Description
The Wells Fargo Scandal: A Simple Overview -Don Draper lectures Peggy on the employee/employer relationship related to her work, her ideas and who owns the final end product of this process.
The Wells Fargo Scandal – A Simple Overview – YouTube
Length: 12:10
Questions:
What is opportunity in the context of ethical decision making?
What conditions existed at Wells Fargo that permitted unethical behavior?
Describe the corporate culture at Wells Fargo.
The Veil of Ignorance – this clip features high profile CEOs who engaged in crimes that damaged their companies and ruined their lives and families.
The Veil Of Ignorance – YouTube
Length: 1:36
Questions:
What is the veil of ignorance?
How would individuals formulate principles if they did not know what their future position in society would be?
In your opinion, do you agree with this thought experiment?
Requirements:
There is no minimum or maximum required number of pages. Your analysis will be considered complete, if it addresses each of the 6 components outlined above.
Use of proper APA formatting and citations. If supporting evidence from outside resources is used those must be properly cited. A minimum of 3-5 sources (excluding the course textbook) from scholarly articles or business periodicals is required.
Include your best critical thinking and analysis to arrive at your justification.
Approach the assignment from the perspective of the senior executive leadership of the company.
Unformatted Attachment Preview
Chapter 6
Ethical Decision Making
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
By the end of this chapter, you should be able to:
• Provide a comprehensive model for ethical decision making in business
• Examine ethical issue intensity as an important element in the ethical decisionmaking process
• Introduce individual factors that influence business ethical decision making
• Introduce organizational factors that influence business ethical decision making
• Explore the role of opportunity in ethical decision making in business
• Understand normative considerations in ethical decision making
• Recognize the role of institutions in normative decision making
• Examine the importance of morals and values to ethical decision making
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Icebreaker
•
What factors within an organization do you think affect ethical
decision making?
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6-1
A Framework for Ethical Decision
Making in Business
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
FIGURE 6-1 Framework for Understanding
Ethical Decision Making in Business
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Framework for Ethical Decision
Making in Business 1 of 6
Ethical Issue Intensity
• Ethical awareness – The ability to perceive whether a situation or decision
has an ethical dimension
• Ethical issue intensity – The relevance or importance of an event or
decision in the eyes of the individual, work group, and/or organization
– Personal and temporal in character to accommodate values, beliefs, needs,
perceptions, the special characteristics of the situation, and the personal pressures
prevailing at a particular place and time
• Moral intensity – Individuals’ perceptions of social pressure and the harm
they believe their decisions will have on others
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Framework for Ethical Decision
Making in Business 2 of 6
Individual Factors
• Gender – In ethical decision making, research shows that in many aspects
there are no differences between men and women.
• Education – A significant factor in the ethical decision-making process;
generally, the more education or work experience people have, the better
they are at making ethical decisions.
• Nationality – The legal relationship between a person and the country in
which they are born
• Age – An individual factor that has a complex relationship with
business ethics
– Younger managers are far more influenced by organizational culture.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Framework for Ethical Decision
Making in Business 3 of 6
Individual Factors (continued)
• Locus of control – Individual differences in relation to a generalized belief
about how one is affected by internal versus external events or
reinforcements
– External control – Individuals with this locus of control see themselves as
going with the flow because that is all they can do (life events are due to
uncontrollable forces).
– Internal control – Individuals with this locus of control believe they control the
events in their lives by their own effort and skill; they view themselves as
masters of their destinies and trust in their capacity to influence their
environment.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Debate Issue: Take a Stand
• Tension between companies and employees over privacy in the workplace
– No laws prevent companies from monitoring and tracking employees.
• Companies believe not monitoring leaves them vulnerable to misconduct.
• Employees argue they have a right to privacy.
– They see tracking as a lack of trust.
– They think activity outside the workplace should not be monitored.
• Take a stand:
1. Companies should have the right to track employees through company
smartphones and monitor their personal Facebook and Twitter accounts.
2. Employees should be able to maintain their personal privacy and not be
tracked through their company smartphones or their Facebook and
Twitter accounts.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Framework for Ethical Decision
Making in Business 4 of 6
Organizational Factors
• Corporate culture – A set of values, norms, and artifacts, including ways of
solving problems that members (employees) of an organization share
– Mission statements and objectives
• Ethical culture – Acceptable behavior, defined by the company and industry
– Reflects the integrity of decisions made and is a function of factors, including
corporate policies, top management’s leadership on ethical issues, the influence of
coworkers, and the opportunity for unethical behavior
• Significant others – Those who have influence in a work group, including
peers, managers, coworkers, and subordinates
• Obedience to authority – A reason employees resolve business ethics
issues by simply following the directives of a superior
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Framework for Ethical Decision
Making in Business 5 of 6
Opportunity
• Opportunity – The conditions in an organization that limit or permit ethical
or unethical behavior
– Immediate job context – Where individuals work, whom they work with, and the
nature of the work
• Can be deterred with formal codes, policies, and rules adequately enforced
by management
– Misconduct can still occur without proper oversight
• Also comes from knowledge, exploiting knowledge
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Framework for Ethical Decision
Making in Business 6 of 6
Business Ethics Intentions, Behavior, and Evaluations
• Ethical business issues, dilemmas involve problem-solving situations where
the rules governing decisions are often vague or in conflict.
• When intentions and behavior are inconsistent with their ethical judgment,
people may feel guilty.
– The next step is changing the behavior to reduce such feelings.
• The road to success depends on how the businessperson defines success.
– Success drives intentions and behavior in business either implicitly or explicitly.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6-2
Using the Ethical Decision-Making
Model to Improve Ethical Decisions
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Using the Ethical Decision-Making
Model to Improve Ethical Decisions 1 of 1
• An ethical decision-making model does not help in determining if a business
decision is right or wrong.
– It is intended to provide insights about ethical decision making in businesses.
– Business ethics involves value judgments and collective agreement about acceptable
patterns of behavior.
• Gaining an understanding of the factors that make up ethical decisions helps
in differentiating between an ethical issue and a dilemma.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6-3
Normative Considerations in
Ethical Decision Making
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Normative Considerations in
Ethical Decision Making 1 of 3
• Normative approaches – How organizational decision makers should
approach an issue
– Different from a descriptive approach that examines how organizational decision
makers approach ethical decision making
• Most organizations develop a set of core values to provide enduring beliefs
about appropriate conduct within the firm.
– Instrumental concern – Focuses on positive outcomes, including firm profitability
and benefits to society
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Normative Considerations in
Ethical Decision Making 2 of 3
Institutions as the Foundation for Normative Values
• Institutional theory – Theory that organizations operate according to takenfor-granted institutional norms and rules
– Government, religion, and education are institutions that influence the creation of
values, norms, and conventions.
• Industry competition determined by:
–
Barriers to entry into the industry
–
Available substitutes for the products produced by the industry rivals
–
The power of the industry rivals over their customers
–
The power of the industry rivals’ suppliers over other rivals
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Normative Considerations in
Ethical Decision Making 3 of 3
Implementing Principles and Core Values in Ethical Business Decision Making
• Veil of ignorance – A thought experiment that examined how individuals would
formulate principles if they did not know what their future position in society
would be
• Equality principle – States that each person has basic rights that are
compatible to the basic liberties of others
• Difference principle – States that economic and social equalities or inequalities
should be arranged to provide the most benefit to the least-advantaged
members of society
• Companies convert basic principles into core values:
– Provide the abstract ideals; operate in a sustainable manner, collaboration and teamwork,
avoid bribery; provide a blueprint into the firm’s goals, ethical decision making
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
FIGURE 6-4 Principles and Values
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Knowledge Check
Question: What states that each person has basic rights that are compatible to
the basic liberties of others?
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6-4
Understanding Ethical Decision Making
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Understanding Ethical Decision Making 1 of 1
• Top-level support for ethical behavior is instrumental in helping employees
engage in their personal approaches to ethical decision making.
• Normative perspectives set forth ideal goals to which organizations should
aspire.
• Knowledge about ethical decision making helps in making good decisions.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Activity
• Why is effective leadership so important for an organizational ethical
culture?
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Activity Debrief
Why is effective leadership so important for an organizational ethical culture?
• An organizational ethical culture is shaped by effective leadership. Without
top-level support for ethical behavior, the opportunity for employees to
engage in their own personal approaches to business decision making will
evolve.
• An ethical corporate culture needs shared values along with proper oversight
to monitor the complex ethical decisions being made by employees. It
requires the establishment of a strong ethics program to educate and
develop compliance policies.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5
Emerging Business Ethics Issues
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
By the end of this chapter, you should be able to:
• Define ethical issues in the context of organizational ethics
• Examine ethical issues as they relate to the basic values of honesty,
fairness, and integrity
• Delineate misuse of company resources, abusive and intimidating
behavior, lying, conflicts of interest, bribery, corporate intelligence,
discrimination, sexual harassment, fraud, consumer fraud, financial
misconduct, and insider trading
• Examine the challenge of determining an ethical issue in business
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Icebreaker
•
What does the term “dilemma” mean to you?
•
Share examples of misconduct in the workplace.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5-1
Recognizing an Ethical Issue
(Ethical Awareness)
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Recognizing an Ethical Issue
(Ethical Awareness) 1 of 1
• People make ethical decisions when they find an ethical component in a
particular issue or situation.
• Failure to acknowledge or be aware of ethical issues is hazardous to an
organization.
– In a dilemma, all of the alternatives have negative consequences, so the less harmful
choice is made.
– Collusion is a secret agreement between two or more parties for a fraudulent, illegal,
or deceitful purpose.
– Deceitful purpose suggests trickery, misrepresentation, or a strategy designed to lead
others to believe something less than the whole truth.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5-2
Foundational Values for Identifying Ethical Issues
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Foundational Values for Identifying Ethical Issues 1 of 3
Integrity
• Integrity – One of the most important elements of virtue; refers to being
whole, sound, and in an unimpaired condition; implies a balanced
organization that not only makes ethical financial decisions but also is
ethical in the more subjective aspects of its corporate culture.
• At a minimum, businesses are expected to follow laws and regulations.
• Business relations should be grounded in integrity.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Foundational Values for Identifying Ethical Issues 2 of 3
Honesty
• Honesty – Refers to truthfulness or trustworthiness
• Issues related to honesty arise because business is sometimes regarded as a
game governed by its own rules rather than those of society.
• Many argue that because people are not economically self-sufficient, they
cannot withdraw from the relationships of business.
– Business must make clear what rules apply.
– Rules appropriate to the involuntary nature of its many participants must be developed.
• Dishonesty – A lack or absence of integrity, incomplete disclosure, and an
unwillingness to tell the truth
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Foundational Values for Identifying Ethical Issues 3 of 3
Fairness
• Fairness – The quality of being just, equitable, and impartial
– Overlaps with concepts of justice, equity, and equality
• Three fundamental elements that motivate people to be fair include:
–
Equality – Refers to the fair and even distribution of benefits and resources
–
Reciprocity – An interchange of giving and receiving in social relationships
–
Optimization – The trade-off between equity (equality) and efficiency (maximum
productivity)
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Knowledge Check
Question: What are the three fundamental elements that motivate people
to be fair?
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5-3
Emerging Ethical Issues and
Dilemmas in Business
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 1 of 14
• Ethical issue – A problem, situation, or opportunity that requires an
individual, group, or organization to choose among several actions that
must be evaluated as right or wrong, ethical or unethical
• Ethical dilemma – A problem, situation, or opportunity that requires an
individual, group, or organization to choose among several actions that
have negative outcomes
– There is not a right or ethical choice in a dilemma, only less unethical or illegal
choices as perceived by any and all stakeholders.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 2 of 14
Misuse of Company Time and Resources
• Time theft is estimated to cost companies hundreds of billions of dollars
annually.
– Late arrivals, leaving early, long lunch breaks, inappropriate sick days, excessive
socializing, engaging in personal activities
• Using company computer software and internet services for personal
business is one of the most common ways employees misuse company
resources.
– Many companies have policies delineating acceptable use of resources
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 3 of 14
Abusive or Intimidating Behavior
• Abusive or intimidating behavior – Common ethical problem, may refer to:
–
–
–
–
–
–
–
–
–
Physical threats
False accusations
Being annoying
Profanity
Insults
Yelling
Harshness
Ignoring someone
Unreasonableness
• Within abusive behavior or intimidation, intent should be a consideration
• Bullying creates a hostile environment
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Debate Issue: Take a Stand
• Workplace bullying is abusive behavior used to assert one’s power over
another.
• The U.S. does not have laws against workplace bullying.
– Many believe employees should be legally protected from workplace bullying because
it is harmful (e.g., depression, anxiety, and low self-esteem).
– Others believe this would limit managers’ ability to manage since they would be afraid
their management styles could be perceived as bullying.
– Bullying is hard to define, making such a law difficult to enforce.
• Take a stand:
1. Bullying in organizations can be harmful to employees and therefore
warrants legal action.
2. Laws against bullying are not feasible as they are hard to define and
have the potential to limit managers’ ability to manage.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 4 of 14
Lying
• Lying – Untruthfulness that can be joking without malice, commission lying,
and omission lying
• Commission lying is creating a perception or belief by words that
intentionally deceive the receiver of the message.
• It also entails intentionally creating noise in the form of technical explanations the
communicator knows the receiver does not understand.
• Omission lying is intentionally not informing others of any differences,
problems, safety warnings, or negative issues relating to the product or
company that significantly affect awareness, intention, or behavior.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 5 of 14
Conflicts of Interest
• Conflict of interest – When an individual must choose whether to advance
his or her own interests, those of the organization, or those of some other
group
• Employees must be able to separate their private interests from their
business dealings.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 6 of 14
Bribery
• Bribery – The practice of offering something (often money) in order to gain
an illicit advantage from someone in authority
• Active bribery – When the person who promises or gives the bribe
commits the offense
• Passive bribery – Offense committed by the official who receives the bribe
• Facilitation payments – Payments made to obtain or retain business or
other improper advantages that do not constitute bribery payments for U.S.
companies in some situations
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 7 of 14
Corporate Intelligence
• Corporate intelligence – The collection and analysis of information on
markets, technologies, customers, and competitors, as well as on
socioeconomic and external political trends
– There are three distinct types of intelligence models:
o Passive monitoring system for early warning
o Tactical field support
o Support dedicated to top-management strategy
– Corporate intelligence involves an in-depth discovery of information from corporate
records, court documents, regulatory filings, and press releases, as well as any other
background information about a company or its executives.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 8 of 14
Discrimination
• Discrimination – Prejudices based on race, color, religion, sex, marital
status, sexual orientation, public assistance status, disability, age, national
origin, or veteran status; illegal in the United States
• Equal Employment Opportunity Commission (EEOC) – Federal agency
that protects against workplace discrimination
• Age Discrimination in Employment Act – Outlaws hiring practices that
discriminate against people of 40 years or older, as well as those that
require employees to retire before the age of 70
• Affirmative action programs – Involve efforts to recruit, hire, train, and
promote qualified individuals from groups that have traditionally been
discriminated against on the basis of race, gender, or other characteristics
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 9 of 14
Sexual Harassment
• Sexual harassment – Any repeated, unwanted behavior of a sexual nature
perpetrated upon one individual by another
• Hostile work environment – Three criteria must be met:
1. The conduct was unwelcome;
2. The conduct was severe, pervasive, and regarded by the claimant as so hostile or
offensive as to alter his or her conditions of employment; and
3. The conduct was such that a reasonable person would find it hostile or offensive.
• Dual relationship – A personal, loving, and/or sexual relationship with
someone with whom you share professional responsibilities
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 10 of 14
Sexual Harassment (continued)
• Steps to avoid sexual misconduct or harassment include:
1. Establish a statement of policy
2. Establish a definition of sexual harassment
3. Establish a nonretaliation policy
4. Establish specific procedures for prevention
5. Establish a reporting procedure and encourage victims to report
6. Enforce established policies
7. Make sure the company has timely reporting requirements to the proper authorities
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Emerging Ethical Issues and
Dilemmas in Business 11 of 14
Fraud
• Fraud – Any purposeful communication that deceives, manipulates, or
conceals facts in order to harm others
• Accounting fraud – Inaccurate information in a corporation’s financial reports,
in which companies provide important information on which investors and
others base decisions
• Marketing fraud – dishonestly creating, distributing, promoting, and pricing
products
–
Puffery – Exaggerated advertising and boasting upon which no reasonable buyer would rely
–
Implied falsity – A message that has a tendency to mislead, confuse, or deceive the public
–
Literally false – When advertising says that tests prove (establishment claims), when the
advertisement cites a study that establishes the claim; and bald assertions (nonestablishment
claims), when the advertisement makes a claim that cannot be substantiated
–
Ambiguous statements
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Activity
• Do you think puffery should be illegal?
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Activity Debrief
Do you think puffery should be illegal?
• Puffery—exaggerated advertising, blustering, and boasting upon which no
reasonable buyer would rely upon—is not actionable under the Lanham
Act.
• The National Advertising Division (NAD) ruled that Samsung’s promotional
claims “Best TV Ever” is an example of puffery rather than misleading
advertising.
• The lines between puffery and deceptive advertising can be murky.
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 1
