Business Ethics Quiz 1 - Lecture notes unit 1 PDF

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Business Ethics and Social Responsibility Quiz 1: Parts 1-2 Outline & Study Guide

Intro to Business Ethics and Course Overview ● What do underrepresented values in the marketplace show us about our ethical responsibility as professionals? ○ We should live out our values in business so that we can actualize the world we want to live in. ●

Defining these values outlines two different worlds ○ the world as it is ○ the world as it might be

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Why is the difference between these two worlds an ethical or moral problem? ○ Reality vs perception

Leeds Model for Values-Based Decision Making (six steps) 1. Define the dilemma 2. Identify alternatives for responding 3. Determine options that might be right 4. Choose what is right 5. Communicate the decision 6. Reflect the decision Part I: Descriptive Ethics—Morality & Neurobiology ●

Two different scenarios in Trolley problem ○ Option A: do nothing and five workers die ○ Option B: pull the lever and one worker dies

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Why do most people give different responses to the two different scenarios? ○ Many people believe that there is a morally-relevant difference in these two scenarios ■ Pre-reflective justification: ■ Reflective Justification:

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Joshua Greene has argued that these two different responses reveal something about our moral thinking and something about our neurobiology. What? ○ Prefrontal cortex ■ (Option A) calculating, utilitarian, reflective ○ Medical frontal lobes and anterior cortex ■ (Option B) intuitive, instinctive, pre-reflective

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The evolution of morality ○ moral intuitions evolve and change, in part due to cultural pressures and shifts

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What is the difference between moralization and amoralization (or “de-moralization”)? ○ Moralizations: we realign our moral judgements with our lifestyle ■ Ex: sexual harassment, junk food, smoking ○ Amoralizations (de-moralization): cultural change can lead to process of demoralization ■ Ex: marijuana, divorce, sexuality

Morality: Nature or Nurture? ● Do genes play any role in our ability to ‘play by the rules’ of morality? ○ People may be genetically predisposed to psychopathy ● There is a genetic basis for moral characteristics like honesty, conscientiousness, and compassion. Jonathan Haidt and the Rider/Elephant Model ● What does the figure of the rider and the elephant represent in the ‘rider-and-elephant’ model of moral cognition? ○ Rider (Moral Reason) ■ The conscious, verbal, thinking brain ○ Elephant (Moral Intuition) ■ The automatic, emotional, visceral brain ● Explain how the ‘rider’ and the ‘elephant’ interact in the context of getting from a starting point to a destination. ○ … ● What are three specific steps to facilitate the movement of the rider and elephant to a desired destination? ○ 1. Direct the rider ■ Give clear direction, reduce mental paralysis ○ 2. Motivate the elephant ■ Find the emotional connection ○ 3. Shape the path ■ Reduce obstacles, tweak the environment, make the journey go downhill ● ●

Identify at least one specific business application of the rider-and-elephant model. ○ … What is a risk of an uncoordinated rider and elephant? ○ …

Milgram Experiment ●

Were more people willing to obey or disobey the authority figure in the Milgram experiment? Why?

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More people were willing to obey (65% complied). People obeying were typically conflicted.

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Explain how the Milgram Experiment did not prove that people blindly obey authority. ○ A minority rebelled. It was always an option not to give into ethical pressure from an authority

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Why should this concern us if we work for someone other than ourselves? ○ It is likely that employees may rebel against company rules

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How does knowing the results of the Milgram experiment matter for business? Give at least one specific business application. ○ Those who obey surrender their personal ethics/ sense

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How might the elephant-and-rider model apply to the Milgram Experiment? ○ …

Why People Lie, Cheat, and Steal (Dan Ariely) ●

Which of the following were not ideas supported by Dan Ariely’s research? ○ The largest economic cost of cheating comes from the ‘big cheaters,’ often featured in the news, who try to get away with major fraud. ○ Most of us think of ourselves as mostly honest—but end up being frequently dishonest in small ways that we can justify to ourselves. ○ Most of us have a ‘personal fudge factor’ that defines how much we can bend the rules before we start to feel ‘dirty’ or as if we’ve lost our integrity. ○ People cheat in ways that track the rules of ‘economic rationality’: they cheat more when the reward is bigger and the risk is smaller, less when the reward is smaller and the risk bigger. 2. Which of the following are not things that Ariely found to effectively reduce cheating? i. Signing an honor pledge ii. Remembering a moral code like the Ten Commandments iii. Being watched iv. Reducing the reward of cheating 3. Do most of us lie, cheat, and steal ‘economically’ (by applying a cost-benefit analysis)? Explain. 4. According to Ariely, people are more likely to cheat for tokens than dollars. What does this show us about how to reduce dishonesty in business? 5. According to Ariely, which of the following conditions make us more likely to cheat? i. Being tired ii. Having already made a small mistake iii. Having a conflict of interest iv. Being in a position to benefit someone else by cheating v. Working in a culture in which lots of other people are cheating

G. The Sociality of Ethics (Haidt) 1. According to Jonathan Haidt, is ethics about individual decision making or the way that groups form and bond together? Explain. 2. Haidt identifies five relatively universal ‘core values’ that shape how morality functions. What are the values? 3. How do these five values correlate with political preferences in the US? i. Which of the five dominate the decisions of very liberal thinkers? ii. Which of the five distinguish (albeit without dominating) very conservative thinkers from liberal ones? 4.What does Haidt’s research show about the relevance of social signaling (like gossip and reputational factors) to morality? Part II: Ethics & Philosophy A. Conflicting Values 1. What are values? Why are they relevant in business? 2. What is an ethical dilemma? i. How is this different than identifying an ethical wrong or right? ii. Can you think of one business scenario not discussed in class in which two or more values come into conflict, creating an ethical dilemma? iii. How can ethics help when values come into (apparent) conflict? 3. What is the value in considering each of the “Big Three” philosophies when facing a dilemma —and not just focusing on one? B. The ‘Big Three’ Ethical Frameworks 1. What are the ‘Big Three’ ethical frameworks? i. What matters most for each framework? ii. Who were the key intellectual representatives of each framework? iii. Which of the three ethical theories is probably the most prominent in business? 2. Can you apply all three frameworks to the Chiquita banana case? C. Utilitarianism 1. What is the key question that utilitarianism asks to evaluate whether an action is good or not? 2. Can a utilitarian focus on one group (employees, shareholders, company insiders, etc.) in evaluating the pros and cons of a certain decision? Why or why not? 3. What are potential benefits of the utilitarian approach to decision-making? (Give at least two.) i. Why is utilitarianism so intuitive to many businesspeople? 4. What are potential drawbacks of the utilitarian approach to decision-making? (Give at least two.) 5. A utilitarian would probably be open to the idea of an apparel company outsourcing its jobs to a country with unsafe working conditions and low wages in order to maximize shareholder value while offering lower cost goods to customers. Why? D. Deontology 1. What is the key question that deontology asks to evaluate whether an action is right or not? i. What does this question have to do with duty? ii. Rights? iii. Consequences?

2. Can a deontologist focus on one group (employees, shareholders, company insiders, etc.) in evaluating the pros and cons of a certain decision? Why or why not? 3. What are potential benefits of the deontological approach to decision-making? (Give at least two.) 4. What are potential drawbacks of the deontological approach to decision-making? (Give at least two.) 5. A deontologist would probably insist that a founder should maintain confidentiality agreements with clients, even if doing so prevented her from raising her next round of venture funding—and led to the eventual collapse of her company. Why? 6. What is the veil of ignorance and how does it work? i. What kind of wealth distribution would most people probably select, if choosing behind the veil of ignorance? ii. How does the principle of the veil of ignorance apply to business? For example, what would a deontologist applying the veil of ignorance say about the gender pay gap? Why? E. Virtue Ethics 1. What is the key question that virtue ethics asks to evaluate whether an action is helpful or not? i. What does this question have to do with human excellence? 2. What are virtues? i. Please give at least four specific examples. 3. How do you become virtuous? i. What is the role of habit? ii. What is the role of character (the disposition to act in a certain way)? iii. What is the Disclosure Rule? 4. Can a virtue ethicist focus on one group (employees, shareholders, company insiders, etc.) in evaluating the pros and cons of a certain decision? Why or why not? 5. What are potential benefits of the virtue ethics approach to decision-making? (Give at least two.) 6. What are potential drawbacks of the virtue ethics approach to decision-making? (Give at least two.) 7. Give one example of how a virtue ethicist CEO would live out her ethics through a specific leadership decision. i. A virtue ethicist might say that refusing to pay extortion money would have been the virtuous thing for Chiquita executives to do. Or, such an ethicist might say that paying the money was the virtuous choice. Which considerations might sway executives one way or the other? Case #1: Wells Fargo A. Given that fraud happened at Wells Fargo, should the bank eliminate cross-selling—or quotas for cross-selling? Or should they keep one or both? 1. How would a utilitarian answer this question? 2. How would a deontologist answer this question? 3. How would a virtue ethicist answer this question? B. Clearly, the executive team and board are responsible for the fraudulent account scandal from a corporate governance perspective. But who is primarily responsible from an ethical

perspective? The executive team and board or the frontline employees who actually committed the fraud? Why? 1. What does Milgram’s experiment have to say about the causes of the fraud? 2. What would Haidt’s rider and elephant have to say about how fraud could have been prevented? 3. What would Dan Ariely’s experiments say about how fraud could have been prevented?

Practice Questions Please note: These are provided to demonstrate how the materials will be tested. Success on these does not indicate or necessarily correlate to success on the actual quiz.

1. The Milgram Experiment demonstrates the influence that a person’s boss can exert in the workplace and the need to incorporate a values-based approach into businesses. a. True b. False 2. The thought experiment that examined how individuals would formulate principles if they did not know what their future position in society would be is called the: a. Equality principle b. Utilitarian veil c. Liberty principle d. Universal principle e. Veil of ignorance 3. The Chiquita Banana example discussed in class demonstrated which of the following shortcomings of Utilitarianism? a. The inability to control the outcomes of business decisions. b. The rights of some may be sacrificed for the welfare of others. c. In the effort to produce good outcomes, immoral actions may be justified. d. A&B e. All of these answer choices 4. John is a schoolteacher. He finds his best friend Nina, who is also the dean of teaching, breaking a school rule. Although sorry, John says that he must report Nina, as he could not

make any exceptions to the rule. The rule is the same for everybody. The above behavior of John serves as an example of: a. Deontological behavior b. Cultural relativism c. Utilitarianism d. Moral relativism e. Conventional behavior 5. The use of “CFC” propellants was made illegal in France because although they were cheap and easy to manufacture and use, they were quickly depleting the Ozone layer. The CFC propellants were important for the comfort of a few individuals but fresh air was the requirement of the whole humankind, a far larger number. The decision to make CFC use illegal was based on which form of ethical decision making: a. Rational ethical decision making b. Ends-based ethical decision making c. Virtue Ethics d. Principle-based ethical decision making 6. Eric views conducting experiments on animals in his pharmaceutical research lab as a way to improve drugs that will benefit mankind. Which moral philosophy most closely represents his viewpoint? a. Deontology b. Relativism c. Justice-based ethics d. Utilitarianism 7. One of Volkswagen’s core values is safety. Volkswagen’s cars are very effective at protecting the passenger during a collision, as most models receive at least 4 out of 5 stars from the National Highway Traffic Safety Administration. However, since 2009, multiple models have been recalled consecutively every year for failing systems and parts within the car; several of these failing parts are those advertised as Volkswagen’s enhanced safety features. According to Virtue Ethics, Volkswagen’s behavior would be considered unethical because a. The company failed to consider what a “virtuous” automobile company should be. b. The managers of this company have not been accurate when distributing information on these recalled products, and therefore have failed to habitually practice honesty. c. By providing inaccurate information upon the safety and quality of these vehicles, the salesmen/women as well as the managers for Volkswagen are hurting Volkswagen’s character. d. All of these answer choices 8. a. b. c. d.

The potential limitations of deontology include: It requires constant self-evaluation and self-correction. It prioritizes the community over the individual. It encourages rule following as opposed to character development. All of these answer choices

9. a. b.

“I hate brussels sprouts” is an example of moralization. True False...