ebert_ch02_eoc_exercises.doc

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Department
Management
Course
MGT 216
Professor
A H M E D R A W Y
Semester
Summer

Description
BUILDING YOUR BUSINESS SKILLS TO LIE OR NOT TO LIE: THAT IS THE QUESTION Goal To encourage you to apply general concepts of business ethics to specific situations. Background Information It seems workplace lying has become business as usual. According to one survey, one- quarter of working adults in the United States said that they had been asked to do something illegal or unethical on the job. Four in 10 did what they were told. Another survey of more than 2,000 secretaries showed that many employees face ethical dilemmas in their day-to-day work. Method Step 1 Working with a small group of other students, discuss ways in which you would respond to the following ethical dilemmas. When there is a difference of opinion among group members, try to determine the specific factors that influence different responses.  Would you lie about your supervisor’s whereabouts to someone on the phone? Would it depend on what the supervisor was doing?  Would you lie about who was responsible for a business decision that cost your company thousands of dollars to protect your own or your supervisor’s job?  Would you inflate sales and revenue data on official company accounting statements to increase stock value? Would you do so if your boss ordered it?  Would you say that you witnessed a signature when you did not if you were acting in the role of a notary?  Would you keep silent if you knew that the official minutes of a corporate meeting had been changed? Would the nature of the change matter?  Would you destroy or remove information that could hurt your company if it fell into the wrong hands? Step 2 Research the commitment to business ethics at Johnson & Johnson (www.jnj.com) and Texas Instruments (www.ti.com/corp/docs/ethics/home.htm) by checking out their respective Web sites. [[Verify accuracy of URL’s. RG]] As a group, discuss ways in which these statements are likely to affect the specific behaviors mentioned in step 1. Step 3 Working with group members, draft a corporate code of ethics that would discourage the specific behaviors mentioned in step 1. Limit your code to a single printed page, but make it sufficiently broad to cover different ethical dilemmas. FOLLOW-UP QUESTIONS 1 What personal, social, and cultural factors do you think contribute to lying in the workplace? 2 Do you agree or disagree with the statement “The term business ethics is an oxymoron.” Support your answer with examples from your own work experience or that of someone you know. 3 If you were your company’s director of human resources, how would you make your code of ethics a “living document”? 4 If you were faced with any of the ethical dilemmas described in step 1, how would you handle them? How far would you go to maintain your personal ethical standards? EXERCISING YOUR ETHICS: INDIVIDUAL EXERCISE TAKING A STANCE The Situation A perpetual debate revolves around the roles and activities of business owners in contributing to the greater social good. Promoting the so-called proactive stance, some people argue that businesses should be socially responsible by seeking opportunities to benefit the society in which they are permitted to conduct their affairs. Others promoting the defensive stance maintain that because businesses exist to make profits for owners, they have no further obligation to society. The Dilemma Assume that you are the manager of a restaurant near a major manufacturing plant. Many of your customers are employees at the plant. Due to inflation, you are about to raise your prices 10 to 15 percent. You have had new menus created and updated your posters. You have been planning to implement the higher prices in about three weeks. You have just heard that another plant owned by the same company has been shut down for two weeks due to an explosion. The plant near you will be expected to make up the slack by asking workers to put in longer hours, adding a new shift, and so forth. You anticipate a substantial jump in your business immediately. You are now trying to make a quick decision about your pricing. One option is to go ahead and roll out your higher prices now. Combined with the big jump in traffic, your profits would skyrocket. The other option is to follow your original timetable and wait three weeks to increase your prices. You will have then passed up the opportunity to capitalize on the temporary jump in business. QUESTIONS TO ADDRESS 1 Which course of action is easier to defend? Why? 2 What is your personal opinion about the appropriate stance that a business should take regarding social responsibility? 3 To what extent is the concept of social responsibility relevant to nonbusiness organizations such as universities, government units, health care organizations, and so forth? EXERCISING YOUR ETHICS: TEAM EXERCISE FINDING THE BALANCE The Situation Managers often find it necessary to find the right balance among the interests of different stakeholders. For instance, paying employees the lowest possible wages can enhance profits, but paying a living wage might better serve the interests of workers. As more businesses outsource production to other countries, these trade-offs become even more complicated. The Dilemma The Delta Company currently uses three different suppliers in Southeast Asia for most of its outsourced production. Due to increased demand for its products, it needs to double the amount of business it currently subcontracts to one of these suppliers. (For purposes of this exercise, assume that the company must award the new supplier contract to a single firm, and that it must be one of these three. You can also assume that the quality provided is about the same for all three companies.) Subcontractor A provides a spartan but clean work environment for its workers; even though the local weather conditions are hot and humid much of the year, the plant is not air conditioned. Delta Company safety experts have verified, though, that the conditions are not dangerous, simply a bit uncomfortable at times. The firm pays its workers the same prevailing wage rate that is paid by its local competitors. While it has never had a legal issue with its workforce, it does push its employees to meet production quotas and it has a very tough policy regarding discipline for tardiness. For instance, an employee who is late gets put on probation; a second infraction within three months results in termination. This supplier provides production to Delta Company at a level such that Delta can attach a 25 percent markup. Subcontractor B also provides a spartan work environment. It pays its workers about 5 percent above local wage levels and hence is an attractive employer. Because of its higher
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