CRITICAL THINKING EXERCISE 4-1 Ethical Dilemmas Below are several situations that present ethical questions in a business. Discuss each situation: (a) from the strictly legal viewpoint, (b) from a moral and ethical viewpoint, and (c) from the point of view of what is best in the long run for the company. Be sure to consider both short- and long-range consequences. Also look at each situation from the perspective of all groups concerned: customers, stockholders, employees, government, and community. 1. A disgruntled employee of your major competitor mails top-secret information or new product samples to you. Do you begin to do a dance on your desktop or do you immediately mail the information back to your competitor? What would you do? a. Throw the plans or secrets away. b. Send them to your research department for analysis. c. Notify your competitor about what is going on. d. Call the FBI. 2. You are the general manager of a regional chemical company. In the course of producing your bulk chemicals, large amounts of particles and smoke are emitted through your plant’s smokestack. The level of pollutants is below current EPA regulations, and you are violating no laws, but neighborhood groups are complaining about minor health problems caused by the smoke. After investigating numerous alternatives, you find the most effective solution would be to install a “scrubber” system, which will remove 90% of the pollutants and ash. Cost: $1 million. Do you install the system? 3. You are a general manager in a cosmetics firm. The results of a study show that your major brand could cause skin cancer. What do you do? 4. You have the opportunity to offer a job to a friend who really needs it. Although you believe that the friend could perform adequately, there are more qualified applicants. What would you do? 5. You are the vice president of a beer company in a state which sets the legal drinking age at twenty-one. Your boss asks you to organize a lobbying effort to have the drinking age reduced to eighteen. What would you do? 6. Because of a loophole in federal laws you find that you could legally pay your workers less than the minimum wage. The cost savings you recommend may mean your getting a choice promotion. What would you do? 7. You are an accountant in a large firm. Your boss tells you to use a controversial accounting practice, which will make the company’s profits seem higher. She tells you it is only to impress stockholders and will not be used in statements submitted to the IRS. What would you do? CRITICAL THINKING EXERCISE 4-1 (continued) 8. You are required to fire a worker for persistent absenteeism, but you know that her absence is because she is caring for her father who is in the advanced stage of Alzheimer’s disease. You feel that the organization is being inhumane in its attitude, but your boss remains insistent. What would you do? 9. A worker is repeatedly late for work. You know she has family problems and is going through a difficult period with an alcoholic husband. Her work is inconsistent— sometimes average, often excellent. She has been with the company for nine years. On Monday she was two hours late for work. What would you do? 10. You believe that your (male) boss is overly friendly with a (female) member of your staff and that she is taking advantage of the situation. What would you do? NOTES FOR CRITICAL THINKING EXERCISE 4-1 Each of these situations may have several possible solutions. The best solution from the company’s point of view may be quite different from one’s own philosophical point of view. Below are some discussion points. 1. This actual situation is at the heart of a dispute between rivals 3M Corporation and Johnson & Johnson. It seems a 3M employee named Philip Stegora mailed samples he stole of a new casting tape to J&J and three other competitors. He offered to meet and explain the technology for a fee of $20,000. Here’s what happened in the 3M and J&J case: None of the contacted companies reported his scheme to 3M. Instead, an outside source contacted 3M, who then turned the case over to the FBI. The case could have ended there, but in patent-infringement proceedings, 3M found that J&J had done chemical tests on the sample Stegora had sent. 3M sued and was awarded $116.3 million from J&J for infringing on its patent and misappropriating trade secrets. Sounds like someone should have sent the tape back to J&J in the first place. 2. In considering whether to install the scrubber, both the short and long-term consequences should be addressed. While the level of pollution is legal today, is it likely to be regulated tomorrow? What would be the public relations impact for the company if it installed the system? If it did not? Should the company publicize the scrubber installation or avoid discussing pollution at all? 3. The key word in this question is “could.” The evidence is inconclusive. How would the company be affected if the product were pulled prematurely? How would it be affected if the product causes dozens of cancers and results in huge lawsuits? 4. This is a grey area. Hiring a friend may smack of favoritism. However, with a friend you already know about his or her background, reputation, experience, and work ethic. The friend may be the best one for the job if you value his or her abilities. The downside is that you may have to fire your friend, losing an employee and a friendship. 5. Eighteen to 21-year-olds represent a huge market for liquor. But, again, the public reaction should be considered. 6. Many smaller companies are exempt from minimum wage laws but still pay the prevailing wage. The supply and demand for workers is a more important price factor. A company that pays less than minimum wage will not be able to attract as many qualified workers as one that does. 7. This is the only black and white dilemma. To use dual accounting practices to deceive investors is illegal. 8. This is a direct order from your superior. You might take a meeting with the supervisor to explain the extenuating circumstances, but if there’s no change in his or her position, you will have to fire the employee or be ready to leave your job. 9. This worker is going through a difficult time. Her work is, however, “often excellent.” The costs of training a replacement worker must be weighed against her possibly temporary reduction in productivity. 10. Your boss is guilty of sexual harassment. The female member of your staff may be taking advantage of it, but that does not change the reality. The boss’s actions may open your company up to a sexual harassment suit. Fighting it will be costly and generate bad publicity. The boss needs to be warned, although you might not be the one to do it. If you have a mentor in the firm or a sympathetic friend in upper management, you might approach them, confidentially, about the situation. If you decide to talk to the boss yourself, how would you handle the encounter? What could your first sentence possibly be?
