BADM 2133 UNIT 1

© 2012 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Business Ethics: Cases and
Selected Readings, 7th Ed.
Marianne M. Jennings
Unit 1

1
The Power of a Credo
1. Who are you? Without the job title, the
salary, the car, the house, who are you?
2. What things would you never do to be
successful? What lines would you never
cross in order to get a job? To get results?
To meet goals?

Examples of Credos
• “I would never withhold evidence in a case.”
(from a prosecutor)
• “I would never sign a document that I know
contains false information.”
• “I would never compromise safety for staying
on schedule.”
2© 2012 Cengage Learning. All Rights Reserved. May not be

Our Legacy
“Fifteen years from now, my son will meet the
son or daughter of one of our people who died
that day, and I will be judged on what that kid
tells my son about what Sandler O’Neill did for
his family.”
– Jimmy Dunne III
• Sole surviving senior partner from
9/11/01 WTC attacks
• One of 17 survivors out of a firm of 83

An Example of a Choice
• New York City Marathon
• Runners’ time verification
• 46 of 71 runners investigated for anomalies in
their time had taken the subway during the
26-mile run

5
Ethics and Normative
Standards
• A higher standard than law
• Examples
– Waiting your turn in line
– Faithful to partners in relationships
– Cheating on exams
• Honesty
• Fairness

6
Philosophical Groundings of
Ethics
1. Divine Command Theory (Natural Law)
2. Ethical Egoism Theory
Ayn Rand
Thomas Hobbes
Adam Smith
Self-Interest
The Theory of Moral Sentiments
3. Utilitarianism
Jeremy Bentham
John Stuart Mill

7
Philosophical Groundings
(cont’d)
4. Categorical Imperative
Immanuel Kent
5. The Contractarianists and Justice
John Locke
John Rawls
6. Rights Theory
Robert Nozick
7. Moral Relativism: Circumstantial Ethics
8. Virtue Ethics: Plato and Aristotle

8
Virtue Ethics: Robert Solomon
• Ability Being dependable and competent
• Acceptance Making the best of a bad situation
• Amiability Fostering agreeable social contexts
• Articulateness Ability to make and defend one’s case
• Attentiveness Listening and understanding
• Autonomy Having a personal identity
• Caring Worrying about the well-being of others
despite power

9
Virtue Ethics (cont’d)
• Charisma Inspiring others
• Compassion Sympathetic
• Coolheadedness Retaining control and reasonableness in
heated situations
• Courage Doing the right thing despite the cost
• Determination Seeing a task through to completion
• Fairness Giving others their due; creating harmony
• Generosity Sharing, enhancing others’ well-being

10
• Graciousness Establishing a congenial environment
• Gratitude Giving proper credit
• Heroism Doing the right thing despite the
consequences
• Honesty Telling the truth; not lying
• Humility Giving proper credit
• Humor Bring relief; making the world better
• Independence Getting things done despite bureaucracy

11
• Integrity Being a model of trustworthiness
• Justice Treating others fairly
• Loyalty Working for the well-being of an organization
• Pride Being admired by others
• Prudence Minimizing company and personal losses
• Responsibility Doing what it takes to do the right thing
• Saintliness Approaching the ideal in behavior

12
• Shame (capable of) Regaining acceptance after wrong behavior
• Spirit Appreciating a larger picture in situations
• Toughness Maintaining one’s position
• Trust Dependable
• Trustworthiness Fulfilling one’s responsibilities
• Wittiness Lightening the conversation when
warranted
• Zeal Getting the job done right; enthusiasm

13
Types of Ethical Dilemmas
1. Taking things that don’t belong to you
2. Saying things you know are not true
3. Giving or allowing false impressions
4. Buying influence or engaging in a conflict of interest
5. Hiding or divulging information
6. Taking unfair advantage

14
Types of Ethical Dilemmas (cont’d)
7. Committing acts of personal decadence
8. Perpetrating interpersonal abuse
9. Permitting organizational abuse
10. Violating rules
11. Condoning unethical actions
12. Balancing ethical dilemmas

J.P. Hayes, the Golfer
"I'm kind of at a point in my career where if
I have a light year, it might be a good
thing. I'm looking forward to playing less
and spending more time with my family.
It's not the end of the world. It will be
fine. It is fine."
15

16
How We Avoid Ethical Dilemmas:
Calling It By a Different Name
“Peer-to-Peer File Sharing” vs. “Copyright Infringement”
“Smoothing Earnings” vs. “Cooking the Books”
“Financial Engineering” vs. “Fraud”
“Aggressive Accounting” vs. “Earnings Manipulation” “Lying?”
“Aggressive Legal Opinion” vs. “Illegal”
“Manipulating Results” vs. “Deseasonalizing the Data”

Watch the Language!
“Cooking the books”
“Copyright infringement”
“Manipulated appraisal”
“Changed the numbers”
“Backdating Options”
“You lied”
“Financial engineering”
“Managing earnings”
“Smoothing earnings”
“Getting results”
“Peer-to-Peer file sharing”
“I got a second opinion”
“Pro forma adjustment”
“Deseasonalized the data”
“Periodic look-backs *sic+”
“No, I misremembered.”
“No, I misspoke.”
“No, I managed expectations.”
17

Watch the Language!
“The employee stole from
inventory.”
“He was accepting cash for political
favors.”
“Bribes”
“Suspended from school”
“Conflict of interest”
“That’s cheating!”
“The employee showed
poor judgment.”
“He was just accessible.”
“Useful expenditures” (Siemens)
“Restricted”
“It wasn’t so much a conflict of
interest as it was a confluence of
conflicting motives.”
“That’s creative thinking!”
18

19
How We Avoid Ethical Dilemmas:
Rationalizing
• “Everybody else does it.”
• “If we don’t do it, someone else will.”
• “That’s the way it has always been done.”
• “We’ll wait until the lawyers tell us it’s wrong.”
• “It doesn’t really hurt anyone.”
• “The system is unfair.”
• “It’s a gray area.”
• “I was just following orders.”
• “We all don’t share the same ethics.”
• “If you think this is bad, you should have seen . . . “
• Etc.

Résumé Puffing – Marilee Jones
• The three degrees that did not exist
• The time elapsed between when she “puffed”
the résumé and when the information
emerged
• The fall-out was the loss of a career

21
Background Check Expert’s
Thoughts
• Peter Crist, a background check expert, said,
“You can’t live in my world and cover stuff up.
At some point in time, you will be found out if
you don’t come clean. It doesn’t matter if it
was 2 days ago or 20 years ago.”1
1JoAnn S. Lublin, “No Easy Solution for Lies on a Resume,” Wall Street Journal,
April 27, 2007, p. B2

22
Some Simple Tests for
Resolving Ethical Dilemmas
• Dr. Peter Drucker
Primum non nocere
Above all, do no harm.

23
Resolving Ethical Dilemmas:
Laura Nash
1. Have you defined the problem accurately?
2. How would you define the problem if you stood on
the other side of the fence?
3. How did this situation occur in the first place?
4. To whom and to what do you give your loyalty as a
person and as a member of the corporation?
5. What is your intention in making this decision?
6. How does the intention compare with the likely
results?

24
Laura Nash (cont’d)
7. Whom could your decision or action injure?
8. Can you discuss your decision with the affected
parties?
9. Are you confident that your position will be as valid
over a long period of time as it seems now?
10. Could you discuss your decision with your
CEO, board, friends, boss, family?
11. What is the symbolic potential of your action if
understood? If misunderstood?
12. Under what circumstances would you make
exceptions to your position?

25
Blanchard and Peale
1. Is it legal?
2. Is it balanced?
3. How does it make me feel?

26
“Contemplating any business act, an employee should
ask himself whether he would be willing to see it
immediately described by an informed and critical
reporter on the front page of his local paper, there to
be read by his spouse, children and friends. At
Salomon we simply want no part of any activities that
pass legal tests but that we, as citizens, would find
offensive.”
Warren E. Buffett
Acting Chairman upon Salomon’s ethical collapse
Front-Page-of-the-Newspaper Test

27
Front-Page Test – Too Late
“If we were making that decision now in light of
the press scrutiny we have been receiving, we
probably would not have taken that risk.”
Robert C. Winters
Former Chairman, Prudential Insurance

28
Jennings’
National Enquirer Model
“Make up the worst possible headline
you can think of, because that’s what
you are going to get.”

29
The Wall Street Journal Test
1. Am I in compliance with the law?
2. What are the consequences of my actions
and decisions?
3. What contribution will my conduct make to
the company, the shareholders, the
employees, the community?
C3 : Compliance, Contribution, Consequences

30
Other Models
Kant and the Categorical Imperative
Am I willing to live in a world that is subject to my
rules or would I resent those who behave by my
rules?
What if the world behaved according to my rules?
Would I be comfortable or would I be nervous?

31
Other Models
• The Golden Rule
–Treat others as you want to be treated.
–How would you feel if you were on the
receiving end of your conduct?

32
Resolving Ethical Dilemmas
Common Elements
Test Primum Non Nocere
Peter Drucker Above all, do no harm
Laura Nash 1. Have you defined the problem accurately?
2. How would you define the problem if you stood on the other side of the fence?
3. How did this situation occur in the first place?
4. To whom and what do you give your loyalties as a person and as a member of
the corporation?
5. What is your intention in making this decision?
6. How does this intention compare with the likely results?
7. Whom could your decision or action injure?
8. Can you engage the affected parties in a discussion of the problem before you
make your decision?
9. Are you confident that your position will be as valid over a long period of time as
it seems now?
10. Could you disclose without qualm your decision or action to your boss, your
CEO, the board of directors, your family, or society as a whole?
11. What is the symbolic potential of your action if understood? If misunderstood?
12. Under what conditions would you allow exceptions to your stand?

33
Resolving Ethical Dilemma
Common Elements (cont’d)
Test Primum Non Nocere
Blanchard/Peale Is it legal?
Is it balanced?
How does it make me feel?
Warren Buffett Would you be willing to see your actions reported on
the front page of the newspaper?
Wall Street Journal Compliance
Contributions
Consequences
Golden Rule Treat others as you want to be treated
Categorical Imperative Could you live in a world with your standards?

34
Steps in Ethical Analysis
1. Make sure you have a grasp of all of the facts available.
2. List any information you would like to have but don’t and what
assumptions you would have to make, if any, in resolving the dilemma.
3. Take each person involved in the dilemma and list the concerns they
face or might have. Be sure to consider the impact on those not
specifically mentioned in the case.
4. Develop a list of resolutions for the problem. Apply the various models
for reaching this resolution.
5. Evaluate the resolutions for costs, legalities and impact.
6. Make a recommendation on the actions that should be taken.

35
On Plagiarism
• Clarify the distinctions between plagiarism, paraphrasing, and direct
citation. From The Random House Handbook, 6th ed., by Frederick Crews
(New York: McGraw-Hill, 1992, pp. 181-183): From the Center for
Academic Integrity
• Source: The joker in the European pack was Italy. For a time hopes were
entertained of her as a force against Germany, but these disappeared
under Mussolini. In 1935 Italy made a belated attempt to participate in
the scramble for Africa by invading Ethiopia. It was clearly a breach of the
covenant of the League of Nations for one of its members to attack
another. France and Great Britain, as great powers, Mediterranean
powers, and African colonial powers, were bound to take the lead against
Italy at the league. But they did so feebly and half-heartedly because they
did not want to alienate a possible ally against Germany. The result was
the worst possible: the league failed to check aggression, Ethiopia lost her
independence, and Italy was alienated after all. (J. M. Roberts, History of
the World (New York: Knopf, 1976), p. 845.)

36
Consider . . .
• Version A: Italy, one might say, was the joker in the
European deck. When she invaded Ethiopia, it was
clearly a breach of the covenant of the League of
Nations; yet the efforts of England and France to take
the lead against her were feeble and half-hearted. It
appears that those great powers had no wish to alienate
a possible ally against Hitler's rearmed Germany.
• Comment: Clearly plagiarism. Though the facts cited are
public knowledge, the stolen phrases aren't. Note that
the writer's interweaving of his own words with the
source's does not render him innocent of plagiarism.

37
• Version B: Italy was the joker in the European deck. Under
Mussolini in 1935, she made a belated attempt to participate
in the scramble for Africa by invading Ethiopia. As J. M.
Roberts points out, this violated the covenant of the League
of Nations. ( J. M. Roberts, History of the World (New York:
Knopf, 1976), p. 845.) But France and Britain, not wanting to
alienate a possible ally against Germany, put up only feeble
and half-hearted opposition to the Ethiopian adventure. The
outcome, as Roberts observes, was "the worst possible: the
league failed to check aggression, Ethiopia lost her
independence, and Italy was alienated after all." (Roberts, p.
845.)
• Comment: Still plagiarism. The two correct citations of
Roberts serve as a kind of alibi for the appropriating of
other, unacknowledged phrases. But the alibi has no force:
some of Roberts' words are again being presented as the
writer's.
Consider . . .

38
• Version C: Much has been written about German rearmament and
militarism in the period 1933-1939. But Germany's dominance in
Europe was by no means a foregone conclusion. The fact is that the
balance of power might have been tipped against Hitler if one or two
things had turned out differently. Take Italy's gravitation toward an
alliance with Germany, for example. That alliance seemed so very far
from inevitable that Britain and France actually muted their criticism of
the Ethiopian invasion in the hope of remaining friends with Italy. They
opposed the Italians in the League of Nations, as J. M. Roberts
observes, "feebly and half-heartedly because they did not want to
alienate a possible ally against Germany." (J. M. Roberts, History of
the World (New York: Knopf, 1976), p. 845.) Suppose Italy, France, and
Britain had retained a certain common interest. Would Hitler have
been able to get away with his remarkable bluffing and bullying in the
later thirties?
• Comment: No plagiarism. The writer has been influenced by the public
facts mentioned by Roberts.
Consider . . .

39
What Students Gain
Through Plagiarism
• Paper or assignment is done more quickly
• They get a higher grade
• They don’t have to do as much work
• Their time is freed up for other
activities, including activities such as
volunteer work
• They don’t have to learn subject matter they
see as peripheral to their success

40
Risks of Plagiarism
• Sanctions for breach of academic integrity
standards
• Reputational harm
• Possible public disclosure
• Even if the student is not caught, the risk of
bigger risks and more breaches in the future
(with higher penalties)

41
What Students Forego By
Not Plagiarizing
• Lose extra time to devote to other courses
and activities
• Better grade because professional writing is
better than their writing
• Higher grades in other courses because of
time commitment to original work in courses

BADM 2133 UNIT 1

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