This document contains a quiz about business ethics. It discusses why people engage in unethical behavior, major ethical dilemmas in business today, and identifies ethical issues in a scenario involving a pharmaceutical sales representative. The quiz questions cover topics like the focus of business ethics, how ethical disputes are resolved, and the role of management in promoting ethical conduct.

1. Business
Ethics
Tathagat
Varma
Session
6/12:
20-­‐Aug-­‐09

2. Quiz
• Why
people
engage
in
unethical
behavior?
– A
belief
that
the
acEvity
is
within
reasonable
ethical
and
legal
limits
–
that
is,
that
is
not
“really”
illegal
or
immoral
– A
belief
that
the
acEvity
is
in
the
individual’s
or
the
corporaEon’s
best
interests
–
that
the
individual
would
somehow
be
expected
to
undertake
the
acEvity
– A
belief
that
the
acEvity
is
“safe”
because
it
will
never
be
found
out
or
publicized;
the
classic
crime-­‐and-­‐
punishment
issue
of
discovery
– A
belief
that
because
the
acEvity
helps
the
company
the
company
will
condone
it
and
even
protect
the
person
who
engages
in
it

3. Quiz
• What
are
the
major
ethical
dilemmas
of
today’s
business?
– Green
/
eco-­‐responsible
business,
sustainable
development
– Data
Privacy,
IP
– Digital
idenEty
– Financial
control
vs.
empowerment
– InternaEonal
business,

4. Quiz
• IdenEfy
ethical
issues
in
the
following
situaEon,
and
suggest
an
ethical
response
to
those
issues:
– Satyam
works
for
a
pharma
company
as
a
sales
rep.
He
is
based
out
of
Bangalore
but
travels
frequently
for
work.
He
aZends
an
interview
with
a
compeEtor
on
a
weekday
in
Mumbai,
and
he
files
expense
report
with
his
company
claiming
the
travel
as
business
travel.
During
interview,
he
is
promised
he]y
bonus
if
he
could
bring
at
least
25%
of
his
current
business
to
the
compeEtor
in
next
3
months.
In
Mumbai,
he
also
met
an
old
friend
over
lunch,
and
included
lunch
bill
as
business
entertainment.
While
retuning
from
Mumbai,
he
picked
up
a
Barbie
doll
for
his
boss’s
daughter
whose
birthday
was
on
coming
Sunday.

5. Quiz
• Satyam
works
for
a
pharma
company
as
a
sales
rep.
He
is
based
out
of
Bangalore
but
travels
frequently
for
work.
He
aZends
an
interview
with
a
compeEtor
on
a
weekday
in
Mumbai,
and
he
files
expense
report
with
his
company
claiming
the
travel
as
business
travel.
During
interview,
he
is
promised
he]y
bonus
if
he
could
bring
at
least
25%
of
his
current
business
to
the
compeEtor
in
next
3
months.
In
Mumbai,
he
also
met
an
old
friend
over
lunch,
and
included
lunch
bill
as
business
entertainment.
While
retuning
from
Mumbai,
he
picked
up
a
Barbie
doll
for
his
boss’s
daughter
whose
birthday
was
on
coming
Sunday.

6. Quiz…
1. Business
ethics
focuses
mostly
on
personal
ethical
issues
– No.
Business
ethics
focuses
on
organizaEonal
concerns
(legal
and
ethical
–
employees,
customers,
suppliers,
society)
2. Business
ethics
deals
with
right
or
wrong
behavior
within
a
parEcular
organizaEon
– Yes.
That
stems
from
the
basic
definiEon
3. Business
ethics
contributes
to
investor
loyalty
– Yes.
Many
studies
have
shown
that
trust
and
ethical
conduct
contribute
to
investor
loyalty
4. If
an
acEvity
is
approved
by
most
members
of
an
organizaEon
and
it
is
also
customary
in
the
industry,
it
is
probably
ethical
– Yes.
An
acEvity
that
is
generally
regarded
as
ethical
and
survives
open
discussion
inside
and
outside
the
organizaEon
is
usually
acceptable
5. The
primary
method
for
resolving
business
ethics
disputes
is
through
the
criminal
court
system
– No.
Lawsuits
and
civil
liEgaEon
are
the
primary
way
in
which
business
ethics
dispute
are
resolved

7. Quiz…
6. Whistle-­‐blowers
o]en
retain
their
posiEons
and
conEnue
to
advance
within
the
organizaEon
– No.
Whistle-­‐blowers
o]en
lose
their
jobs
7. A
person
who
behaves
unethically
and
is
rewarded
is
likely
to
conEnue
to
act
unethically
– Yes.
If
no
punishment
occurs
for
unethical
behavior
or
the
behavior
is
rewarded,
it
is
likely
to
conEnue
8. SocializaEon
refers
to
the
process
in
which
a
person
learns
the
values
and
behaviors
considered
appropriate
by
the
organizaEon
– Yes.
SocializaEon
teaches
employees
how
to
behave
with
respect
to
their
roles
within
the
organizaEon
9. The
accountability
and
responsibility
for
appropriate
business
conduct
rest
with
top
management
– Yes.
ExecuEves
in
the
organizaEon
determine
the
culture
and
iniEaEves
that
support
ethical
behavior
10. Management’s
total
loyalty
to
maximizaEon
of
profit
is
a
principle
obstacle
to
achieving
higher
standards
of
ethical
pracEce
– Yes.

8. The
Discipline
of
Building
Character
• Joseph
Badaracco,
Jr
• We
have
all
experienced,
at
one
Eme
or
another,
situaEons
in
which
our
professional
responsibiliEes
unexpectedly
come
into
conflict
with
our
deepest
values…At
these
Emes,
we
are
caught
in
a
conflict
between
right
and
right.
And
no
maZer
which
opEon
we
choose,
we
feel
like
we’ve
come
up
short.
• In
every
case,
regardless
of
what
path
is
chosen,
these
decisions
taken
cumulaEvely
over
many
years
form
the
very
basis
of
an
individual’s
character.
For
that
reason,
I
call
them
defining
moments.

9. The
Discpline…
• An
ethical
decision
typically
involves
choosing
between
two
opEons:
one
we
know
to
be
right
and
another
we
now
to
be
wrong.
• A
defining
moment,
however,
challenges
us
in
a
deeper
way
by
asking
us
to
choose
between
two
or
more
ideals
in
which
we
deeply
believe.
Such
challenges
rarely
have
a
“correct”
response.
Rather,
they
are
situaEons
created
by
circumstance
that
ask
us
to
step
forward
and
“form,
reveal
and
test”
ourselves.

10. The
Discipline…
• We
form
our
character
in
defining
moments
because
we
commit
to
irreversible
courses
of
acEon
that
shape
our
personal
and
professional
idenEEes.
• We
reveal
something
new
about
is
to
ourselves
and
others
because
defining
moments
uncover
something
that
has
been
hidden
or
crystallize
something
that
had
been
parEally
known.
• And
we
test
ourselves
because
we
discover
whether
we
will
live
up
to
our
personal
ideals
or
only
pay
them
lip
service.

11. The
Discipline…
• In
today’s
workplace,
three
types
of
defining
moments
are
parEcularly
common.
– The
first
type
is
largely
an
issue
of
personal
idenEty.
It
raises
the
quesEon,
Who
am
I?
– The
second
type
is
organizaEonal
as
well
as
personal:
both
the
character
of
groups
within
an
organizaEon
and
the
character
of
an
individual
manager
are
at
stake.
It
raises
the
quesEon,
Who
are
We?
– The
third
type
of
defining
moment
is
the
most
complex
and
involves
defining
a
company’s
role
in
the
society.
It
raises
the
quesEon,
Who
is
the
Company?
• By
learning
to
idenEfy
each
of
these
three
defining
moments,
managers
will
learn
to
navigate
right-­‐vs-­‐right
decisions
with
grace
and
strength.

12. A
Guide
to
Defining
Moments
• For
Individuals:
Who
am
I?
• For
Managers
of
Work
Groups:
Who
are
We?
• For
Company
ExecuEves:
Who
is
the
Company?

13. Who
am
I?
• What
feelings
and
intuiEons
are
coming
into
conflict
in
this
situaEon?
• Which
of
the
values
that
are
in
conflict
are
most
deeply
rooted
in
my
life?
• What
combinaEon
of
expediency
and
shrewdness,
couple
with
imaginaEon
and
boldness,
will
help
me
implement
my
personal
understanding
of
what
is
right?

14. Who
are
We?
• What
are
the
other
strong,
persuasive
interpretaEons
of
the
ethics
of
this
situaEon?
• What
point
of
view
is
most
likely
to
win
a
contest
of
interpretaEons
inside
my
organizaEon
and
influence
the
thinking
of
other
people?
• Have
I
orchestrated
a
process
that
can
manifest
the
values
I
care
about
in
my
organizaEon?

15. Who
is
the
Company?
• Have
I
done
all
I
can
to
secure
my
posiEon
and
the
strength
of
my
organizaEon?
• Have
I
thought
creaEvely
and
boldly
about
my
organizaEon’s
role
in
society
and
its
relaEonship
to
stockholders?
• What
combinaEon
of
shrewdness,
creaEvity,
and
tenacity
will
help
me
transform
my
vision
into
a
reality?

16. Why
Be
an
Ethical
Company?
• …They're
Stronger
and
Last
Longer
• Of
the
original
Forbes
100
in
1917,
61
ceased
to
exist
by
1987.
• Of
the
remaining
39,
only
18
stayed
in
the
top
100,
and
their
return
was
20%
less
than
the
overall
market
during
the
period
from
1917
through
1987.
• Of
companies
in
the
original
Standard
&
Poor's
500-­‐stock
index
in
1957,
only
74
remained
in
1997;
of
these,
only
12
outperformed
the
S&P
500
in
the
period
from
1957
through
1998.
• The
average
CEO
tenure
in
the
U.S.
is
4.2
years,
less
than
half
the
10.5-­‐year
average
in
1990.

17. Why…
• Beer,
author
of
High
Commitment,
High
Performance,
a
book
on
business
ethics
recently
published
by
Josey-­‐
Bass,
posited
three
core
reasons
why
Wall
Street
failed
so
badly
in
the
fall
of
2008:
The
firms
lacked
a
higher
purpose,
lacked
a
clear
strategy,
and
mismanaged
their
risk.
• Charles
Schwab
&
Co.
(SCHW)
has
largely
avoided
the
huge
fallout.
So
has
US
Bancorp
(USB).
A
quality
both
of
these
companies
share
is
a
laser-­‐like
focus
on
customer
service
and
on
honesty
and
transparency.
This
comes
from
their
cultures.
• Neither
company
touched
the
subprime
mortgage
securiEzaEon
market,
because
they
saw
it
as
risky
and
simply
not
the
kind
of
business
that
served
the
company's
long-­‐term
interests

18. Why…
• Another
key
failing
Beer
discussed
was
the
inability
of
actors
inside
the
large,
failing
banks
to
speak
truth
to
power.
Key
players
inside
the
banks
felt
inEmidated
by
superiors;
the
internal
voice
of
conscience
and
purpose
of
these
insEtuEons
was
silenced
by
a
maniacal
focus
on
short-­‐term
profits
and
whatever
scheme
would
bring
them
in.
• The
silencing
of
employees
who
sought
to
challenge
strategy
and
risk-­‐management
pracEces
likely
also
undermined
the
banks'
moral
authority
and
emboldened
those
who
already
felt
inclined
to
do
the
wrong
thing.
With
a
muted
internal
voice,
these
organizaEons
lacked
a
moral
compass.
As
a
result,
they
drove
off
a
cliff
with
astonishing
speed.

19. Why…
• The
moral
here
is
fairly
simple:
When
a
company's
ethical
compass
is
poinEng
true
north,
everything
else
falls
into
line.
This
isn't
to
say
that
companies
with
great
ethics
don't
fail.
But
it
does
seem
to
indicate
that
companies
without
good
ethics
are
far
more
likely
to
fail
due
to
their
inability
to
sustain
or
hear
an
inner
voice
to
guide
them
through
the
dark
Emes
to
the
light.