104 exam review-1

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Comm 104 Final Exam Review

courseware: Plato, TheRing of Gyges

An unjust person is happier than a just person.Justice is the middle ground

courseware: Rawls, ATheory of Justice

Distributive Justice:A conception of justice is a set of principles for choosing between the socialarrangements which determine the division of, and underwriting for a consensus as to the properdistributive shares. It is a matter of justice that economic and social benefits be divided fairly betweenall members of society, and thus there is a role of government in doing so.Subject: Basic StructureGoal: Fair Division of Benefits and BurdensMethod: Original PositionResult: A Bargain

- Original Position is to stand behind a veil of ignoranceo Dont know your gender, sexual orientation, religion, skin colour, height, wealth, etc.

- Think like disembodied Cartesian minds- Setup a basic structure for the situation after the veil is lifted- Rawls makes no assumptions about human nature- Rawls simply proposes that we better be willing to live in the society in which we construct

given that we first know nothing about ourselves- Suppose you are self-interested or altruistic- Rawls proposes that anyone will set up the structure so that the worst off condition of life

possible will be the one in which I am willing to live in- Thus, a social contract- Conception of the good is sub-political- Ensure the political structure makes it such that the worst situation isnt that bad- Principle of justice: distribution of benefits, and how to permit inequalities by wondering how

best to support those who may be in the worst situation - fairness(Bargain) 2 Principles:

1) Each has equal right to the most extensive basic liberties compatible with similar for all2) Socio-economic inequalities are only tolerable if a) they are to everyones advantage and b) are

attached to positions and offices open to all- Deep influence from Kant- Basic structure: constitution, courts, financial regulation, etc.- Risk minimizing strategy (minimaxing)- Context of pluralistic society, neutral with the conception of the good and the life plans- Need similar liberties with everyone- Just basic structure cannot as a thing of justice tolerate the fact that some lead undignified

lives

- Socioeconomic inequalities can be tolerated but only to everyones dis/advantage- Kingdom of ends- Disparity of power is tolerable if these disparities contribute to everyone- Prohibit churches- Basic structure does not lay down concept of the good

Rawls (What contract should we sign on to)- Not utilitarian: could examine that 80% of a class is dark eyed. Would increase happiness that

all dark eyed people get As and all light eyed people get Fs. But this isnt fair or sensible- This is an unacceptable social engineering because utilitarianism makes too great a demand of

sacrifice of liberty.- Rational bargainers would bank on fairness- Tyranny of the majority: If everyone gets a vote, the majority wins but the procedure can be

deeply unfair- Conception of political justice hold a neutral conception of the good, identity is very complex- Rawls intends to block the tyranny of the majority (ex. Residential schools)- To ensure the sphere of liberty ensures a context in which a society can make meaningful

choices- Options meaningfully available- Hutterites can take children out of school and educate them themselves- But the conception of justice involves meaningful options whichare chooseable so children

should be able to go to school, but cannot interfere with the cultural right of Hutterites.- Can justice tolerate differential rights?

text: Friedman, The SocialResponsibility of a Businessis to Increase its Profits, pp.3 - 9

Introduction The notion businesses should be socially responsible is tantamount to socialism Businessmen who talk this way are unwitting puppets of the intellectual forces that have

been undermining the basis of a free society these past decades Businesses cannot have responsibilities; only people can have responsibilities

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Presumably, those responsible are businessmen or, more specifically, corporate executivesThe Role of Executives

Executives are responsible to their employers, the business owners That responsibility is to conduct the business in accordance with their desires, which generally

will be to make as much money as possible while obey laws and ethical customs The executive is an agent not a principal Executives can have their ownpersonal responsibilities, but these are separate from the

responsibilitiesof the corporation

When an executive fulfills personal responsibilities, he is performing as a principal not an agent acting on behalf of shareholders Therefore, if the executive spends the corporations money to fulfill social responsibility,

he is stealingfrom the shareholders (if he spends profits) and is stealingfrom employees (if his actions reduce the corporations ability to complete payroll) and is stealingfrom

customers (if his actions force the company to raise prices) If stockholders, employees orcustomers want to be socially responsible, they can do so with their ownmoney

The imposition of social responsible behaviour on the part of the corporation is essentially a tax Taxation for social benefit is the role of government, which is constructed by a democratic

process It is not the role of the self-appointed or shareholder-elected corporate executive On the other hand, it may be more profitable for the corporation to be socially responsible

(improving communities can lower wage rates, for instance) However, this is still in the interest of shareholders The market mechanism and the political mechanism must not overlap; using the market mechanism to conduct social responsibility (a political province) contravenes what a freemarke

stands for (freedomto do what one likes with their money!)

link: Handy, Whats aBusiness For (Harvardarticle)

Handy agreed that corps were artificial, but he came to the opposite conclusion:corps are communitiesof people working toward a shared purpose and therefore musthave responsibilities).

- Peoples trust in business is very fragile as a result of recent financial scandals that defraudedinvestors

- Companies are mortgaging their futures for a higher stock price in the present, often to thebenefit of executives who are looking to exercise their options

- Whom and what is a business for?o Now that the value of companies largely reside in its intellectual property and skill of

its people,o A business is like a community with a purpose its employees are not meant to be

owned, they are members of the community with rights that must be respectedo The human association which produces and create wealth, those of workers and

managers is not recognized by the law, while the association of shareholders andcreditors is.

o Businesses should be the driver of environmental and social issues active agents ofprogress

- Anglo American stock market capitalism vs. European Model:o In US, the criterion of success is shareholder value stock priceo Many methods of boosting the stock price, are not intrinsically good for the business

and its employeeso Executive stock options are more common form of compensation in the US, but in

Europe, highly undervalued options seem like a way for executive to steal from their

companies and shareholders.o Europeans consider that the US business culture is distorted proclaimed market to

be king, gave priority to shareholders and that business as a driver of progress musttakeprecedence in policy decisions.

o Europeans claim that companies die because their managers focus on the economicactivitiy of producing goods and services and forget that their organizations truenature is that of a community of people (European View)

courseware: The Ethics ofDrug Patents (Case #6)

Only theunited statesvoted against a proposal to deliver lifesaving drugs to HIV/Aids victims In Brazil, extensive prevention efforts and stated-funded anti-retroviral treatment has reduced

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AIDS related deaths by more than half since 1996. This has been done by local production ofgeneric equivalents of brand-name anti-retroviral drugs.

Canada will assist victims of the AIDS pandemic Generic drugs will pay patent-holder a royalty of 2%

link: CompetitiveAdvantage of CorporatePhilanthropy (Harvardarticle)

The way most corporate philanthropy is practiced today, Friedman is right. Companies sponsor the Olympicsto make themselves seem excellent

Supply: Cisco Networking Academy trains computer network administrators (helps them growhelps high school grads)

Demand:Apple Computers donated computers to education, they in return become familiarwith the OS

Strategy: ICGN and CalPERS promoted improved standards of corporate governance anddiscloser

Clusters: AMEX funded Travel and Tourism Academies creates local travel clusters thatbecome more competitive and better able to grow

Dreamworks, SC Johnson Business is better than individuals because: selecting the best grantees, signalingother funders,

improve the performance of grant recipients, advancing knowledge and practice text: Cascio, Costco v.Wal-Mart, pp. 181 192

Differences in core beliefs and values labour costs at Costco are 40% higher than those at Wal-Mart,but they still compete as a low-cost operator. Costco believes in the important of people to theiroperation its not just altruism its good business.

-Costco has employee turnover rates that are a fraction of Wal Marts

- Wall Street claims that Costcos margins could be a lot higher if they reduced their payroll,which Costco CEO refutes as a very short-term focus

- Costco resists the temptation to charge a little more, and always passes on the full cost savingsto its customers it has a strict cap on its profit margins

- Wal-Mart has actively countered any union activity at its stores by closing entire locations,while 13% of Costco employees belong to unions and have had many successful negotions withthem

- Employee turnovercosts at Wal Mart are 2.5 times greater than at Costco Costco has one ofthe most loyal and productive workforces in all of retailing. This productivity advantage morethan offsets its higher labour costs.

text case: J & J andTylenol, pp. 379 383

Take capsules off the shelf Dont change the name

Switch tablets for capsules Roadblock Triple-sealed, tamper resistantpackages

text: Freeman, Managingfor Stakeholders, pp. 149 165

Shareholder model defeated through Enron/Worldcom scandals where aligning CEO interestwith shareholder interest made system unstable

Arguments against shareholder capitalismo Law has takenclaims of customers(Greeman v.Yuba), suppliers, local communities

(Clean Air Act, Clean Water act, Marsh v. Alabama) andemployees(national LabouRelations Act, Equal pay Act)to be taken above the law

o Ethics via Separation Fallacy and the open question argumento

The integration thesis: most business decisions have implicit ethical view. Most ethicaldecisions have implicit view about business

The responsibility principle: most people, most of the time, want to, actually do, and shouldaccept responsibility for the effects of their actions on others

Managing for stakeholders is about creating as much value as possible for stakeholders, withouresorting to tradeoffs

courseware: Karakowsky etal. The StakeholderApproach to Business,Society, and Ethics (pp. 6573 and 75 - 81) text: Kissick, SampleStakeholder Analysis: Quinte

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First Nations Golf Resort,pp. 193 205 link: Prahalad &Hammond Serving the Poor,Profitably (Harvard article)

The difference between disaster and prosperity will be whether big, multinational companiesenter and invest in the worlds poorest markets

MNCs need only to act in their own self-interest, for there are enormous business bneefits to begainedby entering developing markets

65% of worlds population earns less than $2,000 each per year Misconceptions

o Barriers are not as bad as they seem. Political reform, openness to investment, low-cost wireless networking are reducing barriers

o Aggregate spending is not low; a village in Bangladesh spends $90-1000 a month oncellphone service, 7% of its income

o The poor often do buy luxury goods. In the Mumbai shantytown of Dharavi, 85% ofhouseholds own a television set, 75% own a pressure cooker and a mixer, 56% own agas stove and 21% have telephones.They dont save money, buy a house etc

o Prices arent that low and allow for profit. Instead, slum dwellers pay between 4 and100 times as much for drinking water. Foodcosts 20% to 30% more in the poorestcountries. Moneylenders charge interest of 10% to 15% a day. 40 to 70% fromlegitimate microfinance organizations. Companies that are efficient can create somereal value here.

o Its cheap to market and deliver products to the poor. They live in densely populatedcities.

o They are ready to adopt new technologieso Its not exploitation to charge them a 20% interest when the next best alternative is

1000%

The Business Caseo Top-Line Growth(Unilever candy)o Cost saving technology (off the grid ATMs) and aggregating demand (internet kiosks,

phone lines for communities)o Remote services as a cost saving methodo ROCE: Hindustan Lever has no working capital because they outsource

manufacturing, streamline supply chains, actively manage receivables and payattentiondistributors performance

o Innovation (MIT, )

courseware: Yunnus,Creating a World WithoutPoverty (chs. 1 & 2)

Unfettered markets in their current form are not meant to solve socialproblems and insteadmay actually exacerbate poverty, disease, pollution, corruption,crime, and inequality

Globalization is a free-for-all highway; a farmers pickup truck will be forced off the highway If governments were the solution theyd be solved long ago NGOs depend too much on the charity of others; when these stop, the benefits stop Multilateral organizations are bureaucraticand underfunded. Grameen bank makes borrowers

feel important and lets them think of ideas. World bank gives you money but also the ideas.

CSR is a mere windowdressing Social business:axiomatic truth of profit maximizing business ignores the multidimentaionl

nature of human beings Not a charity because it covers its costs and does not have to raise money Non-loss, non-dividend

text: Bowie, Relativismand the Moral Obligations ofMultinational Corporations,pp. 10 - 16

We expect to findsurface differences among cultures even when moral principles are agreedupon(eg parents on trees)

No state ever replied that there is nothing wrong with genocide/torture A multinational provides something approaching a universal morality. Arguments

o Relativism is self-defeatingo Kantian logic

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text: Beauchamp, Bowieand Arnold pp. 33 36, 51 64, 68 - 70

The concept of moral absolutism espouses that some principles and actions are right regardless ofcircumstance, context or belief otherwise (Kants Categorical Imperative falls into this category ofthinking). Absolutism is consistent with Kantian ethics, but not with consequentialism or with moralrelativism. Moral universalism suggests that there are principles which are right regardless of anentitys beliefs or opinions, but which can depend on context or circumstance. A key tenet ofuniversalism is that the principles of right apply to everyone equally, even if people to not agree with orunderstand the principles. Moral universalism is compatible with absolutism, Kantianism,consequentialism, but not with moral relativism.

Cultural relativism is the descriptive claim that practices differ across cultures. It does not espouse thatcertain practices are better than others, only that they differ. Cultural relativism is not inherentlyincompatible with the idea of universal morality because it focuses on the notion of practices beingdifferent (not necessarily that the values underlying the practices are different).Moral relativism suggests something much deeper, however. Moral relativism is the belief that what ismoral (right) is whatever the culture believes is moral (right). This school of thought espouses thatthereis no absolute truth or standard by which other beliefs or practices can be judged. Clearly, this thesis isfundamentally opposed to the universalist perspective.

text: Beauchamp, Bowieand Arnold pp. 40 43, 64 -68

Consequencesbased: Act vs rule utilitarian. Maximize pleasure.Principles Based : Categorical Imperative: 1) only act on principle you would will to be a universal law,2) treat people as ends in themselves, 3) act as though through a legislative member of the Kingdom ofEnds (neveruse people for an alternative purpose and imagine a world where all moral duties areconsistently followed and everyone is an end in themselves)Character: why you do something matters.

text: Beauchamp, Bowieand Arnold pp. 36 - 38

Text

text: U.N. UniversalDeclaration of HumanRights p. 17 22

Example of universalism

link: U.N. Framework:http://198.170.85.29/Ruggie-protect-respect-remedy-framework.pdfcourseware: Google inChina (Ivey Case)

Issue:(Should be taken from Googles point of view.) In light of Googles stated philosophy of DoNo Evil, should Google have agreed to censor search results in order to carry on business in China?

Significant Facts:

Between 1998 and 2006, Google Inc. had experienced unprecedented growth as a provider ofInternet services including e-mail, images, blogging and the largest search engine in the world;it also aggressively entered new markets.

Google has, since inception, operated with the guiding principle, Do No Evil Google.com service in China is not very effective when launched. In 2006, Google launches the more effective google.cn; in order to attain the Chinese

Governments approval (presumably of the .cn suffix), Google agrees to self-censor and purgeany search result of which the government would disapprove.

Googles decision to agree to censorship was met with protest in the United States (and its

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stock price fell).

Google defended its decision by stating that censoring results to establish a presence in Chinawas socially preferable to abandoning China altogether.

Stakeholders and Stakes (in no particular order):

Google shareholders: Economic stakes - a desire for good economic performance and return on

investment (which are affected both positively by revenue from expansion to China, and negatively byadverse publicity in U.S.). Possibly moral stakes they knew of the Google value(s) when they investedand perhaps expected the company to act consistently with its message.

Google executives: In fact they are the ones who made the decision. They have moral stakes in thatthey clearly worried about the ethical impact of the decision. They have economic stakes, in thatcorporate performance likely impacts their compensation (and in the end, their continued employment icontingent in part on this). They have legal stakes in that they are compelled to operate the companyconsistently with the law in jurisdictions in which they carry on business.

Chinese Government: Their stakes are legal and, presumably moral. They clearly regulate howbusiness is carried on in China; they also believe that the censorship is crucial to the underlying beliefson which modern Chinese society should be based. (They may also have economic stakes derivingsome form of tax revenue from Google.)

Chinese Users of google.cn: Their stakes are interest based, and possibly moral. They have aninterest in the use of the google.cn search engine (although the facts stated make it somewhat debatableabout to what extent they care about the censorship which perhaps renders their stakes less moral.)

American consumers (whether they are users of Google or not): Again, their stakes areinterest-based and potentially moral. Given that they are not specifically affected by the censorship,this is hard to assess. There is at least a strong interest in the Chinese situation, and further,censorship would be a moral issue for Americans if their government were decreeing censorship in theUnited States. An assessment of the strength of their stakes would be crucial here.

Conclusions/Recommendations:

Some thoughts: This is a case where cross-cultural norms collide. The case seems to indicate that thisis a bigger issue in the United States and American stakeholders - than it is in China (and Chinesestakeholders other than the Chinese Government). It seems also clear that given the relativepower ofthe Chinese Government in this situation, Google really has two choices operate google.cn in Chinawith censorship, or not operate in China at all (except through google.com which is apparently lesseffective). It would also seem that the shareholders stakes are not really resolved without determiningthe relative strengths of the two sets of consumers.

The stakes of the executives are important. Ultimately, the ethicality of their decision will depend on aweighing of the moral rights of the two sets of consumers. In the end, is it ever morally acceptable toengage in censorship in order to carry on business?

[Postscript: Google recently seems to have come to an ethical conclusion on its foray into China thecompany seems prepared after a number of recent occurrences to leave China, ostensibly arguing that

it can no longer adhere to its do no evil motto. However, negotiations with the Chinese Governmentcontinue.]

text: Kissick, Law andEthics, pp. 107 115

What is Law? Natural law (John Locke): law is in separable from morality Religious rules form the basis for laws Law is based on certain fundamental, immutable truths, handed down by a superior being Law can only be law if it complies with moral code Consider, however, religious leaders how have engaged in genocide in the name of divine

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right or truth Natural law cannot explain laws which are morally neutral (ex: laws governing an election process) Natural law theorists would argue an unjust law cannot law, yet history demonstrates

many societies which faithfully follow unjust laws passed by corrupt governments Positivism (David Hume): there is a difference between what is the law and what ought to

be the law

Those in power formulate law to govern Laws exist separately from morality Positivists find it hard to deny laws steeped in moral tradition Utilitarianism: law should reflect the greatest happiness for the greatest number Cannot explain constitutionally enshrinedindividual rights Marxism: criticism of the doctrine law is a tool for the preservation of the elites power and wealth Ronald Dworkin: law is an interpretive concept Bring our experiences and moral positions to bear on the process of interpretation At the penumbra of the flame that is law, interpretation becomes increasingly important as the case does not fit the typical mold in which the law is normally applied In these cases, morality plays an important role

What is the Relationship between Law and Morality? Some laws support efficiency (and not the greater good) Some laws fly in the face of accepted morality Moral analysis is employed in cases of unclear application of law To act legally does not necessarily mean one is acting ethically Ex: avoidingfull disclosure of security issues is legal but unethical Laws are not always synonymous with morality, and morality is not always about obeying laws Societal actors should obey the spirit as well as the letter of the law

A Simple Definition of Law Law is a set of rules of general application that govern conduct or situations, that is

enforceable through a recognizable means, and that binds members of a society Ethics are law differ in the machinery of implementation Breaking the law results in police action, civil proceedings, courts, orders or punishments Breaking ethical rules results in loss of business, social sanction, bad publicity, crises of confidence - less predictable, less institutional Law and ethics are separated by punishment

What does law do? Law does four things: Structures Regulates Punishes Compensates

What Forms Does Law Take? Two categories of lawmakers: Government (legislative) Courts (judicial) Governments produce statutory law Criminal and regulatory laws are statutory They pass through a constitutional process Judges have tremendous influence over how the statute is interpreted Courts produce common law Derived from past court decisions Contract and tort law are created on this basis

text: Paine, Managing forOrganizational Integrity,pp. 116 129

Rogue employees arent bad apples. Theyre the product of the companys organizationalculture

Sears selling extra unnecessaryauto parts Beech-Nut and apple juice

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Tylenol as an organization that had a shared set of values that led to a rapid, cohesive andethically sound response

Legal vs. Ethical: sale of harmful products without warnings are allowed in some countriesCHARACTERISTICS Compliance IntegrityEthos Conformity with externally

imposed standardsSelf-governance according tochosen standards

Objective Prevent criminal misconduct Enable responsible conductLeadership Lawyer driven ManagementMethods Reduced discretion, auditing

and controls, penaltiesEducation, leadership,accountability, organizationalsystems

Behavioral assumptions Autonomous beings guided bymaterial self-interest

Social beings guided bymaterial self-interest, values,ideals, peers

IMPLEMENTATIONStandards Criminal and regulatory law Company values, social

obligations, including lawStaffing Lawyers ExecutivesActivities Lead development of values,

standards, integrate intocompany systems, guidance,consultation

Education Compliancestandards andsystem

Decision making andvaluescompliancestandards andsystem

Effective Integrity strategyo Guiding values make sense and communicated clearlyo Personallycommitted leaderso Values integrated into decision making and critical activitieso Systems and structures support and reinforce its valueso Managers make ethically sound decisions on a day to day basis

courseware: Soltes, ALetter from Prison (HarvardCase 9)

A significant amount of CA revenue was commonly booked during the final week of thequarter

It was not uncommon for a successful sales associate to receive over a million dollars incompensation

Employees joked C.A. stood for creative accounting Significant evidence that CA backdated their revenues Letter

o CA was among themost aggressive in its pursuit of goals; exerted extreme pressureo My behavior was a direct result of these pressureso Culturally you lived on a knife edgeo management of financial performancehas become a scienceo I might go to China where my experience might outweigh the stigmao These events put a tremendous amount of pressure on your relationships

text: Bird and Waters,The Moral Muteness ofManagers, pp. 130 145

Managers have a reluctance to describe their actions in moral terms even when they are actingfor moral reasons

Managers take for granted the separation of business and ethics except in obviously illegalactivities (like bribery)

Actions, Speech and Normative Expectations Normative expectations are standards of behaviour which people are compelled to obey Morally neutral decisions are a matter of preference, practicality or strategic interest Normative expectations are embodied in:

o Legal rulingso Regulatory agencies decreeso Professional codeso Organizational policies

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o Social moresActions follownormative

conductActions donot follownormative

expectations

Moral terms used in speech Congruent Moral Conduct Hypocrisy,Moral Weakness

Moral terms not used in speech Moral Muteness Congruent Immoral orAmoralContent

The bottom left quadrant expresses managers disinclination from communicating moral ideasdespite their actual conduct reveals deference to moral standards Countless normative standards are passed off as common sense or good management

Causes of Moral MutenessThreat to harmony

Moral talk requires some degree of interpersonal confrontation Managers typically endeavour to avoid conflict

Threat to efficiency

Moral talk distracts from true problem solving Blaming, praising and ideological posturing do not help to clarify issues Moral talk burdens decision making with: Extraneous considerations Antagonism to some responsible management practices Moral talk is also a threat to management flexibility Moral talk is associated with rigid rules; public debates on morality often precede theo implementation of restrictive regulations

Threat to Image of Power and Effectiveness

Moral arguments are too idealistic and utopian Managers experience futility after they unsuccessfully attempt to change morally questionableo corporate policies Managers shun moral talk to avoid revealing ethical illiteracy Value of autonomy deters lower management from debating moral issues with superiors

Consequences of Moral MutenessMoral Amnesia

Creates perception of management as an amoral activity Business decisionsare frame as purely economic; debates emerge over the legitimacy of even including moral considerations in a business decision It is incorrect to polarize profit and ethics

Narrowed Conception of Morality

Moral issues which are not blatantly deviant can be ignored This leads to a narrowing of morality and a broadening of the definition of moral neutrality

Moral Stress

Moral stress emerges from role conflict and role ambiguity in moral contexts The absence of moral talk amplifies the effect of moral stress

Neglect of Abuses

Moral abuses are ignored Organizational silence on moral issues makes it more difficult for members to raise questions

and debate issues

Decreased Authority of Moral Standards Moral arguments are not compelling if they are not socially rooted via moral talk

The Nature of Change Interventions

Employees must feel free to voice ethical concerns without negative repercussions Employees must learn to speak about ethics intelligently

o Develop the rhetorical skills for moral argumento Managers must signal the importance of moral learning and implementation

Interventions require patience and resilience to the short-term pains of reduced organizationalefficiency

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text: Kissick, CorporationStructure and Shareholders,pp. 226 - 236

Text

courseware: NationalSecurities Policy 58-201 text: Davis, SomeParadoxes of Whistle-Blowing, pp. 239 - 249

Justification and Whistle-Blowing

3 senses in which an act may be "justified"o Morality permits:May be something morality permits - morally justified in weak sense

Ex. Eating fruit at lunch - all acts seem morally right, and some alternatives tooo Morally required:Acts may be morally justified in a stronger sense - not only is doing them

morally alright but doing anything else instead is morally wrongo Rationally required:Some acts are still required all things considered - mandatory because

of some non-moral consideration

Focus -> moral justification -> what morality permits or requires Whistle-blowing:involves revealing info that would not ordinarily be revealed

o Intention to prevent something bad that would otherwise occuro Problem -> organizational contexto Only a member of an organization (current or former) can do so -> he can blow the whistle

only on his own organizationo Police member doesn't blow the whistle -> he would just be alerting the public

To be a whistle-blower is to reveal info with which one is entrustedo Must reveal info the organization does not want revealed

The Standard Theory1. Disloyalty is morally permissiblewhen the organization would have done serious and considerable

harm to the public2. Identified threat of harm, reported to immediate superior, and concluded that superior will do

nothingeffective3. Exhausted otherinternal procedureswithin organization4. Evidence that would convince a reasonable observer that her view of the threat is correct5. Good reason to believe that revealing the threat wouldprevent harm at reasonable cost Required because people have moral obligation to prevent serious harm to others if they can do so

withlittle cost to themselves

This is minimally decent Samaritanism Conditions 1-5 state sufficient conditions for morally required whistle-blowing even though 1-3 do

not state sufficient conditions for morally permissible whistle-blowing but at best for morallyexcusable whistle-blowing

Three Paradoxes

Costly to whistle blower -> the standard theory's minimally decent Samaritanism provides nojustification for the central cases of whistle-blowing -> paradox of burden

Paradox of missing harm -> the standard theory is very narrow -> injustice, deception etc. Paradox of failure -> unlikely that it can help

Complicity Theory

They are deeply involved in the activity they reveal Moral complicity itself presupposes (moral) wrongdoing, not harm Complicity justification automatically avoids the paradox of missing harm, fitting the facts ofwhistle-blowing better than a theory which, like the standard one, emphasizes prevention of harm Complicity invokes a more demanding obligation than the ability to prevent harms does

o Morally obliged to avoid doing moral wrongs Avoids paradox of missing harm and burden You are morally required to reveal what you know to the public

o Derives from your work for an organization (not a spy)o Voluntary member (usually employee)o Believe it is engaged in serious moral wrongdoing (not just harm)o Your work will contribute to the wrong if you do not reveal

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o You are justified in beliefs 3-4o Beliefs 3-4 are true

Differences between Complicity Theory and Standard Theory

Whistle-blower derives work for organization -> not a spy Requires that the whistleblower be a voluntary member in the organization

Requires moral wrong not harm for justification Requires whistleblower to believe that her work will have contributed to the wrong in question if

she does nothing - not necessarily that she can prevent it

Does not require the whistle-blower to have enough evidence to convince others of the wrong inquestion

Complicity does not talk about the channels before publicly announcing text: Duska, Whistle-Blowing and EmployeeLoyalty, pp. 251 256

Whistle Blowing

Bowie claims that there is a duty of loyalty towards the employer that prohibits one fromreporting his employer/company, "prima facie"

Duska argues that one does not have an obligation of loyalty to a company, even a prima facieone, because companies are not the kind of things that are properly objects of loyaltyo Objects of loyalty gives them a moral status they do not deserveo Lowers status of the individuals who work for companyo

Relevant moral difference between persons and corporations Idealists: who hold that loyalty is devotion to something more than persons - cause of abstract

entity

Social atomists - one can only be loyal to individuals and that loyalty can ultimately be explainedaway as some other obligation between 2 people

Moderate position: loyalty is still important and real relation that holds between people Atomists view that a group is nothing more than the individuals who comprise it - nothing more

than a mental fiction (group of individuals)o Obligations to individual members onlyo Company -> no moral status -> not a proper object of loyaltyo This view may go to far, some groups (such as families) are real

What binds people together in a business is not sufficient to require loyaltyo Bound together to divide labour and for profito Not for mutual fulfillment and support

If a worker does not produce in a company or if cheaper labourers are available, the company (inorder to fulfill its purpose) should get rid of the worker -> company feels no obligation to loyalty Loyalty to corp is misguided Company is not a person, it is an instrument

o If you treat as an end as an instrument, give a moral status it does not deserve If a company can get its employees to view it as a team they belong to, easier to demand loyalty Business differ from teams

o Loyalty to a team is loyalty within context of sport or competition (social convention) ->winnings are usually morally neutral

o Consequences of losing at business are much largero Not always voluntary members

text: Arrington,Advertising and Behaviour

Control, pp. 291 - 300

Levitt says that its hope and adventure we want to buy. Whats wrong with that?If you buyit and come back to buy it. You obviously want it.

JK Galbraith says that desires are often created by business Is advertising informative or creation of desire? Advertising might control, produce irrational behavior, but it intrinsically does not do those

things Autonomous Desire

o The question is not truly ours or created in usbut can be a mix(think about art,music etc.)

o All desire is affected by the external environment (shelter is, youth is), so it would behard to criticize desires as non-autonomous when it seems like all are

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Rational Desire and choiceo Providing feelings of adventure is not irrational. They actually produce those feelings.

People like adventure so its rational

Free choiceo Most of us have a benevolent sub-conciousness that does not overwhelm our ego. So

while subliminal messaging can help, it should not be the only reason we make ourdecisions

Control / Manipulationo We do not think of teachers controlling/manipulating students; neither should we

advertisers. Both tell you something and you absorb if you wish

In general, advertising isnt bad. text: Brenkert, Marketingand the Vulnerable, pp. 314 325

Being Vulnerable

Person is vulnerable to another (moral or causal) agent (A) with respect to some harm (H) in aparticular context (C)

2 related concepts: susceptibility and disadvantageo One who is vulnerable is susceptibleo An overweight person might be susceptible through flattery or positive remarks by friends

regarding exercise, but not vulnerable to suggestions -> susceptibility mainly meanssensitivity to influences

o Disadvantages are impaired/unequal with regard to heir attempt to obtain various G/S Those who are vulnerable are not vulnerable with regard to others who are competing for similar

goods, but with regard to the harm they might suffer from those who market those goods to them

The vulnerable may get exactly what they want - but it may unwittingly and unfairly harm themVulnerability and Marketing

Might have a simple utilitarian standard which is ethically unacceptable -> harm to thevulnerable by marketing programs might be balanced by countervailing benefits for all otherconsumers and competitorso A few vulnerable individuals to substantially suffer

Sometimes may target those that are not competent enough to evaluate the product marketed tothem -> customers were not dissatisfied and the marketers were pleased with their successeso Might not be aware of problems with the products they useo Market efforts -> maximized total utilities

Marketing to the Vulnerable

Characteristics a morally justified market requires are:o Competition is freeo Competition is openo Deception or fraud are not used in market competition

No direct reference to the conditions or characteristics which those individuals who engage inmarketrelations as ultimate consumers - call them market clients

Essential requirements for individuals to be market clients:o Know they should shop around and are able to do soo Competent to determine differences in quality and best priceo Aware of their legal rightso Have knowledge of the products and their characteristicso Have the resources to enter into market relations

Marketers seek to create consumers (clients) out of ordinary, nonmarket interested people Market has number of advantages over the most reasonable consumer: greater knowledge ofproduct, expertise on how to market, etc. Opportunity to take advantage of vulnerability Lazy shoppers are not included 3 conditions for the specially vulnerable

o Certain experiences, conditions may impede their abilities to participate in normal adultmarket activities

Physically vulnerable - physical or biological conditions Cognitively vulnerable - lack certain levels of ability to cognitively process info -

children, elderly and those who lack education

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Motivationally vulnerably - grieving and gravely ill Socially vulnerable - unable to resist various enticements due to their social situation

- poor, grieving, new mothers in developing countrieso The different conditions and incapacities they possess are due to factors beyond their

control

Less able to protect themselves

Ex. Allergic childo Special conditions and the means/techniques which marketers use render them speciallyvulnerable

Cant identify their own interests Moral market requires a theory of targeted consumer liability (similar to product liability)

Implications

Any marketing to the vulnerable cannot morally be undertaken in a way which trades upon theirvulnerabilitieso Can't solicit business of victims until 30 days after accidents etc (by lawyers)

Children are cognitively vulnerable -> undeveloped abilitieso Doesn't violate their right as a consumer since they do not qualify as market clients

Cases where marketing to genuine market clients but are witnessed by specially vulnerable whopositively react to them

They should seek to alter those marketing methods even if the harm is an indirect results ofmarketer's intentionso Limit exposure of those who are vulnerable

text: Naumes and Naumes,The New Years Eve Crisis,pp. 330 -336

Case Brief The New Years Eve Crisis

Issue:Should Mike Valenti inform his restaurant clientsthat Southern Pastas shipment of stuffed pastashells to their chainsfor New Years Eve were tainted with Salmonella?

Facts:

The pasta shells were shipped to a chain of over 200 restaurants, comprising of almost half ofSouthern Pastas revenues.

Mike acquired Southern Pasta in 2001 after a salmonella contamination, and has invested inretooling the plant to prevent further outbreaks.

Mike faced issues integrating his new acquisition of Southern Pasta, particularly welded itsculture to that of Michaels

Lisa listed Sarah as a reference; Sarah never explicitly agreed to act as a reference, much lessas a referencefor the liaison position.

The problem with the plant was identified to be that the final processing step of making thepasta didnt get the temperature high enough to kill the salmonella according to Fredeveryone at the plant knew this, but failed to take action.

Since Southern has produced the product prior to the acquisition, the liability could be placedon the previous owners.

Fred has the option of trusting that the chain cooks the pasta to the appropriate temperatureto kill the salmonella, or hecould inform them of the issue to ensure that temperature isreached.

Stakeholders and Stakes:

Mike:As the company owner, Mike has a direct interest based stake in protecting the reputation of hisbusiness. Since his personal reputation is tied to his pasta company, he cannot afford to have asalmonella outbreak associated with his product. This also relates to his financial stake, as he faces theprospect of losing half of his revenues if the client restaurant switches suppliers. Lastly, he has a moralstake doing all he can to prevent the sickness and potential death of consumers of his product.

Restaurant Chain: Has an interest based stake in the potential damage to their brand that a salmonellaoutbreak could pose. Also has a financial stakein the potential for loss of customers and lawsuits. If

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the restaurant chain is not informed about the salmonella in the pasta, their moral responsibility totheir clients is lessened. However, they have a legal responsibility to serve food at the FDA regulatedtemperatures.

Consumers:Facing the risk of serious sickness or death, consumers of the pasta have a highly legitimateinterest stake in seeing that the food is prepared to the correct temperature, or recalled altogether.

Previous Owners: They have a legal stake considering that the liability for the contaminated pasta fallon them. They should also have a moral stake in bringing the issue to light.

My Thoughts

In this case, Mikes moral stakes should outweigh his legal responsibility inbringing the issue toattention with restaurants. Although the liability will most likely fall on the previous owners or therestaurants that fail to cook pasta to FDA standards, Mike should realize that his inaction will likelylead to sickness or deathof a number of innocent consumers. While the potential damage in terms oflost clients is considerably high regardless of his decision, by informing restaurants of the need to fullycook this batch of pasta, he can mitigate the chance of sickness while protecting the crucial New YearsEve revenues of his clients.

courseware: Mattel case

(Ivey case)

Chinas rising share of US toy imports can be attributed to lower cost business environment inChina with pressure to keep costs at a minimum Chinese manufacturers have compromisedon product safety

As the number 1 toy maker in the US, Mattel designed most of its Toys in the US but hascontracts with 37 principal vendors in China to produce toys for the company had a verylong supply chain in China with about 3000 companies making different toy parts, but Mattelonly had contact withthe 37

In 2007, testing by a French company discovered that Mattel products contained lead abovepermissible levels

Investigations proved that the lead source was from yellow paint sourced from a non-Mattelsupplier. Mattel conducted periodic audits of certified paint suppliers and vendors to ensurethat its requirements were being followed.

Following its investigations, Mattel conducted the largest toy recall in its history and flaggedcash registers so customers could not buy the toys from stores. This recall was followed byanother recall of contaminated toy cars, and a Polly Pocket toy that had its magnets easily fal

off. Recalls are a nightmare for companies:

o Recalls pose major logistic challenges as the company needs to establish a set up tohandle the recalls

o The company has to deal with regulators who tend to push the company to ensurethat not only a recall is issued, but products are returned to the company

o Recalls are viewed as an admission of guilt and lead to litigation from consumerso Damage reputation of the company

text: Desjardins,Sustainability: BusinesssNew EnvironmentalObligation, pp. 352 - 362

The following article seems to be a mish-mash ofnon-novel, idealistic ideas. The current economic model will not allow everyone in the world to exist(eg CO2, oil) The solution is sustainable business natural capitalism Target economic development Ideas

o

Focus on serviceso Invest in natural capital

Not a zero sum game Interface carpets Bottom of pyramid argument Competitive advantage

text: Case: InterfaceCarpets, pp. 363 370

CEO Ray Anderson: for the first 21 years of Interfaces existence, I never have on though towhat we took from or did to the Earth except to be sure that obeyed all Laws and regulations.I didnt have a vision except comply, comply, comply. I had heard statesmen advocateSustainable development, but I had no idea what it meant.

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Sustainability of business is one that can continue business as usual for the long term Requires that radical changes occur and realize that compliance is not enough No business can be sustainable unless is satisfies three related and mutually dependent criteria

economic sustainability (capable of maintaining profit over long term), ecologically sustainable(recognize biophysical limits to its activities), socially sustainable (company cannot base itsprofits on defrauding its investors).

Steps Interface followed to achieve sustainability:o Eliminate Waste first step to sustainabilityo Benign Emissions Focusing on the elimination of molecular waste emitted with

negative or toxic impacto Renewable Energy Reducing the energy used by our processeso Closing the Loop Aim to redesign our processes and products to create cyclical

material flowso Resource Efficient Transportation reduce movement of people and products in favor

of movement of informationo Sensitivity hookup create a community around interface that understands the

functioning of natural systemso Redesign commerce delivery of value instead of delivery of material

On a traditional business model, carpet is sold to consumers who once they become dissatisfiedwith the color or style are responsible for disposal of the carpet little incentive formanufacturers to produce long lasting carpeting

Once interface shifted to leasing floor covering services, incentives are created to produce longlasting and recyclable carpets it made a shift to becoming a service provider Interface also changed their manufacturing plants reducing water use and pumping capacity

in the first four years of its sustainability mostly, its revenues nearly doubled and itsemployment doubled.

link: McCoy, Parable ofthe Sadhu (Harvard article)Bancroft Case Brief Bancroft Research

March 11, 2011

Issue:(Should be taken from Sarahs point of view.) Should Sarah tell her boss (Gary) that Lisa hasembellished her qualifications and that she would not have recommended her for the position she has

been hired into at Bancroft Research?

Facts:

Sarah works in the research department of biological research firm Bancroft Research, whichhas just undergone a reorganization to link the marketing and research departments.

Sarahs old friend, Lisa, has been hired as the new liaison manager between the twodepartments by Gary.

Lisa listed Sarah as a reference; Sarah never explicitly agreed to act as a reference, much lessas a reference for the liaison position.

Duringher interview, Lisa also embellished her role at her job at Greenbank College, indicatedshe had developed a program that impressed Gary and the Bancroft HR Manager when theyinterviewed her for the liaison position.

Sarah only knows about the impression Lisa made in the interview by looking at a confidentialfile in the HR managers office, contrary to the Bancroft privacy policy.

Lisa is very bright and gave a very good interview; she and Sarah are very old friends, andLisa has had a difficult life thatlikely kept her from pursuing jobs like this in the past.

Stakeholders and Stakes:

Gary/Bancroft Research:The company (Gary) has a legal, interest and ethical-based stakes. Clearlythey have a privacy policy (quasi-legal) that they expect employees tofollow; also there is a legaldutyon the part of employees to fidelity to the employer (full disclosure as she is an agent of the company).The company has an interestin having the best quality employee in the position. Finally, the company

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would likely expect that the employee owes an ethicalduty to be truthful to the company.

Lisa:She has an interest, ethica (moral)l and financial stake in this decision. First and foremost, sheneeds the job which would be a good economicstep for her she is also interested in the job becauseit is a good job that would be more fulfilling; she also has an interestin (not) being embarrassed by thefull disclosure of her qualifications interest in keeping her reputation in tact. Finally, she believes thather friend owes her an ethicalduty to stick by her and not to blow the whistle on her.

Sarah herself:While it is sometimes unusual to say that the person making the decision is a stakeholderherself, it is somewhat akin to saying that shareholders (ownersof the company) have a stake in manycorporate decisions; this is because whatever she chooses will have an impact on her personally.1 Shehas legal, interest-based and most importantly, moral stakes in this decision. Interest-based, becauseshe has an interest in the best person being hired (she will have to work with this person, after all); butshe also has a conflicting interest in seeing that Lisa has a good job (given Lisas hard life, and tosupport her family). Finally, she has conflicting ethical duties (or moral stakes) fidelity and honestywith regard to her employer, contrasted with a duty to support (and not blow the whistle on) her friendLisa.

Other Stakeholders? There may be other stakeholders, but they would not appear to be as significantas the three discussed above:

other applicants for the position would have a stake, albeit with relatively little power andrelatively little impact on the ethical dilemma facing Sarah in her relationships with Gary andLisa these stakeholders do have a sort of rights-based stake concerning the hiring process, butthis is weakened by the fact that there is likely little recourse a prospective applicant couldtake against BR; and

Sarah seems to hold her husbands opinion in high regard, and in that sense, Steve may have asignificant amount of power, but you would have to wonder how much legitimacy he has withrespect to an issue in which he is not involved.

Ordering Stakeholders:

This is difficult, given that both Lisa and Sarah have conflicting ethical stakes. Ultimately, Sarah

herself likely has the legitimacy and power in this case at least as much power as her employer whenyou consider her ethical obligations; however her legitimacy is diminished by the fact that she too hasacted unethically. Gary and the company will rank highly - you could certainly make the argumentthat the companys legitimacy is highest indeed doesnt Sarah as an employee owe a duty of fidelity toher employer in this situation given the employers right tothe truth?

Lisas stakes will likely be third: her economic legitimacy is unquestioned, but her ethical legitimacy isquestionable. Her level of power is not as high as the other two stakeholders.

My Thoughts

In analyzing a case like this, stakeholder analysis does help set out what interests each party has it ispretty clear after this analysis that Lisas interests must come after those of Bancroft and Sarah herself.If you believe that Bancroft Research has priority here, then the solution is easy: Sarah must comeclean about Lisa, and also she must disclose her own indiscretion about looking in the confidential file.

If you believe that Sarah is the stakeholder with the most priority, then the issue is a little moredifficult, but ultimately,Sarah must again disclose these matters to Gary. Her ethical responsibilities toherself and her employer outweigh any obligation she has to Lisa. This, however, does not mean thatshe has to immediately run to Gary. She should suggest to Lisa that shehas an obligation to set the

1Remember the case of the Commerce Director and the admissions problem we agreed that the Director himself wouldbe a stakeholder in the decision he made.

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record straight about Lisas application. They may wish to come up with a strategy that couldminimize the damage to the two of them (after all, despite everything discussed in this brief, Lisa maystill be the best person for the job); however, the truth must be disclosed and by truth, we mean thetruth about Lisas application, AND the truth about how Sarah found out about the interview.

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