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William Frey Business Ethics Collection Editor:
William Frey
Authors:
Jose A. Cruz-Cruz
William Frey Online:
< > CONNEXIONS
Rice University, Houston, Texas This selection and arrangement of content as a collection is copyrighted by William Frey. It is licensed under the
Creative Commons Attribution 2.0 license ( ).
Collection structure revised: January 2, 2009
PDF generated: October 18, 2010
For copyright and attribution information for the modules contained in this collection, see p. 238. Table of Contents
1 Ethical Leadership
1.1
1.2
1.3
1.4 Theory Building Activities: Mountain Terrorist Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Theory-Building Activities: Virtue Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Moral Exemplars in Business and Professional Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Ethics of Team Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 2 Ethical Decision-Making
2.1
2.2
2.3
2.4 Ethical Rights for Working Engineers and Other Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Three Frameworks for Ethical Decision Making and Good Computing Reports . . . . . . . . . . . . . . 29
Values-Based Decision-Making in Gilbane Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Socio-Technical Systems in Professional Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3 CSR (Corporate Social Responsibility)
3.1
3.2
3.3
3.4
3.5 A Short History of the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Moral Ecologies in Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Three Views of CSR (Corporate Social Responsibility) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Theory Building Activities: "Responsibility and Incident at Morales" . . . . . . . . . . . . . . . . . . . . . . . 80
Ethical Issues in Risk Management for Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 4 CG (Corporate Governance)
4.1
4.2
4.3
4.4
4.5 Dierent Approaches to Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Developing Ethics Codes and Statements of Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Pirate Code for Engineering Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Corporate Ethics Compliance O cer Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 128
Being an Ethical Job Candidate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 5 Business Ethics Case Studies
5.1 Biomatrix Case Exercises - Student Module . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
5.2 Gray Matters for the Hughes Aircraft Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
5.3 Case Analysis Module: Therac-25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
5.4 Toysmart Case Exercises - Student Module . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
5.5 Ethics and Laptops: Identifying Social Responsibility Issues in Puerto Rico . . . . . . . . . . . . . . . . 201
5.6 Case Analysis and Presentation: Machado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
6 Business Ethics Bowl Practical and Professional Ethics Bowl Activity: Follow-Up In-Depth Case Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
6.2 Ethics Bowl: Cases and Score Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
6.1 7 Course Procedures
7.1 Rubrics for Exams and Group Projects in Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
7.2 Realizing Responsibility Through Class Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
Attributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .238 iv Chapter 1
Ethical Leadership
1.1 Theory Building Activities: Mountain Terrorist Exercise 1 1.1.1 Module Introduction
This module poses an ethical dilemma, that is, a forced choice between two bad alternatives. Your job is to
read the scenario and choose between the two horns of the dilemma. You will make your choice and then
justify it in the rst activity. In the second activity, you will discuss your choice with others. Here, the
objective is to reach consensus on a course of action or describe the point at which your group's progress
toward consensus stopped. The Mountain Terrorist Exercise almost always generates lively discussion and
helps us to re ect on of our moral beliefs. Don't expect to reach agreement with your fellow classmates
quickly or eortlessly. (If you do, then your instructor will nd ways of throwing a monkey wrench into the
whole process.) What is more important here is that we learn how to state our positions clearly, how to
listen to others, how to justify our positions, and how to assess the justi cations oered by others. In other
words, we will all have a chance to practice the virtue of reasonableness. And we will learn reasonableness
not when it's easy (as it is when we agree) but when it becomes di cult (as it is when we disagree).
The second half of this module requires that you re ect carefully on your moral reasoning and that of
your classmates. The Mountain Terrorist Exercise triggers the dierent moral schemas that make up our
psychological capacity for moral judgment. Choosing one horn of the dilemma means that you tend to favor
one kind of schema while choosing the other horn generally indicates that your favor another. The dominant
moral theories that we will study this semester provide detailed articulations and justi cations of these moral
schemas. Re ecting on your choice, the reasons for your choice, and how your choice diers from that of
your classmates will help you get started on the path of studying and eectively utilizing moral theory.
The following scenario comes originally from the philosopher, Bernard Williams. It is also presented in
introductory ethics textbooks (such as Georey Thomas' An Introduction to Ethics). The rst time this
module's author became aware of its use in the classroom was in a workshop on Agriculture Ethics led by
Paul Thompson, then of Texas A&M University, in 1992. 1.1.2 Moral Theories Highlighted
1. Utilitarianism: the moral value of an action lies in its consequences or results
2. Deontology: the moral value of an action lies, not in its consequences, but in the formal characteristics
of the action itself.
3. Virtue Ethics: Actions sort themselves out into virtuous or vicious actions. Virtuous actions stem from
a virtuous character while vicious actions stem from a vicious or morally awed character. Who we
are is reveals through what we do.
1 This content is available online at < ;. 1 2 CHAPTER 1. ETHICAL LEADERSHIP 1.1.3 Mountain Terrorist Scenario
You are in a remote mountain village. A group of terrorists has lined up 20 people from the village; they
plan on shooting them for collaborating with the enemy. Since you are not from the village, you will not be
killed. Taking advantage of your position, you plead with the terrorists not to carry out their plan. Finally,
you convince the leader that it is not necessary to kill all 20. He takes a gun, empties it of all its bullets
except one, and then hands it to you. He has decided to kill only one villager to set an example to the rest.
As an honored guest and outsider, you will decide who will be killed, and you will carry out the deed. The
terrorists conclude with a warning; if you refuse to kill the villager, then they will revert back to the original
plan of killing all 20. And if you try any funny business, they will kill the 20 villagers and then kill you.
What should you do?
Your Options 1. Take the gun, select a villager, and kill him or her.
2. Refuse the terrorists' oer and walk away from the situation.
Spanish Translation by Dr. Halley Sanchez El Terrorista de la Montaña Tú eres un antropólogo que por un mes ha estado viviendo con y observando (o
sea, estudiando) a los residents de una aldea en una area remota montañoza de un pais en América Latina.
El día que te dispone irte de la aldea, aprece un grupo de hombres armados que reúnen a los aldeanos y
les anuncian que se han enterado de que ellos han estado cooperando con el gobierno represivo y que, como
lección, han de ejecutar viente de ellos. El líder de los terroristas te mira y te dice que tú te puedes ir,
ya que no estás involucardo en la lucha patriótica y que ellos no están en la costumbre de tomar rehénes
extranjeros. Debido a que te da la impresión de que el líder de los supuestos patriótas (terroristas?) es un
hombre educado, tú te atreves tratar de razonar con él. Le explica que llevas un mes en la aldea y que los
aldeanos no han cooperado de forma volutaria con el gobierno. Sí, por supuesto, las tropas del gobierno
pasaron por la aldea y con scaron algunas provisiones, pero los aldeanos no se las dieron libremente sino que
estaban indefenso y no podieron prevenir que le con scaran las mismas. El líder piensa un tiempo y te dice
que por tú ser forastero y obviamente un antropólogo estudioso, te va a dar el beni cio de la duda, y que por
tanto no van a ejecutar viente aldeanos. Pero dado que la lucha patriótica está en un proceso crítico y que
la aldea sí le proveyó provisiones al gobierno, por el bien de la lucha patriótica y el bien de la humanidad,
es menester darle una lección a la aldea. Así que tan sólo han de ejecutar un aldeano. Más, como huesped,
tú has de escoger quién ha de morir y tú has de matarlo tú mismo. Te da una pistola con una sola bala y te
dice que proceda, mientras que a la vez te advierte que de tratar algo heroico, te ejecutarán inmediatamente
y procederán a ejecutar a los viente aldeanos como dijeron al comienzo. Tú eres el antropólogo. ¾Qué harás?
Activity 1 In a short essay of 1 to 2 pages describe what you would do if you were in the position of the tourist. Then
justify your choice.
Activity 2 Bring your essay to class. You will be divided into small groups. Present your choice and justi cation to
the others in your group. Then listen to their choices and justi cations. Try to reach a group consensus on
choice and justi cation. (You will be given 10-15 minutes.) If you succeed present your results to the rest of
the class. If you fail, present to the class the disagreement that blocked consensus and what you did (within
the time limit) to overcome it. 1.1.4 Taxonomy of Ethical Approaches
There are many ethical approaches that can be used in decision making. The Mountain Terrorist Exercise
is based on an arti cial scenario designed to separate these theoretical approaches along the lines of the
dierent "horns" of a dilemma. Utilitarians tend to choose to shoot a villager "in order to save 19." In other
words they focus their analysis on the consequences of an action alternative and choose the one that produces
the least harm. Deontologists generally elect to walk away from the situation. This is because they judge an
action on the basis of its formal characteristics. A deontologist might argue that killing the villager violates 3
natural law or cannot be made into a law or rule that consistently applies to everybody. A deontologist
might say something like, "What right do I have to take another person's life?" A virtue ethicists might try
to imagine how a person with the virtue of courage or integrity would act in this situaiton. (Williams claims
that choosing to kill the villager, a duty under utilitarianism, would undermine the integrity of a person who
abhorred killing.)
Table Connecting Theory to Domain 1. Row 1: Utilitarianism concerns itself with the domain of consequences which tells us that the moral
value of an action is "colored" by its results. The harm/bene cence test, which asks us to choose the
least harmful alternative, encapsulates or summarizes this theoretical approach. The basic principle
of utilitarianism is the principle of utility: choose that action that produces the greatest good for the
greatest number. Cost/bene ts analysis, the Pareto criterion, the Kalder/Hicks criterion, risk/bene ts
analysis all represent dierent frameworks for balancing positive and negative consequences under
utilitarianism or consequentialism.
2. Row 2: Deontology helps us to identify and justify rights and their correlative duties The reversibility
test summarizes deontology by asking the question, "Does your action still work if you switch (=reverse)
roles with those on the receiving end? "Treat others always as ends, never merely as means," the
Formula of End, represents deontology's basic principle. The rights that represent special cases of
treating people as ends and not merely as means include (a) informed consent, (b) privacy, (c) due
process, (d) property, (e) free speech, and (f) conscientious objection.
3. Row 3: Virtue ethics turns away from the action and focuses on the agent, the person performing the
action. The word, "Virtue," refers to dierent sets of skills and habits cultivated by agents. These skills
and habits, consistently and widely performed, support, sustain, and advance dierent occupational,
social, and professional practices. (See MacIntyre, After Virtue, and Solomon, Ethics and Excellence,
for more on the relation of virtues to practices.) The public identi cation test summarizes this approach: an action is morally acceptable if it is one with which I would willingly be publicly associated
given my moral convictions. Individual virtues that we will use this semester include integrity, justice,
responsibility, reasonableness, honesty, trustworthiness, and loyalty.
Covering All the Bases
Ethical Dimension Covering Ethical
Approach Encapsulating
Ethical Test Basic Principles Application
or
Bridging Tools Consequences Utilitarianism Harm/Bene cence
(weigh
harms
against bene ts) Principle of Utility: greatest good
for greatest number Bene t & cost
comparisonUtility
Maximization Formal Characteristics of Act Deontology (Dutybased,
rightsbased,
natural
law, social contract) Reversibility (test
by reversing roles
between agent and
object of action) Categorical
ImperativeFormula
of EndAutonomy Free & Informed
Consent, Privacy,
Property,
Due
Process,
Free
Speech, Conscientious objection continued on next page 4 CHAPTER 1. Skills and habits
cultivated
by
agent Virtue Ethics Public Identi cation (impute moral
import of action to
person of agent) ETHICAL LEADERSHIP Virtues are means
between extremes
with regard to
agent and actionVirtues
are
cultivated dispositions that promote
central community
values Integrity, justice,
responsibility, reasonableness, honesty, trustworthiness, loyalty Table 1.1 1.1.5 Comments on the Relation Between Ethical Approaches
The Mountain Terrorist Exercise has, in the past, given students the erroneous idea that ethical approaches
are necessarily opposed to one another. As one student put it, "If deontology tells us to walk away from
the village, then utilitarianism must tell us to stay and kill a villager because deontology and utilitarianism, as dierent and opposed theories, always reach dierent and opposed conclusions on the actions they
recommend." The Mountain Terrorist dilemma was specially constructed by Bernard Williams to produce
a situation that oered only a limited number of alternatives. He then tied these alternatives to dierent
ethical approaches to separate them precisely because in most real world situations they are not so readily
distinguishable. Later this semester, we will turn from these philosophical puzzles to real world cases where
ethical approaches function in a very dierent and mostly complimentary way. As we will see, ethical approaches, for the most part, converge on the same solutions. For this reason, this module concludes with 3
meta-tests. When approaches converge on a solution, this strengthens the solution's moral validity. When
approaches diverge on a solution, this weakens their moral validity. A third meta-test tells us to avoid framing all ethical problems as dilemmas (=forced choices between undesirable alternatives) or what Carolyn
Whitbeck calls "multiple-choice" problems. You will soon learn that eective moral problem solving requires
moral imagination and moral creativity. We do not " nd" solutions "out there" ready made but design them
to harmonize and realize ethical and practical values.
Meta-Tests • Divergence Test: When two ethical approaches dier on a given solution, then that dierence counts
against the strength of the solution. Solutions on which ethical theories diverge must be revised towards
convergence.
• Convergence Test: Convergence represents a meta-test that attests to solution strength. Solutions on
which dierent theoretical approaches converge are, by this fact, strengthened. Convergence demonstrates that a solution is strong, not just over one domain, but over multiple domains.
• Avoid Framing a Problem as a Dilemma. A dilemma is a no-win situation that oers only two alternatives of action both of which are equally bad. (A trilemma oers three bad alternatives, etc.)
Dilemmas are better dissolved than solved. Reframe the dilemma into something that admits of more
than two no-win alternatives. Dilemma framing (framing a situation as an ethical dilemma) discourages us from designing creative solutions that integrate the con icting values that the dilemma poses
as incompatible. 1.1.6 Module Wrap-Up
1. Reasonableness and the Mountain Terrorist Exercise. It may seem that this scenario is the last
place where the virtue of reasonableness should prevail, but look back on how you responded to those
of your classmates who chose dierently in this exercise and who oered arguments that you had not
initially thought of. Did you "listen and respond thoughtfully" to them? Were you "open to new ideas" 5
even if these challenged your own? Did you "give reasons for" your views, modifying and shaping them
to respond to your classmates' arguments? Did you "acknowledge mistakes and misunderstandings"
such as responding critically and personally to a classmate who put forth a dierent view? Finally, when
you turned to working with your group, were you able to "compromise (without compromising personal
integrity)"? If you did any or all of these things, then you practiced the virtue of reasonableness as
characterized by Michael Pritchard in his book, Reasonable Children: Moral Education and Moral
Learning (1996, University of Kansas Press, p. 11). Congratulate yourself on exercising reasonableness
in an exercise designed to challenge this virtue. You passed the test.
2. ...
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