Questions and Answers of Business Ethics

Eagle Gate College hired an admission consultant from Stevens-Henager College (Janna Miller). After she was hired, Ms. Miller hired other employees from Steven-Henager, and some of those employees
In 1996, Boeing and Lockheed Martin were in a head-to-head competition for a multibillion-dollar government contract for furnishing the rockets that are used for launching satellites into space (a
Starwood and Hilton are direct, head-to-head competitors. In 2007, the Blackstone Group, a private equity firm, acquired Hilton for over $\$ 20$ billion in a top-of-the-market, highly leveraged
Philosophers have, of late years, considered chiefly the tendency of affections, and have given little attention to the relation which they stand in to the cause which excites them. In common life,
Trinity Industries is the manufacturer of a product you see every day-the guardrails in the middle of highways, freeways, toll ways, and byways around the country. However, Trinity will be paying
When the competition is stiff, the product, service, and price may not be the deciding factor. What the buyer believes about the competitor may be controlling. The following are statements made by
The Wall Street Journal investigated online pricing and discovered that your price may vary indeed. ${ }^{41}$ Using your zip code, online retailers determine the price of your stapler, your saw,
Leegin Creative Leather Products, Inc. (Leegin), designs, manufactures, and distributes leather goods and accessories under the brand name Brighton. The Brighton brand has now expanded into a full
Powder Corporation runs Park City Mountain. It owns the parking lots, the land at the foot of the mountains, and benefits from the skiers and tourists who visit year-round. It employs 1,200 people
The U.S. Department of Justice (DOJ) filed an antitrust suit against Apple and five of the largest publishers in the United States (Simon \& Schuster, HarperCollins, Hachette, Penguin, and
Macy's had what it believed to be an exclusive merchandising agreement with Martha Stewart, with Ms. Stewart agreeing to provide her name and endorsement to certain Macy's household products. Several
Mattel, Inc., is the world's largest manufacturer and marketer of toys, dolls, games, and stuffed toys and animals. Mattel employed Carter Bryant as a product designer from September 1995 through
Electronic Arts, Inc., a video company, had developed football and college video games. However, many of the players in the video games seemed to be images and likenesses of actual college athletes
As incongruous as it seems, the Hangover movie franchise is a hotbed of intellectual property issues. Last summer, Warner Brothers settled a lawsuit brought by the tattoo artist who did Mike Tyson's
It all began in 2012 when a Tiffany's customer wrote to Tiffany's to complain that the high-end retailer was selling its engagement rings at Costco. That was news to Tiffany's because the company was
Children at camps around the country in the summer of 1996 were not able to dance the "Macarena" except in utter silence. Their usual oldies dances were halted in 1996. The American Society of
Based on your readings in Unit 1, you understand that society recognizes the value of ethics. The cases in Unit 1 focused on individual conduct. But businesses are groups of individuals, and those
Countless sermons have been preached and printed on the ethics of business or the ethics of the businessman. Most have nothing to do with business and little to do with ethics.One main topic is
In the following classic reading, Albert Carr compares business to poker and offers a justification for business bluffing. Mr. Carr provides a different perspective from the previous discussion with
Companies such as Enron, WorldCom, Adelphia, Lehman, New Century Financial, Fannie Mae, MF Global, UBS, Chase, Valeant, Volkswagen, Theranos, and GM (many of these companies that you will study)
A typical form of flawed reasoning that businesses fall into is the either/or conundrum. This flawed analysis finds us reaching a decision, because the pressure is great, the consequences even
The CFA Institute (Certified Financial Analysts) has a saying, $P=f(x)$. For you nonmathematicians out there, the translation is that the probability of an ethical outcome is a direct function of
In June 2006, the Commodities Futures Trading Commission filed a civil complaint against $\mathrm{BP}$, alleging that its brokers tried to manipulate the price of propane by manipulating the
Valeant, a Canadian-based company, had a business model that was bound to attract public attention. Valeant's strategy was to purchase the rights to older prescription drugs, double (or more) the
The issues in ethics cases may change from driving solo in the carpool lane to Wi-Fi piggybacking, to issues of bribery, insider trading, and capitalization of ordinary expenses, but they still hark
Goldman Sachs was founded in 1869 with the humble purpose of being both an originator and a clearinghouse for commercial paper. Marcus Goldman, a German immigrant, founded the company along with his
The Penn State Nittany Lions football team, begun in 1887 , has been a powerhouse. The team has had seven undefeated seasons, two national titles, two Big Ten conference titles, and five other
The United States was abuzz for three weeks in January 2015 because one of the teams headed to the championship game (Super Bowl XLIX) for the National Football League (NFL) was under investigation
The problems of those online reviews. The number of stars, or lack thereof, can make or break a business. Consider Joe Hadeed's carpet cleaning business. A slew of negative reviews about his work
When I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age
Stakeholder theory is unique because it crosses over so many areas of business: the fields of business ethics, management and corporation law have all focused on stakeholder theory. While there is
"Rain-forest chic" is a label coined in the popular business press for the increasingly popular corporate branding strategy of capitalizing on consumer use of environmental issues as a screen for
The problem in today's era of corporate pseudo-ethics is that the pendulum has shifted too far. From genuine philanthropy "corporate responsibility" has mutated into a dangerous form of political
John Mackey, the founder and CEO of Whole Foods, has taken a sort of blended position on the role of business in society. He begins his analysis by asking the purpose of hospitals and schools and
Marjorie Kelly challenges the notion that stockholders fund the corporation by pointing out that only the initial shareholders of a corporation actually fund the corporation. When shares change hands
The prescription drug Daraprim is used to treat toxoplasmosis, a parasitic disease that generally occurs in patients with weakened immune systems, such as pregnant women or people suffering from
Walmart obtained approval after a long regulatory battle to build five stores in the Washington, DC, area. After the company had obtained the approvals, Washington, DC, approved a ballot measure and
Chipotle disclosed in January 2016 in an 8-K, an SEC filing that publicly traded companies must make when there are material business developments, that it had received a subpoena from the federal
The manufacture and sale of guns continue to be issues of social responsibility. Although the issues surrounding guns are complex, they are emotionally charged. Over the years, there have been a
Craigslist, referred to as the world's largest classified advertising, came into the public spotlight after medical school student Philip H. Markoff was charged with the murder of a young woman he
Planned Parenthood is a controversial organization that has an impact on any organization from which it obtains support and also from those organizations that withhold their support.Dayton-Hudson
Some years ago, when he was serving as the CEO for Motorola, before going on to become Kodak's CEO, George Fisher spoke to a group of our master's students from both engineering and business. One of
Simultaneously, the federal government anticipated pushback from lenders who would point out that these were high-risk loans and required greater returns. However, lenders were evaluated for their
The song set off a storm of protest from law enforcement groups. At the annual meeting of Time Warner at the Beverly Wilshire Hotel, 1,100 shareholders as well as police representatives and their
There are four levels of ethical issues, and there are different root causes for these levels. The levels of lapses as well as the prevention tools are depicted in Figure 3.4, followed by discussion
The New England Compounding Center (NECC) was the epicenter of a nationwide outbreak of meningitis that resulted in 77 deaths. The NECC produced a painkilling steroid for use in back treatments. The
At the beginning of 2015, CVS made the decision to stop selling tobacco in its drug stores around the country. The impact of the decision was about $\$ 2$ billion loss in tobacco sales. The ban has
Ashley Madison.com is known as an "infidelity website." The site, owned by Avid Dating Life, Inc., has as its motto, "Life is short. Have an affair." Its motto gives fairly clear insight into its
Biofuels were developed as an alternative to the use of oil and the dangers of its carbon footprint. Biofuels are made from corn, and the production of cars that run on biofuels has been mandated in
In March 2011, Vogue magazine ran a 3,000-word story, complete with full-page color photographs of Syria's first lady, Asma al-Assad, wife of Syria's leader, Bashar al-Assad. Vogue writer Joan Juliet
In March 1990, Bill Foley, research manager for Herman Miller, Inc., began a routine evaluation of new woods to use in the firm's signature piece--the \$2,277 (the 1990 cost) Eames chair. The Eames
Solyndra is a solar-cell factory located in California. Begun in 2005, Solyndra was perceived as a high-risk firm because its product design was that of creating cylindrical solar cells. The market
The U.S. Justice Department announced that it was dropping all charges against convicted former Alaska U.S. Senator, the late Ted Stevens. U.S. Attorney General Eric Holder announced that his office
George Lefcoe, a renowned USC law professor and expert in real property, zoning, and development and, for a time, a commissioner of the Los Angeles County Regional Planning Commission, offered the
The experts in organizational behavior tell us that when it comes to incentive plans not all employees are created equal. That is, their literature says to tailor those incentive plans individually
Captain Sullenberger's experience and reflections sum up how it works when we face those life-defining, career-defining, and organization-defining ethical dilemmas. Everything we do until those
Penny Winters was a 63 -year-old maintenance worker at the Portage, Indiana, Walmart store. The surveillance cameras caught Ms. Winters eating Oreos that she had not paid for during her evening shift
How are the mighty fallen! $!^{11}$ As we watched the financial firms and businesses fold in near domino fashion following the 2008 financial crisis, we found ourselves wondering what we did or
When Arthur Levitt was the chairman of the Securities Exchange Commission (SEC), he gave a speech at New York University (NYU) that became known as the "Numbers Game" speech. He spoke presciently
There was a time when undergraduate students paid for preparation courses for the LSAT. That practice evolved to hiring a one-on-one tutor to coach them on the LSAT. Law schools had no difficulty
Yvonne Atkinson Gates, once the chairperson of the Clark County, Nevada, Commission, an elected office, also operated her own daiquiri business. Many of the new and expanding hotels in Clark County,
A recurring theme has emerged over the past few years in classroom discussions and management training about cases that involve subprime lending, CDOs, hedge funds, and the exotic instruments that
There is no such thing as a rogue trader. So I wrote in 1996 in analyzing the Nick Leeson/ Joseph Jett losses and characterizations. Joseph Jett was the then-32-year-old bond trader who found an
The FINOVA Group, Inc., was formed as a commercial finance firm in 1992. It was created as a spin-off from the Greyhound Financial Corporation (GFC). GFC underwent a complete restructuring at that
Since 2005, Claremont McKenna, ranked number nine on U.S. News \& World Report's best liberal arts colleges in the country, has been lopping on a few points here and there to its entering students'
In 1998, the Department of the Interior began an incentive plan for oil companies that permitted the companies to waive the $12.5 \%$ royalty generally paid to the U.S. government for oil leases on
This section of SOX established a quasi-governmental entity called the Public Company Accounting Oversight Board (PCAOB, but called "Peek-a-Boo") under the direction of the SEC to (1) oversee the
It was 1983 when Bernard J. (aka "Bernie") Ebbers founded Long Distance Discount Service (LDDS), a discount long-distance telephone company, ${ }^{148}$ Local legend has it that Mr. Ebbers, a
Under the leadership of CEO Don Blankenship, Massey went from a family-operated company to a corporation with 150 mines with revenues of $\$ 2.6$ billion. That growth came in response to Mr.
So wrote Matthew Lee, on May 18, 2008, to the CFO and Chief Risk Officer of Lehman Brothers, a firm that had employed him as an analyst since 1994. Mr. Lee, who headed global balance-sheet and
The U.S. Department of Agriculture issued its biggest meat recall in its history when it ordered a recall of 143 million pounds of meat processed and sold by Westland/Hallmark Meat Packing Company.
"What were they smoking?" The Fortune cover story featured those words in a 3.5-inch headline, as well as photos of Chuck Prince, Citigroup (\$9.8 billion loss), Jimmy Cayne, Bear Stearns ( \(\$
Enron Corp. was an energy company that was incorporated in Oregon in 1985, with its principal executive offices located in Houston, Texas. By the end of 2001, Enron Corp. was the world's largest
Arthur Andersen, once known as the "gold standard of auditing," was founded in Chicago in 1913 on a legend of integrity as Andersen, Delaney \& Co. In those early years, when the business was
Facing foreclosure, mortgagors who have loans that exceed their property value often have a sense of hopelessness and "nothing to lose." These mortgagors simply leave the property, something that is
HealthSouth, a chain of hospitals and rehabilitation centers, used its celebrity and sports figure patients as a means of marketing and distinction. Press releases touted sports figures' use of
Investors and markets are not always jittery for no reason. There were some Tyco accounting issues that centered on its acquisitions and its accounting for those acquisitions. ${ }^{569}$ What
Employees who are faced with a situation at work in which their values are at odds with the actions of their employers are grappling with their sense of loyalty to the company and their coworkers as
Beech-Nut was heavily in debt, had only $15 \%$ of the baby food market, and was operating out of a badly maintained 80-year-old plant in Canajoharie, New York. Creditors and debt were growing.
The Veterans Administration (VA), the country's largest health care system with 9 million Veteran patients and 1,200 facilities, had a plan. It was a program begun with the best of intentions: reward
Morton Thiokol, Inc., an aerospace company, manufactures the solid-propellant rocket motors for the Peacekeeper missile and the missiles on Trident nuclear submarines. Thiokol also worked closely
Diamond Foods, Inc., was once a cooperative among walnut growers, known as Diamond Walnuts. In 2005, it became a publicly traded corporation. The shareholders of the corporation included the farmers
The Foundation for New Era Philanthropy was founded in 1989 by Mr. John G. Bennett Jr. New Era took in over \$200 million between 1989 and May 1995, from 180 nonprofit organizations, before the
Bernard Madoff and his securities firm were an operation that, for over 18 years, managed to lose $\$ 50$ billion in investors' funds. Madoff, the former chairman of NASDAQ, was able to dupe
John Rigas opened his first business in 1952 in Coudersport, Pennsylvania, an old-fashioned movie theater, something he still would own at the time he would be indicted for fraud and other felonies
The governor's report cited three key reasons that such levels of cheating flourished in APS. The first was that the district set unrealistic test-score goals, or "targets." ${ }^{\text {" } 752}$
Tim Donaghy, a referee for the NBA, entered a guilty plea to two federal felony charges in connection with his bets and tips on NBA games. The charges are conspiracy to engage in wire fraud and
The United Way, which evolved from the local community chests of the 1920 s, is a national organization that funnels funding to charities through a payroll deduction system. Ninety percent of all
Media companies purchase ad time on Facebook based on metrics the company uses to calculate the average viewing time for its ads. The price the media companies pay is based on that viewing time.
Well, welcome to the new subprime market-auto loans! The loan companies advertise on television, have toll-free numbers, and are willing to loan just about anyone at least $\$ 1,000$. The reason
On November 3, 2009, Robert McDonnell was elected the 71st governor of Virginia. When Mr. McDonnell took office, he was struggling financially. A real estate LLC (Mobo) that he owned with his sister
The New York Post took a ruler and discovered something interesting: the Subway Footlong is only 11 inches long. The Post became curious because in January 2013, a Subway customer from Perth,
In 1991, the California Department of Consumer Affairs began investigating Sears Auto Repair Centers. Sears' automotive unit, with 850 repair shops nationwide, generated 9%9% of the merchandise
The FDA ordered the company to "cease misbranding."34 Ms. Kardashian issued a corrective post the day after the FDA letter was received explaining the limitations of Diclegis and providing a link to
The city of Detroit pays out almost $200$200 million per year in pension benefits to its retired workers. The city's annual contributions to its pension plan are less than half of that sum. 3636 As
Even the well-seasoned Dillard's manager was taken aback by this one. A customer brought in a pair of moderately expensive dress shoes, expressing a desire to return them because they just weren't
Included in government research grants to universities are indirect cost payments designed to compensate for the researchers' use of the schools' facilities.Stanford University received approximately
When the U.S. Supreme Court decided Kelo v. City of New London, 545 U.S. 469(2005), a constitutional and legislative shock wave rumbled across the country. States changed their statutes and
Intel, which makes components used in $80 \%$ of all personal computers, introduced the powerful Pentium chip in 1993. Intel had spent \$1 billion developing the chip, and the cost of producing it
Following the September 11, 2001, attacks on the World Trade Center and Washington, DC, there were many who had lost loved ones, their homes or businesses, or both.The outpouring of support from the

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