Exam 2: Business and Its Ethical Dilemmas

BP's exploration activity decreased following the Deepwater Horizon spill.

Junius Wright is applying for a position with a federal contractor. Junius was a member of the Communist party for 2 years during college. A question on the application asks, "Have you ever been a member of an organization that supported subversive activity against the United States?"   Junius answers "no" because in his chapter, no one ever discussed activity against the United States. Which of the following statements is correct?

Which company uses primum non nocere as its credo?

CDOs:

Fabrice Tourre was aware that the CDO market was going to crash.

What was the issue with Valeant's accounting?

The either/or conundrum produces a comfort with ethical issues because we convince ourselves that there is no other choice.

Frank Hoffman is the CEO of Triple Plus, Inc., a group of four successful restaurants in the Southwest. One member of the Triple Plus board of directors, Sam Wasson, has a daughter, Chelsea Wasson, who has just started Chelsea's Cloths, a business that supplies restaurant linens. Wasson has approached Hoffman to explain Chelsea's business. Chelsea's Cloths has adopted an environmental emphasis in its operations as a way of countering the industry trend toward the use of paper products in restaurants. Sam Wasson initially recruited Hoffman as CEO, was instrumental in having the board select Hoffman, and is one of Hoffman's strong backers. Wasson supported Hoffman when other board members were impatient with his new procedures, policies, and changes. Ordinarily, when someone approaches Frank Hoffman with information on a new supplier, he takes the information and refers it to the purchasing/supply area or refers the person directly to the manager of purchasing. In this case, Frank personally presented the information to Triple's purchasing manager, Deidre Hall. Frank offered Deidre the Chelsea's Cloths brochure and card and explained, "She is Sam Wasson's daughter. She just graduated in marketing from State University last June and now has her own firm. See what you can do. Our contract with Lila's Linens is up for renewal. Maybe we can do something." Deidre evaluated Chelsea's and Lila's proposals as well as that of an additional firm in making the purchasing decision. Although the pricing between Chelsea's and Lila's is equivalent, Chelsea's is too young a firm to have a track record, and Deidre is not convinced that Chelsea's can handle Triple's large account. Given Mr. Hoffman's interest, however, Deidre is confused about what recommendation to make. a.Should Deidre recommend Chelsea's firm or offer her true recommendation? b. Would it be ethical for Hoffman to change Deidre's decision? c.What if Wasson had requested bid information so that his daughter could be competitive? Should Deidre supply it? Should Hoffman direct Deidre to supply it? d.Can you solve the conflict without offending the director? e.Does Hoffman need to be concerned about how his intervention would reflect the "tone at the top"? Could employees misinterpret his actions?

In the Penn State case, who was charged with criminal activity?

Peter Drucker believes that stiff punishments for executives are important in preventing unethical behavior.

Leaders who are focused on their own goals are less likely to lose their way when it comes to ethics.

Who named BP the world's most admired company?

In the Goldman Abacus deal, who determined what mortgages went into the investment pool?

Peter Drucker believes that those who have more education should be held to higher standards.

Discuss how the ethical views of the New England Patriots and Goldman Sachs are similar. Also discuss whether the two organizations follow the Drucker or Carr views on ethics in business.

Discuss why Goldman Sachs was a disciple of Albert Carr's theory of "business is a poker game and we are all bluffing."

Albert Carr believes that a card up the sleeve is not the same as bluffing and is a form of cheating.

Loyalty to employers can create conflicts with employees who have concerns about their employer's conduct.

Goldman did not pay a fine to the SEC.

"To bribe or not to bribe" is a set-up for the either/or conundrum.