Q&A Hero

Q: Screening bad apples out before hiring is an effective way to curb employees' unethical conduct.

Q: Susan is interviewing for a position in purchasing with a major international retailer. Susan would like to go into consulting and sees this job, if she gets it, as experience for joining a consulting firm in 2-3 years. The interviewer asks Susan, "Where do you see yourself in five years?" Susan replies, "Working here"¦and I probably would have moved up to head one area of purchasing." Evaluate Susan's response, considering ethical categories and applying the readings from Unit 2.

Q: In May 2010, Martha Stewart gave an interview to the New York Times magazine in which she was asked, "Do you find it odd that the SEC investigated you for insider trading, which resulted in your conviction in 2004, while letting a sociopath like Bernie Madoff run unchecked?" (Mr. Madoff ran a $50 billion Ponzi scheme). Ms. Stewart responded, "Let me just say one thing. They should have been paying closer attention to other things." She then added that she never stole anyone's money like Madoff did. Evaluate Ms. Stewart's comments in the context of ethical analysis, a credo, and her attitude about ethics in business.

Q: Discuss why Goldman Sachs was a disciple of Albert Carr's theory of "business is a poker game and we are all bluffing."

Q: Lee Iacocca, chairman and CEO of Chrysler Corporation, announced on January 27, 1988, that the automaker would be closing its Kenosha, Wisconsin, plant. Iacocca and his board of directors were under significant pressure from shareholders due to Chrysler's continuing poor financial performance. Chrysler had acquired the Kenosha plant when it purchased American Motors Corporation in 1987. In his announcement, Iacocca blamed national trade policy for Chrysler's declining sales and resultant earnings problems. At the Kenosha plant, which manufactured the Dodge Omni and the Plymouth Horizon, 5,500 of the 6,500 workers were to be laid off and production moved to a Detroit plant. Kenosha, a city of 77,000 on the shores of Lake Michigan, depended heavily on Chrysler's presence. The announcement of the closing came at a critical time. Chrysler was negotiating to renew its contract with the United Auto Workers (UAW). Also, the Kenosha plant carried a history of union financial assistance. The UAW had loaned American Motors over $60 million to keep the Kenosha plant running, and Chrysler had assumed the loan obligations as part of the acquisition. Also, Wisconsin had paid $5 million for job training at the Kenosha plant in 1987 after Chrysler promised that the plant would build Omnis and Horizons for at least five more years. Peter Pfaff, a member of the UAW Local 72 of Kenosha and an employee at the plant since 1972, said: "I was there. We"ve got it on tape and in writing. They said they"d stay. Greenwald (then Chrysler Motors chairman) keeps saying Chrysler never said that, but I was there when he said it." The Kenosha local threatened to delay negotiations on renewing the national contract with 64,000 workers. After the threat, Iacocca announced that Chrysler would establish a $20 million trust fund to aid the 5,500 Kenosha workers through housing payments and educational funding. This fund would be in addition to severance pay, extended unemployment benefits, and repayment of the UAW loans. While denying that Chrysler was setting a precedent, Iacocca declared it had a "moral obligation" to Kenosha. Wisconsin threatened to sue Chrysler over the job training program but agreed to hold off in exchange for Iacocca's promise to extend production at the plant for several months into the fall of 1988. Iacocca stated that Chrysler was "guilty as hell of being cockeyed optimists. Blame us for being dumb managers, for spending $200 million to put two old cars (the Chrysler Fifth Avenue and the Dodge Diplomat) in an eighty-six-year-old plant, but please don"t call me a liar when I"ve got to close it sooner than I thought." Iacocca sought congressional support for converting the Kenosha plant to defense work by Chrysler. Chrysler and the UAW negotiated a contract that provided additional unemployment benefits for the 5,500 laid-off workers and more job security for the 1,000 workers who would transfer to other Chrysler operations. Ultimately, the plant closing resulted in 3,700 layoffs. By mid-1990, Kenosha was enjoying unprecedented economic growth. At a July 1990 ceremony in which engineers detonated explosives to destroy the 250-foot-high smokestack of the Chrysler plant, dignitaries and former workers cheered. Kenosha resident T. R. Garcia said at the blasting, "I think it's about time they got rid of it. What we need to do is develop the lake front, and this thing is the last to leave." City planner Ray Forgianni, Jr., added, "The community's image is probably the best it's been in 100 years. The closing was almost like a catalyst. The handwriting was on the wall-the economy needed to diversify." a. Did Chrysler have a moral obligation to the Kenosha workers and Wisconsin, or was it just responding to pressure? b. Do arrangements like Chrysler had with the UAW loans and Wisconsin interfere with the ability to make business decisions? Review Iacocca's quote on business mistakes as you evaluate the issue. c. Were the shareholders required to pay twice for the closing " once in severance pay and again in extended benefits? d. Was Chrysler simply putting its duty to shareholders above its duty to Wisconsin, Kenosha, and its workers? Is this proper? Is it ethical? e. Was Chrysler's action just a catalyst for needed economic development? f. Iacocca, after having stepped down as chairman of Chrysler, made a takeover offer for Chrysler in 1995. What would Chrysler's ethical culture be like if Mr. Iacocca had succeeded in his takeover bid?

Q: Frank Hoffman is the CEO of Triple Plus, Inc., a group of four successful restaurants in the Southwest. One member of the Triple Plus board of directors, Sam Wasson, has a daughter, Chelsea Wasson, who has just started Chelsea's Cloths, a business that supplies restaurant linens. Wasson has approached Hoffman to explain Chelsea's business. Chelsea's Cloths has adopted an environmental emphasis in its operations as a way of countering the industry trend toward the use of paper products in restaurants. Sam Wasson initially recruited Hoffman as CEO, was instrumental in having the board select Hoffman, and is one of Hoffman's strong backers. Wasson supported Hoffman when other board members were impatient with his new procedures, policies, and changes. Ordinarily, when someone approaches Frank Hoffman with information on a new supplier, he takes the information and refers it to the purchasing/supply area or refers the person directly to the manager of purchasing. In this case, Frank personally presented the information to Triple's purchasing manager, Deidre Hall. Frank offered Deidre the Chelsea's Cloths brochure and card and explained, "She is Sam Wasson's daughter. She just graduated in marketing from State University last June and now has her own firm. See what you can do. Our contract with Lila's Linens is up for renewal. Maybe we can do something." Deidre evaluated Chelsea's and Lila's proposals as well as that of an additional firm in making the purchasing decision. Although the pricing between Chelsea's and Lila's is equivalent, Chelsea's is too young a firm to have a track record, and Deidre is not convinced that Chelsea's can handle Triple's large account. Given Mr. Hoffman's interest, however, Deidre is confused about what recommendation to make. a. Should Deidre recommend Chelsea's firm or offer her true recommendation? b. Would it be ethical for Hoffman to change Deidre's decision? c. What if Wasson had requested bid information so that his daughter could be competitive? Should Deidre supply it? Should Hoffman direct Deidre to supply it? d. Can you solve the conflict without offending the director? e. Does Hoffman need to be concerned about how his intervention would reflect the "tone at the top"? Could employees misinterpret his actions?

Q: Raymond Randall is an attorney with the Federal Trade Commission. A 19-year veteran with the agency, Mr. Randall was known as a good trial attorney. The FTC charged William Farley, the chairman of Fruit of the Loom, Inc., with violations of the reporting provisions of the Hart-Scott-Rodino Act, when he purchased shares of West Point-Pepperell Corporations prior to a Fruit of the Loom takeover bid. The Hart-Scott-Rodino Act requires investors to notify the government when their holdings in a firm pass $15 million. The FTC sought a fine of $10,000 per day against Mr. Farley, for a total of $910,000. Mr. Farley did notify the FTC once Fruit of the Loom made its decision to acquire West Point-Pepperell. Randall was assigned the Farley case. The FTC took a position of refusing to disclose to Farley and his attorneys documents relating to the case. Mr. Randall felt that the documents pointed to weaknesses in the FTC case and supported Mr. Farley's point that he notified the FTC once the takeover position was announced. Mr. Randall leaked the documents to Mr. Farley's lawyer. Mr. Farley's lawyers were concerned that they should not be in possession of government documents returned the documents and resigned from the case because they had seen the documents. Mr. Farley's new attorneys went to court demanding production of the documents. The documents were ordered produced by the court. When the FTC refused to produce them, the case against Mr. Farley was dismissed by a federal district judge. a. Did Mr. Randall do the right thing in disclosing the documents to Farley's attorneys? b. Did Mr. Farley's lawyers do the right thing in returning the documents to the FTC?

Q: Althea Caldwell is the director of Arizona's Department of Health Services (DHS). DHS is charged the administration of the state's behavioral health system and is responsible for contracting with private providers for millions of dollars of mental health care each year for eligible patients. Ms. Caldwell accepted a $20,000 per year director position for a hospital group corporation. One of the hospitals in the group was one to which state contracts for mental health treatment had been awarded. One month after accepting the position, Ms. Caldwell asked the state's attorney general for an opinion as to whether she had a conflict of interest. Does Ms. Caldwell have a conflict of interest?

Q: In 1991, James McElveen fell 30 feet from a waterfall and broke his back. He was employed by a small business and had no medical insurance. His lifetime friend, Benny Milligan, was with him when the fall occurred. Benny took James to the emergency room. Moved by his friend's severe injuries and pain and suffering and realizing that James did not have insurance, Benny switched IDs with James in the hospital emergency room. James required surgery to fuse his back to avoid what doctors said would have been certain paralysis. The cost of the surgery and hospitalization was $41,107.45. Neither James, employed as a mechanic, nor Benny, employed as a painter, could have paid for the surgery and follow-up care. Benny's employer's insurance paid for the surgery because the hospital took the information from Benny's ID found in James' pockets. While Benny was contemplating telling his employer, someone notified the insurance company of the switch. Benny, James, and Benny's wife, Tammy Milligan were charged and convicted of mail fraud, wire fraud and conspiracy. Tammy, because of the Milligans' three young daughters, is serving her sentence through home confinement, Benny is serving 9 months and James is serving 7 months. All three were serve three years on probation and pay restitution. Benny states, "I know what I did was wrong. But I look back on it, and I feel that I had to do it at the time. I don't feel like I'm a criminal in the sense of rapers, muggers and murderers." Benny said he did not understand that a hospital has an obligation to treat someone who is dying. Friends testified that as they were racing James to the hospital they told Benny that hospitals in the area had routinely refused to provide medical treatment. Benny said he wanted to tell his employer, but he was afraid he would be fired and then be stuck with the bill. Tammy adds that the government is right to demand restitution but wrong to imprison them. James asked the judge if he could go to prison for all three of them, "I would be lost without my friendship with Benny. I probably would be dead." a. Benny and James committed an illegal act. Was it unethical? b. What punishment is appropriate in the case? c. If you were Benny's employer, what would you have done?

Q: James and Jennifer Stolpa and their five-month old son, Clayton, were stranded outdoors in a snowstorm for 8 days. They were rescued after James left Jennifer and Clayton in a cave and hiked 30 miles in subfreezing temperatures to get help. During the time they were stranded, the Stolpas ate Doritos-brand corn chips that they had with them in their car. When they were rescued and taken to the Washoe Medical Center for treatment of severe frostbite, they were visited by boxing champ, George Foreman. Mr. Foreman is a spokesperson for Doritos. His visit to the Stolpas earned national press and television coverage that emphasized the Doritos consumption. If you were an executive with Doritos, would you have sent Mr. Foreman to the hospital?

Q: Data Processing, Inc. is a service firm that performs word processing functions for law firms, corporations and government agencies. Their facilities consist of 120 office units with a word processor in each unit. Their facilities were formerly a shoe manufacturing plant, and all of the office units are located in one large room. Over the past 14 months, 7 of the 120 word processors have been diagnosed with breast cancer. In six of the seven cases diagnosed, there is no family history of breast cancer. Jane Quinn, the owner and CEO of data processing, has seen a cluster study that links employment as a word processor to a higher rate of breast cancer. Ms. Quinn does not disclose the study to her employees and takes no further action. Discuss the ethical issues.

Q: Why do companies issue press releases when executives depart that indicate the executives are leaving to spend more time with their families? What are the ethical issues in issuing such statements if they are not true?

Q: Paul Babcock gave the following advice to Standard Oil Company executives who were going to testify before Congress about the business practices of Standard Oil, "Parry every question with answers which, while perfectly truthful, are evasive of bottom facts." Apply ethical analysis to the advice and the statement.

Q: What is Mr. Rajaratnam, the former head of Galleon Hedge fund, accused of doing?a. Advance trading on IPOsb. Trading on inside informationc. Honest services fraudd. Fraud in financial reports

Q: Who said a corporation has no conscience? a. The chairman of General Motors b. Jeff Dachis of Razorfish c. Bill Gates d. Sir Alfred Coke

Q: Who said, "What's good for me is good for all shareholders"? a. The chairman of General Motors b. Jeff Dachis of Razorfish c. Bill Gates d. Sir Alfred Coke

Q: What statutory duty did the Penn State University officials have regarding Mr. Sandusky's conduct? a. To report it to the proper authorities b. To terminate Mr. Sandusky c. To report it to the NCAA d. To conduct an investigation

Q: What were the NCAA sanctions imposed on Penn State? a. The so-called death penalty plus a fine b. There were no sanctions except a fine c. A suspension of the football program d. Penn State was stripped of all of Paterno's 112 wins

Q: What did the Freeh report on Penn State conclude? a. That the university needed to just provide more training for employees regarding minors on campus b. That the administrators had done the best that they could in handling the situation c. That the Board of Trustees had acted inappropriately d. That Joe Paterno had fulfilled all of his duties to report

Q: What was the allegation about the TV show "Breaking Amish"? a. That the people depicted were not really Amish b. That the people depicted in the show had already left their Amish communities before the show began c. That the people depicted in the show never went to New York City as shown d. All of the above are true

Q: What was the allegation made about HGTV's "House Hunter" show? a. That the houses were not really for sale b. That substitute actors were used for actual homeowners c. That the prices on the homes were changed d. That the buyers never closed the deals

Q: Who was the key witness against Mr. Sandusky at his trial? a. Joe Paterno b. The Penn State athletic director c. The janitor at the football facilities d. Michael McQueary

Q: In the Penn State case, who was charged with criminal activity? a. The president of the university b. Joe Paterno c. The janitor who did not report what he witnessed d. Michael McQueary

Q: Which of the following was a characteristic of the culture at Galleon? a. It was open and transparent b. Mr. Rajaratnam was a difficult and demeaning boss c. It had a good compliance program d. It had training on insider training

Q: How much of the lost money at MF Global did investors receive back in the bankruptcy? a. Between 12 and 42 cents per dollar b. Between 75 and 93 cents per dollar c. Nothing, the liquidation brought no cash d. 50% of their original investment

Q: Who of the following objected to Mr. Corzine's risky venture into Greek debt? a. Edith O'Brien b. Michael Roseman c. Michael Stockman d. Laurie Ferber

Q: When a company announces that an executive is "Leaving to spend more time with his family": a. It means the executive is retiring. b. It means that the executive has a health problem. c. It means that the executive is probably leaving for a different reason. d. It means that the executive is leaving to spend more time with his family.

Q: Which of the following is an example Albert Carr uses to illustrate bluffing? a. A job applicant over 40 who dyes his hair. b. A woman wearing make-up. c. A job applicant who changes the list of magazines he reads on the job application. d. Carr uses all of the above examples

Q: Which of the following is not true about Jon Corzine? a. He is the former governor of New Jersey. b. He is the former senator from New Jersey. c. He is the former chairman of Goldman Sach's. d. He was hands-off in his management style at MF Global.

Q: Edith O'Brien:a. Was MF Global's treasurer.b. Tried to stop the use of client's funds for hedging.c. Was general counsel for MF Global.d. Has been charged criminally.

Q: CDOs:a. Are illegal.b. Are collateralized debt obligations.c. Are not securities.d. Could not be hedged.

Q: What was AIG's role in the Goldman stock offerings? a. It was the insurer for losses on those offerings b. It was the underwriter c. It disclosed Goldman's conduct to the SEC d. It had no role with Goldman

Q: How did Goldman avoid violation of SOX in advancing cash to two of its officers? a. It made them a loan b. It made them an interest-free loan c. It purchased stock from the executives d. It had them issue a promissory note

Q: In the Goldman Abacus deal, who determined what mortgages went into the investment pool? a. Fabrice Tourre b. ACA c. John Paulson d. Lloyd Blankfein

Q: As a result of the Goldman "trading huddles": a. Auction-rate securities are now illegal. b. There are now new regulations of analysts. c. Investment banking houses can no longer employ analysts. d. The definition of sophisticated investors has been changed.

Q: Which of the following is NOT a Goldman cultural philosophy? a. Filthy rich by forty b. Long-term greedy c. The customer is first and foremost d. Don"t kill the marketplace

Q: Which company uses primum non nocere as its credo? a. AIG b. ABC TV c. ImClone d. Johnson & Johnson

Q: Primum non nocere is associated as an ethical philosophy of: a. Plato. b. Aristotle. c. Peter Drucker. d. Laura Nash.

Q: Which of the following feels that business is like a big poker game and that bluffing in business is expected and acceptable? a. Laura Nash b. Peter Drucker c. Ayn Rand d. Albert Carr

Q: James Dodgsen is a student in a graduate course in business. The professor in the course has given Dodgsen and his classmates a surprise quiz in class. Dodgsen did not do the reading for class that day because he had been grading papers as part of his TA position. He has been prepared for every other class that semester. As he glances as the quiz questions, he realizes that he does not know any of the answers. However, he sees that Jane Frampton, the student who sits next to him, is well prepared and answering the questions with great ease. He can see her answers because of her large, block-style printing. Dodgsen copies her answers. a. Dodgsen is justified in using the answers because he the pop quiz was unfair. b. Dodgsen is justified in using the answers because he was fulfilling his TA responsibilities instead of preparing for class. c. Dodgsen is justified in using the answers if he intends to read the material eventually. d. Dodgsen has been dishonest. e. None of the above

Q: Suppose, with reference to #12 above, that Pickford already owns an interest in the biotech firm, but Munford Stanley is not the underwriter. Pickford: a. Does not have a conflict of interest. b. Has a conflict of interest, but it is acceptable in IPOs. c. Has a conflict of interest that must be disclosed to all purchasers. d. Does not have a conflict of interest, but Munford Stanley does. e. None of the above

Q: Professor Reba McGintry is the head of the Student Conduct Board. Charges have been brought against 3 students who are also members of the university basketball team. The charges are based on the criminal charges brought by the local district attorney against the 3 men for sexual assault. Professor McGintry's husband was one of the staff attorneys in the DA's office who made the decision to go forward with the prosecution. Professor McGintry: a. Can proceed with the hearing because the two matters are unrelated. b. Can proceed with the hearing because of marital privilege. c. Must excuse herself from the students' hearing because of a conflict of interest. d. Has no conflict, but her husband does. e. None of the above

Q: Beth Williams is an exercise physiologist who serves as an expert consultant for Women's Walkers, Inc., a shoe company specializing in manufacturing walking shoes for women. Dr. Williams is paid an annual consulting fee along with additional fees for drafting reports and making media and public appearances for the company. Executive Woman, a national magazine, has asked Dr. Williams to serve as one of three experts on a panel that will evaluate the full market range of women's walking shoes. a. Dr. Williams will be paid a consulting fee by Executive Woman as well.b. Dr. Williams can participate in the Executive Woman panel so long as her affiliation with Women's Walkers is disclosed.c. Dr. Williams can participate in the Executive Woman panel if she waives her fee.d. Dr. Williams is an academic with no conflict of interest and can participate in the Executive Woman panel.

Q: MF Global used customer funds for hedging activity.

Q: Adding in additional home repairs for an insurance claim for damage to your home is simply a shifted norm.

Q: Goldman's securities offerings in the 1920s were similar to its offerings in the mortgage-debt instruments sold in the 2000s.

Q: Goldman did not pay a fine to the SEC.

Q: The SEC failed to pass the shareholder say-on-pay regulation.

Q: Fabrice Tourre was aware that the CDO market was going to crash.

Q: Goldman was originally founded as a partnership.

Q: During the 1990s, Goldman increased it standards for profitability before doing an IPO.

Q: In the equation P=Æ’(x), P stands for profits.

Q: Ikea fell into the either/or conundrum in solving its problems in dealing with Russian authorities.

Q: "To bribe or not to bribe" is a set-up for the either/or conundrum.

Q: Increasing isolation is a part of leadership but does not affect ethical choices.

Q: A focus on the trappings of success causes leaders to lose their way.

Q: Albert Carr believes that a card up the sleeve is not the same as bluffing and is a form of cheating.

Q: Albert Carr believes that bluffing in business is justified because it is understood as part of the game of business.

Q: Violation of company rules would not be considered an ethical violation.

Q: Albert Carr likens business to a poker game.

Q: With respect to #27, it would be unethical for you to hire your friend to get him to bring the information to your company.

Q: With respect to #20, it is not necessary for the company to take any action to correct the problem or refund money for those who already own the new calculator.

Q: Although you are not part of your company's engineering group, you have discovered a major flaw in the company's new paper-thin solar calculator. The calculator adds when the subtract button is pressed if there are more than three figures to the right of the decimal point. Since it is not your area, you should do and say nothing.

Q: With respect to #10, using your work computer and paper to complete the case analyses would be unethical.

Q: Reality TV shows enhance the "real life" scenarios.

Q: Galleon Hedge Fund was involved in insider trading.

Q: Leaders who are focused on their own goals are less likely to lose their way when it comes to ethics.

Q: Peter Drucker believes that those who have more education should be held to higher standards.

Q: What rationalization do most speeders use to justify driving in excess of the speed limit? a. I'm a better driver. b. That's what they do in California. c. Everybody speeds. d. That speed limits are arbitrary.

Q: What rationalization did the students at Stuyvesant High School offer for cheating? a. They were under tremendous pressure for grade achievement. b. They were high achievers to whom test scores were irrelevant. c. They were helping each other. d. The Warren Buffett rationalization.

Q: Which of the following categories does hazing fit into? a. Interpersonal abuse b. Organizational abuse c. Conflict of interest d. None of the above

Q: Into which group would the students at Stuyvesant High School fall? a. Moral relativists b. Utilitarians c. Ethical egoists d. Virtue

Q: With respect to #85, what is Senator Specter concerned about? a. The slippery slope b. That the NFL is unregulated c. That there is no need for concern d. That no crime was committed

Q: With respect to #85, what rationalization did Matt Walsh follow? a. "I was just following orders." b. "Everybody does it." c. "That's the way it has always been done." d. All of the above

Q: Matt Walsh, a golf pro from Hawaii, was a video operator for the New England Patriots from 1999-2002. Walsh says that he taped the Patriots' opponents' signals, information that he says was then used by the Patriots when they next met that team. If you know the signals, then you know what defense has planned. Offense is then a tad easier. Some quotes emerged from the situation: From Patriots' coach, Bill Belichick, "I misinterpreted the rules." From Jacksonville Coach Jack Del Rio on the videotaping, "I think all teams do that. That's been going on forever." From Matt Walsh, "I had always been a big Patriots fan. I wasn"t going to question what they wanted me to do." From Pennsylvania Senator Arlen Specter, "If you can cheat in the NFL, you can cheat in college, you can cheat in high school, you can cheat on your grade-school math test. There's no limit as to what you can do. I think they owe the public a lot more candor and a lot more credibility." What rationalization is the Jacksonville coach applying? a. "Everybody does it." b. "That's the way it has always been done." c. "If we don"t do it. . ." d. All of the above

Q: Which model for ethical decision analysis requires managers to seek additional perspectives on ethical issues? a. Laura Nash model b. The Wall Street Journal model c. The Blanchard and Peale Model d. Both a and c e. a, b, and c

Q: The UCLA Medical Center is facing sanctions from California's Department of Health because several of its employees viewed records of famous patients, patients with whom the employees had no contact or care responsibilities. The employees viewed the records of, among others, Maria Shriver (wife of Governor Arnold Schwarzenegger), the late Farrah Fawcett, and Britney Spears. The unauthorized access to the records was uncovered when the story of the late Ms. Fawcett's recurrence of cancer was published in The National Enquirer before Ms. Fawcett had disclosed her health condition to family or friends. Ms. Fawcett's lawyers then notified the hospital of the only possible source of the information. Which category of an ethical breach applies to the conduct of the hospital employees? a. Committing acts of personal decadence b. Conflict of interest c. Divulging information d. Balancing ethical dilemmas

Q: A group of Wachovia (now part of Wells Fargo) customers filed a class action lawsuit against Wachovia Bank because fraudulent telemarketers had taken money from their accounts and that the telemarketers did so with the knowledge of bank executives who were aware of the fraud but did nothing to stop it. Banks executives insisted that they knew nothing about the thefts. However, internal e-mails released during discovery in the case showed that executives were discussing the frauds and providing warnings. "YIKES!!!!" "DOUBLE YIKES!!!!" "There is more, but nothing more that I want to put into a note." Warning from a Wachovia bank executive to colleagues that the bank had received 4,500 complaints of fraud in two months from customers who had been fleeced of $400 million by marketing firms who paid the bank large fees for access and on returned checks. "We are making a ton of money from them." What test for resolving ethical dilemmas would have helped the executives at Wachovia reach a better decision as they debated the issue on their e-mails? a. "I was just following orders." b. "This doesn"t really hurt anyone." c. The Front-Page-of-the-Newspaper Test d. "It's a gray area."

Q: Minnesota has a statewide smoking ban for public places. However, the state statute includes an exemption that permits smoking by actors in theatrical performances. In order to take advantage of the exemption, the Old Clover Inn, located in Vadnais Heights, Minnesota, has begun holding theater night, every night. The Old Clover Inn has placed its pool tables in an area that is framed with theater curtains and refers to the pool players as its actors. The Inn also has a stage for its cribbage players who sit and play cribbage and smoke. The Inn calls the nightly production, "As the Clover Turned," and it distributes a playbill that describes the nightly plays as involving "numerous uncredited actors in the role of bar patrons." The Inn distributes buttons for $1 to patrons. The buttons read, "Act Now!" The Minnesota Health Department has warned the Inn that what it is doing is an attempt to circumvent the law. Which statement best describes the Old Clover Inn's approach to ethics? a. Old Clover Inn acts in a socially responsible manner, going above the requirements of the law in running a business. b. Old Clover Inn has found a perfectly legal way of doing business and compliance with the law is one standard for ethics. c. Old Clover Inn believes that ethics requires doing more than the law requires and less than the law allows. d. None of the above

Q: LeAnn Rimes, a country western singer, signed a contract at age 12 with Curb Records. Curb Records is owned by Mike Curb, a long-standing presence in the music industry who began his career with a group known as The Mike Curb Congregation. Under the terms of that contract as it originally existed, and as it was signed by Ms. Rimes' guardians, Ms. Rimes would have been 35 before she had delivered the 21 albums required under the agreement. "At 12, I didn"t understand everything in my contract. All I know is that I really wanted to sing," was the explanation Ms. Rimes offered when she later testified before the California Senate Select Committee on the Entertainment Industry looking into the labor issues surrounding long-term album requirements contracts. Which of the following would apply to Curb Records' conduct with regard to Ms. Rimes? a. Taking unfair advantage b. Conflict of interest c. There is no ethical dilemma because Ms. Rimes' guardians were involved d. Taking something that does not belong to you.