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A particular act can be deemed unethical yet still be legal.
The law provides guidelines; however, acts within those guidelines may at times be unethically practiced or may not be covered specifically by the law.
The terms morals and ethics are synonymous.
Morals refers to the standards of right and wrong that should be applied, while ethics refers to the conscious system of proper decision making.
Depending on the size and nature of the organization, the two codes may, at times, be combined into one document.
Ethical dilemmas faced by managers are often complex, with no clear choice.
Organizational ethics programs manage values and conflicts among them rather than a person's personal values.
Enron Corporation was a private corporation dealing in a governmentally regulated market.
Enron Corporation was a public corporation dealing in a deregulated market.
AIG caused a major political firestorm when, after receiving taxpayer bailout money, it distributed $165 million in performance bonuses to executive employees.
After receiving $173 billion in taxpayer money to keep the company running, AIG then distributed $165 million in performance bonuses to executive employees.
The fundamental underlying concept of corporate social responsibility is that conscience resides not just in individuals but also in a corporation itself.
Arthur Andersen, for example, was convicted of obstruction of justice, fined, and banned from performing audits for a number of years.
Each of the values named is a component of corporate citizenship.
The 2008 Lehman Brothers bankruptcy eclipsed the Enron bankruptcy as the largest in America's history.
Primarily because of its ban from performing audits, customers and employees left the company and the company ceased most operations although a small portion of the original organization continues in operation.
Immanuel Kant is credited with developing theories of duty ethics.
Linda's company has a code of ethics and a separate code of conduct. If she wants to be sure that she complies with the company dress code, she would reference the code of ethics.
A company dress code is a topic found in a code of conduct.
Enron profits showed that first-quarter revenues rose from $12 billion in 2000 to $84 billion in 2001.
Social responsibility is at its highest when the moderate view, or government's hand theory, of corporate social responsibility is utilized.
Although convicted, Kenneth Lay died before he was sentenced.
Enron had an elaborate and well-written code of ethics that it simply violated.
the citizens who live near the airports that planes maintained by Sky High fly into
Mighty Motors is a major automobile manufacturer with assembly plants in small towns throughout the United States. Mighty Motors is suffering losses in the current economy and has decided to stop manufacturing the Mighty Brute, an SUV with horrible gas mileage that simply isn't selling. The company will also be closing the only plant that is exclusively dedicated to manufacturing the Brute. This particular assembly plant is the primary employer in the town that it is located in. Who, among the following, would be considered a secondary stakeholder in this decision?
The categorical imperative test consists of:
the narrow view, or invisible hand theory
The moderate view of assessing corporate citizenship holds that:
AIG received a government bailout to save the company because:
In Arthur Andersen LLP v. United States, Andersen's previous conviction was overturned by the Supreme Court because it was determined that:
Which of the following was not an argument made by recipients of AIG bonuses who were defending their right to receive and retain the bonus money?
The bonuses came from money AIG had on hand at the time of the collapse and did not come from the taxpayer-supplied funds.
the broad view, or management's hand theory
Harry seeks to implement a policy of enhanced values management in his office. Which of the following is not a direct outcome of values management in the workplace that Harry can expect?
the broad view, or management's hand theory.
The reputed mastermind of the Enron business model was:
As a result of the AIG bailout, the U.S. government received a(an) ________ stake in the company.
creation of private value.
In Grimshaw v. Ford Motor Company, Ford was found liable because:
Student answers will vary. However, the answer must include a comparison of the benefits and consequences of both a principles-based (categorical imperative) and a consequences-based (utilitarian) approach. Either approach is acceptable as long as the student defends his or her position and recognizes the holding of the rejected position.
When a company is developing a code of ethics, what are the four key points that must be followed to create a usable and effective document?
A company should consider the following: (1) Review any values needed to adhere to relevant laws and regulations; (2) review which values produce the top three of four traits of a highly ethical and successful product or service in each area the company will operate in; (3) identify values needed to address current issues in the workplace; and (4) consider any top values that might be important to primary and secondary stakeholders.
The most prominent of Arthur Andersen's ethical lapses was allowing conflicts of interest to cloud its business judgment. Andersen was netting approximately $100 million in annual fees while its share in the overall auditing market was dropping. The chief auditor assigned to oversee Enron became one of Andersen's top-paid employees. Since that employee's compensation was directly tied to the retention of the Enron account, the employee became an advocate for Enron rather than an impartial auditor. Furthermore, when a member of the Andersen audit team raised questions about Enron's accounting methods, Andersen complied with Enron's demand that he be removed from the team, again showing the influence Enron held over Andersen's business judgment. Andersen's conviction, although subsequently overturned, stemmed from Andersen's apparent attempt to destroy evidence of wrongdoing by conducting a massive shredding of documents pertaining to Enron accounting matters, an attempt to protect the company's most profitable client.
Assume that you have money you'd like to invest in stock. Would you prefer to invest in a company that evidences values based on the invisible hand theory, the government's hand theory, or the management's hand theory of operations? Explain reasons for your choice, and indicate why the rejected choices were not chosen.
The invisible hand theory places profit and shareholder worth as its priority. Using corporate money for social good is looked at as a failure of a manger's fiduciary duty. While profits are maximized, should a serious ethical or social responsibility problem occur, profits are easily put at risk.
The government's hand theory believes that corporate responsibility should be dictated through government action such as statutes and regulations. While this recognizes that profit is important, social responsibility is also considered, so profit is somewhat reduced based on the level of government interference or control.
The management's hand theory advocates corporate social responsibility and believes that profits are secondary, so the returns on investments in the corporation are, in theory, reduced.
What is the difference between ethics and morals?
While ethics and morals need to be addressed simultaneously in most instances, morals refers to generally accepted standards of right and wrong as defined in a given society. Ethics refers to the conscious system for deciding moral dilemmas.
What were the reasons offered to defend the fact that AIG had paid $165 million in bonuses to certain employees?
AIG defended its actions by claiming that the bonuses were based on contractual obligations already in place when the bailout money was paid to the company. Additionally, it claimed that the employees were high producers and key employees whose retention was necessary if the company was to make a recovery. The employees had negotiated their bonus packages based on performance incentives and had reached the incentive goals, thereby earning the money.
Why is the case of Grimshaw v. Ford Motor Company looked at as an example of the failing of the invisible hand and government's hand approaches to corporate social responsibility?
The case involved the Ford Pinto which Ford engineers knew was defectively built and dangerous. Ford chose not to make a $15.30 repair based on a desire to maximize profits. The invisible hand approach failed because even though the company's policies became public and Ford did suffer reduced revenues, the reduced revenues were at best temporary and the deaths and injuries resulting from Ford's policy hurt the public more than the company. The government's hand approach failed because even with regulation in the automobile industry, the regulation was not comprehensive enough to cover all potential problems and there was little policing of the regulations. Existing regulations were inadequate to protect the public from Ford's profit-over-consumer-safety decision.
George is 85 years old and Grace, his wife, is 83. They are on a fixed retirement budget and have no disposable income and no savings. Grace's doctor informs her that she requires a particular medicine that costs $84. They don't have money to buy the medicine, there are no relatives or friends to ask, and there are no programs that can provide them with the medicine money. Feeling he has no choice, George goes to the local bank and robs it, handing the teller a note demanding $84 in small bills. Discuss George's action from a moral and ethical point of view.
This is an example of a situation in which someone acted illegally but it could be argued that the act was indeed ethical. From a morals perspective, George broke the law and therefore violated standards, the criminal code, set by society. From an ethical perspective, some could argue that even under the circumstances a criminal act cannot be ethical; however, many would argue that the ethical nature of the act should be reviewed based on the motivation for the act. Is it ethical to steal to save a loved one's life if there is no alternative?
Name the five-step process that a manager should use for ethical decision making.
The five steps are (1) the manager must define the problem; (2) the manager must identify the impact of the problem with regard to primary and secondary stakeholders; (3) the manager must apply legal standards as well as the company's defined values and ethical principles; (4) the manager must develop choices and solutions and then analyze each possible solution in terms of its impact on primary and secondary stakeholders; and (5) the manager must implement the final decision and then monitor and evaluate its impact to be sure the results are as expected.
This is certainly an ethical matter because she is being treated differently than others and that is not acceptable in today's society. From the company's standpoint, the company appears not to embrace the need to enforce a values management approach to management of its employees. If the men are paying too much attention to Valarie, this could certainly affect productivity and teamwork. If Valarie is being distracted and must work while psychologically uncomfortable, her productivity could suffer negatively as well. Additionally, should the conduct persist or escalate, the company would be subject to a sexual harassment lawsuit, which could affect the management, the company in general, shareholders, and other stakeholders in a severely negative manner as a result of publicity harming the company's public image and the costs involved in defending the case and potentially paying a judgment following the lawsuit.
After the plaintiff has proved his or her prima facie case of disparate treatment, if the employer provides a false reason for its discriminatory actions, this is called a _______.
Mixed motives discrimination is analyzed using the ________ standard.
The EEOC cannot litigate every claim made; it selects those of major legal significance or those in which the employer's conduct is egregious.
Stephen is 40 years old and has applied for a job at a large computer game development company. He is told that he is "over the hill" and not eligible for employment at that company. Stephen does not have a valid age discrimination suit under the Age Discrimination in Employment Act because the act applies only to those already employed, not to applicants in the hiring process.
The ADEA applies to current employees who are discriminated against on the job as well as situations involving discrimination in hiring.
Weight is not a protected class under Title VII, so no remedies are available under the statute.
The ADA requires that reasonable accommodations be provided to legitimately disabled employees.
Most employers are not subject to affirmative action requirements.
Disciplinary actions rarely give rise to employment discrimination claims.
Disciplinary actions frequently give rise to employment discrimination claims.
After an EEOC investigation and choice not to file a suit, the employee may demand a right-to-sue letter and file his or her own lawsuit.
Every time Mike passes Kathy in the office he rubs against her. Sometimes he walks up behind her and massages her shoulders even though she has told him not to. Lately he's been pinching her butt when no one is watching. Mike is committing quid pro quo sexual harassment.
Mike is committing hostile work environment harassment through his excessive and unnecessary physical contact.
State antidiscrimination laws often are written to include employers not subject to federal statutes and often enhance the employers' obligations and legal responsibilities.
It may not be discriminatory to require that persons in a protected class, in certain instances, be afforded special rights.
Disparate impact claims under the Age Discrimination in Employment Act do not require that the employer prove a business necessity in order to defend its actions.
The EEOC must engage in conciliation negotiation before pursuing a lawsuit.
State and local affirmative action plans in regard to race- or gender-based preferences in the hiring of government contractors are subject to strict scrutiny.
Intent to discriminate must be proved for a disparate case to be successful.
Disparate impact occurs when an employer's policy, although neutral on its face, has the effect of discrimination, even if not intended.
The most common form of sexual harassment is quid pro quo harassment.
The most common form of sexual harassment is hostile work environment harassment.
The Equal Pay Act was designed to prohibit unequal pay between the sexes for similar work.
A successful Age Discrimination in Employment Act suit requires that the plaintiff affirmatively prove that age was the direct reason for the adverse employment action suffered.
The plaintiff needs to prove only that age was more likely than not the reason for the adverse employment action suffered.
The ADA recognizes both physical and mental impairments that limit major life activities.
Outward manifestations of a disability are not required for a person to be legitimately disabled.
Although commonly misunderstood, affirmative action bans the use of quotas to reach antidiscrimination goals.
The replacement must be substantially younger than the terminated employee but is not required to be a member of a recognized protected class.
Emmanuelle has been the subject of intense and continuous hostile environment sexual harassment over a period of months. If she quits before filing a complaint with the EEOC, she forfeits the right to file the complaint and seek damages.
An employee who quits because of pervasive sexual harassment may still file a complaint with the EEOC and seek damages.
A plaintiff need not be in a minority within a protected class to be covered under Title VII.
Your school's football coach has just been fired. When the athletic director informs him of the termination, he tells the coach that although he has had recent winning seasons, the inability to make it into postseason play and his inability to groom players for the pros has weighed prominently in the decision. The coach is also told that his recruiting has not been effective and that his fund-raising has been disappointing. The AD then tells him that his pretty-boy image makes him look too effeminate, he dresses like a nerd, and he doesn't portray the proper image of a head football coach desired by the school. The coach's best theory for pursuing a discrimination lawsuit is:
Which of the following is not a protected class under the original Civil Rights Act of 1964?
The EEOC is a ____-member commission.
Tom, a city policeman, is featured as Mr. August in the police charity calendar wearing only a pair of Speedos and a smile. Chuck is a fellow cop and a homosexual. Every opportunity that he has, Chuck brushes up against Tom and asks if Tom has ever been with a man. Chuck buys Tom gifts and leaves them by Tom's locker. Tom throws the gifts away immediately. Tom has asked Chuck to stop, but Chuck just laughs and says, "I'll get you someday." Tom is and has always been a heterosexual. Tom has complained to his superiors pursuant to department policy, but they claim it's just horseplay and not serious. If Tom files a complaint with the EEOC:
Which of the following would likely not be considered a major life activity supporting a disability claim?
In Diaz v. Pan Am Word Airways Inc., the plaintiff was denied a job as a flight attendant because the airline had a policy of hiring only women as flight attendants. The court held that:
while important, more effective performance by women in nonmechanical functions and customer preference did not make gender a bona fide qualification for the position.
Jon and Amy work for Dover Farm and Home Company. Jon and Amy are caught one day stealing a tractor. The next day, Jon was given a verbal warning and Amy was terminated.
The Equal Employment Opportunity Commission was created by:
The business necessity defense is a defense to:
disparate treatment regarding women.
The company is not required to make or offer any accommodations to Kim.
Once the plaintiff has established a prima facie case under the McDonnell Douglas standard and the defendant has presented justification for the actions taken, the plaintiff must now prove any of the following except:
the stated reasons contain a mixed motive.
The Equal Pay Act is an amendment to the:
In Enriquez v. West Jersey Health Systems, the plaintiff began an external transformation from male to female. When her contract was not renewed, she brought suit claiming discrimination.
In a disparate impact case, if an employer can show that a challenged employment practice is job-related and consistent with business necessity, the plaintiff can still win by showing that:
Mohammed has met his prima facie case requirement under the McDonnell Douglas standard. His Arab heritage makes him a member of a national origin protected class, his two years of experience shows his general qualifications as a custodial worker, and he was rejected for the job and the job search continued after his rejection. When the burden of proof shifted to the employer, the reasons for its discriminatory acts are specious at best. The courts should question whether 10 years of experience is truly a requirement to perform basic custodial duties and should conclude that there is no adequate reason to require a high school degree as long as one can evidence an ability to read, write, and communicate at a level required of a custodial worker. The courts will find the employer's reasons to be pretext, and Mohammed should be successful in his claim.
Lilly Ledbetter had worked for 19 years at Goodyear Tire when she discovered that her paycheck was not equal to those of men who performed the same functions and had the same seniority. When she filed a claim under the EPA, the court rejected her suit because it had not been filed within 180 days of receiving her first unfair paycheck. This changed the widely used standard which held that the 180 days began to run when the plaintiff became aware of the problem. Congress recognized that since salaries are often kept confidential, employees are usually not aware of inequities for a considerable time. Congress also recognized that if the Supreme Court's standard were used, once the 180-day period was up, employers would have little incentive to correct pay discrimination issues. The legislation clarified and created one standard, changing the Supreme Court's decision, by making 180 days from becoming aware of the unequal pay the time frame to be used by all.
What procedures or policies should employers implement to protect themselves from charges of discrimination even when firing an employee for misconduct?
Employers are not required to overlook misconduct when dealing with antidiscrimination statutes. Employers may discipline or terminate employees guilty of misconduct; however, the employers should take certain steps to protect themselves from potential liability. Employers should establish a comprehensive set of policies and procedures, defining what is considered misconduct and stating the possible penalties. Employees must be made aware of their existence, and these policies and procedures must be made readily available to all employees for their reference. Just as important, policies, procedures, and penalties must be interpreted and applied to instances of employee misconduct consistently and uniformly and without any deviation between protected classes.
At best this could be characterized by Dr. Augustus as a mixed motives discrimination case; however, this argument should fail. Although his publication record is appropriate, his inability to communicate with his students as well as his documented unwillingness to work with students and colleagues evidences inadequate job performance. Although Dr. Augustus is a member of a protected group based on his race and his African heritage, he has not been terminated due to either. Other faculty members in the same protected classifications have been successful or are working successfully, so the discrimination he is claiming is not evident. The ability to reasonably work with students and the ability to properly communicate are essential functions of a professor, and he was terminated for failure to perform. It is important to note that merely having an accent is not sufficient cause for termination in this type of situation. It is the incomprehensible nature of his accent that prohibits Dr. Augustus from doing his job properly.
What are the four defenses available to an employer under the Equal Pay Act that will permit different levels of pay between men and women?
If the plaintiff has established a prima facie case, the defendant employer may avoid liability by proving that the difference in pay is based on a bona fide seniority system and the higher-paid employees have seniority over the lower-paid ones; the difference results from a merit system that is available to all and applied in a fair and nonbiased way; the unequal pay results from a difference in quality or quantity of output, such as more pay for more items delivered or created; or the unequal pay results from any factor other than sex, such as prior experience or different educational levels.
An employer will be held liable for the offensive conduct of a co-employee that rises to the level of sexual harassment if no system has been put in place that is meant to deter harassment, the employer failed to make employees aware of the company's existing sexual harassment policy, or the employer failed or refused to enforce an existing sexual harassment policy.
Under Title VII sex refers to gender, being male or female. Sexual preference is currently not protected by Title VII regulations, so gay, lesbian, bisexual, and transgender men and women are not covered. Tom may have a cause of action on the state or local level if his state or city is one that has enacted laws protecting sexual preference (typically homosexual or heterosexual) as a protected group.
Robin has just graduated with an MS in elementary education. He sends his résumé to a number of school boards, and one writes back offering an interview for a kindergarten position. When Robin arrives at the interview, it is obvious that the interviewers had expected a female. They ask a few general questions and conclude the interview. Two days later he gets a rejection letter. He later finds out that a female applicant with only a bachelor's degree was hired. He believes that he has been discriminated against due to sex, and he files a complaint with the EEOC. The school district defends by saying that kindergarten teachers are traditionally female and that the parents' preference is for a female to conduct the class. Is the school board justified in its actions, and will its defense be effective?
The school is not justified, and its defense will not be persuasive. Robin is a victim of disparate treatment based on being a male. He has applied for a position that he is qualified for, he was rejected, and subsequently someone in a different protected class was hired. The school is asserting a BFOQ of being female, but this is based on traditional stereotyping and parental preference, neither of which will be valid to justify the school board's position.
Ben's diabetes, while a serious disease, has not impaired a major life function, so he would not be regarded as disabled. Nevertheless, his superiors have considered the diabetes when making a decision regarding his application for promotion and regarded him as disabled. Under the ADA Amendments Act, being regarded as disabled is a covered scenario, and Ben would have the right to bring an action based on the promotion denial.
Name the four elements that must be proved to establish a prima facie case of disparate treatment in hiring under the McDonnell Douglas standard.
To establish a prima facie disparate treatment case, the plaintiff must prove (1) that the applicant is a member of a protected class, (2) that the applicant applied for a job he or she was qualified for and met the employer's legitimate expectations, (3) that the applicant was rejected for the job, and (4) that the employer continued to seek applicants or filled the position with someone outside the applicant's protected class.
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