1-1 chapter 1 discussion: ethics & business paul l. schumann, ph.d. © 2004 by paul l. schumann....

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Chapter 1 Discussion:Chapter 1 Discussion:Ethics & BusinessEthics & Business

Paul L. Schumann, Ph.D.Paul L. Schumann, Ph.D.

© 2004 by Paul L. Schumann. All rights reserved.© 2004 by Paul L. Schumann. All rights reserved.

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IntroductionIntroduction

What did Merck do to deal with the disease What did Merck do to deal with the disease “river blindness”?“river blindness”? Why did Merck invest so much money and Why did Merck invest so much money and

effort into a drug that made no money?effort into a drug that made no money?

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Nature of Business EthicsNature of Business Ethics

What does “ethical” mean to you?What does “ethical” mean to you? How does Velasquez define “morality”?How does Velasquez define “morality”? What are the five characteristics that What are the five characteristics that

distinguish moral standards from other distinguish moral standards from other standards?standards?

How does Velasquez define “ethics”?How does Velasquez define “ethics”? How does Velasquez define “business How does Velasquez define “business

ethics”?ethics”?

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Nature of Business EthicsNature of Business Ethics To whom should moral standards apply:To whom should moral standards apply:

Should a company be morally responsible for Should a company be morally responsible for its actions? Why?its actions? Why?

Should the managers involved be morally Should the managers involved be morally responsible for the actions they take in the responsible for the actions they take in the name of a company? Why?name of a company? Why?

Should both a company and its managers be Should both a company and its managers be morally responsible? Why?morally responsible? Why?

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Nature of Business EthicsNature of Business Ethics In what ways do the following issues In what ways do the following issues

involving multinational companies raise involving multinational companies raise ethical issues?ethical issues? Shift operations to a country with cheaper labor Shift operations to a country with cheaper labor

and less government regulation.and less government regulation. Transfer materials and money between Transfer materials and money between

countries to escape paying taxes.countries to escape paying taxes. Transfer products to countries that aren’t ready Transfer products to countries that aren’t ready

for the technology.for the technology. Different nations have different standards.Different nations have different standards.

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Nature of Business EthicsNature of Business Ethics What is the theory of “ethical relativism”?What is the theory of “ethical relativism”?

Are there some moral standards that a society Are there some moral standards that a society must accept if it is to survive? Examples?must accept if it is to survive? Examples?

Do apparent differences in moral standards Do apparent differences in moral standards across different societies sometimes disappear across different societies sometimes disappear on closer examination? Examples?on closer examination? Examples?

If two people disagree on moral standards, does If two people disagree on moral standards, does that mean they both have to be right? Explain?that mean they both have to be right? Explain?

What are some examples of incoherent What are some examples of incoherent consequences of the theory of ethical consequences of the theory of ethical relativism?relativism?

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Nature of Business EthicsNature of Business Ethics

Is it ethical for someone who believes in Is it ethical for someone who believes in ethical relativism to impose their ethical ethical relativism to impose their ethical relativism morality on others who disagree relativism morality on others who disagree with ethical relativism? Explain?with ethical relativism? Explain?

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Moral DevelopmentMoral Development

According to Kohlberg, what is Stage One According to Kohlberg, what is Stage One of moral development?of moral development? ““The only crime is getting caught.” How is this The only crime is getting caught.” How is this

an example of Stage One thinking?an example of Stage One thinking? Give an example of Stage One thinking.Give an example of Stage One thinking. Give an example of employee behavior in a Give an example of employee behavior in a

business that illustrates Stage One thinking.business that illustrates Stage One thinking. As managers, how can we motivate a Stage As managers, how can we motivate a Stage

One employee to act ethically?One employee to act ethically?

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According to Kohlberg, what is Stage Two According to Kohlberg, what is Stage Two of moral development?of moral development? ““You scratch my back and I’ll scratch yours.” You scratch my back and I’ll scratch yours.”

How is this an example of Stage Two thinking?How is this an example of Stage Two thinking? Give an example of Stage Two thinking.Give an example of Stage Two thinking. Give an example of employee behavior in a Give an example of employee behavior in a

business that illustrates Stage Two thinking.business that illustrates Stage Two thinking. As managers, how can we motivate a Stage As managers, how can we motivate a Stage

Two employee to act ethically?Two employee to act ethically?

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According to Kohlberg, what is Stage Three According to Kohlberg, what is Stage Three of moral development?of moral development? Give an example of Stage Three thinking.Give an example of Stage Three thinking. Give an example of employee behavior in a Give an example of employee behavior in a

business that illustrates Stage Three thinking.business that illustrates Stage Three thinking. As managers, how can we motivate a Stage As managers, how can we motivate a Stage

Three employee to act ethically?Three employee to act ethically?

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According to Kohlberg, what is Stage Four According to Kohlberg, what is Stage Four of moral development?of moral development? Give an example of Stage Four thinking.Give an example of Stage Four thinking. Give an example of employee behavior in a Give an example of employee behavior in a

business that illustrates Stage Four thinking.business that illustrates Stage Four thinking. As managers, how can we motivate a Stage As managers, how can we motivate a Stage

Four employee to act ethically?Four employee to act ethically?

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According to Kohlberg, what is Stage Five According to Kohlberg, what is Stage Five of moral development?of moral development? Give an example of Stage Five thinking.Give an example of Stage Five thinking. Give an example of employee behavior in a Give an example of employee behavior in a

business that illustrates Stage Five thinking.business that illustrates Stage Five thinking. As managers, how can we motivate a Stage As managers, how can we motivate a Stage

Five employee to act ethically?Five employee to act ethically?

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According to Kohlberg, what is Stage Six of According to Kohlberg, what is Stage Six of moral development?moral development? Give an example of Stage Six thinking.Give an example of Stage Six thinking. Give an example of employee behavior in a Give an example of employee behavior in a

business that illustrates Stage Six thinking.business that illustrates Stage Six thinking. As managers, how can we motivate a Stage Six As managers, how can we motivate a Stage Six

employee to act ethically?employee to act ethically?

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According to research by Kohlberg and According to research by Kohlberg and others, does everyone progress through all others, does everyone progress through all the stages? Explain.the stages? Explain.

In what ways are higher stages “better” than In what ways are higher stages “better” than lower stages?lower stages?

How has Carol Gilligan criticized How has Carol Gilligan criticized Kohlberg?Kohlberg? What does the research show about Gilligan’s What does the research show about Gilligan’s

ideas?ideas?

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For & Against Business EthicsFor & Against Business Ethics Velasquez argues that “…ethical behavior Velasquez argues that “…ethical behavior

is the best long-term business strategy for a is the best long-term business strategy for a company…” (p. 5). Do you agree or company…” (p. 5). Do you agree or disagree? Why? Examples?disagree? Why? Examples?

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Moral ResponsibilityMoral Responsibility

What are the two excusing conditions that What are the two excusing conditions that can completely eliminate a person’s moral can completely eliminate a person’s moral responsibility?responsibility? Why is ignorance an excusing condition?Why is ignorance an excusing condition?

• What if a person chooses to be ignorant?What if a person chooses to be ignorant?

• What if the person is ignorant because of What if the person is ignorant because of negligence?negligence?

Why is inability an excusing condition?Why is inability an excusing condition?

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Moral ResponsibilityMoral Responsibility

Your boss orders you to do something Your boss orders you to do something unethical. Should you be able to reduce unethical. Should you be able to reduce your moral responsibility because you were your moral responsibility because you were just “following orders”?just “following orders”? Murder a competitor?Murder a competitor? Do you have a moral obligation as an employee Do you have a moral obligation as an employee

to obey the immoral orders of your boss?to obey the immoral orders of your boss?

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Case: Case: The Air Force BrakeThe Air Force Brake Cast of characters:Cast of characters:

John Warren: engineer who designed brake, John Warren: engineer who designed brake, short-tempered when challengedshort-tempered when challenged

Searle Lawson: 26, engineer grad 1 year agoSearle Lawson: 26, engineer grad 1 year ago Kermit Vandivier: lab asst, 42, married, 7 kidsKermit Vandivier: lab asst, 42, married, 7 kids Robert Sink: Warren’s boss, project manager, Robert Sink: Warren’s boss, project manager,

not engineer, HS degree, started as draftsmannot engineer, HS degree, started as draftsman Richard Gloor: test engineerRichard Gloor: test engineer Russell Van Horn: Sink’s bossRussell Van Horn: Sink’s boss Russell Line: senior executiveRussell Line: senior executive

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Case: Case: The Air Force BrakeThe Air Force Brake

What were the 2 key reasons why Goodrich What were the 2 key reasons why Goodrich won the bid to make the A7D brakes?won the bid to make the A7D brakes? Why did Goodrich make an “absurdly low” Why did Goodrich make an “absurdly low”

bid?bid?

How was the brake design to be tested?How was the brake design to be tested? Why did the brake design fail the tests?Why did the brake design fail the tests? What happened when the brakes repeatedly What happened when the brakes repeatedly

failed the tests?failed the tests?

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Who might be affected by what happens?Who might be affected by what happens? What moral issues did Kermit Vandivier What moral issues did Kermit Vandivier

face?face? What choices did Kermit Vandivier have What choices did Kermit Vandivier have

when he was ordered to write a false report?when he was ordered to write a false report? What are the pros and cons of each choice?What are the pros and cons of each choice?

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Is it morally right for a person in Is it morally right for a person in Vandivier’s situation to write a false report? Vandivier’s situation to write a false report? Why?Why? What moral standards can we develop to guide What moral standards can we develop to guide

our moral judgment?our moral judgment? What is the consistency requirement for moral What is the consistency requirement for moral

standards?standards? Do the moral standards meet the consistency Do the moral standards meet the consistency

requirement?requirement?

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In terms of Kohlberg’s stages of moral In terms of Kohlberg’s stages of moral development, at which stage is:development, at which stage is: Searle Lawson? Why?Searle Lawson? Why? Kermit Vandivier? Why?Kermit Vandivier? Why?

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Additional facts:Additional facts: After Goodrich submitted the false report, the After Goodrich submitted the false report, the

Air Force began flight tests.Air Force began flight tests. Several near crashes during landings:Several near crashes during landings:

• When the brakes were applied on landing, the When the brakes were applied on landing, the wheels would lock, causing the plane to skid 1500 wheels would lock, causing the plane to skid 1500 feet down the runway.feet down the runway.

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Who should be morally responsible for any Who should be morally responsible for any “accidents” caused by the brakes?“accidents” caused by the brakes? Kermit Vandivier? Why?Kermit Vandivier? Why? Searle Lawson? Why?Searle Lawson? Why? John Warren? Why?John Warren? Why? Robert Sink? Why?Robert Sink? Why? Russell Line? Why?Russell Line? Why? Goodrich as a company? Why?Goodrich as a company? Why?

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Should anyone’s moral responsibility be Should anyone’s moral responsibility be reduced due to the reduced due to the ignoranceignorance or or inabilityinability excuses?excuses? Kermit Vandivier? Why?Kermit Vandivier? Why? Searle Lawson? Why?Searle Lawson? Why? John Warren? Why?John Warren? Why? Robert Sink? Why?Robert Sink? Why? Russell Line? Why?Russell Line? Why? Goodrich as a company? Why?Goodrich as a company? Why?

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Additional facts:Additional facts: Vandivier went to a lawyer, then FBI.Vandivier went to a lawyer, then FBI. Lawson went to a lawyer, then FBI.Lawson went to a lawyer, then FBI. Air Force began investigation.Air Force began investigation. Vandivier resigned from Goodrich.Vandivier resigned from Goodrich.

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Additional facts:Additional facts: US Senate held hearings.US Senate held hearings.

• Vandivier testified.Vandivier testified.

• Lawson’s testimony supported Vandivier’s.Lawson’s testimony supported Vandivier’s.

• Sink and others denied wrongdoing.Sink and others denied wrongdoing.– Vandivier dismissed as a high school grad with no Vandivier dismissed as a high school grad with no

technical training.technical training.

– Lawson dismissed as young and inexperienced.Lawson dismissed as young and inexperienced.

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Additional facts:Additional facts: Vandivier became a newspaper reporter.Vandivier became a newspaper reporter. Lawson became an engineer for LTV.Lawson became an engineer for LTV. Warren kept his job.Warren kept his job. Line was promoted.Line was promoted. Sink was promoted to Line’s job.Sink was promoted to Line’s job.

What lessons can be learned from this case?What lessons can be learned from this case?

1-1 chapter 1 discussion: ethics & business paul l. schumann, ph.d. © 2004 by paul l. schumann....

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