LSB 3213 1st Edition Lecture 6 Outline of Last Lecture Privacy Rights Laws Right to Remain Silent Due Process Equal Protection Chapter 5 Business Ethics Unethical Practices Three Frameworks to Determine Ethical Behaviors o Deontology o Utilitarianism o Virtue Ethics Salmonella Example Context Matters Systematic Approach Studying for Exams Current Lecture Business Ethics What do dinosaurs and ethical lawyers have in common o They re both extinct Unethical reputations are hard to live down Three Frameworks Deontology Utilitarianism Virtue Ethics Factory Garbage Collection Consulting firm example o Argentina consulting company does business intelligence work including hidden microphones video cameras etc to collect evidence or information o This particular client is a tire manufacturer who wants information about their competitor o The boss of the consulting co wants more confidential information and to collect the company s garbage Paid the garbage men to the garbage to the consulting company These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Apply o Deontology Duty to your client to get more information Duty to obey the law not use bribery or steal personal information Duty to man Kant s categorical imperative o Utilitarianism Cost benefit analysis risk of getting in trouble vs value amount of information collected Helps everyone the garbage man consulting company and client o Virtue Ethics Values internally feel that it is wrong Corporate Social Responsibility Contribute to solving societal problems o Example only allow food companies to advertise healthy non funk food products on Disney channel 2 ways of justifying this o Market perspective bottom line Only focus on making a profit money and profit is the bottom line o Non market perspective triple bottom line Feel that more than just profits are important People profits planet Profit Maximization Short term vs long term o Long term is easier said than done Bonuses o Software sales example of bonuses If bonuses are based on sales commissions than it is important that the deal or sale works out in the long run or else there is no bonus In the short run everyone benefits from a large sale the sales person company etc o Accounting example There is pressure on accountants for sales to be recognized as soon as possible in order for sales people to get their commissions in the current quarter instead of when the sale is final in the next quarter Long Term Ethics Increase market share among youth o If the company usually markets their products to older customers Joe Camel campaign o Seemed like a good idea but Used animated an animated character designed to appeal to youth to buy cigarettes In a lawsuit the cigarette company claimed not to be marketing to youth Lawyers found information that showed that cigarette companies wanted to do studies on youth buying habits in order to gain lifetime customers The settlement Restrictions on marketing for cigarettes Animated characters Human images Marlboro Man Vending machines Outdoor ads or billboards Whistleblowing Laws Protections against retaliation o An employee who reports a company s unethical behavior is protected Exxon Valdez o An oil tanker goes through pristine Alaska waters while the captain is drunk o The oil tanker crashes o Why did no one speak up about the captain drinking Whistleblower laws could have been applied Sarbanes Oxley Act 2 whistle blowing protections o Anonymous reporting mechanisms o Reporting up People are responsible for only telling their direct supervisor not to the CEO Report of people keeps going up the chain from one level to the next Harry Potter o It takes a great deal of bravery to stand up to our enemies but just as much to stand up to our friends Foreign Corrupt Practices Act FCPA The law o Designed to prevent a US company from bribing foreign government officials or to give a bribe to a private intermediary to give money to foreign officials for the purpose of gaining business o Grease payments bribing or giving money to get paperwork processed more quickly is okay Apply ethical philosophies o Utilitarianism giving exception from practicality of grease payments Kant s categorical imperative if it is illegal to bribe an official here in the US it should be illegal to bribe officials overseas American Rice Inc Example Exports to Haiti Bribes at customs for tax benefits to approve invoices more quickly and not check that the invoice and how much they actually shipped match o This was in order to pay less in taxes as there were heavy taxes on the weight of shipments imported into the country Violation of FCPA o In court American Rice Inc says it does not violate FCPA because it is not bribing for more business o By knowing they can sell more than competitors and pay less taxes the court decided that it did violate FCPA Invoices at coffee company o At a coffee company they used two invoices 1 for customers for how much the coffee actually cost and the 2nd invoice had all of the data This was a standard business practice Business Ethics in Practice Personal stories examples from classmates Next Week Tuesday Chapter 2 Courts ADR Thursday Chapter 3 Court Procedures Will also be using clickers next week to practice concepts for the exam