,Solution and Answer Guide: Mann/Roberts, Essentials of Business Law and the Legal Environment, 14e, (c) 2025, 9780357987766;
Chapter 2: Business Ethics
Solution and Answer Guide
Mann/Roberts, Essentials of Business Law and the Legal Environment, 14e, (c) 2025,
9780357987766; Chapter 2: Business Ethics
TABLE OF CONTENTS
Answers to Questions and Case Problems ........................................................................1
ANSWERS TO QUESTIONS AND CASE PROBLEMS
1. You have an employee who has a chemical imbalance in the brain that causes him to be
severely unstable. The medication that is available to deal with this schizophrenic condition
is extremely powerful and decreases the taker's life span by one to two years for every year
that the user takes it. You know that his doctors and family believe that it is in his best
interest to take the medication. What course of action should you follow?
Answer: This question illustrates one scenario where arguments against corporate
social responsibility could come into play. If you take the “anti-social
responsibility” position that a corporation has—as its primary objective—a
fundamental responsibility to maximize profits, the employer could make the
medication a requirement for the employee to remain in the workforce. It could be
argued that this decision may also decrease the possibility of injury or deterioration
in working conditions for other employees. The other side of the argument,
however, is that this type of decision is too personal for a corporation to make. The
ultimate determination should reside with the employee, and it should be his free
decision to take or not take the medication. This puts the responsibility back
where it belongs: on the employee and his family.
2. You have a very shy employee from another country. After a time, you notice that the quality
of her performance is deteriorating. You find an appropriate time to speak with her and
determine that she is extremely distraught. She tells you that her family has arranged a
marriage for her and that she refuses to obey their contract. She further states to you that
she is thinking about committing suicide. Two weeks later, after her poor performance
continues, you determine that she is on the verge of a nervous breakdown; and once again
she informs you that she is going to commit suicide. What should you do? Consider further
that you can petition a court to have her involuntarily committed to a mental hospital. You
know, however, that her family would consider such a commitment an extreme insult and
that they might seek retribution. Does this prospect alter your decision? Explain.
Answer: A good, responsible manager would be hard-pressed to demand that the
employee either improve her on-the-job performance or face dismissal. However,
initiating an involuntary committal to a mental hospital could constitute an
improper invasion of rights with many legal repercussions. An interim step of
providing appropriate psychological social counseling (perhaps at company
expense) would seem to best fit into the concept of good corporate management.
This would benefit not only the individual but the corporation, as it may be able to
© 2025 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 1
accessible website, in whole or in part.
,Solution and Answer Guide: Mann/Roberts, Essentials of Business Law and the Legal Environment, 14e, (c) 2025, 9780357987766;
Chapter 2: Business Ethics
keep a valued employee. The cost of counseling is likely to be less expensive than
hiring and training a new employee.
3. You receive a telephone call from a company that you never do business with requesting a
reference on one of your employees, Mary Sunshine. You believe Mary performs in a generally
incompetent manner, and you would be delighted to see her take another job. You give her
a glowing reference. Is this right? Explain.
Answer: Pawning off an incompetent employee would certainly help the
profitability of an employer. However, relatively accurate referrals are expected,
and good corporate citizenship would impose a moral responsibility to act properly.
The employer would be better advised to give a more accurate, but not overly
negative, description of Mary’s job performance (while staying within the
conditional privilege of avoiding a defamation action), rather than generate
animosity and gain a reputation as a liar among other businesses in the area.
4. You have just received a report suggesting that a chemical your company uses in its
manufacturing process is very dangerous. You have not read the report, but you are
generally aware of its contents. You believe that the chemical can be replaced fairly easily,
but that if word gets out, panic may set in among employees and community members. A
reporter asks if you have seen the report, and you say no. Is your behavior right or wrong?
Explain.
Answer: Weighing the arguments for profitability to shareholders and fairness to
shareholders and employees against the arguments for good corporate citizenship
and long-run profits, an appropriate response might be that you are aware of the
report but haven’t thoroughly read or studied it. Proceeding with a course that
acknowledges (at least internally) past dangerous practices, while immediately
correcting the current problems, and correcting future problems in a timely
manner, may be an appropriate legal as well as moral response to this problem.
This is one of the reasons many corporations have a corporate spokesperson to
give appropriate and consistent responses.
5. You and Joe Jones, your neighbor and friend, bought lottery tickets at the corner
drugstore. While watching the lottery drawing on television with you that night, Joe leaped
from the couch, waved his lottery ticket, and shouted, “I've got the winning number!”
Suddenly, he clutched his chest, keeled over, and died on the spot. You are the only living
person who knows that Joe, not you, bought the winning ticket. If you substitute his ticket
for yours, no one will know of the switch, and you will be $10 million richer. Joe's only
living relative is a rich aunt whom he despised. Will you switch his ticket for yours?
Explain.
Answer: Perhaps an advocate of utilitarianism or social egalitarianism might feel
that switching the ticket would be morally appropriate on the premise that it
maximized pleasure and was an appropriate distribution of wealth. However, such
a moral rationalization would demonstrate the flaws in both theories. There is no
escaping the fact that switching the tickets would be improper under the law and
most moral theories.
6. Omega, Inc., a publicly held corporation, has assets of $100 million and annual earnings in
the range of $13 to $15 million. Omega owns three aluminum plants, which are profitable,
and one plastics plant, which is losing $4 million a year. Because of its very high operating
costs, the plastics plant shows no sign of ever becoming profitable, and there is no
evidence that the plant and the underlying real estate will increase in value. Omega
decides to sell the plastics plant. The only bidder for the plant is Gold, who intends to use
© 2025 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 2
accessible website, in whole or in part.
, Solution and Answer Guide: Mann/Roberts, Essentials of Business Law and the Legal Environment, 14e, (c) 2025, 9780357987766;
Chapter 2: Business Ethics
the plant for a new purpose: to introduce automation, and to replace all existing
employees. Would it be ethical for Omega to turn down Gold's bid and keep the plastics
plant operating indefinitely for the purpose of preserving the employees' jobs? Explain.
Answer: Indefinite maintenance of the plastics plant may strike one as being the
morally correct thing to do. The moral basis for such a decision would be
essentially egalitarianism where the wealth generated by many is redistributed to
benefit others. However, as the basis for an economic system, such an approach
may be doomed to ultimate failure in that it does not rectify anything and only
prolongs a perhaps snowballing problem that could taint and impair the job
security of everyone employed by Omega. If managerial and operational changes
truly cannot rectify the net loss situation suffered by the plastics plant, sale of the
plant to Gold may, in a broader context, be the morally correct thing to do.
7. You are the sales manager of a two-year-old electronics firm. At times, the firm has
seemed to be on the brink of failure, but recently it has begun to be profitable. In large
part, the profitability is due to the aggressive and talented sales force you recruited. Two
months ago, you hired Alice North, an honors graduate from the State University, who
decided that she was tired of the Research Department and wanted to try sales.
Almost immediately after you sent Alice out for training with Brad West, your best
salesperson, he began reporting to you an unexpected turn of events. According to Brad,
“Alice is terrific: she's confident, smooth, and persistent. Unfortunately, a lot of our buyers
are good old boys who just aren't comfortable around young, bright women. Just last
week, Hiram Jones, one of our biggest customers, told me that he simply won't continue
to do business with ‘young chicks’ who think they invented the world. It's not that Alice is
a know-it-all. She's not. It's just that these guys like to booze it up a bit, tell some off-
color jokes, and then get down to business. Alice doesn't drink, and although she never
objects to the jokes, it's clear she thinks they're offensive.” Brad felt that several potential
deals had fallen through “because the mood just wasn't right with Alice there.” Brad
added, “I don't like a lot of these guys' styles myself, but I go along to make the sales. I
just do not think Alice is going to make it.”
When you call Alice in to discuss the situation, she concedes the accuracy of Brad's report
but indicates that she's not to blame and insists that she be kept on the job. You feel
committed to equal opportunity but don't want to jeopardize your company's ability to
survive. Explain what you should do.
Answer: This is a common problem with a myriad of legal and moral implications.
From a profitability standpoint, especially in the case of a company on the brink of
economic failure, ignoring the requirements and whims of customers can amount
to economic death. From a legal standpoint, the Equal Opportunity laws operate
harshly against an employer that discriminates on the basis of sex or race in hiring
and promotional activities. Employees are frequently aware of their rights, yet wish
to help the business of an employer and otherwise act as a good “team player.” A
possible response might be (with the consent of Alice) attempting to divide sales
accounts to give to Alice those accounts where her sex would be a neutral or
perhaps positive factor, while retaining for Brad oversight of the “good old boy”
accounts. Such an approach would acknowledge both her legal rights and her
justifiable expectations while not undermining the profitability of a company whose
very existence is at issue. Best utilization of employees is critical to any
corporation, and this includes sensitivity to both the employees’ needs and the
customers’ needs.
© 2025 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 3
accessible website, in whole or in part.
Chapter 2: Business Ethics
Solution and Answer Guide
Mann/Roberts, Essentials of Business Law and the Legal Environment, 14e, (c) 2025,
9780357987766; Chapter 2: Business Ethics
TABLE OF CONTENTS
Answers to Questions and Case Problems ........................................................................1
ANSWERS TO QUESTIONS AND CASE PROBLEMS
1. You have an employee who has a chemical imbalance in the brain that causes him to be
severely unstable. The medication that is available to deal with this schizophrenic condition
is extremely powerful and decreases the taker's life span by one to two years for every year
that the user takes it. You know that his doctors and family believe that it is in his best
interest to take the medication. What course of action should you follow?
Answer: This question illustrates one scenario where arguments against corporate
social responsibility could come into play. If you take the “anti-social
responsibility” position that a corporation has—as its primary objective—a
fundamental responsibility to maximize profits, the employer could make the
medication a requirement for the employee to remain in the workforce. It could be
argued that this decision may also decrease the possibility of injury or deterioration
in working conditions for other employees. The other side of the argument,
however, is that this type of decision is too personal for a corporation to make. The
ultimate determination should reside with the employee, and it should be his free
decision to take or not take the medication. This puts the responsibility back
where it belongs: on the employee and his family.
2. You have a very shy employee from another country. After a time, you notice that the quality
of her performance is deteriorating. You find an appropriate time to speak with her and
determine that she is extremely distraught. She tells you that her family has arranged a
marriage for her and that she refuses to obey their contract. She further states to you that
she is thinking about committing suicide. Two weeks later, after her poor performance
continues, you determine that she is on the verge of a nervous breakdown; and once again
she informs you that she is going to commit suicide. What should you do? Consider further
that you can petition a court to have her involuntarily committed to a mental hospital. You
know, however, that her family would consider such a commitment an extreme insult and
that they might seek retribution. Does this prospect alter your decision? Explain.
Answer: A good, responsible manager would be hard-pressed to demand that the
employee either improve her on-the-job performance or face dismissal. However,
initiating an involuntary committal to a mental hospital could constitute an
improper invasion of rights with many legal repercussions. An interim step of
providing appropriate psychological social counseling (perhaps at company
expense) would seem to best fit into the concept of good corporate management.
This would benefit not only the individual but the corporation, as it may be able to
© 2025 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 1
accessible website, in whole or in part.
,Solution and Answer Guide: Mann/Roberts, Essentials of Business Law and the Legal Environment, 14e, (c) 2025, 9780357987766;
Chapter 2: Business Ethics
keep a valued employee. The cost of counseling is likely to be less expensive than
hiring and training a new employee.
3. You receive a telephone call from a company that you never do business with requesting a
reference on one of your employees, Mary Sunshine. You believe Mary performs in a generally
incompetent manner, and you would be delighted to see her take another job. You give her
a glowing reference. Is this right? Explain.
Answer: Pawning off an incompetent employee would certainly help the
profitability of an employer. However, relatively accurate referrals are expected,
and good corporate citizenship would impose a moral responsibility to act properly.
The employer would be better advised to give a more accurate, but not overly
negative, description of Mary’s job performance (while staying within the
conditional privilege of avoiding a defamation action), rather than generate
animosity and gain a reputation as a liar among other businesses in the area.
4. You have just received a report suggesting that a chemical your company uses in its
manufacturing process is very dangerous. You have not read the report, but you are
generally aware of its contents. You believe that the chemical can be replaced fairly easily,
but that if word gets out, panic may set in among employees and community members. A
reporter asks if you have seen the report, and you say no. Is your behavior right or wrong?
Explain.
Answer: Weighing the arguments for profitability to shareholders and fairness to
shareholders and employees against the arguments for good corporate citizenship
and long-run profits, an appropriate response might be that you are aware of the
report but haven’t thoroughly read or studied it. Proceeding with a course that
acknowledges (at least internally) past dangerous practices, while immediately
correcting the current problems, and correcting future problems in a timely
manner, may be an appropriate legal as well as moral response to this problem.
This is one of the reasons many corporations have a corporate spokesperson to
give appropriate and consistent responses.
5. You and Joe Jones, your neighbor and friend, bought lottery tickets at the corner
drugstore. While watching the lottery drawing on television with you that night, Joe leaped
from the couch, waved his lottery ticket, and shouted, “I've got the winning number!”
Suddenly, he clutched his chest, keeled over, and died on the spot. You are the only living
person who knows that Joe, not you, bought the winning ticket. If you substitute his ticket
for yours, no one will know of the switch, and you will be $10 million richer. Joe's only
living relative is a rich aunt whom he despised. Will you switch his ticket for yours?
Explain.
Answer: Perhaps an advocate of utilitarianism or social egalitarianism might feel
that switching the ticket would be morally appropriate on the premise that it
maximized pleasure and was an appropriate distribution of wealth. However, such
a moral rationalization would demonstrate the flaws in both theories. There is no
escaping the fact that switching the tickets would be improper under the law and
most moral theories.
6. Omega, Inc., a publicly held corporation, has assets of $100 million and annual earnings in
the range of $13 to $15 million. Omega owns three aluminum plants, which are profitable,
and one plastics plant, which is losing $4 million a year. Because of its very high operating
costs, the plastics plant shows no sign of ever becoming profitable, and there is no
evidence that the plant and the underlying real estate will increase in value. Omega
decides to sell the plastics plant. The only bidder for the plant is Gold, who intends to use
© 2025 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 2
accessible website, in whole or in part.
, Solution and Answer Guide: Mann/Roberts, Essentials of Business Law and the Legal Environment, 14e, (c) 2025, 9780357987766;
Chapter 2: Business Ethics
the plant for a new purpose: to introduce automation, and to replace all existing
employees. Would it be ethical for Omega to turn down Gold's bid and keep the plastics
plant operating indefinitely for the purpose of preserving the employees' jobs? Explain.
Answer: Indefinite maintenance of the plastics plant may strike one as being the
morally correct thing to do. The moral basis for such a decision would be
essentially egalitarianism where the wealth generated by many is redistributed to
benefit others. However, as the basis for an economic system, such an approach
may be doomed to ultimate failure in that it does not rectify anything and only
prolongs a perhaps snowballing problem that could taint and impair the job
security of everyone employed by Omega. If managerial and operational changes
truly cannot rectify the net loss situation suffered by the plastics plant, sale of the
plant to Gold may, in a broader context, be the morally correct thing to do.
7. You are the sales manager of a two-year-old electronics firm. At times, the firm has
seemed to be on the brink of failure, but recently it has begun to be profitable. In large
part, the profitability is due to the aggressive and talented sales force you recruited. Two
months ago, you hired Alice North, an honors graduate from the State University, who
decided that she was tired of the Research Department and wanted to try sales.
Almost immediately after you sent Alice out for training with Brad West, your best
salesperson, he began reporting to you an unexpected turn of events. According to Brad,
“Alice is terrific: she's confident, smooth, and persistent. Unfortunately, a lot of our buyers
are good old boys who just aren't comfortable around young, bright women. Just last
week, Hiram Jones, one of our biggest customers, told me that he simply won't continue
to do business with ‘young chicks’ who think they invented the world. It's not that Alice is
a know-it-all. She's not. It's just that these guys like to booze it up a bit, tell some off-
color jokes, and then get down to business. Alice doesn't drink, and although she never
objects to the jokes, it's clear she thinks they're offensive.” Brad felt that several potential
deals had fallen through “because the mood just wasn't right with Alice there.” Brad
added, “I don't like a lot of these guys' styles myself, but I go along to make the sales. I
just do not think Alice is going to make it.”
When you call Alice in to discuss the situation, she concedes the accuracy of Brad's report
but indicates that she's not to blame and insists that she be kept on the job. You feel
committed to equal opportunity but don't want to jeopardize your company's ability to
survive. Explain what you should do.
Answer: This is a common problem with a myriad of legal and moral implications.
From a profitability standpoint, especially in the case of a company on the brink of
economic failure, ignoring the requirements and whims of customers can amount
to economic death. From a legal standpoint, the Equal Opportunity laws operate
harshly against an employer that discriminates on the basis of sex or race in hiring
and promotional activities. Employees are frequently aware of their rights, yet wish
to help the business of an employer and otherwise act as a good “team player.” A
possible response might be (with the consent of Alice) attempting to divide sales
accounts to give to Alice those accounts where her sex would be a neutral or
perhaps positive factor, while retaining for Brad oversight of the “good old boy”
accounts. Such an approach would acknowledge both her legal rights and her
justifiable expectations while not undermining the profitability of a company whose
very existence is at issue. Best utilization of employees is critical to any
corporation, and this includes sensitivity to both the employees’ needs and the
customers’ needs.
© 2025 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly 3
accessible website, in whole or in part.
