Deck 2: Business Ethics and Social Responsibility

Question 1

Ethics Case: Mickey Weighs In
As we have seen, many food companies manipulate products to maximize their appeal, without regard to the health of their customers. Disney is taking a different approach-announcing recently that only healthy foods can be advertised on its children's television channels, radio stations, and websites. Candy, fast food, and sugared cereals are banned from Mickey land. Kicked to the curb are such childhood favorites as Lunchables and Capri Sun drinks. In addition, sodium must be reduced by one quarter in food served at its theme parks. Nor does Disney permit its characters to associate with unhealthy foods. No more Mickey Pop-Tarts or Buzz LightyearHappy Meals. Said Disney chairman, Robert Iger, "Companies in a position to help with solutions to childhood obesity should do just that."
Disney will certainly lose advertising, but would not say how much. Food sales at its theme parks may decline if children find the options less appealing. Its licensing revenues are also affected by its decisions to remove Disney characters from the likes of Pop-Tarts and Happy Meals.
On the other hand, this healthy initiative will enhance its reputation, at least with parents, who increasingly seek healthy food options for their children. Disney will profit from license fees it receives for the use of a Mickey Check logo on healthy food in grocery aisles and restaurants. This food initiative may also help forestall more onerous government regulation.
How much advertising and licensing revenue would you be willing to give up to protect children from ads for unhealthy foods Does your answer depend on how profitable the division is

Answer 1

It does not matter that how profitable the division is and how much of advertising and licensing revenue generated is give up to protect children from ads for unhealthy food. It matters that if any such initiative has been taken up by the company to protect children from unhealthy food habits than it would be continue to reach the level or up to the expectations of the company.

Question 2

Because Raina processes payroll at her company, she knows how much everyone earns, including the top executives. This information could make for some good gossip, but she has kept it all completely confidential. She just found out, however, that it is against company policy for her to do payroll for C-level employees. And her boss knew it. Yesterday, the CEO went to her boss to confirm that he, the boss, was personally doing the processing for top management. Her boss lied to the CEO and said that he was. Then he begged Raina not to tell the truth if the CEO checked with her. Raina just got a message that the CEO wants to see her. What does she say if he asks about the payroll

Answer 2

Ethically, if CEO asked R about the processing then she should speak the truth that she is processing the payroll of the company including the top managerial employees and she would also let her CEO know that her boss is not working on it.
Ethics says that she needs not to tell a lie. If R does not tell the truth to the CEO as she was begged by her boss not to tell that she is working on the payroll process then she would lay under the ethic trap it means she is following the order of her boss knowing that it is complete wrong to tell lie to his CEO about the payrolls. Any policy made by the company is for the betterment of the employees or for the benefit of the company. It is highly unethical to work against the policies of the company

Question 3

Ethics Case: Mickey Weighs In
As we have seen, many food companies manipulate products to maximize their appeal, without regard to the health of their customers. Disney is taking a different approach-announcing recently that only healthy foods can be advertised on its children's television channels, radio stations, and websites. Candy, fast food, and sugared cereals are banned from Mickey land. Kicked to the curb are such childhood favorites as Lunchables and Capri Sun drinks. In addition, sodium must be reduced by one quarter in food served at its theme parks. Nor does Disney permit its characters to associate with unhealthy foods. No more Mickey Pop-Tarts or Buzz LightyearHappy Meals. Said Disney chairman, Robert Iger, "Companies in a position to help with solutions to childhood obesity should do just that."
Disney will certainly lose advertising, but would not say how much. Food sales at its theme parks may decline if children find the options less appealing. Its licensing revenues are also affected by its decisions to remove Disney characters from the likes of Pop-Tarts and Happy Meals.
On the other hand, this healthy initiative will enhance its reputation, at least with parents, who increasingly seek healthy food options for their children. Disney will profit from license fees it receives for the use of a Mickey Check logo on healthy food in grocery aisles and restaurants. This food initiative may also help forestall more onerous government regulation.
What ethics traps does Disney face

Answer 3

D is facing the money ethics trap. Most of the companies will always look for the profits. They can go to any limits to earn more and more profits. But D wants to take an initiative to support a good cause. The only trap they are facing is related to money only. They will certainly lose advertisement. Food sale at its theme park may decline if children find it less appealing. Its licensing revenue also get affected by this decision.

Question 4

If you were one of the many companies using products that contain formaldehyde, what would you do What would you be willing to pay to provide a safer product

Question 5

Charlie Sheen, the star of the hit CBS TV show Two and a Half Men, has admitted to using large quantities of cocaine. He has been hospitalized with drug overdoses and has been charged with both misdemeanor and felony drug offenses, which have led to probation several times. When asked about entering rehab, he said that only losers go to recovery programs and he could cure himself with his mind. He openly spent tens of thousands of dollars on prostitutes. His second wife filed a restraining order against him, alleging that he had pushed her down the stairs and threatened to kill her. He was also charged with a felony for threatening his third wife. She claims that he held a knife to her throat and said "You better be in fear. If you tell anybody, I'll kill you." Then there was the widely reported incident in the Plaza Hotel in New York City in which the police escorted him to the hospital after he trashed his room and threatened the prostitute whom he had hired-all while his ex-wife and children slept in a room across the hall. Five months later, the police removed his twin sons from his house after their mother obtained a restraining order. On a radio show, Sheen made anti-Semitic comments about his boss, called him a clown and a charlatan, and said that he "violently hated him." This boss was the most successful producer of comedy shows in the business.
Would you fire a warehouse worker who behaved this way How much revenue does an employee have to bring in to be able to buy his way out of bad behavior

Question 6

Kant believed that:
(a) it is ethical to tell a lie if necessary to protect an innocent person from great harm.
(b) it is ethical to tell a lie if the benefit of the lie outweighs the cost.
(c) it is ethical to make a true, but misleading, statement.
(d) it is wrong to tell an outright lie or to mislead.

Question 7

Ethics Case: No Sheen on Sheen
Charlie Sheen, who starred in the hit CBS television show Two and a Half Men , admitted to using large quantities of cocaine. He was hospitalized with drug overdoses and had been charged with both misdemeanor and felony drug offenses, which led to probation several times. When asked about entering rehab, he said that only losers go to recovery programs and he could cure himself with his mind. He openly spent tens of thousands of dollars on prostitutes. His second wife filed a restraining order against him, alleging that he had pushed her down the stairs and threatened to kill her. He was also charged with a felony for threatening his third wife. She claimed that he held a knife to her throat and said, "You better be in fear. If you tell anybody, I'll kill you." Then there was the widely reported incident in the Plaza Hotel in New York City in which the police escorted him to the hospital after he trashed his room and threatened the prostitute whom he had hired-all while his ex-wife and children slept in a room across the hall. Five months later, the police removed his twin sons from his house after their mother obtained a restraining order. On a radio show, Sheen made anti-Semitic comments about his boss, called him a clown and a charlatan, and said that he "violently hated him." This boss was the most successful producer of comedy shows in the business.
What is your Life Principle What behavior are you willing to tolerate in the interest of profitability

Question 8

While waiting in line at a supermarket, you observe a woman trying to pay with food stamps. Under the law, food stamps cannot be used to pay for prepared items so the register would not accept the stamps in payment for a $6 container of chicken noodle soup from the deli counter. The woman explained that she was sick and did not have the energy to cook. She just wanted to go home and get in bed. In general, you agree that this law is reasonable-people on limited budgets should not be buying more expensive prepared food. But the woman is sick. Would it be ethical for you to buy her chicken soup if she agreed to buy $6 worth of your grocery items

Question 9

Yanni is the CEO of Cloud Farm, a company that provides online data centers for Internet companies. Because these data centers are enormous, they are located in rural areas where they are often the main employer. A series of tornados has just destroyed a data center near Farmfield, Arkansas, a town with a population of roughly 5,000 people. Farmfield is a threehour drive from the nearest city, Little Rock.
Here is the good news: the insurance payout will cover the full cost of rebuilding. Indeed, the payout will be so generous that Cloud Farm could build a bigger and better facility than the one destroyed. The bad news Data centers are much more expensive to build and operate in the United States than in Africa, Asia, or Latin America. Yanni could take the money from the insurance company and build three data centers overseas. He has asked Adam and Zoe to present the pros and cons of relocating.
Adam says: "If we rebuild overseas, our employees will never find equivalent jobs. We pay $20 an hour, and the other jobs in town are mostly minimum-wage. And remember how some of the guys worked right through Christmas to set up for that new client. They have been loyal to us-we owe them something in return. And it's not just bad for Farmfield or Arkansas, it's bad for the country. We can't continue to ship jobs overseas."
Zoe responds: "That is the government's problem, not ours. We'll pay to retrain the workers, which, frankly, is a generous offer. Our investors get a return of 4 percent; the industry average is closer to 8 percent. If we act like a charity to support Farmfield, we could all lose our jobs. It is our obligation to do what's best for our shareholders-which, in this case, happens to be what's right for us, too."
Imagine that you personally own $10,000 worth of shares in Cloud Farm. Would you be upset with a decision to rebuild the data center in the United States

Question 10

Ethics Case: Mickey Weighs In
As we have seen, many food companies manipulate products to maximize their appeal, without regard to the health of their customers. Disney is taking a different approach-announcing recently that only healthy foods can be advertised on its children's television channels, radio stations, and websites. Candy, fast food, and sugared cereals are banned from Mickey land. Kicked to the curb are such childhood favorites as Lunchables and Capri Sun drinks. In addition, sodium must be reduced by one quarter in food served at its theme parks. Nor does Disney permit its characters to associate with unhealthy foods. No more Mickey Pop-Tarts or Buzz LightyearHappy Meals. Said Disney chairman, Robert Iger, "Companies in a position to help with solutions to childhood obesity should do just that."
Disney will certainly lose advertising, but would not say how much. Food sales at its theme parks may decline if children find the options less appealing. Its licensing revenues are also affected by its decisions to remove Disney characters from the likes of Pop-Tarts and Happy Meals.
On the other hand, this healthy initiative will enhance its reputation, at least with parents, who increasingly seek healthy food options for their children. Disney will profit from license fees it receives for the use of a Mickey Check logo on healthy food in grocery aisles and restaurants. This food initiative may also help forestall more onerous government regulation.
What if this initiative had not come down from the highest levels in the company Would you have been willing to fight for it

Question 11

Yanni is the CEO of Cloud Farm, a company that provides online data centers for Internet companies. Because these data centers are enormous, they are located in rural areas where they are often the main employer. A series of tornados has just destroyed a data center near Farmfield, Arkansas, a town with a population of roughly 5,000 people. Farmfield is a threehour drive from the nearest city, Little Rock.
Here is the good news: the insurance payout will cover the full cost of rebuilding. Indeed, the payout will be so generous that Cloud Farm could build a bigger and better facility than the one destroyed. The bad news Data centers are much more expensive to build and operate in the United States than in Africa, Asia, or Latin America. Yanni could take the money from the insurance company and build three data centers overseas. He has asked Adam and Zoe to present the pros and cons of relocating.
Adam says: "If we rebuild overseas, our employees will never find equivalent jobs. We pay $20 an hour, and the other jobs in town are mostly minimum-wage. And remember how some of the guys worked right through Christmas to set up for that new client. They have been loyal to us-we owe them something in return. And it's not just bad for Farmfield or Arkansas, it's bad for the country. We can't continue to ship jobs overseas."
Zoe responds: "That is the government's problem, not ours. We'll pay to retrain the workers, which, frankly, is a generous offer. Our investors get a return of 4 percent; the industry average is closer to 8 percent. If we act like a charity to support Farmfield, we could all lose our jobs. It is our obligation to do what's best for our shareholders-which, in this case, happens to be what's right for us, too."
What is your Life Principle on this issue Would you be willing to risk your job to protect your employees

Question 12

What ethics traps is Orlanda facing

Question 13

Ethics Case: Truth ( ) in Borrowing
Rob is in the business of buying dental practices. He finds solo practitioners, buys their assets, signs them to a long-term contract and then improves their management and billing processes so effectively that both he and the dentists are better off.
Rob has just found a great opportunity with a lot of potential profit. There is only one problem. The bank will not give him a loan to buy the practice without checking the dentist's financial record. Her credit rating is fine, but it turns out that she filed for bankruptcy twenty years ago. That event no longer appears on her credit rating, but the bank asked about bankruptcies on the form it required her to sign. She is perfectly willing to lie. Rob refused to turn in the form with a lie. But when the bank learned about the bankruptcy, it denied his loan even though her bankruptcy in no way affects his ability to pay the loan. And the incident is ancient history-the dentist's current finances are strong. Four other banks also refused to make the loan.
Rob is feeling pretty frustrated. He figures the return on this deal would be 20 percent. Everyone would benefit-the dentist would earn more, her patients would have better technology, he could afford a house in a better school district, and the bank would make a profit. There is one more bank he could try.
Who would be harmed by this lie

Question 14

Ethics Case: No Sheen on Sheen
Charlie Sheen, who starred in the hit CBS television show Two and a Half Men , admitted to using large quantities of cocaine. He was hospitalized with drug overdoses and had been charged with both misdemeanor and felony drug offenses, which led to probation several times. When asked about entering rehab, he said that only losers go to recovery programs and he could cure himself with his mind. He openly spent tens of thousands of dollars on prostitutes. His second wife filed a restraining order against him, alleging that he had pushed her down the stairs and threatened to kill her. He was also charged with a felony for threatening his third wife. She claimed that he held a knife to her throat and said, "You better be in fear. If you tell anybody, I'll kill you." Then there was the widely reported incident in the Plaza Hotel in New York City in which the police escorted him to the hospital after he trashed his room and threatened the prostitute whom he had hired-all while his ex-wife and children slept in a room across the hall. Five months later, the police removed his twin sons from his house after their mother obtained a restraining order. On a radio show, Sheen made anti-Semitic comments about his boss, called him a clown and a charlatan, and said that he "violently hated him." This boss was the most successful producer of comedy shows in the business.
What would Kant and Mill say is the right thing to do in this case What result under the Front Page Test

Question 15

You are negotiating a new labor contract with union officials. The contract covers a plant that has experienced operating losses over the past several years. You want to negotiate concessions from labor to reduce the losses. However, labor is refusing any compromises. You could tell them that, without concessions, the plant will be closed, although that is not true.
Is bluffing ethical Under what circumstances What would Kant and Mill say What result under the Front Page test What is your Life Principle

Question 16

The Senate recently released a report on wrongdoing at JPMorgan Chase Co. It found that bank executives lied to investors and the public. Also, traders, with the knowledge of top management, changed risk limits to facilitate more trading and then violated even these higher limits. Executives revalued the bank's investment portfolio to reduce apparent losses. The bank's internal investigation failed to find this wrongdoing. Into what ethics traps did these JPMorgan employees fall What options did the executives and traders have for dealing with this wrongdoing

Question 17

Who would be harmed by this lie

Question 18

Yanni is the CEO of Cloud Farm, a company that provides online data centers for Internet companies. Because these data centers are enormous, they are located in rural areas where they are often the main employer. A series of tornados has just destroyed a data center near Farmfield, Arkansas, a town with a population of roughly 5,000 people. Farmfield is a threehour drive from the nearest city, Little Rock.
Here is the good news: the insurance payout will cover the full cost of rebuilding. Indeed, the payout will be so generous that Cloud Farm could build a bigger and better facility than the one destroyed. The bad news Data centers are much more expensive to build and operate in the United States than in Africa, Asia, or Latin America. Yanni could take the money from the insurance company and build three data centers overseas. He has asked Adam and Zoe to present the pros and cons of relocating.
Adam says: "If we rebuild overseas, our employees will never find equivalent jobs. We pay $20 an hour, and the other jobs in town are mostly minimum-wage. And remember how some of the guys worked right through Christmas to set up for that new client. They have been loyal to us-we owe them something in return. And it's not just bad for Farmfield or Arkansas, it's bad for the country. We can't continue to ship jobs overseas."
Zoe responds: "That is the government's problem, not ours. We'll pay to retrain the workers, which, frankly, is a generous offer. Our investors get a return of 4 percent; the industry average is closer to 8 percent. If we act like a charity to support Farmfield, we could all lose our jobs. It is our obligation to do what's best for our shareholders-which, in this case, happens to be what's right for us, too."
If Cloud Farm decides to rebuild in Arkansas, should it pay the workers while the center is being rebuilt If yes, should it apply to all the workers, or just the high-level ones who might leave if they were not paid

Question 19

Ethics Case: Mickey Weighs In
As we have seen, many food companies manipulate products to maximize their appeal, without regard to the health of their customers. Disney is taking a different approach-announcing recently that only healthy foods can be advertised on its children's television channels, radio stations, and websites. Candy, fast food, and sugared cereals are banned from Mickey land. Kicked to the curb are such childhood favorites as Lunchables and Capri Sun drinks. In addition, sodium must be reduced by one quarter in food served at its theme parks. Nor does Disney permit its characters to associate with unhealthy foods. No more Mickey Pop-Tarts or Buzz LightyearHappy Meals. Said Disney chairman, Robert Iger, "Companies in a position to help with solutions to childhood obesity should do just that."
Disney will certainly lose advertising, but would not say how much. Food sales at its theme parks may decline if children find the options less appealing. Its licensing revenues are also affected by its decisions to remove Disney characters from the likes of Pop-Tarts and Happy Meals.
On the other hand, this healthy initiative will enhance its reputation, at least with parents, who increasingly seek healthy food options for their children. Disney will profit from license fees it receives for the use of a Mickey Check logo on healthy food in grocery aisles and restaurants. This food initiative may also help forestall more onerous government regulation.
What is your Life Principle How much profitability (or income) are you willing to give up to protect children you do not know

Question 20

Milton Friedman was a strong believer in the __________model.
He ___________argue that a corporate leader's sole obligation is to make money for the company's owners.
(a) shareholder; did
(b) shareholder; did not
(c) stakeholder; did
(d) stakeholder; did not

Question 21

What would Mill and Kant recommend

Question 22

What is your Life Principle about telling lies When is making a misrepresentation acceptable To protect someone's life or physical safety To protect a job To protect another person's feelings To gain an advantage When others are doing the same When it makes sense from a cost-benefit perspective

Question 23

Craig Newmark founded craigslist, the most popular website in the country for classified ads. Rather than maximizing its profits, craigslist instead focused on developing a community among its users. It was a place to find an apartment, a pet, a job, a couch, a date, a babysitter, and, it turned out, a prostitute. Most of the ads oncraigslist were free, but blatant ads for sex were not. Much of the company's revenue was from these illegal services. Many of the prostitutes available on craigslist were not independent entrepreneurs; they were women and girls bought and sold against their will. To fight sex trafficking, craigslist required credit cards and phone numbers, and it reported any suspicious ads. Law enforcement officials pressured craigslist to close the sex section of its website. But some people argued that blocking these ads was a violation of free speech and would just drive this business more underground where law enforcement officials were less likely to be able to find it. Others said that banning these ads made the business model of selling children for sex less profitable. Does it seem that trafficking women and children was in keeping with the founder's Life Principles What were his options Could he have had any real impact on this thriving industry What traps did he face

Question 24

Ethics Case: Mickey Weighs In
As we have seen, many food companies manipulate products to maximize their appeal, without regard to the health of their customers. Disney is taking a different approach-announcing recently that only healthy foods can be advertised on its children's television channels, radio stations, and websites. Candy, fast food, and sugared cereals are banned from Mickey land. Kicked to the curb are such childhood favorites as Lunchables and Capri Sun drinks. In addition, sodium must be reduced by one quarter in food served at its theme parks. Nor does Disney permit its characters to associate with unhealthy foods. No more Mickey Pop-Tarts or Buzz LightyearHappy Meals. Said Disney chairman, Robert Iger, "Companies in a position to help with solutions to childhood obesity should do just that."
Disney will certainly lose advertising, but would not say how much. Food sales at its theme parks may decline if children find the options less appealing. Its licensing revenues are also affected by its decisions to remove Disney characters from the likes of Pop-Tarts and Happy Meals.
On the other hand, this healthy initiative will enhance its reputation, at least with parents, who increasingly seek healthy food options for their children. Disney will profit from license fees it receives for the use of a Mickey Check logo on healthy food in grocery aisles and restaurants. This food initiative may also help forestall more onerous government regulation.
What obligation does Disney have to its young customers Does it owe them anything other than entertainment

Question 25

Darby has been working for 14 months at Holden Associates, a large management consulting firm. She is earning $75,000 a year, which sounds good but does not go very far in New York City. It turns out that her peers at competing firms are typically paid 20 percent more and receive larger annual bonuses. Darby works about 60 hours a week-more if she is traveling. A number of times, she has had to reschedule her vacation or cancel personal plans to meet client deadlines. She hopes to go to business school in a year and has already begun the application process.
Holden has a policy that permits any employee who works as late as 8:00 P.M. to eat dinner at company expense. The employee can also take a taxi home. Darby is in the habit of staying until 8:00 P.M. every night, whether or not her workload requires it. Then she orders enough food for dinner, with leftovers for lunch the next day. She has managed to cut her grocery bill to virtually nothing. Sometimes she invites her boyfriend to join her for dinner. As a student, he is always hungry and broke. Darby often uses the Holden taxi to take them back to his apartment, although the cab fare is twice as high as to her own place.
Sometimes Darby stays late to work on her business school applications. Naturally, she uses Holden equipment to print out and photocopy the finished applications. Darby has also been known to return catalog purchases through the Holden mail room on the company dime. Many employees do that, and the mail room workers do not seem to mind.
Is Darby doing anything wrong How would you behave in these circumstances

Question 26

What Life Principle would you apply

Question 27

You are a president of a small, highly rated, liberal college in California. Many of the dining hall workers are Latino. Some of these workers are trying to organize a union, which would dramatically increase the college's costs at a time of budget pressure. One of your vice presidents suggests hiring a law firm to review the college's employment records to make sure all employees have the proper documentation showing that they are in the United States legally. It seems likely that some of the rabble rousers will turn out to be illegal and could be deported, thereby solving your union problem. What would you do

Question 28

Charlie Sheen, the star of the hit CBS TV show Two and a Half Men, has admitted to using large quantities of cocaine. He has been hospitalized with drug overdoses and has been charged with both misdemeanor and felony drug offenses, which have led to probation several times. When asked about entering rehab, he said that only losers go to recovery programs and he could cure himself with his mind. He openly spent tens of thousands of dollars on prostitutes. His second wife filed a restraining order against him, alleging that he had pushed her down the stairs and threatened to kill her. He was also charged with a felony for threatening his third wife. She claims that he held a knife to her throat and said "You better be in fear. If you tell anybody, I'll kill you." Then there was the widely reported incident in the Plaza Hotel in New York City in which the police escorted him to the hospital after he trashed his room and threatened the prostitute whom he had hired-all while his ex-wife and children slept in a room across the hall. Five months later, the police removed his twin sons from his house after their mother obtained a restraining order. On a radio show, Sheen made anti-Semitic comments about his boss, called him a clown and a charlatan, and said that he "violently hated him." This boss was the most successful producer of comedy shows in the business.
If CBS fired Sheen from his TV show, the network would lose tens of millions of dollars. At what point, if any, should CBS have fired him If not for this, then for what

Question 29

A group of medical schools conducted a study on very premature babies-those born between 24 and 27 weeks of gestation (instead of the normal 40 weeks). These children face a high risk of blindness and death. The goal of the study was to determine which level of oxygen in a baby's incubator produced the best results. Before enrolling families in the study, the investigators did not tell them that being in the study could increase their child's risk of blindness or death. The study made some important discoveries about the best oxygen level. These results could benefit many children. What would Mill and Kant say about this decision not to tell the families

Question 30

David has just spoken with a member of his sales team who has not met her sales goals for some months. She has also missed 30 days of work in the past six months. It turns out that she is in the process of getting a divorce, and her teenage children are reacting very badly. Some of the missed days have been for court, others because the children have refused to go to school. If David's team does not meet its sales goals, no one will get a bonus, and his job may be at risk. What should he do

Question 31

Many socially responsible funds are now available to investors who want to make ethical choices. For example, the Appleseed Fund avoids tobacco products, alcoholic beverages, gambling, weapons systems, or pornography, while the TIAA-CREF Social Choice Equity Premier Fund invests in companies that are "strong stewards of the environment," devoted to serving local communities and committed to high labor standards. Are socially responsible funds attractive to you Does it matter if they are less profitable than other alternatives How much less profitable Do you now, or will you in the future, use them in saving for your own retirement

Question 32

Yanni is the CEO of Cloud Farm, a company that provides online data centers for Internet companies. Because these data centers are enormous, they are located in rural areas where they are often the main employer. A series of tornados has just destroyed a data center near Farmfield, Arkansas, a town with a population of roughly 5,000 people. Farmfield is a threehour drive from the nearest city, Little Rock.
Here is the good news: the insurance payout will cover the full cost of rebuilding. Indeed, the payout will be so generous that Cloud Farm could build a bigger and better facility than the one destroyed. The bad news Data centers are much more expensive to build and operate in the United States than in Africa, Asia, or Latin America. Yanni could take the money from the insurance company and build three data centers overseas. He has asked Adam and Zoe to present the pros and cons of relocating.
Adam says: "If we rebuild overseas, our employees will never find equivalent jobs. We pay $20 an hour, and the other jobs in town are mostly minimum-wage. And remember how some of the guys worked right through Christmas to set up for that new client. They have been loyal to us-we owe them something in return. And it's not just bad for Farmfield or Arkansas, it's bad for the country. We can't continue to ship jobs overseas."
Zoe responds: "That is the government's problem, not ours. We'll pay to retrain the workers, which, frankly, is a generous offer. Our investors get a return of 4 percent; the industry average is closer to 8 percent. If we act like a charity to support Farmfield, we could all lose our jobs. It is our obligation to do what's best for our shareholders-which, in this case, happens to be what's right for us, too."
Do you agree with Zoe's argument that it is the government's responsibility to create and protect American jobs, and that it is a CEO's job to increase shareholder wealth

Question 33

Which of the following believed that the dignity of human beings must be respected, and that the most ethical decisions are made out of a sense of obligation
(a) Milton Friedman
(b) John Stuart Mill
(c) Immanuel Kant
(d) John Rawls

Question 34

Each year, the sale of Girl Scout cookies is the major fund-raiser for local troops. But because the organization was criticized for promoting such unhealthy food, it introduced a new cookie, Mango Cremes with Nutrifusion. It promotes this cookie as a vitamin-laden, natural whole food. "A delicious way to get your vitamins." But these vitamins are a minuscule part of the cookie. The rest has more bad saturated fat than an Oreo. The Girl Scouts do much good for many girls. And to do this good, they need to raise money. What would Kant and Mill say about Mango Cremes What about the Front Page test What do you say

Question 35

Ethics Case: Truth ( ) in Borrowing
Rob is in the business of buying dental practices. He finds solo practitioners, buys their assets, signs them to a long-term contract and then improves their management and billing processes so effectively that both he and the dentists are better off.
Rob has just found a great opportunity with a lot of potential profit. There is only one problem. The bank will not give him a loan to buy the practice without checking the dentist's financial record. Her credit rating is fine, but it turns out that she filed for bankruptcy twenty years ago. That event no longer appears on her credit rating, but the bank asked about bankruptcies on the form it required her to sign. She is perfectly willing to lie. Rob refused to turn in the form with a lie. But when the bank learned about the bankruptcy, it denied his loan even though her bankruptcy in no way affects his ability to pay the loan. And the incident is ancient history-the dentist's current finances are strong. Four other banks also refused to make the loan.
Rob is feeling pretty frustrated. He figures the return on this deal would be 20 percent. Everyone would benefit-the dentist would earn more, her patients would have better technology, he could afford a house in a better school district, and the bank would make a profit. There is one more bank he could try.
Should Rob file loan documents with the bank, knowing the dentist has lied

Question 36

Ethics Case: Mickey Weighs In
As we have seen, many food companies manipulate products to maximize their appeal, without regard to the health of their customers. Disney is taking a different approach-announcing recently that only healthy foods can be advertised on its children's television channels, radio stations, and websites. Candy, fast food, and sugared cereals are banned from Mickey land. Kicked to the curb are such childhood favorites as Lunchables and Capri Sun drinks. In addition, sodium must be reduced by one quarter in food served at its theme parks. Nor does Disney permit its characters to associate with unhealthy foods. No more Mickey Pop-Tarts or Buzz LightyearHappy Meals. Said Disney chairman, Robert Iger, "Companies in a position to help with solutions to childhood obesity should do just that."
Disney will certainly lose advertising, but would not say how much. Food sales at its theme parks may decline if children find the options less appealing. Its licensing revenues are also affected by its decisions to remove Disney characters from the likes of Pop-Tarts and Happy Meals.
On the other hand, this healthy initiative will enhance its reputation, at least with parents, who increasingly seek healthy food options for their children. Disney will profit from license fees it receives for the use of a Mickey Check logo on healthy food in grocery aisles and restaurants. This food initiative may also help forestall more onerous government regulation.
Does this information make you more likely to buy Disney products or allow your children to watch Disney TV

Question 37

The following statement is true:
(a) Most people are honest most of the time.
(b) Even people who do not believe in God are more likely to behave honestly after reading the Ten Commandments.
(c) When confronted with wrong-doing, most people immediately recognize what is happening.
(d) People make their best ethical decisions when in a hurry.

Question 38

Should Rob file loan documents with the bank, knowing the dentist has lied

Question 39

Charlie Sheen, the star of the hit CBS TV show Two and a Half Men, has admitted to using large quantities of cocaine. He has been hospitalized with drug overdoses and has been charged with both misdemeanor and felony drug offenses, which have led to probation several times. When asked about entering rehab, he said that only losers go to recovery programs and he could cure himself with his mind. He openly spent tens of thousands of dollars on prostitutes. His second wife filed a restraining order against him, alleging that he had pushed her down the stairs and threatened to kill her. He was also charged with a felony for threatening his third wife. She claims that he held a knife to her throat and said "You better be in fear. If you tell anybody, I'll kill you." Then there was the widely reported incident in the Plaza Hotel in New York City in which the police escorted him to the hospital after he trashed his room and threatened the prostitute whom he had hired-all while his ex-wife and children slept in a room across the hall. Five months later, the police removed his twin sons from his house after their mother obtained a restraining order. On a radio show, Sheen made anti-Semitic comments about his boss, called him a clown and a charlatan, and said that he "violently hated him." This boss was the most successful producer of comedy shows in the business.
What would you say to someone who argues that the goal at work is to make as much money as possible, but at home it is to be a kind and honorable human being

Question 40

Ethics Case: Mickey Weighs In
As we have seen, many food companies manipulate products to maximize their appeal, without regard to the health of their customers. Disney is taking a different approach-announcing recently that only healthy foods can be advertised on its children's television channels, radio stations, and websites. Candy, fast food, and sugared cereals are banned from Mickey land. Kicked to the curb are such childhood favorites as Lunchables and Capri Sun drinks. In addition, sodium must be reduced by one quarter in food served at its theme parks. Nor does Disney permit its characters to associate with unhealthy foods. No more Mickey Pop-Tarts or Buzz LightyearHappy Meals. Said Disney chairman, Robert Iger, "Companies in a position to help with solutions to childhood obesity should do just that."
Disney will certainly lose advertising, but would not say how much. Food sales at its theme parks may decline if children find the options less appealing. Its licensing revenues are also affected by its decisions to remove Disney characters from the likes of Pop-Tarts and Happy Meals.
On the other hand, this healthy initiative will enhance its reputation, at least with parents, who increasingly seek healthy food options for their children. Disney will profit from license fees it receives for the use of a Mickey Check logo on healthy food in grocery aisles and restaurants. This food initiative may also help forestall more onerous government regulation.
What would Mill or Kant have said What result with the Front Page Test

Question 41

If you were an executive at Exxon, Dow, or DuPont, all members of the American Chemistry Council, how would you react to this effort to hide the facts on formaldehyde

Question 42

Yanni is the CEO of Cloud Farm, a company that provides online data centers for Internet companies. Because these data centers are enormous, they are located in rural areas where they are often the main employer. A series of tornados has just destroyed a data center near Farmfield, Arkansas, a town with a population of roughly 5,000 people. Farmfield is a threehour drive from the nearest city, Little Rock.
Here is the good news: the insurance payout will cover the full cost of rebuilding. Indeed, the payout will be so generous that Cloud Farm could build a bigger and better facility than the one destroyed. The bad news Data centers are much more expensive to build and operate in the United States than in Africa, Asia, or Latin America. Yanni could take the money from the insurance company and build three data centers overseas. He has asked Adam and Zoe to present the pros and cons of relocating.
Adam says: "If we rebuild overseas, our employees will never find equivalent jobs. We pay $20 an hour, and the other jobs in town are mostly minimum-wage. And remember how some of the guys worked right through Christmas to set up for that new client. They have been loyal to us-we owe them something in return. And it's not just bad for Farmfield or Arkansas, it's bad for the country. We can't continue to ship jobs overseas."
Zoe responds: "That is the government's problem, not ours. We'll pay to retrain the workers, which, frankly, is a generous offer. Our investors get a return of 4 percent; the industry average is closer to 8 percent. If we act like a charity to support Farmfield, we could all lose our jobs. It is our obligation to do what's best for our shareholders-which, in this case, happens to be what's right for us, too."
If you were in Yanni's position, would you rebuild the plant in Arkansas or relocate overseas

Question 43

Ethics Case: No Sheen on Sheen
Charlie Sheen, who starred in the hit CBS television show Two and a Half Men , admitted to using large quantities of cocaine. He was hospitalized with drug overdoses and had been charged with both misdemeanor and felony drug offenses, which led to probation several times. When asked about entering rehab, he said that only losers go to recovery programs and he could cure himself with his mind. He openly spent tens of thousands of dollars on prostitutes. His second wife filed a restraining order against him, alleging that he had pushed her down the stairs and threatened to kill her. He was also charged with a felony for threatening his third wife. She claimed that he held a knife to her throat and said, "You better be in fear. If you tell anybody, I'll kill you." Then there was the widely reported incident in the Plaza Hotel in New York City in which the police escorted him to the hospital after he trashed his room and threatened the prostitute whom he had hired-all while his ex-wife and children slept in a room across the hall. Five months later, the police removed his twin sons from his house after their mother obtained a restraining order. On a radio show, Sheen made anti-Semitic comments about his boss, called him a clown and a charlatan, and said that he "violently hated him." This boss was the most successful producer of comedy shows in the business.
What ethics traps did Sheen's bosses face in this situation

Question 44

In Japan, automobile GPS systems come equipped with an option for converting them into televisions so that drivers can watch their favorite shows, yes, while driving. "We can't help but respond to our customers' needs," says a company spokesperson. Although his company does not recommend the practice of watching while driving, he explained that it is the driver's responsibility to make this decision. Is it right to sell a product that could cause great harm to innocent bystanders Where does the company's responsibility end and the consumer's begin What would Mill and Kant say

Question 45

Ethics Case: Truth ( ) in Borrowing
Rob is in the business of buying dental practices. He finds solo practitioners, buys their assets, signs them to a long-term contract and then improves their management and billing processes so effectively that both he and the dentists are better off.
Rob has just found a great opportunity with a lot of potential profit. There is only one problem. The bank will not give him a loan to buy the practice without checking the dentist's financial record. Her credit rating is fine, but it turns out that she filed for bankruptcy twenty years ago. That event no longer appears on her credit rating, but the bank asked about bankruptcies on the form it required her to sign. She is perfectly willing to lie. Rob refused to turn in the form with a lie. But when the bank learned about the bankruptcy, it denied his loan even though her bankruptcy in no way affects his ability to pay the loan. And the incident is ancient history-the dentist's current finances are strong. Four other banks also refused to make the loan.
Rob is feeling pretty frustrated. He figures the return on this deal would be 20 percent. Everyone would benefit-the dentist would earn more, her patients would have better technology, he could afford a house in a better school district, and the bank would make a profit. There is one more bank he could try.
What if Rob pays back the loan without incident, as he knew he would Was what he did wrong Do the ends justify the means

Question 46

Ethics Case: The Storm After the Storm
Yanni is the CEO of Cloud Farm, a company that provides online data centers for Internet companies. Because these data centers are enormous, they are located in rural areas where they are often the main employer. A series of tornados has just destroyed a data center near Farmfield, Arkansas, a town with a population of roughly 5,000 people. Farmfield is a threehour drive from the nearest city, Little Rock.
Here is the good news: The insurance payout will cover the full cost of rebuilding. Indeed, the payout will be so generous that Cloud Farm could build a bigger and better facility than the one destroyed. The bad news Data centers are much more expensive to build and operate in the United States than in Africa, Asia, or Latin America. Yanni could take the money from the insurance company and build three data centers overseas. He has asked Adam and Zoe to present the pros and cons of relocating.
Adam says, "If we rebuild overseas, our employees will never find equivalent jobs. We pay $20 an hour, and the other jobs in town are mostly minimum-wage. And remember how some of the guys worked right through Christmas to set up for that new client. They have been loyal to us-we owe them something in return. Going overseas is not just bad for Farmfield or Arkansas, it's bad for the country. We can't continue to ship jobs overseas."
Zoe responds, "That is the government's problem, not ours. We'll pay to retrain the workers, which, frankly, is a generous offer. Our investors get a return of 4 percent; the industry average is closer to 8 percent. If we act like a charity to support Farmfield, we could all lose our jobs. It is our obligation to do what's best for our shareholders-which, in this case, happens to be what's right for us, too."
What ethics traps does Yanni face in this situation

Question 47

Is there anything wrong with accepting these gifts

Question 48

What if Rob pays back the loan without incident Was the lie still wrong Do the ends justify the means

Question 49

Do you have the same rule when lying to protect yourself, as opposed to benefiting others

Question 50

Located in Bath, Maine, Bath Iron Works builds high-tech warships for the Navy. Winning Navy contracts is crucial to the company's success-it means jobs for the community and profits for the shareholders. Navy officials held a meeting at Bath's offices with its executives and those of a competitor to review the specs for an upcoming bid. Both companies desperately wanted to win the contract. After the meeting, a Bath worker realized that one of the Navy officials had left a folder on a chair labeled: "Business Sensitive." It contained information about the competitors' bid that would be a huge advantage to Bath. William Haggett, the Bath CEO, was notified about the file just as he was walking out the door to give a luncheon speech. What should he do What ethics traps did he face What result if he considered Mill, Kant, or the Front Page test

Question 51

What ethics traps would you face in making a decision

Question 52

Many people enjoy rap music at least in part because of its edgy, troublemaking vibe. The problem is that some of this music could cause real trouble. Thus, Ice-T's song "Cop Killer" generated significant controversy when it was released. Among other things, its lyrics celebrated the idea of slitting a policeman's throat. Rick Ross rapped about drugging and raping a woman. Time Warner Inc. did not withdraw Ice-T's song but Reebok fired Ross over his lyrics. One difference: Time Warner was struggling with a $15 billion debt and a depressed stock price. Reebok at first refused to takeaction but then singing group UltraViolet began circulating an online petition against the song and staged a protest at the main Reebok store in New York.
What obligation do companies have to their customers What factors matter when making a decision about the content of entertainment.

Question 53

Which of the following wrote the book Utilitarianism and believed that ethical actions should "generate the greatest good for the greatest number"
(a) Milton Friedman
(b) John Stuart Mill
(c) Immanuel Kant
(d) John Rawls

Question 54

Steve supervises a team of account managers. One night at a company outing, Lawrence, a visiting account manager, made some wildly inappropriate sexual remarks to Maddie, who is on Steve's team. When she told Steve, he was uncertain what to do, so he asked his boss. She was concerned that if Steve took the matter further and Lawrence was fired or even disciplined, her whole area would suffer.
Lawrence was one of the best account managers in the region, and everyone was overworked as it was. She told Steve to getMaddie to drop the matter. Just tell her that these things happen, and Lawrence did not mean anything by it.
What should Steve do What ethics traps does he face What would be your Life Principle in this situation

Question 55

When James Kilts became CEO of Gillette Co., the consumer products giant had been a mainstay of the Boston community for a hundred years. But the organization was going through hard times: Its stock was trading at less than half its peak price, and some of its storied brands of razors were wilting under intense competitive pressure. In four short years, Kilts turned Gillette around-strengthening its core brands, cutting jobs, and paying off debt. With the company's stock up 61 percent, Kilts had added $20 billion in shareholder value.
Then Kilts suddenly sold Gillette to Procter Gamble Co. (P G) for $57 billion. So short was Kilts's stay in Boston that he never moved his family from their home in Rye, New York. The deal was sweet for Gillette shareholders-the company's stock price went up 13 percent in one day. And tasty also for Kilts-his payoff was $153 million, including a $23.9 million reward from P G for having made the deal and for a "change in control" clause in his employment contract that was worth $12.6 million. In addition, P G agreed to pay him $8 million a year to serve as vice chairman after the merger. When he retires, his pension will be $1.2 million per year. Moreover, two of his top lieutenants were offered payments totaling $57 million.
Any downside to this deal Four percent of the Gillette workforce-6,000 employees-were fired. If the payouts to the top three Gillette executives were divided among these 6,000, each unemployed worker would receive $35,000. The loss of this many employees (4,000 of whom lived in New England) had a ripple effect throughout the area's economy. Although Gillette shareholders certainly benefited in the short run from the sale, their profit would have been even greater without this $210 million payout to the executives. Moreover, about half the increase in Gillette revenues during the time that Kilts was running the show were attributable to currency fluctuations. A cheaper dollar increased revenue overseas. If the dollar had moved in the opposite direction, there might not have been any increase in revenue. Indeed, for the first two years after Kilts joined Gillette, the stock price declined. It wasn't until the dollar turned down that the stock price improved.
Do CEOs who receive sweeteners have too strong an incentive to sell their companies Is it unseemly for them to be paid so much when many employees will lose their jobs