunity
Commission (EEOC)
• Based upon research
o 60 percent of women report having been sexually harassed at work.
• Industries with highest rates of sexual harassment
o 42 percent occurred in food and service hospitalities
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o 30 percent in legal profession
OPERATION AREAS
Every employee level and operational area is confronted with ethical issues. Unethical
discriminatory practices based on race or gender can occur in dealings with suppliers,
employees, customers, the government, or the public. Unethical discrimination can occur at any
DISCUSSION ACTIVITY
Ask students to write down two or three sentences about an ethical dilemma they faced at
work—it could be a full-time summer job, part-time job, or as a member of an organization
CHAPTER QUESTION 2: IN WHAT WAYS DO UNETHICAL BEHAVIORS
INCREASE ORGANIZATIONAL COSTS?
Managers often underestimate the costs associated with unethical behaviors. The most direct cost
is lost business. It only takes one unethical behavior for an organization to lose a key customer or
find itself sued by an aggrieved party.
LEGAL COSTS
• Lawsuits are one of the most easily quantifiable costs associated with unethical
behaviors.
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EMPLOYEE THEFT
• Theft represents a cost directly incurred by the organization for hiring untrustworthy
employees.
• Employees can steal money, products, or time.
DISCUSSION ACTIVITY
In small groups, have each student describe a situation when he or she observed an employee or
customer stealing. How did the student react to the situation? Why?
MONITORING COSTS
Organizations incur monitoring costs when they employ, or do business with, unethical
individuals.
o JPMorgan Chase spent more than $730 million over 3 years to hire 2,500
REPUTATION COSTS
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• An organization’s reputation is one of its most important assets.
• Reputation management is a high priority for many corporations and accounts for 63
percent of their market value.
• VW emissions scandal
o Stock price declined 30 percent.
ABUSIVE TREATMENT COSTS
Researchers attribute a wide range of costs to less egregious unethical behaviors, such as a
verbally abusive manager:
• Abusive supervision affects approximately 13 percent of U.S. workers.
• Costs in terms of absenteeism, health care costs, and lost productivity have been
estimated to be $23.8 billion annually.
• Some employees “get even” with the abusive boss by stealing money or product from
Instructor Resource
Collins, Business Ethics 3e
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the most prevalent predictor of lawsuits is not the doctor’s skills or training. Instead,
it is the quality of the relationship between doctor and patient. Potential litigants tend
not to sue doctors they like.
RECRUITMENT AND TURNOVER COSTS
As will be discussed in the following section, unethical organizations incur greater costs
CHAPTER QUESTION 3: WHAT ARE THE COMPETITIVE ADVANTAGES OF
CREATING AND SUSTAINING AN ETHICAL ORGANIZATION?
A growing amount of research on organizational performance has shifted the theoretical debate
from choosing between ethical performance and financial performance to choosing ethical
performance because of its contributions to financial performance. Table 1.2 lists 11 competitive
advantages.
• 2016 meta-analysis of studies examining the relationship between corporate social
responsibility and corporate financial performance concluded that there was a
ATTRACT AND RETAIN HIGH QUALITY EMPLOYEES
o Ethical organizations, compared to unethical organizations, are more likely to attract
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ATTRACT AND RETAIN HIGH QUALITY CUSTOMERS
o A stellar ethical reputation is priceless marketing and leads to higher levels of
customer satisfaction and loyalty.
ATTRACT AND RETAIN HIGH QUALITY SUPPLIERS
o An ethical organization attracts high-quality suppliers and has higher levels of
supplier satisfaction and loyalty.
ATTRACT AND RETAIN HIGH QUALITY INVESTORS
o High-quality investors are attracted to ethical organizations, which leads to higher
levels of investor satisfaction and loyalty.
EARN GOOD WILL WITH COMMUNITY MEMBERS AND GOVERNMENT OFFICIALS
o Ethical organizations honestly communicate with stakeholders and pay their fair share
of taxes.
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o When problems arise between a company and powerful constituency groups,
PERFORMANCE BENEFITS
A host of performance benefits that ethical organizations achieve because they attract high-
quality employees and are trusted by customers, suppliers, investors, and government officials
include:
• Greater trustworthy information for decision making
DISCUSSION ACTIVITY
Ask if any students have ever done the following:
* chosen a job based on ethical considerations
BEST PRACTICES: PERSUADING EMPLOYEES OF THE IMPORTANCE OF BEING
ETHICAL
DISCUSSION ACTIVITY
Teacher role plays an unethical boss:
* Boss is verbally abusive.
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* Blames employees of his/her mistakes.
Have students try to persuade the teacher to be more ethical.
CHAPTER QUESTION 4: WHAT ARE THE FOUR BELIEFS ABOUT HUMAN
NATURE AS RELATED TO ETHICS AT THE TIME OF BIRTH?
What are the different perspectives on human nature?
HUMAN NATURE
• Given the many financial benefits associated with ethical behavior, and the many costs
associated with unethical behavior, why don’t all organizations excel in ethics? The core
of the problem can be found in the nature of human beings.
• Human nature refers to the moral, psychological, and social characteristics of human
BORN WITH PRIOR KNOWLEDGE OF RIGHT AND WRONG
• Among the ancient Greek philosophers, Socrates (469–399 BC) and Plato (427–347 BC)
theorized that individuals are born with a soul—consisting of mind, emotions, and desires
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BORN GOOD
• Conscience, in this context, is the voice of God, or pure goodness, within us.
o Individuals possess free will and can act in accordance with the goodness embodied
within their soul or conscience, or choose to do wrong.
• According to the philosopher Jean-Jacques Rousseau (1712–1778), children are born
good and then learn immoral behaviors from morally corrupt adults and institutions.
• University of Virginia Psychology Professor Jonathan Haidt maintains that infants are
BORN WITH INHERITED SIN
• Others believe that individuals are born morally imperfect, or with inherited sin.
• This does not mean individuals are born evil, just morally imperfect.
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BORN MORALLY NEUTRAL
• Lastly, some philosophers maintain that individuals are born morally neutral.
• Aristotle (384–322 BC) disagreed with his teacher Plato’s view that infants possessed
DISCUSSION ACTIVITY
Ask students to write answers to: (1) are people born morally good, bad, or neutral, and (2) is the
world getting morally better or worse over time? Provide some evidence to support your answer.
Have students discuss their answers in small groups.
CHAPTER QUESTION 5: DESCRIBE THE SIX STAGES OF MORAL
DEVELOPMENT.
COGNITIVE DEVELOPMENT
Whether born morally perfect, imperfect, or neutral, children are born into a particular
STAGES OF MORAL DEVELOPMENT