• Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
35
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
0
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Business Ethics: Cases andSelected Readings, 7th Ed.Marianne M. JenningsUnit 9© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 2. The Earthquakes and theDifferencesHaiti• 7.0 RS• 52 aftershocks• 230,000 deaths• 300,000 injured• 1,000,000 homeless• 250,000 residencesdestroyed• 30,000 commercialbuildings destroyedConcepción, Chile• 8.8 RS• 130 aftershocks• 521 deaths• Limited injuries• 300,000 homeless• 370,000 homes damaged© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.328
  • 3. Colorado and Louisiana MMS• Hotline report on “ethical issues in Colorado”• Report issued – no other divisionsinvestigated their own employees’ behaviors© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.329
  • 4. IG Report on Colorado MineralsManagement• Explored “opting out” of the Ethics inGovernment Act by policy or regulation• When confronted with evidence of sexualrelationships with industry contacts, employeesresponded that “the relationships were arms-length.”“Sexual relationships with prohibited sources cannot, bydefinition, be arms-length.”Earl Devaney, DOI IG330© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 5. DOI IG Report on MineralsManagement Division in Colorado• One-third of the staff accepted gifts and socialized withindustry members• Two employees received gifts on 135 occasions from four oiland gas companies• Government employees shared bid proposals andqualification information with bidders• Accepted lodging from industry members after meetings atlocal hotels because they were too intoxicated to drive home• Employees had their own consulting firms that oil-and-gascompanies hired for help with paperwork submitted toemployees’ agencies331© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 6. IG Report on MMS in Louisiana• The “red-jacket auctions”• Hunting and fishing trips with oil industryexecutives• Fluid transfer of employees from MMS to oilcompanies• Negotiating for employment with oil companiesusing government e-mail accounts• “Everybody does this. We are all dependent oneach other.”332© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 7. The Rationalizations at MMS• “That’s the way it has always been done.”• “Everybody does this.”• “Nobody is really harmed by this.”• “We are not influenced by these kinds ofthings.”• “We are doing a good job and making money– what’s the issue?”• “If I don’t do it, somebody else will.”333© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 8. The Cultural Factors at MMS• Tone at the Top problems• Iconic leaders who were powerful• Pervasive conflicts of interest• Numbers pressure and pressure to continue• Bad judgment on the part of leaders andemployees• Perceived innovation334© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 9. 335335The Alleged Scheme From theKodak Employee with theAssessor and AppraiserBased on the reductions Schwab made to Kodak Parks realproperty tax assessment, Nicolo and Camarata calculated the taxsavings to Kodak over a fifteen-year period to be $31,527,168.They also calculated Nicolos fee from Kodak to be$7,881,798.00, which was 25 percent of Kodaks projected taxsavings. Prior to this scheme being uncovered in April2005, Kodak had paid Nicolo the amount of $4,161,220 of themore than $7 million he would have been paid. From thisamount, Nicolo paid Camarata the amount of $1,553,300 for hisrole in hiring Nicolo, and Schwab the amount of $1,052.100 forhis role in reducing Kodak Parks real property tax assessment.© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 10. 336Commodities, Conflicts, and Clintons© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 11. The Governor and theSenate Seat“This is not like a guy taking $500for a zoning change. This isselling a U.S. Senate seat.”Chicago Alderman Brian DohertyJudy Keen, “Blagojevich case is a blot on Chicagoans’ pride,” USAToday, December 11, 2008, p. 5A© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.337
  • 12. Stakeholders in Illinois• The public and the voters• Candidates and elected officials who complywith fundraising and donation laws anddisclosures• The political parties• Contractors who will not “pay to play”• Economic system of Illinois because ofinefficiencies such processes introduce338© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 13. Stakeholders in Torture• Prisoners• Government officials• Citizens and their safety• Those who might be arrested in the future• The nation and its standing and reputation339© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 14. 340Wolfowitz on His Conflict ofInterest“In the larger scheme of things, we have muchmore important work to do.”© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 15. Stakeholders for Joe thePlumber• Joe• His ex-wife and child• Other citizens because of chilling effect ontheir willingness to participate in elections• Other employees in the agency because of theconduct of their leader• Citizens’ perception of government and trust• Citizens’ loss of trust in family agencies341© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 16. The OIG FindingsIt is also our conclusion that the Deputy Director of Family Stability, PaulFraunholtz and the Deputy Director of Unemployment Compensation, JudyCicatiello played no direct role in the decision making process that led to thequeries being run on Wurzelbacher. However, they are not without fault inthis situation either—albeit to a lesser degree than Jones-Kelley. Theyoversee two of the confidential ODJFS database systems accessed toconduct queries on Wurzelbacher. We cannot accept as an excuse that theymerely ran the query after receiving a request from senior management.They are responsible for ensuring that access to these databases is limitedto the furtherance of the agency’s functions or purposes. In this case,Fraunholtz and Cicatiello both failed to exercise independent judgmentexpected of senior management. At the very least they should have inquiredhow the requests related to legitimate agency operations.342© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 17. 343Stanford and Everybodyand BenchmarkingOverhead funds from federal grants used for:– $3,000 cedar-lined closet for Kennedy’s home– $2,000 flowers– $2,500 grand piano refurbishing– $7,000 sheets– $4,000 wedding reception– $184,000 yacht depreciation© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 18. 344The Language of An EthicalBreachDecember 18, 1990“What was intended as government policy to build thecapacity of universities through reimbursement of indirectcosts leads to payments that are all too easilymisunderstood. Therefore, we will be reexamining ourpolicies in an effort to avoid any confusion that mightresult. At the same time, it is important to understandthat the items currently questioned, taken together, havean insignificant impact on Stanford’s indirect-cost rate.”“Moreover, Stanford routinely charges the government lessthan our full indirect costs precisely to allow for errors andallowances.”© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 19. 345The Language of an EthicalBreachJanuary 14, 1991“I don’t care whether it’s flowers, or dinners andreceptions, or whether it’s washing the table linenafter it’s been used, or buying an antique here orthere, or refinishing a piano when its finish getscrappy, or repairing a closet and refinishing it – allthose are investments in a university facility thatserves a whole array of functions.”From an interview with the Stanford Daily© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 20. 346The Language of An EthicalBreachJanuary 23, 1991“Because acute public attention on these itemsthreatens to overshadow the more important andfundamental issue of the support of federallysponsored research, Stanford is voluntarilywithdrawing all general administration costs foroperation of Hoover House claimed for the fiscalyears since 1981.”University statement© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 21. 347Evolutionary ProgressFebruary 19, 1991“I am troubled by costs that are perfectlyappropriate as university expenditures andlawful under government rules but I believeought not be charged to the taxpayer. Ishould have been more alert to this policyissue, and I should have insisted on moreintensive review of these transactions.”Remarks to alumni© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 22. 348More ProgressMarch 23, 1991“Our obligation is not to do all the law permits, but to dowhat is right. Technical legality is not the guidingprinciple. Even in matters as arcane as government costaccounting, we must figure out what is appropriate andact accordingly. With respect to indirect-costrecovery, we pursued what was permissible under therules, without applying our customary standard of whatis proper . . .”Remarks to alumni© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 23. 349Kennedy’s DemiseJuly, 1991“It is very difficult for a person identified with aproblem to be a spokesman for its solution.”Donald KennedyLetter of Resignation© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.
  • 24. 350The Attitude SurvivesWe took a beating. It was sufficiently bad that after thehearings and during the summer of 1991, it became clearto me that there was so much faculty concern about theruckus and whether Stanford would continue to be atarget for this kind of thing that I decided that if yourepart of a problem, you cant be part of a solution and so Iresigned. I think that steadied things down considerably. Itwasnt any fun to do that. It was not any fun to take acertain amount of newspaper abuse in connection with it.Stanfords recovered nicely. Were still not paid the indirectcost rate I think we are entitled to under articulatedgovernment policies, but the sequel to the whole furor, Ithink, made it plain to everybody that Stanford hadntengaged in any wrongdoing.Donald Kennedy, Interview in 2000© 2012 Cengage Learning. All Rights Reserved. May not bescanned, copied or duplicated, or posted to a publicly accessiblewebsite, in whole or in part.