BUSINESS ETHICS PERSPECTIVE
Read the “Business Ethics Perspective” regarding Good Faith and the Nuclear Condition Option in Chapter 7 (p 217).
1. Briefly present the facts of the case.
2. Answer questions 1-5 with support for your argument from the concepts discussed in the text.
Assume that Manager also learns that Widget Co is able to obtain financing on extremely favorable terms according to industry standards.
1. Given that the contract requires that any financing terms must be acceptable to Widget Co, what are Manager’s legal obligations to go through with the transaction? Does this differ from Manager’s ethical obligations?
2. Is it possible for Manager to comply with the good faith requirement and still avoid the contract with Owner?
3. Recall the discussion of ethical decision-making models in Chapter 5, “Business Ethics, Corporate Social Responsibility, and Law.” How could these models help guide Manager’s course of action?
4. Assume that the president orders Manager to lie on the loan application, thereby ensuring that any financial institution will reject the loan application. Note that lying on a bank loan application is a crime. What are Manager’s options at that point?
5. Is this a case where using the nuclear option is simply a good, hard-nosed business practice? Are there any circumstances you could articulate under which Manager has no legal obligation but does have an ethical obligation to Owner?
