LSB 3213 1st Edition Lecture 6Outline 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 Behaviorso Deontologyo Utilitarianismo Virtue Ethics- Salmonella Example- Context Matters- Systematic Approach- Studying for ExamsCurrent Lecture:Business Ethics- What do dinosaurs and ethical lawyers have in common?o They’re both extinct.- Unethical reputations are hard to live downThree Frameworks- Deontology- Utilitarianism- Virtue EthicsFactory Garbage Collection- Consulting firm exampleo Argentina consulting company does business intelligence work including hidden microphones, video cameras, etc to collect evidence or informationo This particular client is a tire manufacturer who wants information about their competitoro 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 companyThese 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.- Applyo 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 cliento Virtue Ethics Values/ internally feel that it is wrongCorporate Social Responsibility- Contribute to solving societal problemso 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 lineo Non-market perspective (triple bottom line) Feel that more than just profits are important People, profits, planetProfit Maximization- Short term vs. long termo Long term is easier said than done- Bonuseso 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, etco 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 quarterLong Term Ethics- Increase market share among youth?o If the company usually markets their products to older customers- Joe Camel campaigno Seemed like a good idea, but… Used animated an animated character designed to appeal to youth to buycigarettes  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 billboardsWhistleblowing Laws- Protections against retaliationo An employee who reports a company’s unethical behavior is protected- Exxon Valdezo An oil tanker goes through pristine Alaska waters while the captain is drunko The oil tanker crasheso Why did no one speak up about the captain drinking? Whistleblower laws could have been appliedSarbanes-Oxley Act- 2 whistle blowing protectionso Anonymous reporting mechanismso 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 Pottero “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 lawo 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 businesso Grease payments- bribing or giving money to get paperwork processed more quickly- is okay- Apply ethical philosophieso 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 overseasAmerican 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 matcho 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 businesso 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 practiceBusiness Ethics in Practice- Personal stories/examples from classmatesNext Week- Tuesday: Chapter 2 (Courts & ADR)- Thursday: Chapter 3 (Court Procedures)- Will also be using clickers next week to practice concepts for the