CHAPTER 2
Q U E S T I O N S
1. You have an employee who has a chemical imbalance in the brain that causes him to be severely emotionally unstable. The medication that is available to treat this schizophrenic condition is extremely powerful and decreases the taker’s life span by one to two years for every year that the user takes it. You know that his doctors and family believe that it is in his best interest to take the medication. What course of action should you follow?
2. You have a very shy employee who is from another country. After a time, you notice that the quality of her performance is deteriorating. You find an appropriate time to speak with her and determine that she is extremely distraught. She informs you that her family has arranged a marriage for her and that she refuses to obey their contract. She further informs you that she is contemplating suicide. Two weeks later, with her poor performance continuing, you determine that she is on the verge of a nervous breakdown; once again she informs you that she is going to commit suicide. What should you do? Consider further that you can petition a court to have her involuntarily committed to a mental hospital. You know, however, that her family would consider such a commitment an extreme insult and that
they might seek retribution. Does this prospect alter your decision? Explain.
3. You receive a telephone call from a company you never do business with requesting a reference on one of your employees, Mary Sunshine. You believe that Mary is generally incompetent and would be delighted to see her take another job. You give her a glowing reference. Is this right? Explain.
4. You have just received a report suggesting that a chemical your company uses in its manufacturing process is very dangerous. You have not read the report, but you are generally aware of its contents. You believe that the chemical can be replaced fairly easily but that if word gets out, panic may set in among employees and community members. A reporter asks if you have seen the report, and you say no. Is your behavior right or wrong? Explain.
5. You and Joe Jones, your neighbor and friend, bought lottery tickets at the corner drugstore. While watching the lottery drawing on television with you that night, Joe leaps from the couch, waves his lottery ticket, and shouts, “I’ve got the winning number!” Suddenly, he clutches his chest, keels over, and dies on the spot. You are the only living person who knows that Joe, not you, bought the winning ticket. If you substitute his ticket for yours, no one will know of the switch, and you will be $10 million richer. Joe’s only living relative is a rich aunt whom he despised. Will you switch his ticket for yours? Explain.
6. Omega, Inc., a publicly held corporation, has assets of $100 million and annual earnings in the range of $13 to $15 million. Omega owns three aluminum plants, which are profitable, and one plastics plant, which is losing $4 million a year. The plastics plant shows no sign of ever becoming profitable because of its very high operating costs, and there is no evidence that the plant and the underlying real estate will increase in value.
Omega decides to sell the plastics plant. The only bidder for the plant is Gold, who intends to use the plant for a new purpose, to introduce automation, and to replace all current employees. Would it be ethical for Omega to turn down Gold’s bid and keep the plastics plant operating indefinitely for the purpose of preserving the employees’ jobs? Explain.
7. You are the sales manager of a two-year-old electronics firm. At times, the firm has seemed to be on the brink of failure but recently has begun to be profitable. In large part, the profitability is due to the aggressive and talented sales force you recruited. Two months ago, you hired Alice North, an honors graduate from State University who decided that she was tired of the research department and wanted to try sales.
Almost immediately after you send Alice out for training with Brad West, your best salesperson, he begins reporting to you an unexpected turn of events.
According to Brad, “Alice is terrific: she’s confident, smooth, and persistent. Unfortunately, a lot of our buyers are good old boys who just aren’t comfortable around young, bright women. Just last week, Hiram Jones, one of our biggest customers, told me that he simply won’t continue to do business with ‘young chicks’ who think they invented the world. It’s not that Alice is a know-it-all. She’s not. It’s just that these guys like to booze it up a bit, tell some off-color jokes, and then get down to business. Alice doesn’t drink, and although she never objects to the jokes, it’s clear she thinks they’re offensive.” Brad believes that several potential deals have fallen through “because the mood just wasn’t right with Alice there.” Brad adds, “I don’t like a lot of these guys’ styles myself, but I go along to make the sales. I just don’t think Alice is going to make it.”
When you call Alice in to discuss the situation, she concedes the accuracy of Brad’s report but indicates that she’s not to blame and insists that she be kept on the job. You feel committed to equal opportunity but do not want to jeopardize your company’s ability to survive.
What should you do?
8. Major Company subcontracted the development of part of a large technology system to Start-up Company, a small corporation specializing in custom computer systems. The contract, which was a major breakthrough for Start-up Company and crucial to its future, provided for an initial development fee and subsequent progress payments, as well as a final date for completion.
Start-up Company provided Major Company with periodic reports indicating that everything was on schedule. After several months, however, the status reports stopped coming, and the company missed delivery of the schematics, the second major milestone. As an in-house technical consultant for Major Company, you visit Startup Company and find not only that they are far behind schedule but also that they lied about their previous progress. Moreover, you determine that this slippage has put the schedule for the entire project in jeopardy.
The cause of Start-up’s slippage was the removal of per-sonnel from your project to work on short-term contracts to obtain money to meet the weekly payroll.
Your company decides that you should stay at Startup Company to monitor its work and to assist in the design of the project. After six weeks and some progress, Start-up is still way behind its delivery dates.
Nonetheless, you are now familiar enough with the project to complete it in-house with Major’s personnel.
Start-up is still experiencing severe cash flow problems and repeatedly requests payment from Major. But your CEO, furious with Start-up’s lies and deceptions, wishes to “bury” Start-up and finish the project using Major Company’s internal resources. She knows that withholding payment to Start-up will put them out of business. What do you do? Explain.
9. A customer requests certain sophisticated tests on equipment he purchased from your factory. Such tests are very expensive and must be performed by a third party. The equipment was tested as requested and met all of the industry standards but showed anomalies that could not be explained. Though the problem appears to be minor, you decide to inspect the unit to try to understand the test data—a very expensive and time-consuming process. You inform the customer of this decision. A problem is found, but it is minor and highly unlikely ever to cause the unit to fail. In addition to the time and expense required to rebuild the equipment, notifying the customer that you are planning to rebuild the unit would also put your overall manufacturing procedures in question.
Should you fix the problem, ship the equipment as is, or inform the customer? Explain.
10. You are a project manager for a company making a major proposal to a Middle Eastern country. Your major competition is from Japan.
a. Your local agent, who is closely tied to a very influential sheikh, would receive a 5 percent commission if the proposal were accepted. Near the date for the decision, the agent asks you for $150,000 to grease the skids so that your proposal is accepted. What do you do?
b. What do you do if, after you say no, the agent goes to your vice president, who provides the money?
c. Your overseas operation learns that most other foreign companies in this Middle Eastern location bolster their business by exchanging currency on the gray market. You discover that your division is twice as profitable as budgeted due to the amount of domestic currency you have received on the gray market. What do you do?
11. Explain what relevance ethics has to business.
12. How should the financial interests of stockholders be balanced with the varied interests of stakeholders? If you were writing a code of conduct for your company, how would you address this issue?
13. A company adopts a policy that (a) prohibits romantic relationships between employees of different ranks and (b) permits romantic relationships between employees of the same rank only if both employees waive in writing their rights to sue the company should the relationship end. Violation of this rule is grounds for dismissal. Is this rule ethical? If not, how should it be revised? Explain.
