Deck 3: Organizational Ethics

Question 1

You work for a mortgage servicing company- making sure that mortgage payments get processed accurately and the funds forwarded to the mortgage holder. Lately your company has been dealing withas many foreclosure notices as payments, and the market is starting to turn in an interesting direction. Customers whose houses are worth30 or 40 percent less than they paid for them just a couple of years ago are starting to question whether it makes sense to continue to pay for an asset (their home) that may remain "upside down" for many years to come. They can still afford the mortgage payment they are currently making, but since the house is worthso muchless than what they paid for it, they are starting to feel that they are throwing good money after bad.

The company's growing concern over this new phenomenon was the topic of an all-staff meeting earlier this week. Senior leaders reminded everyone that mortgages are a legal contract and that homeowners have a legal obligation to make the payments to whichthey agreed. After the meeting, however, several of your colleagues shared some of the case histories they are currently working on Several common issues are starting to come up withthese cases:
• Because of multibillion dollar bailouts for banks, many people see themselves as victims of predatory lending practices withno apparent willingness on the part of the banks that received those bailout funds to help the individual homeowners.
• Media coverage of mortgage modification programs is reporting that banks are unwilling or unable to help, so what's the point in even trying
• Because pools of mortgages have been sliced and diced into complicated financial derivatives, no one is even sure who the mortgage holder is anymore.
• The foreclosure process is so backed up in many cities that it can take as long as two years-that's a lot of time to live rent-free while you are saving up funds to move somewhere else-and withso many homes in foreclosure, rental property is attractively cheap these days.
You recall from your business ethics course in college that the elements of trust and consumer confidence in business are built on the belief that eachparty to a financial transaction has an ethical as well as a legal obligation to fulfill its part of the transaction, but it's clear that people are starting to feel that predatory lending practices now give them an excuse to ignore that ethical obligation.
Whichethics theories are being applied here

Answer 1

Case summary:
An individual works in a mortgage servicing firm wherein he ensures that people accurately pay for mortgage payments and these payments are timely forwarded to the mortgage holders. However, the individual's firm started facing several requests for foreclosure of the mortgage when several customers failed to make payment for the debt they took from the lender. The major reason for non-payment of mortgage amount was that people thought that when the price of their property for which they have borrowed money has reduced, then why they should pay for the high mortgage amount. Over this concern, the seniors of the firm reminded everyone that mortgage is a legal contract and people are obligated to make required payment over it.
The ethics theories that can be applied to this case are :
• Deontology Ethical Theory : It refers to a theory wherein it is required for people to deliver their legal obligations as required by them to perform as per legal contract or agreement. It requires delivery of actions on the basis of certain rules, duties, and rights. As in this case, as per the duty of the borrowers and the right of the lender, it is required for the borrowers to pay the mortgage amount to the lender.
• Utilitarianism Ethical Theory : It refers to a theory that differentiates right action from the wrong action by looking at the outcomes of the actions. As per this theory, greatest good for greatest number of people id given priority. As in this case, the mortgage payments made by people were making them feel burdensome owing to the decreased value of their assets for which they were making payments, it can be said that the mortgage servicing firm should convince the lenders to adjust with reduced mortgage amount depending upon the market situation of those assets.
These are the two ethics theories that can be applied in the given case.

Question 2

Scott Kelly, XYZ's marketing vice president, was shouting on the telephone to Tom Evers, director of new product development in XYZ's R D laboratories: "We're going to kick off a major ad campaign timed to make people want your new model appliance, just before we start delivering them to dealers, and I want to be sure your production date is firm and not one of those best estimates you've stuck us within the past." Taking a quick breath, he continued: "You people in R D don't have muchcredibility withmarketing! You don't tell us what you're up to until it's too late for us to advise you or interact in any way. I still remember the money you spent on that water purifier we didn't want. And it didn't help your credibility when you tried to keep the project alive after we told you to kill it!"
Tom assured Scott that the schedule for starting production was absolutely firm. "We've run extensive tests, including life tests, and everything definitely indicates 'go'! We're going to do a small pilot production run and test those pilot units in employee homes. That's a purely routine confirmation, so I can assure you that the production date is locked in. Go ahead withyour ad campaign-we're giving you a sure winner this time."

But Tom was wrong. A glitchappeared near the end of the pilot test and very close to the production date. In a hastily called engineering meeting, to whichmarketing was not invited, a quick-fix design change was approved. Another short pilot production run would be made, and the revised units would again be tested in employee homes. A delay of one to two months, perhaps longer, for start of production was indicated. Withthis schedule set, Tom arranged a meeting to apprise marketing of the problem and the new production schedule.
Scott exploded as soon as Tom began his account of the production delay. "You gave me a firm production date! We've got a major ad campaign under way, and its timing is critical. We'll have customers asking for these new models, and the dealers won't have them. We'll look silly to our customers, and our dealers will be upset."
"Now wait," Tom interrupted, "I didn't give you the production date as absolutely firm. I remember cautioning you that a problem could develop in the pilot run and suggested you allow for it in kicking off the ad campaign. I told you we'd do our best to make the date but that there's always an element of chance witha new machine. We're better off having customers asking dealers where the new models are than being out there witha big quality problem."
In fact, Scott was so skeptical of Tom's production date that he recorded their original conversation without Tom's knowledge and then produced the recording when Tom denied giving a firm production date. Tom responded: "You taped my conversation without telling me! That's unethical." Was it

Answer 2

Case summary:
Person SK was the vice-president marketing of Company ZY that is into the manufacturing of home appliances like water purifiers. SK shouted at Person TE, director of new product development to ensure that the new appliance designed by the research and development department goes for production on scheduled date because of a huge marketing campaign that the marketing department of the firm has planned for the product. Over this, TE assured SK that the planning for the production of a new product is quite firm and there is only a need of pilot testing for this product to check its quality which will be undertaken at the house of the firm's employees. However, when the product went for pilot testing, a small issue with its performance was discovered which was corrected by a change in design. As a result, the production of the appliance would get delayed for two to three months. When TE informed SK about this delay, he bursted out at TE making him realize that he assured the production of the appliance on the scheduled date. Over this, TE argued that never assured him of this schedule and instead of providing a bad quality product to the customers, it would be better if the firm offer its product late offering high-quality in it.
In this case, Person SK recorded the telephonic conversation that he had with Person TE about TE's assurance of sending the product for production on its scheduled date. SK also presented this recording as an evidence when TE refused to accept that he gave assurance to SK about the product's scheduled production. When TE came to know about this, he alleged that SK undertook an unethical action by recording this conversation without his consent.
This action of Person SK of recording his conversation with Person TE will not be considered as unethical because the conversation that SK recorded was completely related to business, and with this recording, SK has not invaded in the privacy of TE. It is very common for business professionals to record conversations that they have with their colleagues and others associated with the business. These recordings act as evidence when the professionals are alleged by others for the actions that were not committed by them or the communications not made by them. Similarly, when SK recorded the conversation, he had with TE, his intention was purely related to business and he just wanted to ensure that TE stick to his words and the assurances that he offered to SK over telephone. This way it can be concluded that SK's recording of the conversation with TE will not be considered as unethical.

Question 3

What are "creative bookkeeping techniques" Provide three examples.

Answer 3

Bookkeeping refers to the accounting practice wherein financial transactions of the firm are properly recorded. It includes recording of business transactions like sales, purchases, payments, receipts, etc. by an individual or by the organization where these business activities take place.
The following are the three examples of creative bookkeeping techniques :
1. It is required by the firm to record the value of the property purchased by it in the balance sheet as per the purchase price of that property. However, when the accountants revalue the property in order to show its high amount, the amount of that property in the balance sheet increases. With this revaluation of the property, the firm distorts its financial health by being "over-optimistic".
2. Sometimes the firms lend money to the influential people connected with the firm in some or the other way. However, the firm attempts to hide this lending of money from other people associated with the firm by ensuring that the borrower of the money repays the loan amount before the end of the month so that the new loan will get appear in the record of the next period.
3. In service contracts, a firm charges a typical service charge from its customers, and typically require the customers to pay the service charge before carrying out the service work. However, if the accountant of the firm posts this service charge in the first quarter of the year, and records this only in the second quarter of the year, then the firm's balance sheet will show profits in the first quarter, and loss in the second quarter owing to the service costs rendered by the firm.

Question 4

What steps should companies take during the hiring process to insure that such bad hires do not happen

Question 5

HR requires that these training videos be viewed for a reason. What risks is Steve taking here Review the four reasons on page 50 why HR should be directly involved in any code of ethics.

Question 6

You work for a mortgage servicing company- making sure that mortgage payments get processed accurately and the funds forwarded to the mortgage holder. Lately your company has been dealing withas many foreclosure notices as payments, and the market is starting to turn in an interesting direction. Customers whose houses are worth30 or 40 percent less than they paid for them just a couple of years ago are starting to question whether it makes sense to continue to pay for an asset (their home) that may remain "upside down" for many years to come. They can still afford the mortgage payment they are currently making, but since the house is worthso muchless than what they paid for it, they are starting to feel that they are throwing good money after bad.

The company's growing concern over this new phenomenon was the topic of an all-staff meeting earlier this week. Senior leaders reminded everyone that mortgages are a legal contract and that homeowners have a legal obligation to make the payments to whichthey agreed. After the meeting, however, several of your colleagues shared some of the case histories they are currently working on Several common issues are starting to come up withthese cases:
• Because of multibillion dollar bailouts for banks, many people see themselves as victims of predatory lending practices withno apparent willingness on the part of the banks that received those bailout funds to help the individual homeowners.
• Media coverage of mortgage modification programs is reporting that banks are unwilling or unable to help, so what's the point in even trying
• Because pools of mortgages have been sliced and diced into complicated financial derivatives, no one is even sure who the mortgage holder is anymore.
• The foreclosure process is so backed up in many cities that it can take as long as two years-that's a lot of time to live rent-free while you are saving up funds to move somewhere else-and withso many homes in foreclosure, rental property is attractively cheap these days.
You recall from your business ethics course in college that the elements of trust and consumer confidence in business are built on the belief that eachparty to a financial transaction has an ethical as well as a legal obligation to fulfill its part of the transaction, but it's clear that people are starting to feel that predatory lending practices now give them an excuse to ignore that ethical obligation.
Are homeowners really "throwing good money after bad" in making payments on mortgages for homes that are worthmuchless than the mortgage

Question 7

Explain why marketers feel that their involvement in the production and delivery of goods and services is an ethical one.

Question 8

Can you polish your resume without resorting to little white lies Provide some examples of how you might do that.

Question 9

M att really wanted this job, and he really wanted to make a good first impression with Steve. Plus, Steve was right; he wasn't going to harass anyone or insult others based on their race, and he certainly wasn't going to risk his chances at the management-training program by doing anything unethical. What was the worst that could happen If anyone from HR ever found out that he didn't watch the training videos, he could show how the company had benefited from his making up the backlog on the Morton6000, and he was sure that Steve would back him up.
Matt signed the forms and got to work.
Three months later, Matt finished his probationary period and met with the HR director to review his performance and, Matt hoped, discuss his a pplication for the management-training program. The HR director was very friendly and complimentary about Matt's performance over the last 90 days. But he had one question for Matt: "The production log for the Morton6000 shows that you made a big dent in our backlog on your first morning here. I'm curious how you managed to do that when your paperwork shows that you spent three hours watching training videos as part of your new employee orientation."
What should Matt tell the HR director

Question 10

What should Matt do now

Question 11

Would your opinion change if the advertisers were more obvious in their campaigns-such as admitting after each skit that the raving fans were really actors

Question 12

Your friend has been unemployed for two years. She decides to boost her resume by claiming to have been a consultant for those two years in order to complete in a very tough hob market. She explains that a colleague of hers did the same thing to cover a six-month period of unemployment. Does the longer period of unemployment make the decision any less unethical Why or why not

Question 13

Visit the U.S. government recall Web site www.recalls.gov, select a product recall event from the past three years, and answer the following questions:
a. What information would you consider to be evidence of an ethical transgression in this product recall
b. Other than recalling the product, what other actions did the company take to address the situation
c. What steps would you suggest that the company should have taken to restore that reputation
d. Locate the Web sites for the American Marketing Association (AMA) and the American Institute of Certified Public Accountants (AICPA). One has a "Professional Code of Conduct," and the other has a "Statement of Ethics." Does the terminology make a difference Why or why not
e. Compare and contrast the components of eachapproach.
f. Since the AMA offers certification as a "Professional Certified Marketer," would the organization benefit from promoting a professional code of conduct like the AICPA Why or why not

Question 14

M att really wanted this job, and he really wanted to make a good first impression with Steve. Plus, Steve was right; he wasn't going to harass anyone or insult others based on their race, and he certainly wasn't going to risk his chances at the management-training program by doing anything u nethical. What was the worst that could happen If anyone from HR ever found out that he didn't watchthe training videos, he could show how the company had benefited from his making up the backlog on the Morton6000, and he was sure that Steve would back him up.
Matt signed the forms and got to work.
Three months later, Matt finished his probationary period and met withthe HR director to review his performance and, Matt hoped, discuss his a pplication for the management-training program. The HR director was very friendly and complimentary about Matt's performance over the last 90 days. But he had one question for Matt: "The production log for the Morton6000 shows that you made a big dent in our backlog on your first morning here. I'm curious how you managed to do that when your paperwork shows that you spent three hours watching training videos as part of your new employee orientation."
What are Matt's chances of joining the management-training program now

Question 15

Would you leave your position with a company if you saw evidence of unethical business practices Why or why not What factors would you consider in making that decision

Question 16

If you discovered that a colleague at work had lied on her resume, what would you do

Question 17

Explain the term organizational culture.

Question 18

List the five key functional areas within an organization.

Question 19

Explain the opposing argument that marketing is an unethical process.

Question 20

Why would a $500,000 salary cap prompt personnel to leave for other banks

Question 21

Is this unethical marketing Explain why or why not.

Question 22

How would you feel if you were involved in such an ambush

Question 23

Which argument do you support Provide an example to explain your answer.

Question 24

Why was the stripping of Lewis' Chairmanship a significant move on the part of BoA shareholders

Question 25

Consider the functional departments we have reviewed in this chapter. Which department do you think faces the greatest number of ethical challenges Why

Question 26

Philip Kotler argues that professional marketers "should have the same ambivalence as nuclear scientists who help build nuclear bombs." Is that a valid argument Why or why not

Question 27

Explain why HR personnel might consider themselves to be the conscience of the organization.

Question 28

How could John Thain justify spending $1.2 million on his office when Merrill Lynch was on the verge of bankruptcy

Question 29

Is it ethical to ambush
Divide into two teams. One team must prepare a presentation advocating the use of the ambushmarketing tactics described in the Review Exercise. The other team must prepare a presentation explaining the ethical dilemmas those tactics present.

Question 30

An isolated incident
Divide into two groups, and prepare arguments for and against the following behavior: You are the regional production manager for a tire company that has invested many millions of dollars in a new retreading process that will allow you to purchase used tires, replace the tread, and sell them at a significantly lower cost (witha very healthy profit margin for your company). Initial product testing has gone well, and expectations for this very lucrative new project are very high. Promotion prospects for those managers associated withthe project are also very good. The company chose to go witha "soft" launchof the new tires, introducing them into the Malaysian market withlittle marketing or advertising to draw attention to the new product line. Once demand and supply are thoroughly tested, the plan is to launchthe new line worldwide witha big media blitz. Sales so far have been very strong based on the low price. However, this morning, your local contact in Malaysia sent news of a bus accident in whichtwo schoolchildren were killed. The cause of the accident was the front left tire on the bus, whichlost its tread at highspeed and caused the bus to roll over. You are only three days away from your next progress report meeting and only two weeks from the big worldwide launch. You decide to categorize the accident as an isolated incident and move forward withyour plans for the introduction of your discount retread tires to the world market.

Question 31

Select one of the ethical transgressions listed in the HR sections and document how you would respond to that situation as the employee.

Question 32

What did Ken Lewis hope to gain by claiming that he was "pressured" into completing the Merrill Lynch deal

Question 33

Scott Kelly, XYZ's marketing vice president, was shouting on the telephone to Tom Evers, director of new product development in XYZ's R D laboratories: "We're going to kick off a major ad campaign timed to make people want your new model appliance, just before we start delivering them to dealers, and I want to be sure your production date is firm and not one of those best estimates you've stuck us within the past." Taking a quick breath, he continued: "You people in R D don't have muchcredibility withmarketing! You don't tell us what you're up to until it's too late for us to advise you or interact in any way. I still remember the money you spent on that water purifier we didn't want. And it didn't help your credibility when you tried to keep the project alive after we told you to kill it!"
Tom assured Scott that the schedule for starting production was absolutely firm. "We've run extensive tests, including life tests, and everything definitely indicates 'go'! We're going to do a small pilot production run and test those pilot units in employee homes. That's a purely routine confirmation, so I can assure you that the production date is locked in. Go ahead withyour ad campaign-we're giving you a sure winner this time."

But Tom was wrong. A glitchappeared near the end of the pilot test and very close to the production date. In a hastily called engineering meeting, to whichmarketing was not invited, a quick-fix design change was approved. Another short pilot production run would be made, and the revised units would again be tested in employee homes. A delay of one to two months, perhaps longer, for start of production was indicated. Withthis schedule set, Tom arranged a meeting to apprise marketing of the problem and the new production schedule.
Scott exploded as soon as Tom began his account of the production delay. "You gave me a firm production date! We've got a major ad campaign under way, and its timing is critical. We'll have customers asking for these new models, and the dealers won't have them. We'll look silly to our customers, and our dealers will be upset."
"Now wait," Tom interrupted, "I didn't give you the production date as absolutely firm. I remember cautioning you that a problem could develop in the pilot run and suggested you allow for it in kicking off the ad campaign. I told you we'd do our best to make the date but that there's always an element of chance witha new machine. We're better off having customers asking dealers where the new models are than being out there witha big quality problem."
Given Scott's concerns over R D's credibility, should he have taken Tom's production date as being absolutely firm

Question 34

Scott Kelly, XYZ's marketing vice president, was shouting on the telephone to Tom Evers, director of new product development in XYZ's R D laboratories: "We're going to kick off a major ad campaign timed to make people want your new model appliance, just before we start delivering them to dealers, and I want to be sure your production date is firm and not one of those best estimates you've stuck us within the past." Taking a quick breath, he continued: "You people in R D don't have muchcredibility withmarketing! You don't tell us what you're up to until it's too late for us to advise you or interact in any way. I still remember the money you spent on that water purifier we didn't want. And it didn't help your credibility when you tried to keep the project alive after we told you to kill it!"
Tom assured Scott that the schedule for starting production was absolutely firm. "We've run extensive tests, including life tests, and everything definitely indicates 'go'! We're going to do a small pilot production run and test those pilot units in employee homes. That's a purely routine confirmation, so I can assure you that the production date is locked in. Go ahead withyour ad campaign-we're giving you a sure winner this time."

But Tom was wrong. A glitchappeared near the end of the pilot test and very close to the production date. In a hastily called engineering meeting, to whichmarketing was not invited, a quick-fix design change was approved. Another short pilot production run would be made, and the revised units would again be tested in employee homes. A delay of one to two months, perhaps longer, for start of production was indicated. Withthis schedule set, Tom arranged a meeting to apprise marketing of the problem and the new production schedule.
Scott exploded as soon as Tom began his account of the production delay. "You gave me a firm production date! We've got a major ad campaign under way, and its timing is critical. We'll have customers asking for these new models, and the dealers won't have them. We'll look silly to our customers, and our dealers will be upset."
"Now wait," Tom interrupted, "I didn't give you the production date as absolutely firm. I remember cautioning you that a problem could develop in the pilot run and suggested you allow for it in kicking off the ad campaign. I told you we'd do our best to make the date but that there's always an element of chance witha new machine. We're better off having customers asking dealers where the new models are than being out there witha big quality problem."
Has Scott's behavior damaged future relations between marketing and R D In what way How could this situation have been avoided
Source: Adapted from W. Gale Cutler, "When R D Talks, Marketing Listens-on Tape," Research Technology Management 37, no. 4 (July-August 1994), p. 56.

Question 35

Why is HR's involvement in the selection of the leaders of the company so important to ethical business conduct

Question 36

Of all the decisions made by Ken Lewis in this case study, which one do you think did the most damage to his reputation Why

Question 37

You work for a mortgage servicing company- making sure that mortgage payments get processed accurately and the funds forwarded to the mortgage holder. Lately your company has been dealing withas many foreclosure notices as payments, and the market is starting to turn in an interesting direction. Customers whose houses are worth30 or 40 percent less than they paid for them just a couple of years ago are starting to question whether it makes sense to continue to pay for an asset (their home) that may remain "upside down" for many years to come. They can still afford the mortgage payment they are currently making, but since the house is worthso muchless than what they paid for it, they are starting to feel that they are throwing good money after bad.

The company's growing concern over this new phenomenon was the topic of an all-staff meeting earlier this week. Senior leaders reminded everyone that mortgages are a legal contract and that homeowners have a legal obligation to make the payments to whichthey agreed. After the meeting, however, several of your colleagues shared some of the case histories they are currently working on Several common issues are starting to come up withthese cases:
• Because of multibillion dollar bailouts for banks, many people see themselves as victims of predatory lending practices withno apparent willingness on the part of the banks that received those bailout funds to help the individual homeowners.
• Media coverage of mortgage modification programs is reporting that banks are unwilling or unable to help, so what's the point in even trying
• Because pools of mortgages have been sliced and diced into complicated financial derivatives, no one is even sure who the mortgage holder is anymore.
• The foreclosure process is so backed up in many cities that it can take as long as two years-that's a lot of time to live rent-free while you are saving up funds to move somewhere else-and withso many homes in foreclosure, rental property is attractively cheap these days.
You recall from your business ethics course in college that the elements of trust and consumer confidence in business are built on the belief that eachparty to a financial transaction has an ethical as well as a legal obligation to fulfill its part of the transaction, but it's clear that people are starting to feel that predatory lending practices now give them an excuse to ignore that ethical obligation.
If homeowners made poor financial decisions- taking too muchequity out of their houses or buying at the wrong time-do the predatory lending practices of the banks and mortgage companies justify walking away from those mortgages

Question 38

You work for a mortgage servicing company- making sure that mortgage payments get processed accurately and the funds forwarded to the mortgage holder. Lately your company has been dealing withas many foreclosure notices as payments, and the market is starting to turn in an interesting direction. Customers whose houses are worth30 or 40 percent less than they paid for them just a couple of years ago are starting to question whether it makes sense to continue to pay for an asset (their home) that may remain "upside down" for many years to come. They can still afford the mortgage payment they are currently making, but since the house is worthso muchless than what they paid for it, they are starting to feel that they are throwing good money after bad.

The company's growing concern over this new phenomenon was the topic of an all-staff meeting earlier this week. Senior leaders reminded everyone that mortgages are a legal contract and that homeowners have a legal obligation to make the payments to whichthey agreed. After the meeting, however, several of your colleagues shared some of the case histories they are currently working on Several common issues are starting to come up withthese cases:
• Because of multibillion dollar bailouts for banks, many people see themselves as victims of predatory lending practices withno apparent willingness on the part of the banks that received those bailout funds to help the individual homeowners.
• Media coverage of mortgage modification programs is reporting that banks are unwilling or unable to help, so what's the point in even trying
• Because pools of mortgages have been sliced and diced into complicated financial derivatives, no one is even sure who the mortgage holder is anymore.
• The foreclosure process is so backed up in many cities that it can take as long as two years-that's a lot of time to live rent-free while you are saving up funds to move somewhere else-and withso many homes in foreclosure, rental property is attractively cheap these days.
You recall from your business ethics course in college that the elements of trust and consumer confidence in business are built on the belief that eachparty to a financial transaction has an ethical as well as a legal obligation to fulfill its part of the transaction, but it's clear that people are starting to feel that predatory lending practices now give them an excuse to ignore that ethical obligation.
Would you walk away from your mortgage in this situation How would you justify that decision
Sources: Roger Lowenstein, "Walk Away from Your Mortgage," The New York Times , January 10, 2010; Glenn Setzer, "Stop Paying Your Mortgage and Walk Away " www.mortgagenewsdaily.com, March11, 2008; and David Streitfeld, "Owners Stop Paying Mortgages, and Stop Fretting," The New York Times , May 31, 2010.

Question 39

Why have ethics policies and ethics training suddenly become so important

Question 40

What should Lewis have done

Question 41

Do you think Steve's argument for skipping the training videos is justified

Question 42

List the four primary line functions.

Question 43

List the three primary areas of the finance function in an organization.

Question 44

Although Johnson Johnson took a massive short-term loss as a result of its actions, it was cushioned by the relative wealth of the company. Should it have acted in the same way if the survival of the firm were at stake

Question 45

M att really wanted this job, and he really wanted to make a good first impression with Steve. Plus, Steve was right; he wasn't going to harass anyone or insult others based on their race, and he certainly wasn't going to risk his chances at the management-training program by doing anything unethical. What was the worst that could happen If anyone from HR ever found out that he didn't watchthe training videos, he could show how the company had benefited from his making up the backlog on the Morton6000, and he was sure that Steve would back him up.
Matt signed the forms and got to work.
Three months later, Matt finished his probationary period and met withthe HR director to review his performance and, Matt hoped, discuss his a pplication for the management-training program. The HR director was very friendly and complimentary about Matt's performance over the last 90 days. But he had one question for Matt: "The production log for the Morton6000 shows that you made a big dent in our backlog on your first morning here. I'm curious how you managed to do that when your paperwork shows that you spent three hours watching training videos as part of your new employee orientation."
What do you think the HR director's reaction will be

Question 46

If the majority of consumers are already skeptical about most advertising they are exposed to, how do you think the general public would feel about such marketing campaigns

Question 47

Explain how the accounting profession is governed by GAAP.

Question 48

James E. Burke reportedly said that he felt that there was no other decision he could have made. Do you agree Could he, for example, have recalled Tylenol only in the Midwest Was there a moral imperative to recall all Tylenol

Question 49

Define the term value chain.

Question 50

Should the HR department be the ethics champion in the organization Why or why not

Question 51

Why would audited accounts be regarded as being "clean"

Question 52

What was the moral minimum required of the company in this case Would it favor some stakeholders more than others How would you defend balancing the interests of some stakeholders more than others

Question 53

Critics argue that such campaigns "blur the lines between consumerism and con artistry." Is that a fair assessment Why or why not

Question 54

The sole remaining supplier.
Divide into two groups, and prepare arguments for and against the following behavior: Back in the mid-1970s heart pacemakers ran on transistors before advances in technology replaced them withthe silicon computer chips we are all familiar withtoday. Your company has found itself in a situation where it is the last remaining supplier of a particular transistor for the current models of heart pacemakers on the market. Your competitors have all chosen to get out of the business, claiming that the risks of lawsuits related to malfunctioning pacemakers was simply too great to make the business worthwhile. Your management team has now arrived at the same conclusion. The chief executive officer defends the decision by arguing that as a business-to-business supplier to other manufacturers, you have no say in how the transistors are used, so why should the fact that they are used in life-saving equipment factor into the decision Your responsibility is to your shareholders, not to the patients who depend on these pacemakers. You are not responsible for all the other manufacturers getting out of the business.

Question 55

What key decision brought about the demise of Arthur Andersen

Question 56

Imagine that a Third-World country volunteers to take the recalled product. Its representatives make assurances that all the tablets will be visually inspected and random samples taken before distribution. Would that be appropriate in these circumstances Would it have been a better solution than destroying all remaining Tylenol capsules

Question 57

Provide three examples of unethical behavior that you have observed at the company you work for (or a company you have worked for in the past). What were the outcomes of this behavior

Question 58

Identify the three functional components of the marketing process.

Question 59

Does the competitive pressure to get hired justify the decision to boost your resume Why

Question 60

Apparently no relatives of any of the victims sued Johnson Johnson. Would they have had a moral case if they had Should the company have foreseen a risk and done something about it

Question 61

Scott Kelly, XYZ's marketing vice president, was shouting on the telephone to Tom Evers, director of new product development in XYZ's R D laboratories: "We're going to kick off a major ad campaign timed to make people want your new model appliance, just before we start delivering them to dealers, and I want to be sure your production date is firm and not one of those best estimates you've stuck us within the past." Taking a quick breath, he continued: "You people in R D don't have muchcredibility withmarketing! You don't tell us what you're up to until it's too late for us to advise you or interact in any way. I still remember the money you spent on that water purifier we didn't want. And it didn't help your credibility when you tried to keep the project alive after we told you to kill it!"
Tom assured Scott that the schedule for starting production was absolutely firm. "We've run extensive tests, including life tests, and everything definitely indicates 'go'! We're going to do a small pilot production run and test those pilot units in employee homes. That's a purely routine confirmation, so I can assure you that the production date is locked in. Go ahead withyour ad campaign-we're giving you a sure winner this time."

But Tom was wrong. A glitchappeared near the end of the pilot test and very close to the production date. In a hastily called engineering meeting, to whichmarketing was not invited, a quick-fix design change was approved. Another short pilot production run would be made, and the revised units would again be tested in employee homes. A delay of one to two months, perhaps longer, for start of production was indicated. Withthis schedule set, Tom arranged a meeting to apprise marketing of the problem and the new production schedule.
Scott exploded as soon as Tom began his account of the production delay. "You gave me a firm production date! We've got a major ad campaign under way, and its timing is critical. We'll have customers asking for these new models, and the dealers won't have them. We'll look silly to our customers, and our dealers will be upset."
"Now wait," Tom interrupted, "I didn't give you the production date as absolutely firm. I remember cautioning you that a problem could develop in the pilot run and suggested you allow for it in kicking off the ad campaign. I told you we'd do our best to make the date but that there's always an element of chance witha new machine. We're better off having customers asking dealers where the new models are than being out there witha big quality problem."
Tom was obviously overconfident in the final stages of the testing process, but was his behavior unethical Why or why not

Question 62

In searchof an ethical department.
Divide into groups of three or four. Eachgroup must select one of the organizational departments featured in this chapter (HR, R D, marketing, sales, and finance) and document the potential areas for unethical behavior in that department. Prepare a presentation outlining an example of an ethical dilemma in that department and proposing a solution for resolving it.

Question 63

Supporters of these campaigns argue that our economy is built on consumerism and that if you don't find more effective ways to reach consumers, the entire economy will suffer. Does that make the practice OK Should we just accept it as a nuisance and a necessary evil like solicitation calls during dinner

Question 64

Do you think the board of directors of Bausch Lomb made the right decision in choosing not to fire Zarrella Why or why not

Question 65

How well do you think a general credo works in guiding action Would you prefer a typical mission statement or a clear set of policy outlines, for example Do you see any way in which the Johnson Johnson credo could be improved or modified