SOLUTION MANUAL FOR Understanding Business Ethics 3rd Edition Peter A. Stanwick, Sarah D. Stanwick Chapter 1-13

SOLUTION MANUAL FOR
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Understanding Business Ethics 3rd Edition Peter A. Stanwick, Sarah D. Stanwick
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Chapterv1-13
Chapterv1
ThevFoundationvofvEthicalvThought


vThevpurposevofvthisvchaptervisvtovgivevthevstudentsvavbroadvoverviewvofvthevtheoreticalvfoundationvt
hatvsupportsvethicalvdecision-
making.vItvisvfromvthisvtheoreticalvgroundingvthatvthevstudentsvcanvunderstandvhowvtheirvdecisionsv
relatedvtovethicalvissuesvcanvimpactvnotvonlyvthemselvesvbutvothersvasvwell.vInvaddition,vthisvchapte
rvintroducesvthevstructurevofvthevtextbookvwhichvallowsvthevinstructorvtovalsovexplainvhisvorvhervstru
cturevforvthevclass.


KeyvLearningvPoints
Therevarevavnumbervofvkeyvlearningvpointsvwhichvcanvbevaccomplishedvwhenvthisvchaptervisvpresent
edvtovyourvstudents.vThesevlearningvpointsvinclude:
1. Thevchaptervintroducesvthevstudentvtovthevconceptsvofvethicsvandvbusinessvethics.
2. Ethicsvisvavcomplexvconceptvtovdescribe.vDifferentvphilosophiesvhavevusedvdifferentvtheoriesvinvo
rdervtovhelpvexplainvandvguidevethicalvbehavior.
3. Althoughvsomevofvthevtheoriesvpresentedvinvthisvchaptervwerevdevelopedvovervtwovthousandvy
earsvago,vtheyvarevappropriatevandvapplicablevtovtoday‟svbusinessvenvironment.
4. ThisvchaptervdemonstratesvthatvtheveightvunderlyingvprinciplesvpresentedvinvthevGlobalv
BusinessvStandardsvCodexvarevinterrelatedvwithveachvothervasvwellvasvwithvthevmajorvphilo
sophicalvtheoriesvrelatedvtovethics.
5. “PaneravCaresvCommunityvcafes:vAvLoafvinvEveryvArm”vdemonstratesvhowvonevcompanyvcanva
ddressvthevneedsvofvmanyvstakeholders.
6. SirvNicholasvWinton:vAvTruevHumanitarianvdemonstratesvthatvonevpersonvcanvhavevanvimpactvo
nvmanyvothersvbyvdoingv“thevrightvthing”vevenvatvgreatvpersonalvrisk.


PaneravCaresvCommunityvCafes:vAvLoafvinvEveryvArm
Thevopeningvvignettevhighlightsvhowvonevcompany,vPaneravBread,vhasvdevelopedvanvoutreachvpro
gramvofvprovidingvfoodvforvwhichvthevcustomersvwillvpayvonlyvwhatvtheyvcan.vIfvthevcustomervdoesv
notvhavevanyvmoney,vtheyvcanvdonatev1vhourvofvvolunteervworkvinvexchangevforvthevmeal.
Anvinterestingvfactvisvthatv60vpercentvofvthevcustomersvpayvthevretailvvalue,v20vpercentvpayvbelowvth
evretailvvalue,vandv20vpercentvpayvabovevthevretailvvaluevofvthevmeal.

,1. Askvthevclassvhowvmanyvofvthemvhavevvolunteeredvforvavnonprofitvorganization.
Followvupvwithvthosevwhovrespondvpositivelyvbyvaskingvthemvwhyvtheyvvolunteered.vAnvadditional
vfollow-

upvquestionvwouldvbevtovaskvifvthosevsamevstudentsvwouldvconsidervvolunteeringvinvthevfuture.


2. HowvdoesvPaneravBreadvsatisfyvthevdemandsvofvthevstockholdersvbyvpotentiallyv“givingvaway”vf
oodvandvprofits?
ItvcouldvbevarguedvthatvPaneravBreadvhasvanvenlightenedvstakeholdervperspectivevtovaddressvthevne
edsvofvitsvcustomers.vNotvonlyvdoesvthisvprogramvsupportvthosevinvneedvinvthevlocalvcommunitiesvb
utvitvsendsvavmessagevtovallvofvPanera‟svstakeholdersvthatvitvisvinterestedvinvservingvtheirvneeds.vFurt
hermore,vthevlong-
termvfinancialvbenefitvofvthisvprogramvcouldvbevthatvasvthosevcustomersvincreasevtheirvstandardvofvl
iving,vtheyvcanvaffordvtovpayvthevfullvpricevofvthevmealvandvwillvhavevbecomevbrandvloyalvtovPanera
vBreadvduevtovthisvprogram.




3. Wouldvthisvtypevofvprogramvworkvforvothervrestaurants?
Itvisvexpectedvthatvthisvcouldvcreatevavlivelyvdiscussionvinvthevclass.vForvthosevwhovagreevthatvitvcoul
dvbevtransferredvtovothervrestaurants,vthevargumentvcouldvbevthatvthevunderlyingvphilosophyvofvthevpr
ogramvisvtovsupportvthosevpeoplevinvthevlocalvcommunityvwhovhavevfoodvsecurityvissues.
Therefore,vitvshouldvbevapplicablevinvanyvtypevofvfoodvservice.vForvthosevwhovsayvno,vitvcouldvbevar
guedvthatvPaneravBreadvprobablyvhasvhighervprofitvmarginsvonvitsvfoodvthanvothervtypevofvquickvser
vicevrestaurants.vTherefore,vothervfast-
foodvrestaurantsvsuchvasvMcDonaldsvandvBurgervKingvdovnotvhavevthevflexibilityvtovoffervtheirvfoo
dvatv“belowvcost”.


DefinitionvofvEthicsvandvBusinessvEthics
TovintroducevthevconceptsvofvEthicsvandvBusinessvEthicsvtovthevstudentsvinvthevclassroom,vavgoodvst
artingvdiscussionvpointvwouldvbevtovaskvthevstudentsvwhatvkindvofvethicalvdilemmasvtheyvhavevface
dvinvthevpast.vAvfollow-
upvdiscussionvpointvwouldvbevtovaskvthemvwhatvtypevofvethicalvdilemmasvtheyvthinkvtheyvwillvfacevi
nvtheirvjobsvaftervtheyvhavevgraduated.


ThevRolevofvMorals
Itvisvimportantvforvstudentsvtovunderstandvthevthreevcomponentsvofvmorals:vindividualvprinciples,vin
dividualvcharacter,vandvthevconsequencesvofvthevactions.vDuevtovthevmultifacetedvnaturevofvmorals,vt
hevstudentsvneedvtovrealizevthatvtheyvmayvhavevethicalvprinciplesvbutvifvtheirvcharactervignoresvorvdo
wnvplaysvthevsignificancevofvthevconsequences,v“ethical”vpeoplevcanvdov“unethical”vactions.vTheref
ore,vthevGreedvisvGoodvexamplevfromvthevmovievWallvStreetvisvavgoodvvisualvexamplevtovhighlightvt
hisvpotentialvconflict.vGordonvGekkovbelievesvthatvhevhasvmoralvprinciples,

,butvbasedvonvhisvunethicalvcharactervandvhisvdisregardvforvthevconsequencesvofvhisvactions,vhevdoesv
unethicalvactivities.
IsvGreedvGood?
Duringvthisvdiscussion,vplayingvthevGreedvisvGoodvclipvfromvthevmoviev“WallvStreet”v(https://www
.youtube.com/watch?v=6Da1tDKFfno)vwillvenhancevthisvargument.vAsvtheyvarevwatchingvthevclip,
vaskvthevstudentsvtovobservevhowvthevshareholdersvemotionsvshiftvduringvthevspeech vtovnovlongervsup

portingvmanagement‟svpositionvonvthevacquisitionvtovsupportingvGordonvGekko‟svproposal.vThisvd
iscussionvcouldvalsovaddressvthevissuevofvavcharismaticvleader.vGordonvGekkovisvveryvcharismaticva
ndvthereforevmakesvhisvideasvmuchvmorevconvincingvwhethervtheyvarevethicalvorvnot.
WhyvisvStudyingvEthicsvImportant?
Thev2012vErnstv&vYoungvstudyvhighlightedvthatv15vpercentvofvthevrespondentsvreportedvthatvtheyvw
ouldvbevwillingvtovpayvavbribevinvordervtovclosevavdeal.vAvfollow-
upvquestionvforvthevstudentsvwouldvbevhowvmanyvofvthosevrespondentsvwouldvalsovbevwillingvtovgiv
evavbribevbutvdidvnotvwantvtovadmitvanvillegalvactivityvonvthevsurvey.vFurthermore,v39vpercentvofvthev
respondentsvstatedvthatvbriberyvwasvcommonvinvtheirvindustry.vThevresultsvofvthisvstudyvhavevdemo
nstratedvthatvemployeesvarevconsistentlyvbeingvchallengedvonvtheirvethicalvbeliefs.vSincevmorevempl
oyeesvarevevaluatedvonvtheirvindividualvperformance,vtherevisvavhighvfinancialvincentivevtovperformv
unethicalvactivitiesvinvorderv“tovgetvthevjobvdone”.vTherefore,vthevstudentsvneedvtovbevawarevthatvthe
yvwillvfacevnumerousvethicalvdilemmasvinvtheirvcareersvandvtheyvneedvtovunderstandvwhatvthevpotent
ialvconsequencesvofvthosevactionsvwouldvhavevonvtheirvprofessionalvandvpersonalvlife.
ThevFoundationsvofvEthicalvTheoryvType
svofvEthicalvExaminations


Descriptive—
Thevpresentationvofvfactsvthatvrelatevtovavspecificvsetvofvcircumstancesvrelatedvtovanvethicalvissue.
Analytical—
Usingvthevfactsvofvthevethicalvsituationvtovtryvtovunderstandvorvanalyzevthevactionsvofvthevdecision-
makersvasvrelatedvtovthevethicalvissue.
Normative—
Avprescribedvcoursevofvactionvthatvisvrecommendedvtovavoidvunethicalvbehaviorvinvfuture.
AnvExamplevofvEthicalvExaminationsvUsingvEnronvExecutives
Descriptive—
KenvLayvandvJeffvSkillingvwerevfoundvguiltyvofvfraudvbasedvonvtheirvactionsvasvtopvexecutivesvatvEnron.
Analytical—
KenvLayvandvJeffvSkilling,vthroughvtheirvcognitivevlens,vbelievedvthatvtheyvwerevdoingvnothingvwr
ong.vInvaddition,vifvtheyvwerevdoingvsomethingvwrongvdoing,vtheyvwerevnotvawarevofvitvand/orvdidv
notvbothervtovaskvaboutvit.vAlternatively,vKenvLayvandvJeffvSkillingvknew

, exactlyvwhatvtheyvwerevdoingvinvavcalculatedvattemptvtovdefraudvEnron‟svstockholders.vFurthermo
re,vtheyvactivelyvtriedvtovconcealvtheirvbehaviorvinvordervtovtryvtovavoidvprosecutionvbyvthevfederalvg
overnment.
Normative—
Needvtovhavevavcodevofvethicsvthatvcreatesvrealvconsequencesvifvunethicalvbehaviorvisvdetected.vTryvt
ovensurevthatvpowervisvnotvconcentratedvatvthevCEOvlevelvbyvhavingvavseparationvofvthevCEOvandvthe
vChairmanvofvthevBoard.vHavevthevappointmentvofvavChiefvEthicsvOfficervwhovreportsvtovthevBoardv

ofvDirectorsvandvisvaccountablevtovensurevthevethicalvconductvofvallvthevemployeesvwithinvthevfirm.v
Revisevthevselectionvandvrewardvsystemvforvemployeesvtovtryvandvensurevthatvethicalvpeoplevarevsele
ctedvandvrewardedvforvtheirvpositivevethicalvbehavior.


TeleologicalvFrameworks


EthicalvEgoism—Eachvindividual‟svownvself-
interestsvdrivevthem.vOnvbalance,vtherevarevmorevpositivevthanvnegativevresults.
Utilitarianism—
Eachvindividual‟svactionsvwillvbevbasedvonvprovidingvthevgreatestvgoodvtovthevgreatestvnumbervofvp
eople.
Sidgwick‟svDualism—
ThevmiddlevgroundvbetweenvEthicalvEgoismvandvUtilitarianism.vSidgwickvarguesvthatvself-
interestvcanvbevincludedvinvdeterminingvthevgreatestvgoodvforvthevgreatestvnumbervandvthatvthevothe
rvtwovtheoriesvarevnotvmutuallyvexclusive.
Aftervthesevthreevtheoriesvhavevbeenvpresented,vavgoodvleadingvdiscussionvpointvwouldvbevtovdiscus
svwhatvdrivesvavfreevmarketvsystem.vIfvitvisvindividualvself-
interest,visvitvanvEthicalvEgoismvbasedvsystem?vIfvthisvisvtrue,vthenvwhyvarevtherevsovmanyvnonprofit
vorganizations? vCouldvSidgwick‟s vDualismvbevthevanswer—

thatvavfreevmarketvsystemvisvdrivenvbothvbyvthevextrinsicvrewardsvbyvthevaccumulationvofvmaterialvg
oodsvasvwellvasvthevintrinsicvrewardsvofvhelpingvothers?vThisvwouldvsupportvSidgwick‟svargumentvt
hatvindividualvactionsvneedvtovbevexplainedvfromvthevrationalvbenevolencevaspectvofvUtilitarianismv
andvthevprudencevaspectvofvEthicalvEgoism.vAtvthisvpoint,vyouvcanvrefervbackvtovthevopeningvvignett
evonvthevPaneravCaresvprogram.vItvcouldvbevarguedvthatvthevPaneravCaresvprogramvwouldvbevanvexa
mplevofvSidgwick‟svDualism.vItvisvanvoutreachvprogramvwhichvservesvthevneedsvofvthevcommunityv
(utilitarianism)vwhilevstillvfocusingvonvreceivingvrevenuesvandvprofitsvfromvthevprogramv(ethicalveg
oism).
DeontologicalvFrameworks
Existentialism—
Thevonlyvpersonvwhovcanvdeterminevrightvandvwrongvisvbasedvonvthevfreevwillvofvthevpersonvmaking
vthevdecisions.vAsvavresult,vdutyvisvconnectedvwithvactions—

eachvindividualvdeterminesvthevvaluevofvhis/hervactions.
Contractarianismv(SocialvContractvTheory)—
Allvindividualsvagreevtovsocialvcontractsvtovbevmembersvwithinvsociety.vAsvavmembervofvsociety,vea