Welcome! Your professor has assigned BUSINESS ETHICS: TEXT AND WORKBOOK as required reading for your class. We hope you enjoy the book -- it's not your average textbook -- and we're sure you appreciate its modest cost. To help you out even more, on this page you'll find the "Test Yourself" questions plus all the assignments for each chapter. You can copy these questions and/or assignments into a word processing file and complete your assignments using your computer. Much easier that way!

CHAPTER 1: Test Yourself

1. What are the main points of the 2003 study of the Ethics Resource Center?
2. Name at least ten common ethics problems found in business.
3. Is ethics the same as morals? Why or why not?
4. Distinguish between ethics problems, temptations, dilemmas, and issues, using examples.
5. What are four ways of defining (or thinking about) ethics?
6. Describe three behaviors that are not ethics-related, and explain why they’re not?
7. What’s the point of business ethics education?

Assignment 1.1: Good Business, Bad Business
Write out your answers to these two questions. Bring to class for discussion:

1. How would you describe a really good business? What would make it really good, in your view?
2. What about a morally bankrupt, ethically reprehensible business–how would you describe that?What would make it so, in your view?

Assignment 1.2
Can you add anything to the list of ethical situations from your own work experience? Save some room to add notes on what we learn from others in class discussion:

Assignment 1.3: Main Messages
Bring to class for discussion: Without looking back over these pages, write out two or three MAIN MESSAGES you recall from this chapter. Given what your classmates say, how well did you understand and remember the chapter’s main messages? Are there other main messages noted that you need to review?

CHAPTER 2: Test Yourself

1. What are the essential conditions of capitalism described in this chapter?
2. How do you define "social control"? Is it a bad thing? A good thing? Explain.
3. What are the three types of power used in exercising social control? How are these types applied to individuals and to organizations in business?
4. What is the Chicago School of Economics, and why do we care?
5. Briefly answer the question: Is there room for ethics in economic behavior?
6. Articulate Kenneth Arrow's argument on why the price system is inadequate.
7. Map and illustrate Oliver Williamson's discussion of two key dimensions of contracting and their implications.

Assignment 2.1: Ideas About Capitalism
Capitalism has provoked some rather extreme ideas. In a later chapter we'll learn more about Aristotle's Golden Mean, but the concept is very simple: extremes are bad, moderation is good. Here's a chance to apply that idea to a very important topic. Google around until you find extreme explanations of capitalism from both ends -- left and right -- of the political spectrum. Jot down the main ideas from both extremes, and be sure to keep track of your sources. Now, consider these ideas carefully, and craft a "balanced position" or a "golden mean" for class discussion.

Assignment 2.2: Translating Adam Smith
What's your translation of this passage from Adam Smith? (See course material.) What's the main message, in ordinary language?

Assignment 2.3: Game Theory
Game theory offers considerable confirmation of Sen's off-the-cuff remark that only a fool would do business without trust. And, even moreastonishingly, game simulations with multiple players and multiple iterations, where the decision each player faces is to cheat or not to cheat in a tit-for-tat strategy, offers remarkable evidence that cheating can be isolated and snuffed out if those around the cheater are paying attention.

Prove this to yourself by finding and reporting on game theory simulations or experiments that conclude that cheating isn't in the actor's best interests. Make brief notes on your finds.

Assignment 2.4: "Greed" with John Stossel
Your instructor may show you a video in class entitled "Greed" with John Stossel. Think about the messages conveyed by this film -- the actions advocated, the values espoused, the claims made. Here are some of them, and you will no doubt find others. You can make notes in the blank space along the side of the page. What do we learn about capitalism, and ourselves, from those ideas?

1. What do Leona Helmsley, Imelda Marcos, and Baby Doc Duvalier have in common with Bill Gates, Warren Buffett, and Ted Turner? What's different about them?
2. Why is it OK for sports stars and entertainers to make lots of money, but not CEOs? Why do we think CEOs are greedy, but Michael Jordan isn't?
3. What is greed, anyway? Consider these definitions, pick your favorite, and explain why.
   • Greed is a hunger for success, for innovation, for new knowledge.
   • Greed is the same as self-interest.
   • Greed is wanting more than you deserve.
   • Greed is wanting more than you need.
   • Greed is taking for yourself at the expense of others.
4. "Get more for yourself by serving others -- not by caring for them." Bill Gates has to persuade us, entice us, to make all his money. Businesspeople get rich when they figure out how to give us what we want at a price we are willing to pay.
   Do you agree with these statements? Explain.
5. Everyone wins in free exchange -- unless someone cheats. People wise up and don't let the cheaters stay around for long. Do you agree with these statements? Explain.
6. "Too much is barely enough." What do you think drives some people to believe this and act on it?
7. Consider these statements: "Self-interest leads people to cooperate," vs. "Wealth is a zero-sum game. If you win, I lose." But game theory tells us that there are logical reasons why we will cooperate with others, even if our raw self-interest lies in not cooperating. Explain.
8. Is it just excessive greed that's the problem? Unrestrained greed leads to theft, fighting, and taking by force. But then, "Everybody wants more. That's capitalism! private property!" and "I built it. I own it. I deserve it."
9. Americans seem to have an assumption that making money is bad. Charity feels more noble than making money. Do you believe this is true of American culture in general? Where do you stand on this?
10. Shouldn't there be rules to make distribution more equal? The wage gap between the highest and the lowest paid employees has widened. But maybe it's the ones at the bottom who need free markets the most. Children in poverty are fascinated by capitalism. Where do you stand in this debate, and why?
11. Are nonprofit organizations selfless? Isn't that better than being greedy? Or is it? What do you think?
12. Who has done more for the world -- Michael Milken or Mother Theresa? Why do you think so?
13. Ted Turner's billion dollar gift to the U.N. is "patently stupid," says a speaker in the film. Do you agree? Why or why not?
14. What else did you notice and remember from this film?

CHAPTER 3: Test Yourself

1. What is a stakeholder? Can you identify several important functional types?
2. Explain how stakeholder interests can be best understood.
3. Draw the stakeholder salience model, define its seven types, and give an example of each type.
4. Can you explain the logic that underlies the stakeholder salience model?
5. The stakeholder salience model is dynamic, not static. Why is this? Give an illustration.
6. Companies implement stakeholder engagement in a variety of ways. What do you think a company should pay attention to when deciding how to engage stakeholders?
7. No need to memorize the Clarkson Principles verbatim, as long as you can express their essence in simple, clear language. Can you?
8. What is issues management?
9. What is an expectational gap? What are the three types of gaps, and what are their attributes?
10. If there is an expectational gap, does an issue necessarily exist? Explain.
11. What are the stages and events in the issue life cycle? Why do you think it's important for managers to understand that issues have life cycles?
12. Is it OK for companies to develop a single issue response strategy, no matter what type of issue arises?
13. What is corporate social responsibility?
14. What is corporate social performance?
15. Friedman complains that CSR is unethical. What's his argument? How would you analyze and critique this argument?
16. The Carroll, Wood, and Kang CSR/CSP models are logically related. Can you explain how?
17. Connect the dots from stakeholders to issues management to corporate social responsibility and performance to business ethics.

Assignment 3.1: Companies Speak on Their Stakeholders
Compare the three statements from Pfizer, General Mills, and General Electric. What do you notice? Are the stakeholders the same for all three companies? What about the order in which stakeholders are listed? Are commitments similar? What would these statements tell you as a potential investor? As a future employee? As a member of the company's local community?

Assignment 3.2: Convince Yourself
The Venn diagram showing stakeholder categories is an exercise in logic. Work through the logic yourself by thinking through what kind of stakeholder is likely to have one, two, or all three critical attributes.

Assignment 3.3: Values in the Clarkson Principles
Try to express each of the seven Clarkson principles using just one or two words to capture its essence. Does this tell you anything about the values underlying these principles?

Assignment 3.4: Tracking an Issue Life Cycle
This assignment could be done in groups or individually, as your instructor directs. Choose a public issue related to business, research it, and track it through its various stages. Identify the trigger(s) that move the issue from nascent to developing, and identify the resolution. Show how the issue has re-emerged, plateaued, or disappeared since the resolution you identify. Be sure to keep track of the sources you use.

Assignment 3.5: Discover Friendman's Argument
Milton Friedman's New York Times Magazine piece on corporate social responsibility is out there on the web and probably also in your library's bibliographic databases. Go find this article and outline Friedman's argument. If you're really ambitious, or if your instructor tells you to, check out Friedman's book, Capitalism and Freedom, to get a better idea of his philosophy of life and of business. What do you suppose is the value that Friedman holds most dear? Your instructor may ask you to write a short paper to turn in, based on this assignment.

CHAPTER 4: Test Yourself

1. What does it mean to see government as a form of social control?
2. What are the Three E's that justify regulation in economic terms? Give an example of each.
3. In terms of equity failures, what are the conditions of free and fair contracting?
4. What are the two legal foundations of the legitimacy of U.S. regulation?
5. What does this chapter's discussion of the Pure Food Act of 1906 tell you about regulation in America?
6. What happened in the 1930s and 1940s that changed the direction of U.S. regulation of business?
7. In the 1960s and 1970s, a great deal of so-called "social regulation" was promulgated. What are some examples?
8. Describe the era of regulatory backlash and deregulation in the U.S.
9. Defend the phrase, "regulation is a tool of the people." Now critique the phrase and offer a counter-view. What evidence would you like to have to see which viewpoint is more accurate?
10. What is the point of global standard-setting for businesses?
11. Name and describe the work of several international organizations involved in setting standards for business conduct.

Assignment 4.1: Exploring the Three Es of Regulation
Search for one specific example of how regulation addresses each of the three Es -- efficiency, externalities, and equity. Your example might be a particular regulation that attempts to solve a particular problem, or it might be a news story about some breach of conduct that violates regulatory standards, or it might be a story about an effort to pass a new regulatory law to plug a perceived hole in standards. Bring your examples to share with the class, and be sure to note your sources.

Assignment 4.2: Exploring Global Standards
Choose one of the organizations listed in the table above, or let your instructor assign one to you and/or your team. Go to the organization's website and find out more about it, including:

• How and why was it formed?
• What, specifically, does the organization focus on in terms of international ethics and/or social responsibility principles and standards?
• Who participates in the work of this organization?
• What can you find out about the organization's impact?

Be prepared to present your findings in class. Be sure to note your sources.

CHAPTER 5: Test Yourself

1. Name and describe five sources of ethical problems in business, using an example for each.
2. Are businesses and their managers mostly unethical? Explain.
3. True or False: Greedy people can best be controlled through regular ethics training and a very visible corporate values statement. Explain your answer.
4. Many people believe that business is like a poker game, played by its own rules. What's your answer to this, and why?
5. "I was afraid" and "nobody told me not to" are qualitatively different explanations from people who have committed unethical behavior. Explain.
6. What is the "OOPS!" factor?
7. What are some good reasons for companies to want their employees to be ethical?
8. Name the "early warning signs" of ethical trouble and give examples for at least three of them.

Assignment 5.1: Your Experience
In your own work life so far, have you experienced any of these sources of ethical problems? Which ones? Can you share a short story with the class?

Assignment 5.2: Main Messages
Without looking back over the chapter, write out two or three MAIN MESSAGES you recall from this chapter.

CHAPTER 6: Test Yourself

1. What's the short story of the Enron fraud?
2. What is the extimated cost of fraud, worldwide and in the U.S.?
3. What is a good working definition of fraud?
4. Identify the features that must be present in order for an act to be fraud.
5. Be able to distinguish fraud from theft, and be able to identify several different types of fraud.
6. What is COSO, and what is its relevance to the subject of fraud?
7. What does the COSO report emphasize with respect to preventing fraud through internal controls?
8. Conflicts of interest are important antecedents of many frauds. Give one or two examples of a conflict of interest that can easily lead to fraud.
9. Why do you think that corporate disasters are discussed in this chapter?
10. What is a good working definition of whistle blowing?
11. What are some of the problems and issues associated with whistle blowing?
12. Distinguish identity, image, and reputation.
13. What is the relationship of fraud, disaster, and whistle blowing to reputation management?

Assignment 6.1: Learn More About Enron
To learn more about Enron's basic story, check out the interactive video, "Enron 101," available at http://www.msnbc.com/modules/enron/. A timeline of Enron events is also helpful to understand what happened. A good one detailing the emerging crisis is available at http://www.washington_post.com/wp-dyn/articles/A25624-2002Jan10.html, and the Houston Chronicle's timeline is also good: http://www.chron.com/disp/story.mpl/special/enron/timeline/2342585.html. One part of the story you'll want to know about concerns the effects on Enron employees' retirement accounts. Another part of the story is the account of Sherron Watkins, who would have been a whistle blower if she had gone outside with her concerns earlier.

Assignment 6.2: Famous Whistle-Blowers
You can learn what it's like to blow the whistle by examining the stories of Enron, Worldcom, Brown & Williamson and the tobacco lawsuits, Erin Brockovich, or any number of others. Search out one such story and note here your observations and insights for class discussion.

Assignment 6.3: Closing Off Fraud Opportunities
What's the problem with the four examples in the bullet list? What could go wrong? How easy do you think it would be to commit fraud in each case?

• Fred
• D'anae
• Marcus
• Sherry

Assignment 6.4: Disaster Preparedness
Go on-line and locate one or two useful sources of information about how businesses need to protect themselves from natural and human catastrophes like hurricanes and terrorist attacks. Print out the basic guidance -- that is, what should managers be aware of? What steps should they take? What should a preparedness plan look like? Should there be provision for shelter, supplies, communications? Bring your sources and the guidance they offer to class to compare with what others have found.

Assignment 6.5: The Loyalty Problem in Whistle Blowing
To bring home the issue of the complex loyalties involved in whistle blowing, imagine yourself at the center of a network of people and organizations, each having a particular relationship to you as well as relationships, perhaps, among themselves. That is, draw out your own stakeholder network (actually called a role-set in social psychology).

Then imagine that you're considering whether to blow the whistle on your company, which is involved in "midnight dumping" of toxic wastes into a field and a small stream upriver from a suburban community of young families. You have already tried to get the problem fixed internally, but senior executives are involved in the behavior and there's no one to listen to you.

Take each one of your relationships separately and trace out the loyalties that characterize it. Does the result help you decide to go ahead and blow the whistle, or are you now even more torn about this decision? Why?

Assignment 6.6: What Is Hirschman Saying?
Translate the passage from Hirschman into simple language and key points. Bring your translation to share with the class, and compare yours to others'.

Assignment 6.7: Exit, Voice, and Loyalty
Consider Hirschman's three categories of response to serious problems. Remember, we're talking about things like major product defects, life-threatening safety issues, and such. Think about being in such a situation yourself, as an employee. What conditions and circumstances might lead you to take one kind of action or another? The table in the worksheet (in the text material) gives you a couple of suggestions of relevant conditions.

Assignment 6.8: Hotlines Can Make Whistle Blowing Unnecessary
People blow the whistle when they believe they know of unethical or illegal conduct, and when they further believe that inside actions will not stop the conduct. "The American Institute of Certified Public Accountants (AICPA) has recommended that all organizations seriously consider establishing a whistleblower hotline due to the fraud detection benefits. In January 2005, the institute's Antifraud Programs and Controls Task Force released a tool designed to help organizations evaluate the effectiveness of their hotlines. This free tool is available on the audit committee section of the AICPA Web site, www.aicpa.org/audcommctr."

Go to the AICPA's website and find their recommendations for how to make a company hotline (now more often called helplines) work for those who have issues, concerns, or questions about ethics and legality in the workplace.

CHAPTER 7: Test Yourself

1. Explain why values form the foundation of ethics and ethical analysis.
2. What is the difference between values that express what is good, values that express what is right, and values that express virtues?
3. Within-class and cross-class conflicts of values account for much of America's political debate. Choose any example and illustrate how such a conflict informs politics.
4. What are Frederick's five "natural value clusters"? What is the role of each cluster in shaping how values drive human behavior?
5. Explain and illustrate this statement: "Ethics and the law only partially overlap."
6. In simple terms, what Irwin Financial's decision process for ethical matters? Choose an ethical issue and apply their method.
7. Discuss some similarities in ethical values among the world's major religions.
8. Identify several common moral values and explain how standards or rules behavior can be drawn from them.
9. Explain what corporate codes of conduct are for, and what they typically contain.
10. Explain the difference between an organizational code of conduct and a professional code of conduct.

Assignment 7.1: What Do You Value in Other People?
What are three or four things that you most admire in other people? Think, for example, about your best friend, a mentor, a parent, a favorite teacher, or someone in the community whom you would like to emulate. Bring your notes for class discussion.

Assignment 7.2: Value Clashes
Clashes of values within categories and across categories call for different coping strategies. Can you explain why?

Assignment 7.3: Economizing and Ecologizing
Take one example from economies and one from politics to show how prevalent the clashes between economizing and ecologizing are in modern life.

Assignment 7.4: Legal/Ethical
You should convince yourself that law and ethics are only partially overlapping as guides to behavior. Think through another example, and jot your analysis down in the empty figure provided in the text material.

Assignment 7.5: Common Principles
Keep a list for yourself of common principles of morality as the class goes along through the discussion.

Assignment 7.6: Comparing Common Principles
FOR DISCUSSION: Let's compare this list with the list we made in class. Did we overlook any important values or principles that we would now like to add to our list? Does the "expert" list above leave out things that we think are very important?

Assignment 7.7: Ethics Vignettes
Your instructor will pose several vignettes that illustrate ethics in ordinary business life. For each of these vignettese, try to discern what common principles of morality are at stake as we try to unpack what the issues are and what the actors should do. There's a table in the text materials to help you in your analysis. Be prepared to discuss your observations in class.

Assignment 7.8: Writing the Rules
Now that you've seen common principles in action, practice writing out the rules for behavior that the principle suggests. For each of the following principles, note the common rules.

• Non-malevolence
• Promise-keeping
• Truth-telling
• Respect for persons
• Mutual aid
• Respect for property
• Fairness

Assignment 7.9: Company Codes of Conduct
Your instructor will assign you a company or -- if you're working in teams -- an industry sector. Go online and find the mission, vision, and values statements of your company or companies. Some companies post their codes of conduct on their websites. Note which ones do and don't, and bring some examples of code language to class for discussion.

Assignment 7.10: Professional Codes
Go on-line and find another professional code of conduct. You might find one for accountants, bankers, financial analysts, engineers, real estate brokers, purchasing agents, etc. Put down the site reference and extract the key principles and values.

Assignment 7.11: A Code for Mangers
There's no accepted professional code of conduct for managers. Why do you think this is? If there were such a code, what do you think it would contain?

CHAPTER 8: Test Yourself

1. A popular book from years past was called Everything I Need to Know, I Learned in Kindergarten. How would you assess the premise in this book's title?
2. Briefly explain Jean Piaget's theory of cognitive development and its relationship to the subsequent theory of moral development.
3. Name and describe the six stages of Kohlberg's theory of moral development. Give one or two examples of reasoning at each stage.
4. How and why did Carol Gilligan adapt the Kohlberg six-stage schema?
5. What is the contribution of domain theory to our understanding of moral development?
6. What do you think is the most important contribution of moral development theory to the practice of management?

Assignment 8.1: The Heinz Dilemma
You can do this assignment alone or in groups, as your teacher instructs. It is interesting to retrace Kohlberg's basic method of discovery and try it on for size. Here's a brief version of the "Heinz story," a situation that Kohlberg often used to elicit behavioral choices and rationales from his subjects.

Poor Heinz has a terminally ill wife, and he's desparate to help her. He visits his druggist friend, who says there's a new cure, but it's very expensive. Heinz is beyond distraught. Here's the answer to his wife's illness, and he cannot afford it! The druggist shows him the drug, then sets it on the counter as he turns away to answer the phone. WHAT SHOULD HEINZ DO? WHY?

1. Rapidly list as many reasons as you can why Heinz should steal the drug.
2. Then, rapidly list as many reasons as you can why Heinz should not steal the drug.
3. Compare your reasons to the stages of moral development and try to categorize them.

Assignment 8.2: The Golden Rule at Each Stage
Most people are familiar with the Golden Rule, "do unto others as you would have them do unto you," or "treat others as you want to be treated." Now that you have an understanding of Kohlberg's six stages of moral development, translate the Golden Rule into the version that a person at each stage would accept.

Assignment 8.3: Some Questions...if the Moral Development Folks Are Right
Here's a tricky management problem: How can an organization encourage ethics if there are people working in it who typically operate at different levels of moral development? What are the problems that are going to arise?

1. Which type(s) would you rather have working for you? Why?
2. Which type(s) would you rather work for? Why?
3. How can an organization be designed and operated so that each employee, regardless of stage of moral development, can contribute to an ethical climate?
4. How can organizations facilitate their employees' growth and maturity?

CHAPTER 9: Test Yourself

1. Identify six problems that arise when the Golden Rule is our only ethics principle.
2. Give practical, work-related examples of each of the six problems.
3. What does an ethical person need, in addition to the Golden Rule?
4. What is “diminished moral capacity”? Who has it, and with what result?
5. Describe the Milgram, Zimbardo, and “blue eyes” experiments and briefly discuss their results. What do these studies have in common? What does this have to do with the Golden Rule?
6. What do people need in order to be free moral agents, and why?
7. Identify and discuss one problem with the Golden Rule that is not included in this chapter.

1. What is the central principle of utilitarian thinking?
2. How do classical utilitarians like Bentham and Mill define “good”?  (And, by the way, do Bentham and Mill use different definitions of what is good?)
3. What’s the basic difference between a consequentialist and a deontological approach to ethics?
4. How would you respond to the challenge that utilitarianism is just a way of declaring that the ends justify the means?
5. Describe the utilitarian reasoning process and give an example of how it works.
6. Identify and explain the major problems with utilitarian thinking.
7. What additional constraints have been placed on classical utilitarianism by modern thinkers? 

As best you can, use the utilitarian reasoning process to examine your job choices after graduation.  What are your options?  Who will be affected by your decision?  How will those people be harmed or benefited – what happiness or pain will they experience – because of your decision?  (Don’t forget about certainty, intensity, duration, fecundity, nearness, purity, extent.)  What’s the best (most moral) choice for you to make, according to the utilitarian principle?

1. What are your options?
2. Who will be affected by your decision?
3. How will those people be harmed or benefited – what happiness or pain will they experience – because of your decision?  (Don’t forget about certainty, intensity, duration, fecundity, nearness, purity, extent.)
4. What’s the best (most moral) choice for you to make, according to the utilitarian principle?