Business ethics a stakehoder and issues management approach joseph weiss

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Business Ethics This page intentionally left blank Business Ethics A Stakeholder and Issues Management Approach with Cases Fifth Edition Joseph W Weiss Bentley College Australia • Canada • Mexico • Singapore • Spain • United Kingdom • United States Business Ethics: A Stakeholders and Issues Management Approach, Fifth Edition Joseph W Weiss VP/Editor-in-Chief: Melissa Acuña Acquisitions Editor: Michele Rhoades Developmental Editor: Daniel Noguera Editorial Assistant: Ruth Belanger Sr MarComm Manager: Jim Overly Marketing Manager: Clinton Kernen © 2009, 2006 South-Western, a part of Cengage Learning ALL RIGHTS RESERVED No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher For product information and technology assistance, contact us at Cengage Learning Academic Resource Center, 1-800-423-0563 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com Text Permissions Manager: Timothy Sisler ExamView® and ExamView Pro® are registered trademarks of FSCreations, Inc Windows is a registered trademark of the Microsoft Corporation used herein under license Macintosh and Power Macintosh are registered trademarks of Apple Computer, Inc used herein under license Technology Project Editor: Rob Ellington © 2009 Cengage Learning All Rights Reserved Content Project Manager: Lysa Kosins Manufacturing Coordinator: Doug Wilke Production Service: PrePressPMG Sr Art Director: Tippy McIntosh Internal and Cover Designer: Mike Stratton/Stratton Design Cover Image: Todd Davison PTY LTD/The Image Bank/Getty Images Cengage Learning WebTutor™ is a trademark of Cengage Learning Library of Congress Control Number: 2008930405 ISBN-13: 978-0-324-58973-3 ISBN-10: 0-324-58973-5 South-Western Cengage Learning 5191 Natorp Boulevard Mason, OH 45040 USA Cengage Learning products are represented in Canada by Nelson Education, Ltd For your course and learning solutions, visit academic.cengage.com Purchase any of our products at your local college store or at our preferred online store www.ichapters.com Printed in Canada 12 11 10 09 08 Brief Contents Chapter Business Ethics, the Changing Environment, and Stakeholder Management Chapter Stakeholder and Issues Management Approaches 39 Chapter Ethical Principles, Quick Tests, and Decision-Making Guidelines 95 Chapter The Corporation and External Stakeholders: Corporate Governance: From the Boardroom to the Marketplace 155 Chapter Corporate Responsibilities, Consumer Stakeholders, and the Environment 223 Chapter The Corporation and Internal Stakeholders: Values-Based Moral Leadership, Culture, Strategy, and Self-Regulation 277 Chapter Employee Stakeholders and the Corporation 341 Chapter Business Ethics Stakeholder Management in the Global Environment 417 v This page intentionally left blank Contents Preface xvii Case Authorship xxv Chapter Business Ethics, the Changing Environment, and Stakeholder Management 1.1 Business Ethics and the Changing Environment Seeing the “Big Picture” Environmental Forces and Stakeholders Stakeholder Management Approach 1.2 What Is Business Ethics? Why Does It Matter? Unethical Business Practices and Employees Ethics and Compliance Programs 10 Why Does Ethics Matter in Business? 11 Working for the Best Companies 12 1.3 Levels of Business Ethics 12 Asking Key Questions 14 Ethical Insight 1.1 15 1.4 Five Myths about Business Ethics 15 Myth 1: Ethics Is a Personal, Individual Affair, Not a Public or Debatable Matter 16 Myth 2: Business and Ethics Do Not Mix 17 Myth 3: Ethics in Business Is Relative 17 Myth 4: Good Business Means Good Ethics 18 Myth 5: Information and Computing Are Amoral 19 vii viii Contents 1.5 Why Use Ethical Reasoning in Business? 19 1.6 Can Business Ethics Be Taught and Trained? 20 Stages of Moral Development 21 Kohlberg’s Study and Business Ethics 22 1.7 Plan of the Book 22 Chapter Summary 24 Questions 25 Exercises 25 Real-Time Ethical Dilemma 27 Cases 28 Case 1: Enron: What Caused the Ethical Collapse? 28 Case 2: Microsoft: The Next Chapter 32 Chapter Stakeholder and Issues Management Approaches 39 2.1 Why Use a Stakeholder Management Approach for Business Ethics? 40 Stakeholder Management Approach: Criticisms and Responses 41 2.2 Stakeholder Management Approach Defined 42 Stakeholders 43 Stakes 44 2.3 How to Execute a Stakeholder Analysis 44 Taking a Third-Party Objective Observer Perspective 45 Role of the CEO in Stakeholder Analysis 45 Summary of Stakeholder Analysis 52 2.4 Negotiation Methods: Resolving Stakeholder Disputes 53 Stakeholder Dispute Resolution Methods 53 Contents 2.5 Stakeholder Approach and Ethical Reasoning 56 2.6 Moral Responsibilities of Cross-Functional Area Professionals 56 Marketing and Sales Professionals and Managers as Stakeholders 57 R&D, Engineering Professionals, and Managers as Stakeholders 58 Accounting and Finance Professionals and Managers as Stakeholders 59 Public Relations Managers as Stakeholders 59 Human Resource Managers as Stakeholders 60 Summary of Managerial Moral Responsibilities 60 2.7 Issues Management, Stakeholder Approach, and Ethics: Integrating Frameworks 60 What Is a Public “Issue”? 61 Other Public Issues 61 Stakeholder and Issues Management: “Connecting the Dots” 62 Moral Dimensions of Stakeholder and Issues Management 63 Introduction to Issues Management: Two Frameworks 63 2.8 Managing Crises 68 How Executives Have Responded to Crises 70 Crisis Management Recommendations 72 Chapter Summary 73 Ethical Insight 2.1 74 Questions 75 Exercises 75 Real-Time Ethical Dilemma 77 ix 496 Index ethical displacement, 459 ethical idealism, 119f, 121 ethical insight, 97 ethical issues, 99f bribery, 433–435 gifts, 436 levels of, 98–104 piracy and intellectual property protection, 439–440 racial and sexual discrimination (globally), 436–438 sexual discrimination, 438–439 ethical principles-in-action, 432 method, 432–433 ethical reasoning criteria, 96–97, 102–103 hypernorms, 462–464 international styles, 461 moral responsibility and, 103–104 using, 19–20 ethical relativism benefits of, 116–117 logic of, 116 principles, 117 stakeholder analysis, 117–118 ethical standards, 102 globalization and, 429–430 ethical tests, 123–124 Ethical Trading Initiative (ETI), 480, 481 ethical traps, 431 ethical virtue, 105f ethics codes Borg-Warner, 289–290 definition, 312 Johnson & Johnson, 287–288, 312 Levi Strauss & Company, 281–285 necessity of, 314 Southwest Airlines, 288 starting point, 312–313 survey of, 313 ethics, in advertising, 229–230 Ethics Officer Association, 175 ethics programs, 316 Ethics Resource Center, 299, 301 ethnocentrical, 431 ETI See Ethical Trading Initiative Etzioni, Amitai, 247 European Advertising Standards Alliance (EASA), 240 European Council against Racism and Intolerance (ECRI), 438 European Sponsorship Association (ESA), 240 European Union (EU), 421, 421f, 443 Microsoft and, 32–33 EV1 death of, 206–207 life of, 204–205 evaluations, 298–299 external stakeholders moral stakes and corporate responsibilities, 161f Exxon Mobile, 327 Exxon Valdez, 69, 184–187 resolution, 186 F FAA See Federal Aviation Administration Facebook, 236 advertising and, 261–263 Beacon, 261–262 factual evidence, 102 Fair Credit Billing Act, 180 fair dealing practices, 354 Fair Labor Association (FLA), 480, 481 fair wages, 359 FakeYourSpace.com, 260 Falise, Robert A., 182 families, 352 Family and Medical Leave Act (FMLA), 371–372 Faneuil, Douglas, 117 Faragher v City of Boca Raton, 381 Fast Food Nation, 443 fast food restaurants, 224, 443–444 Fastow, Andrew, 28, 29, 30, 177 activities of, 29–30 charges against, 177 evaluations by, 30 FCPA See Foreign Corrupt Practices Act FDA See Food and Drug Administration Federal Aviation Administration (FAA), 98 Federal Hazardous Substances Act, 180 Federal Sentencing Guidelines, 7, 174–175, 175–176t Federal Trade Commission (FTC) Act, 179, 230 advertising regulatory role, 230 COPPA and, 240 disclosure, 239 Index function, 227 online advertising, 239 online regulatory role, 240 Federal Water Pollution Control Act, 180, 254 FedEx, ACSI rating, 164 Feldman, Amy, 327 Feuerstein, Aaron, 293, 317 bankruptcy, 133–134 critics, 133 impact of, 12–13 mill fire, 132–134 values, 132–133, 134 Feuerstein, Daniel, 134 Fidelity, 312 file sharing, 1–2, 192–193 financial forecasting, 331–332 Fink, Steven, 65, 68, 69, 70, 74, 225 Firestone tire, 182 firm of endearment (FoE), 291 First Amendment, 232–233, 235, 242 Fisher, Nancy, 268 Fisher Price, 79 FLA See Fair Labor Association FMLA See Family and Medical Leave Act Flannery, Tim, 143 Fleishman-Hillard, 328 FoE See firm of endearment Fogle, Jared, 224 Food and Drug Administration (FDA), 247 antidepressants, 244 consumer safety role, 228 drug approval, Erbitux application, 129–130 statistics on weight problems, 223 tobacco regulation, 244 Food Quality Protection Act, 181 Ford, Henry, 204 Ford Motor Company, 61, 146–150, 181, 182, 225, 285, 422 Ford Pinto, 69, 146–150, 181, 225 Foreign Corrupt Practices Act (FCPA), 102, 434–435 foreign country style, 461 Fortune, 12, 29 Fox Legal, 260 FOX News channel, 65 Freeman, R Edward, 116, 124, 308 free market theory application, 119–120 corporate/consumer relationships, 158–160 corporate social responsibility, 158 principles, 158–159 problems with, 159 free speech advertising and, 232–235 Friedman, Milton, 16, 110, 158 Friedman, Thomas, Friends of the Earth, 144 Friis, Janus, 211 Frontline, 62 Fry, Roger, 55 FTC See Federal Trade Commission FTC Improvement Act, 179 fuel sources, 205–206 future generations, 256 G Gaia, 143 Gap, Inc sweatshops, 480 Gates, Bill, 163, 300 business model, 34–35 ethical responsibilities, 104 philanthropy, 121, 164 Gates, Melinda, 120, 164 Gautschi, Heidi, 263 gay rights, 350 GE Capital, 134 Gell-Mann, Murray, gender strength, 349f General Electric, 285, 313, 314, 422, 453 biofuels and, 144 General Mills, 313 General Motors, 381, 429 electric car, 203–208 fuel sources, 205–206 generation X, 342, 345, 346–347 generation Y, 345 genetic discrimination, 265–268, 369 government response, 266–267 Genetic Information Nondiscrimination Act (GINA), 267, 268 Genetic Nondiscrimination in Health Insurance and Employment Act, 369 Getting to Yes: Negotiating Agreement Without Giving In, 55, 459 Ghitis, Fred, 477 Gibbons, Susie, 395 497 498 Index gifts vs bribery, 436 GI generation, 344 Gilbert, Daniel, 116, 124, 308 Gilmartin, Raymond, 197, 199 GINA See Genetic Information Nondiscrimination Act Gioia, Dennis A., 74, 146, 181 Global Crossing, Global Dreams, 448 globalization acceleration of, 5–7 child labor, 442 corruption and, 440–441, 441f crime and, 440–441, 441f definition, 419–420 digital divide, 443 economic integration, 419 impact, 418 leadership competencies, 423–440 leadership skills, 424f poverty and, 422–423, 442 principles, 429–430 racial discrimination, 436–438 sexual discrimination, 436–438 slavery and, 429, 442 smart, 465 sovereignty loss and, 444–445 sweatshops, 479–481 values, 429–430 westernization and, 443–444 global level, 99 global skills, 426 global style, 461 Global Sullivan Principles, 429 Global Trends, The, 441 global warming halting, 251 major sources, 251 type five, 251f Goldberg, Laura, 193 golden rule, the, 123 Goldman Sachs Group, 170–171f, 418 good faith practices, 354 Google, 32, 33, 34, 35, 166, 236, 291, 302 China, 474–477 Pulse, 166 Gore, Al, 143 Gorog, Chris, 194 Gostin, Lawrence, 233 Graham, Grant, 178 Grameen Bank, 453 Greater New Orleans Broadcasting Association Inc v United States, 233 Greenfield, Jerry, 300 greenhouse gases, 250–251, 252f green marketing, 255–256 Greenpeace, 144 Greider, William, 448 Greyser, Stephen, 74 Griswold v Connecticut, 363 Grossi, Deana, 400 Grossman, Elizabeth, 406 Groupthink, 296 GTE, 313 Guiliani, Rudolph, 400 H Hakki, Ayman, 243 Haley, Michael, 386 Hall, Thomas, 178 Halliburton, Hamel, Gary, 304 Harde, James, 134 Harley-Davidson, 291, 302 Harris Interactive, 166 Hasbro, 46 Hawken, Paul, 448 Haworth, Joan, 393 Hazelwood, Joseph, 185, 186 heard, right to be, 226 Health and Human Services Department, 224 health care, 352 Health Insurance Association of America (HIAA), 267 Health Insurance Portability and Accountability Act (HIPAA), 267 HealthSouth Corporation, 178 healthy environment, right to, 226 Heinz, 422 Helsinki Final Act, 456 Hewlett-Packard, 280, 285, 313 HIAA See Health Insurance Association of America Hilby Wilson, 302 HIPAA See Health Insurance Portability and Accountability Act Hitt, William, 296 Home Depot, 298, 423 Honda, 291, 312 Honeywell, 380 Hood, Julia, 328 Index homosexuality, in military, 398–402 HR See human resources Huckabee, Mike, 400 Human Genome Project, 265, 268 business response to, 265–266 human life, 245–246 value of, 245–246 human resources (HR), 60 human rights, 109, 456 Hum, Brian, 423 Hurricane Katrina, 67 hypernorms, 462–464 I IBM, 33, 170f, 285, 423 ICCPR See International Covenant on Civil and Political Rights idealism, 121 idealists, 122, 123 identity theft, 238 IDEO, 291 IE See Internet Explorer IFA See International Franchise Association Ikea, 291, 302 ILO Declaration of Fundamental Principles and Rights at Work, 429 ImClone, 117, 129–131 IMF See International Monetary Fund immoral treatment, 118 imperfect markets, 227 imperialism, 117 Imperium Renewables, 144 India, 43 outsourcing to, 4, 471–473 individualists, 122, 123 individual level, 98, 102 industrial activities, 253 industry level, 99 information technologies (ITs) See also Internet ethical effects, 11 India, 43 oversees operations, 43 informed, right to, 225 Ingram, Sonia, 405 innerconnection style, 461 Insider, The, 386 insider information, 329–330 insight stage, 71 integrative approach/method, 54–55 intellectual property (IP) protection, 439 internal stakeholders competing professional value orientations, 309f International Covenant on Civil and Political Rights (ICCPR), 443 International Franchise Association (IFA), 315 international level, 99 International Monetary Fund (IMF), 422 International Money Laundering Abatement and Anti-Terrorism Financing Act, 373 Internet See also information technologies advertising and, 236–239 Americanization and, 443–444 emergence, 6–7 file sharing, 179, 192–193 scam, 237 workplace, 366–367 Internet Explorer (IE), 33 Internet Spyware Prevention Act, 237–238 Interscope Records, intuition ethic, the, 123 investment banking, 30 IP See intellectual property iPod, 194 ISO 9000, 249 issues management methods four-stage life cycle, 67–68, 67f frameworks, 63–68 moral dimensions, 63 public, 61–62 seven-phase development process, 65–67 six-step process, 64–65 stakeholder management and, 60–68 two crisis-management, 69–72 IT See information technologies iTunes, 194 J Jairam, Aparna, 360 Jenkins, Martin, 394 JetBlue, 84–87, 280, 291, 292 crisis response, 69 Customer Bill of Rights, 86 Valentines Day disaster, 85–86 499 500 Index Jobs, Steve, 163 John, Elton, 193 Johndrow Anthony, 166 Johns-Manville Corporation, 182–184, 248 Johnson, Gerrick, 80 Johnson & Johnson, 285, 291, 301 credo, 287, 287–288f ethics code, 312 Jones, Pamela, Jordan’s Furniture, 291 J.P Morgan Chase, 30, 170f Jungle, The, 225 just cause termination, 362 justice, 49, 105f principle of, 112, 376 problems, 111–112 stakeholder analysis, 112–113 transforming, 112 types, 111–112 K Kalra, Krishan, 293 Kant, Immanuel, 107, 108 Kaufman, Susan, 395, 396 Kawasoe, Katsuhiko, 181 Kay, Mary, 300 Kazaa, 211 Kelleher, Herb, 288, 290, 300, 317 Kelly Airmail Act, 84 Kennedy, Anthony, 380 Kennedy, John F., 70, 163 Kerviel, Jerome, 136–141 Kessler, David, 232 Killing of Karen Silkwood, The, 386 Kim, W Chan, 309 Kincannon, Louis, 351 King, Martin Luther Jr., 163 Klaassen, Abbey, 262 KMPG, 313 knowledge workers, 423 Kohlberg, Lawrence, 21–22 Kollar-Kotelly, Coleen, 34 Korn/Ferry International, 424 Korten, David, 448 Kostrzewski, Paige, 80 Kotter, John, 292 Kozlowski, Dennis, 101, 177 Krawcheck, Sallie, 407 Krolick, Stanley, 122 Kroll Zolfo Cooper Inc., 134 L labor unions, 370 Lands’ End, 281 Lange, Sylvia, 186 Lanman, Robert, 266, 267 laws changes in, regulatory, sexual harassment, 383–385f tort reform, 258 Lay, Kenneth, 100 activities, 29–30 charges against, 177 ethics code, 31 leadership bureaucratic style, 295–296 core competencies, 287–290 defining purpose, mission, values, 279–286 failures, 294 manipulator style, 295 moral, profile, 286 professional managers, 296 roles, 278–279 shared, 427–429 spiritual dimensions, 292–293 strategic questions, 279–281 strategy development, 304–307 styles, 295–297 transforming style, 296 unique approaches, 292–293 Lee Der Industrial, 80 Lee, Kai-Fu, 476 less-developed countries, 449, 454 let the buyer beware, 227 let the seller take care, 227 Levi Strauss & Company hypernorms, 462, 463 sweatshops, 480 values statement, 281–285f Levitt, Arthur, 174 Lexmark, Lexus and the Olive Tree, The, liability absolute, 248 product, 247–249 strict, 248 Lightner, Candy, 62 limited competition, principle of, 257 Limp Bizkit, 193 Linux, 32 Liz Claiborne, 480 Index LJM2, 30 LL Bean, 291, 302 Love, Courtney, 193 Lovelock, James, 143 Low-cost carriers, 84–85 Lowe’s, 423 Lowery, Beth, 203 Lucent, 435 Lutz, Bob, 207 M Macpherson v Buick Motor Company, 247 MADD See Mothers Against Drunk Driving Madonna, 236 Madsen, Peter, 436 Malden Mills, 293, 317 bankruptcy, 133–134 CEO’s story, 12–13 crisis, 132–134 fire, 12–13 rebuilding, 132, 133, 134 Malone, Thomas, 343 management amoral, 118 crisis See crisis management decision-making styles, 121–122 environmental change and, ethical reasoning, 56 moral, 118 multinational, 453–456 social contract, 160–162 stakeholder See stakeholder management managerial competencies, 425–426f managers, 57–58 Manandhar, Narayan, 436 manipulation, 235 manipulators, 295 Manville Personal Injury Settlement Trust, 182, 183 Manzella, Darren, 400 marketers, 263 marketing, green, 255–256 markets ethics based on, 119–120 failures, 227–228 imperfect, 227–228 mixed, 226 Marlboro man, 241 Marriot, 285 Marx, Thomas, 67 Mary Kay, 300 materialistic cultural values, 253 Mattel crisis management, 72 lead paint toy recall, 39–40, 46–52, 64, 65, 66, 79–83 Matthews, Mitch, 34 Mauborgne, Renee, 309 McAnally, Stephen, 404 McCain, John, 400 McDonaldization of Society, The, 225, 443–444 McDonald’s, 224, 225 McDonnell Douglas, 313 McEntee, Gerald, McGhee, Iain, 325 McGrath, Michael, 472 MCI Worldcom, McLean, Bethany, 30 McMahon, T., 112 Mean Business: How I Save Bad Companies and Make Good Companies Great, 294 means-ends ethic, the, 123 Media Monitoring Project (MMP), 240 mentoring programs, 347–348 Merck, 285 KGaA, 130 VIOXX, 196–200, 225 Merrill Lynch, 4, 171f Nigerian power plant, 29 sex discrimination by, 404–405, 407 subprime lending crisis, Waksal case, 129–130 Mesothelioma Reporter, 184 Metallica, 193 MetLife, 171f Meyrowitz, Carol, 156 microfinancing, 452–453 Microsoft, 17, 18, 300, 440 alliance against, 33 alternatives to, 34 antitrust case, 32–33 business strategy, 33–35 Chinese censorship, 475 diagnostic typology of stakeholders, 51f domination, 33 Europe and, 32–33 and Facebook, 262 market share, 34 monopoly, 20, 32–33 501 502 Index military Don’t Ask Don’t Tell policy, 398–402 Millennials, 345, 346–347 Mill, John Stuart, 104 Mintz, Steven, 66 missions, 281 Levi Strauss & Company, 281–285f Mitroff, Ian, 293 Mitsubishi Motor Company, 181, 383 mixed markets, 160 MNE See multinational enterprises Money Laundering Control Act, 373 monopolies, 20, 32–33 Montgomery, David, 165 Monus, Micky, 294, 317 moral courage, 292–294 moral creativity, 96–97, 100–101 moral development, 21 moral management, 118 moral profiles, 286 moral reasoning, 102, 118 moral relativism, 431–432 moral responsibilities CEOs, 48–49 cross-functional aspects, 56–60 ethical reasoning and, 103–104 summary of, 60 moral rights, 109 Moreno, Katarzyna, 133 Morgan Stanley, 4, 170f, 403–404, 406 Morrison and Foerster, 366 Mothers Against Drunk Driving (MADD), 62, 67 mothers, working, 353 motivation, 162 Motorola, 4, 285, 302 core ideology, 286 MoveOn.org, 262 MP3.com, 192, 195 MP3s advertising and, 236 Napster, 192 multigenerational workforce, 346–347 multinational enterprises (MNEs), 418, 422 abuses by, 447–449 characterization, 445–446 consumer protection, 455 decision making styles, 461–462 employment practices, 454–455 environmental protection, 455 external monitoring groups, 457–458 goal of, 446–447 host-country and, 451–452 human rights, 456 hypernorms, 462–464 individual decision making, 458–461 largest, 446–447 local culture, 459–460 morality management, 453–456 percentages of, 446–447 perspective of, 449–451 political payments, 455 power of, 446–452 stakeholder management, environmental issues, and ethical concerns, 450f world’s largest companies, 447f Muriel Siebert & Company, 405 Musthhaler, Linda, 262 MySpace, 261, 475 N Nader, Ralph, 68, 121, 225 NAFTA See North American Free Trade Agreement naive relativism, 115 See ethical relativism Napster advertising and, 235 and children, 239 demise of, 192–193 impact of, 194 P2P technology, 192 reincarnation, 194–195 Nardelli, Robert, 298 Nash, Laura, 9, 101 National Aeronautics and Space Administration (NASA), 58 National Business Ethics Survey (NBES), 9–10, 98 National Center for Health Statistics, 223 National Commission on Product Safety (NCPS), 245 National Environmental Act, 180 National Highway Traffic Safety Administration (NHTSA), 146, 228, 247 National Human Genome Research Institute (NHGRI), 265 National Institute of Health, 265 National Traffic and Motor Vehicle Safety Act, 68 National Transportation Safety Board (NTSB), 228 Index needs, right to, 226 Neeleman, David, 70, 85, 86, 280, 292, 293 negative rights, 109, 120 negligence, doctrine of, 247 negotiations, 125 Netscape, 32 New Balance, 291, 302 New York Times, 65 Niebuhr, Rheinhold, 121 Nike sweatshops, 480 Noise Pollution Act, 180 noncompete agreements, 329 Nord, Nancy, 80 Nordstrom, 285 norms, 462–464 North American Free Trade Agreement (NAFTA), 421 Northern Chemical, 302 Northrop Grumman, Northwest Airlines ACSI ratings, 164 Norton, 313 Novak, Michael, 28 Novell Networks, 33 Nozick, Robert, 120 Nynex, 380 O OAS See Organization of American States Obama, Barack, 400 obesity, 223–224 Occupational Safety and Health Administration (OSHA), 253, 360, 369–370 OCEG See Open Compliance Ethics Group OECD See Organization for Economic and Cooperative Development OECD Guidelines for Corporate Governance, 429 OECD Guidelines for Multinational Enterprises, 429, 456 Office of Thrift and Supervision (OTS), 386 Ogilvy, 262 oil spills, 184–187 Old Joe Camel, 241 Olive Garden ACSI rating, 164 ombudspersons, 314–316 Omnimedia, 178 Oncidi, Anthony, 395 O’Neill, Brian, 185 100 best companies, 12 One World, Ready or Not, 448 online technologies, 6–7 Open Compliance Ethics Group (OCEG), 310 Oracle Corporation, 33 organizational cultures See also corporations definition, 300 Enron’s, 302–303 ethically strong, 301 ethically weak, 302–303f observing, 300–301 stakeholder values, 307–310 whistle-blowing and, 385–389 organizational level, 98–99, 102 Organization for Economic and Cooperative Development (OECD), 434 gifts and, 436 Organization of American States (OAS) Convention, 434 Orlofsky, David, 134 OSHA See Occupational Safety and Health Administration OTS See Office of Thrift and Supervision outsourcing, 4, 40, 43, 44 China and, 40, 471–473 India, 471–473 Wal-Mart, 471–473 oversight, 171 P P2P See peer-to-peer Packard, David, 280, 300 Palihapitiya, Chamath, 261 PanAm, 84 Parloff, Roger, 395, 396 Pastin, Mark, 302 Patagonia, 291, 302 paternalism, 235 Paulhus, Deborah, 405 Paycheck Fairness Act, 375 Payne v Western A.R.R Co., 354 Pay Without Performance, the Unfulfilled Promise of Executive Compensation, 297 503 504 Index Pearson v Shalala, 233 peer review programs, 315–316 peer-to-peer (P2P) networks Napster and, 192 Skype, 213, 214 PepsiCo, 196, 453 Permanent Subcommittee of the Investigation of the Committee on Governmental Affairs, 169 Pesterfield, Susanne, 404 Petry, Ed, 175 Pfizer, 184, 196 Phar-Mor, 294, 317 philanthropists, 120–121 philanthropy, 119f, 164 Philip Morris, 248, 285 Phillips-Van Heusen, 480 phishing, 238 Pinto, 146–150, 181 piracy, 439–440 Pittiglio, Theodore, 472 plant closings, 370–371 Plato, 113, 114 Polartec, 132, 133 Police Department of the City of Chicago v Mosley, 401 pollution air, 250–251 causes, 253 water, 251–253 Polly Pocket toys, 80 polygraphs, 365 population explosion, 253 pop-up ads, 236 Porras, Jerry, 280, 285, 286 Posadas de Puerto Rico Associates v Tourism Company of Puerto Rico, 233 positive rights, 109, 120 poverty, 442 global, 422–423 Powell, Lewis F., 233 power-based approach/method, 54–55 power-rights relationship, 112 PR See public relations pragmatists, 122, 123 prepays, 30 Presser, Paul, 480 pressures, 98 Price v City of Fort Wayne, 372 PricewaterhouseCoopers, 137, 313 Sarbanes-Oxley Act, 171 principles of social responsibility, 430, 430f privacy drug testing, 367–369 online, 227, 240 polygraphs, 365 psychological testing, 365 rights to, 363, 364 technology and, 364 workplace, 365–366 privity, principle of, 247 procedural justice, 111 Procter & Gamble, 240, 285, 422 philanthropy, 164 tampon case, 182 prodromal stage, 69–70 productivism, 119f productivists, 119–120 product liability doctrines, 247–248 limits of, 248–249 products managing, 158–159 recalls, 246–247 regulating, 246 safety, 244–247 professional level, 98 professional managers, 296 progressivism, 119f, 121 PRWeek, 328 psychological testing, 365 public policy, 354 public relations (PR) client-supplied information, 330 confidentiality, 329–330 contracts, 329 employee benefits, 332 employee poaching, 330–331 ethical dilemmas, 328–334 financial forecasting, 331–332 goal of, 328 industry nature, 328 managers, 59–60 stock gifting, 331 Public Relations, Inc control systems, 333 culture, 333 description, 328 employee behavior, 333 ethical dilemmas, 328–334 ethical profile, 332–334 leadership, 332 structure, 333 Index Puff Daddy, 193 Pugh v See’s Candies, Inc., 354 Pure Food and Drug Act, 180 Q Quaker Oats, 453 quality of work life (QWL) programs, 361 Quattrone, Frank, 178 Queen Bee & Wannabes, 240 Quigley Company, 184 Qwest Communications International, 3, 178 QWL See quality of work life R Rabin, Robert, 472 racial discrimination, 372–373 global, 436–438 racial profiling, 372 Ralls, Steve, 399 Ramus, Catherine, 165 Rashke, Richard, 386 Rawls, John, 110–111 Raytheon, 312 RCRA See Resource Conservation and Recovery Act R&D See research & development reaction stage, 71 readiness checklist, 316–317 RealNetworks, 33 reconciliation, 55 Recording Industry Association of America (RIAA), 1–2, 193 RedHat, 33 redress, right to, 226 reduction in force (RIF), 60 Reebok, 480 regulation, role of, 171, 178–179 regulatory agencies, 179 regulatory laws, Rehnquist, William, 242 REI, 291, 302 Reilly, Paul, 424 Reitz, Joseph, 458 relational approach/method, 54–55 relativism See cultural relativism; ethical relativism; moral relativism Rely tampon, 182 reputation, 164–166 best, 167f quiz, 167 Reputation Institute, 165, 166 Reputation Quotient (RQ), 166 research & development (R&D), 58–59 Resource Conservation and Recovery Act (RCRA), 254 responsibility See corporate responsibility restorative justice, 55 retributive justice, 111 RIAA See Recording Industry Association of America Rice, Condoleezza, 207 RIF See reduction in force Rigas, John, 178 Rigas, Michael, 178 Rigas, Timothy, 178 rights, 49, 104f basis, 109 limitations, 110 power relationship and, 112 productivism, 119–120 stakeholder analysis, 110 types of, 109–110 rights principle, 376 Rio de Janiero Earth Summit, 325 RiskMetrics Group, 169 rituals, 300 Ritzer, George, 225 R J Reynolds, 241 Romney, Mitt, 400 Roosevelt, Franklin D., 163 Roscoe Pound Foundation, 248 Rothenberg, Randall, 263 RottenNeighbor.com, 260 Rowan, J., 357 Roxio Inc., 193 RQ See Reputation Quotient rule of law, 168 Ryan, Sarah-Lee, 237 S Safe Drinking Water Act, 180, 254 safety, product, 244–247 safety, right to, 225 safety, workplace, 360–361, 369–370 SAI See Social Accountability International sales professionals values, 308 Salter, Malcolm S., 303 Samuelson, Paul, 160 Sander, Richard H., 378 505 506 Index Sarbanes-Oxley Act, 59, 310 compliance incentives, 174–175 creation, Federal Sentencing Guidelines, 174–175, 175–176t implementation, cons, 172–174 implementation, pros, 172–174 key sections, 171–172 penalties provision, reform provision, 172 Sarkozy, Nicholas, 137 scam, advance-fee loan, 231 Internet, 237 scandals See corporate scandals Schell, Orville, 476 Schieffelin, Allison, 403 Schmidt, Charles, 266 Schroeder, Patricia, 371 Schultz, William, 241 Scrushy, Richard, 178 SEC See Securities and Exchange Commission Securities and Exchange Commission (SEC), 435 Arthur Andersen case, 88 ImClone, 130 Sarbanes-Oxley implementation, 172–174 securities industry, 403–408 self-interest, enlightened, 121 self-interest approach, 115–118 self-regulation, 310 Seligman, Brad, 395 seller, take care, 227 services, managing, 159–160 sexual discrimination, 438–439 global, 436–438 sexual harassment charges, 379 definition, 379–380 employer guidelines, 382 foreign firms, 382–383 history, 379–380 laws, survey of, 383, 383–385f liability, 380 sample corporate policy, 381f securities industry, 403–408 tangible action, 380–382 Title VII protection, 379–380 sexual identity, 400–401 Shape Up America!, 243 Shearson Lehman Brothers, 404 Shell Oil, 422 Sherman Antitrust Act, 179 Sherman, Cary, Shister, Neil, 472 Shuhong, Zhang, 79 Siebert, Muriel F., 405 Siekaczek, Reinhard, 433 Siemens, 433 silent generation, 344 Silkwood, Karen, 386 Silverman, Josh, 211 Simms, Louise, example, 95–125 Sinclair, Upton, 225 Sinegal, Joe, 292 Sites, Neill, 405 Siwei, Cheng, 476 Six Sigma, 249 60 Minutes, 62, 65 Skilling, Jeffrey activities of, 29–30 business model, 19, 100 charges against, 177 Skype, 211–216 China, 475 future of, 215–216 peer-to-peer (P2P), 213, 214 Slaughter, Louise, 369 slavery, 429, 442 Smith, Adam, 158 Smith Barney, 404, 405 Smith, Ethan, 192 Smith, Kenneth, 183 Smith, Roger, 204 smoking See cigarette smoking Social Accountability International (SAI), 480, 481 social contract changing, 353–356, 358–359 consumer rights, 226–227 stakeholder management, 160–162 social dimension, 453 social entrepreneurship, 453 social mission, definition, 281 social responsibility, 119–121, 157–160 societal level, 99 Societe Generale (SoGen) Code of Conduct, 139 Jerome Kerviel scandal, 136–141 safeguards, 138–139 SoGen See Societe Generale Sony, 285 core ideology, 286 Sony BMG Music Entertainment, 2, 192 Index Soros, George, 164 Souter, David, 186 South Africa, 429, 431–432 Southern Company ACSI rating, 163 Southwest Airlines, 85, 281, 288, 290, 291, 300, 317 spirituality, 292–293 Sprint Nextel ACSI rating, 163 Spurlock, Morgan, 225 Spykes, 242 spyware, 238 stake, 44 stakeholder analysis CEO role in, 45–52 coalition mapping, 46–47 description, 44 ethical relativism, 117 executing, 44–53 interest assessment, 47–48 justice, 49, 112–113 moral responsibilities, 48–49 power assessment, 48 relationship mapping, 45–46 rights, 49, 110 sample questions, 46f shifting coalitions, 52 social responsibility, 119 strategies/tactics, 49–52 summary of, 52–53 third party perspective, 45 universalism, 49, 108 utilitarianism, 49, 107 stakeholder management, 278–299 advantages, 40–42 criticisms, 41–42 definition, 42–44 description, 7–8 ethical reasoning and, 56 examples of firms, 291–292 issues management methods and, 60–68 moral dimensions, 63 moral responsibility and, 56–60 relationship, 291–292 reputation, 164–166 stakeholders collaborative, 50 consumers, 224–228 core competencies, 287–290 definition, 3, 43–44 diagnostic typology, 50f dispute resolution, 53–55 economic, 160 environmental forces, 5–7 external, responsibility of, 160–166 focal, 45 HR managers as, 60 internal values, 307–310 Kerviel scandal, 140–141 macro level issues, management, 39–72 managers as, 57–58, 57f marginal, 50 mixed blessing, 50 MNEs See multinational enterprises (MNEs) monitoring, 50 moral responsibility matrix, 49f nonsupportive, 50 primary vs secondary, 8f PR managers as, 59–60 R&D managers as, 58–59 sales professionals as, 57–58 secondary, 43–44 social, 160 social responsibility, 157–160 supportive, 50 values-based approach, 279 voluntarily, 49 stakes, definition, 44 Standard & Poor, 166 Stardoll, 240 Starbucks, 291 Stephens, Carrol, 306 Steward, David, 293 stewardship, 120 Stewart, Martha, 101, 117, 178 stock gifting, 331 stockholder approach, 41 stockholder model, 119–121 strategic alignment, 280f Strategic Name Development, 472 strategy enterprise, 304 function, 304–307 levels, 305–306 moral dimensions, 304 Strauss, Levi, 281 structures boundaryless, 307 centralized, 306 decentralized, 306 definition, 305 507 508 Index networked, 307 types, 306 subprime lending crisis, 3, 120 Subway, 224 Sullivan, Leon, 429 Sullivan, Scott, 177 Sumner, Hydie, 404 Sunbeam, 294, 317 Sun Microsystems, 33 Super Size Me, 225 supportive, 50 Supreme Court See U.S Supreme Court sustainable development, 325–327 Swanton, Mary, 396 Swartz, Jeffrey, 293, 317 Swartz, Mark, 177 sweatshops, 479–481 demonstrations, 480 Szwajkowski, 227 T Tai, David, 423 Tales from the Boom-Boom Room, 404–405 Target, 46 Teal, Thomas, 133 teams, formation of, 427–428 technology globalization, 443 information See Internet pollution and, 253 privacy and, 364 Teflon, 104 Telephone Consumer Protection Act, 180 Temple, Nancy, 88 termination, just cause, 362 terrorism, global, 420, 422 test of common sense, 123 test of one’s best self, the, 123 test of the purified idea, the, 123 test of ventilation, 123 Texaco, 422 Thiokol, 58 third party perspective, 45 Thomas, Clarence, 379 Thomas, Nancy, 405 Thompson, Larry, 88 3M, 285, 302 Thurow, Lester, 471 Thurrott, Paul, 33 Tillerson, Rex, 186 Tillich, Paul, Timberland, 291, 317 Time Warner, 164 Title VII, 379 TJX Companies, 155–156 hackers, data theft, 155–156 TNC See transnational corporations tobacco advertising, 241–242 health costs, 244 liability limits, 248–249 regulation, 244 settlement, 241–242 Todd, Robert, 472 Tom’s of Maine, 293 Topol, Eric, 198 Torah, 133 Total Quality Management (TQM), 249 Toxic Substances Control Act, 181, 254 Toyota, 291, 453 Toy recall, Mattel, 79–83 Toys R Us, 46 TQM See Total Quality Management Trademark Counterfeiting Act, 179 Trader Joe’s, 291 transformers, 296 transnational corporations (TNCs), 445 Transparency International, 434, 457 triple bottom line, 452–453 Tropicana, 453 Truth and Lending Act, 180 Tucker, Jo, 366 Turner, Ted, 164 TWA, 379 20/20, 65 Tyco International, 3, 59, 177 U unegalitarian, 428 unethical practices costs of, 12 by employees, 9–10 by industry, 10 UN See United Nations UNICEF, 422 Unilever, 240 Union Carbide, 448 United, 84 United Nations (UN) Code of Conduct on Transnational Corporations, 456 Index Declaration of Human Rights, 429, 456 Human Rights Council, 438 United Parcel Service (UPS), 291 ACSI rating, 163 United States Constitution, 109 Universal, 192 Universal Declaration of Human Rights, 109, 443 universalism, 49, 104f, 107–108 and stakeholder analysis, 108 Unsafe at Any Speed, 68, 225 UPS See United Parcel Service urbanization, 253 Ury, William, 55 US Airways ACSI rating, 163 USA Patriot Act, 373 U.S Constitution, 401 U.S Sentencing Commission, 310 U.S Supreme Court affirmative action, 376, 377–378 Don’t Ask, Don’t Tell policy, 399 free speech, 232–234 sexual harassment, 406 tobacco advertising, 233, 242 utilitarianism, 49, 105f act-based, 104 principle, 376 principles, 104, 106 problems with, 106 rule-based, 104 stakeholder analysis, 107 V values generational, 344–346 innovation and, 309–310 internal, 307–310 statements, 301 values-based approach, 279 impact of, 279 value statements See ethics codes Vara, Vauhini, 262 Verizon, 170f, Veronis Suhler Stevenson, 263 Vetco International, 435 Victor, Bart, 306 Viereck v City of Gloucester City, 372 VIGOR study, 196–197, 198 Virgin Airways biofuels and, 144 Virgin Fuel, 144 Virgin Group, 143, 296–297 Villalba, Stephanie, 404 VIOXX, 196–200, 225 APPROVe study, 197, 198 recall and lawsuits, 199 VIGOR study, 196–197, 198 virtue ethics character-based, 113–114 concept of, 113–114 critiques of, 113 stakeholder analysis, 114 VoIP Skype, 211–216 technology, 212–213 Volcker, Paul, 174 Volt, Chevy, 207 voluntarily, 49 W wages CEO, 297–299 comparable, 375 fair, 359 women, 359 Waksal, Aliza, 130 Waksal, Jack, 130 Waksal, Patti, 130 Waksal, Sam, 101 Erbitux promotion, 129–130 ethical style, 117–118 FDA refusal reaction, 129–130 indictment of, 130 Walker, Brant, 260 Walker, John, 178 Wall Street, 30 Wall Street Journal, 65 Wal-Mart, 17, 46, 285, 300 appeals, 394–395 class action case, 394 core ideology, 285 gender discrimination at, 393–396 outsourcing, 471–473 suits against, 98–99 sweatshops, 480 women’s status, 393–394 Walton, Sam, 300, 471 Warner Brothers, 192 water pollution, 251–253 Watkins, Sherron, 30 Weather Makers, The, 143 weather report, ethical, 311f 509 510 Index Weber, Max, 295 WebTrack, 239 Wegmans, 291, 302 Weinberger, David, 263 Wells Fargo, Wendy’s, 224 westernization, 443–444 When Corporations Rule the World, 448 whistle-blowing cultural norms and, 386 definition, 385–386 external, preventing, 388–389 guidelines, 388 inappropriate, 387 moral justification, 387 negative impact, 385–387 Whittaker, Martin, 327 WHO See World Health Organization Whole Foods, 291 Wigand, Jeffrey, 386 Wilson, Howard, 204 Windows Vista, 34 Winnick, Gary, 101 wired equivalent privacy (WEP), 156 Wiseman, Rosalind, 240 women affirmative action, 375–378 in securities industry, 403–408 sexual harassment, 379–385 wages, 359 in workforce, 348–350 Women in Financial Services: The Word on the Street, 405–406 worker knowledge, 423 working family models, 353f workforce See also employees aging, 341–344 changes, implications, 353–356 cultural diversity, 351 digital economy, 343 disabled workers, 352 drug testing, 367 educational challenges, 351 gay rights, 350 generational differences, 344–346 genetic discrimination, 369 health care, 352 multigenerational, 346–347 privacy, 367–369 profile of, 341–343 sexual harassment, 367 women in, 348–350 workplace bridging diversity, 347–348 dating, 367, 368f discrimination, 372–378 employee rights, 361–365 Internet use, 366–367 privacy, 365, 366f safety, 369–370 sexual harassment, 379–385 smoking in, 370 World Bank, 422 WorldCom, 89, 302 scandal summary, 177 World Economic Forum, 137 World Health Organization (WHO), 241, 255 World Trade Organization (WTO), 422 WTO See World Trade Organization Wu, Eddie, 34 X Xerox, 253, 313, 314–315 Y Yahoo!, 32, 34, 236, 475 Yastremskiy, Maksym, 156 YouTube, 236 Z Zenios, Stefanos, 245 Zennstrom, Niklas, 211 Zubulake, Laura, 405 Zuckerberg, Mark, 261, 262 [...]... of ethics in solving moral dilemmas that are occurring now at every professional level • To introduce in a simple, straightforward, and interesting way stakeholder and issues management methods as strategic and practical ways for mapping corporate, group, and individual relationships so readers can understand and apply ethical reasoning in the marketplace and in workplace relationships • To engage and. .. core of Chapter 8, Business Ethics, Stakeholder Management, and Multinational Corporations in the Global Environment.” • Contemporary approach Revised sections on globalization, international ethics, stakeholder management and negotiation methods for assessing organizations, and ways business ethics has been affected since the corporate scandals, including the subprime lending crisis and the advance of... a responsible follower in organizations today • Chapter 7 addresses the individual employee stakeholder and examines new and changing workforce/workplace trends, moral issues, and dilemmas employees and managers face and must solve to survive and compete in national and global economies • Chapter 8 extends the level of analysis to global and multinational corporations (MNCs) and discusses ethical issues. .. expand readers’ awareness of what constitutes ethical and unethical practices in business at the individual, group, organizational, global, and multinational levels through real-time—not hypothetical— ethical dilemmas, stories, and cases • To instill self-confidence and competence in the readers’ ability to think and act according to moral principles as they create, manage, and Preface study stakeholder... Organizations 307 6.4 Leading and Balancing Internal Stakeholder Values in the Organization 307 6.5 Corporate Self-Regulation and Ethics Programs: Challenges and Issues 310 Organizations and Leaders as Moral Agents 312 Ethics Codes 312 Codes of Conduct 312 Problems with Ethics and Conduct Codes 314 Ombuds and Peer Review Programs 314 Is the Organization Ready to Implement a ValuesBased Stakeholder Approach? ... following ancillaries are available to instructors who adopt Business Ethics: A Stakeholder and Issues Management Approach: • Instructor’s Manual and Test Bank is available online at http://www.cengage com /management/ weiss and with the Instructor’s Resources CD (0-32459790-8) The Instructor’s Manual and Test Bank includes lecture outlines, suggested answers to end-of-chapter discussion questions and ethical... of Ethical Issues and Dilemmas 98 Moral Creativity 100 12 Questions to Get Started 101 Three Criteria in Ethical Reasoning 102 Moral Responsibility 103 3.3 Utilitarianism: A Consequentialist (Results-Based) Approach 104 Utilitarianism and Stakeholder Analysis 107 3.4 Universalism: A Deontological (Duty-Based) Approach 107 Universalism and Stakeholder Analysis 108 3.5 Rights: A Moral and Legal Entitlement-Based... lead-off cases and scenarios to attract students’ attention • Expanded coverage of corporate governance laws and values-based methods • Updated research and business press findings and stories have been added to each chapter to explain concepts and perspectives In addition to providing concrete frameworks for analyzing and discussing a wide range of ethical issues, the fifth edition of Business Ethics. .. matter—ethically, economically, socially, legally, and spiritually The post–9/11 world is different Potential terrorist threats, ongoing corporate scandals, security issues, globalization, off-shoring and outsourcing, and what types of work and jobs will be available for graduating students and those returning for advanced degrees all present business and ethical issues that can and do affect our professional... Discrimination 372 Equal Employment Opportunity and the Civil Rights Act 373 Age and Discrimination in the Workplace 374 Comparable Worth and Equal Pay 375 Affirmative Action 375 Ethics and Affirmative Action 376 Reverse Discrimination: Arguments against Affirmative Action 377 Ethical Insight 7.3 378 7.5 Sexual Harassment in the Workplace 379 What Is Sexual Harassment? 379 Who Is Liable? 380 Tangible
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