CJ 510 Module Six Inte

CJ 510 Module Six Interview Guidelines and Rubric
Overview: Imagine yourself being interviewed for an entry-
level police officer position by three high-ranking members of a
police agency. You will respond to
three different situations involving corruption. This assignment
will help you apply what you have learned about ethical
leadership to real-world situations. You
will need to consider the scenarios carefully, craft an answer to
each scenario, and have research to defend your answer. In an
interviewing situation, the
interviewer may challenge your answer, even if it is the

appropriate answer. That is why it is important to have a
prepared argument that includes supporting
research.
You will need to respond to the following three situations.
Situation A
As a newly hired police officer, you respond to an alarm call at
3 a.m. with your field training officer. Upon arrival, you find
that a pharmacy has been broken into,
and when you walk inside, you see another officer already on
scene. This officer, who you know has 30 years on the job,
takes a candy bar worth $1 off the shelf
and begins to eat it. It is clear that he did not pay for it and has
no intention of leaving money behind.
Will you do or say anything about this situation? If you decide
to do something, what will your action entail? If you decide to
not react, provide a rationale for
your choice.
Situation B
As a newly hired police officer, you work daily with a field
training officer as well as three other officers on the 11 p.m.–7
a.m. shift. You have noticed on several
occasions that there is an odor of liquor when one particular
officer comes into the locker room before the shift. You have
had conversations with him and he
has told you that he goes out to dinner before he comes into
work and has a couple drinks but that it is no big deal. This
particular field training officer has a lot
of experience and is trusted within the community and
organization. When you were hired, you were told that the
organization is implementing a plan to weed
out corruption that is occurring in the field. The plan being
implemented is not about officers drinking on the job, but you

are concerned that if you do not say
something regarding this behavior, he is going to hurt someone.
You are worried that if you do say something, there may be
retaliation against you.
Explain what you will do in this situation. Will you say
something to your field training officer? Why or why not?
Situation C
For the final question of your interview, the interviewers tell
you to pretend for a moment that you are the new chief of police
in their police department. You are
aware that the department has had numerous substantiated cases
of corruption ranging from officers taking bribes from drug
dealers to more minor offenses of
officers accepting free food and coffee while they are on duty.
You are also aware that one of your executive officers, a
member of your management team, has
been the subject of the highest number of investigations of
corruption, but each time he has been exonerated.
Explain what actions you will take that will make an immediate
impact on changing the culture of corruption within the
department. What will you do long-term
about this issue of corruption in your agency? Also explain how
your actions in your professional and personal life will make it
easier or more difficult for you to
change the culture of corruption that exists in the agency.

Prompt: In your answers to each situation, pay attention to the
following critical elements:
1. Articulate answers to potential employment interview
questions regarding issues involving corruption.
2. Articulate realistic responses that would be fitting for a real
interview.
3. Support your reasoning for your answers with the textbook or
other source.
Refer to the Criminal Justice Library Tips for support in finding
and citing outside resources.
Rubric
Guidelines for Submission: This submission should be
submitted in a 1–2-page Word document, double-spaced, in 12
point Times New Roman Font, and follow
APA formatting.
Critical Elements Proficient (100%) Needs Improvement (80%)
Not Evident (0%) Value
Situation A: Issues
Involving Corruption
Articulates answers to potential
employment interview questions
regarding issues involving
corruption and supports ideas

with relevant details
corruption, but answers contain
gaps or inaccuracies
Does not provide answers to
potential employment interview
questions regarding issues
involving corruption
13
Situation A: Realistic
Response
Articulates realistic responses
that would be fitting for a real
interview and supports ideas
Articulates realistic responses,
but responses contain gaps
Does not provide realistic
responses that would be fitting
for a real interview
12
Situation B: Issues

13
Situation B: Realistic
Response
12
Situation C: Issues

13
http://snhu-
media.snhu.edu/files/course_repository/graduate/cj/cj510/cj510
_criminal_justice_library_tips.pdf
http://libanswers.snhu.edu/faq/8737
https://owl.english.purdue.edu/owl/resource/560/01/

Situation C: Realistic
Response
12
Supports Reasoning Includes information from the

course text or other sources to
support answers regarding issues
Includes information from the
course text or other sources to
support answers regarding issues
involving corruption, but
supporting resources are not
relevant or contain inaccuracies
Does not include information
from the course text or other
sources to support answers
corruption
15
Articulation of Response Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
Submission has major errors
that negatively impact readability
and articulation of main ideas
Submission has critical errors
that prevent understanding of
ideas
10

Total 100%
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Unit 6: Overview - Global Markets
Introduction
It is important for managers to recognize two opposing
challenges. These include (1) being proactive in taking
advantage of new opportunities (looking outward), and (2)
ensuring the effective coordination and integration of existing
operations (looking inward). Those challenges suggest the need
for flexible organizations. Successful organizations are both
efficient in how they manage existing assets and competencies
as well as taking advantage of opportunities in rapidly changing
and unpredictable environments.
Organizational structures need to be designed to handle both
internal processes and external parties such as suppliers,
customers, and alliance partners. The challenge for managers is
to create systems that both maintain order and provide

flexibility. There are different types of organizational
structures with varying control systems.
Corporate governance can be defined as the relationship
between the various participants in determining the direction
and performance of the corporation. The primary participants
include shareholders, management (led by the chief executive
officer), and the boards of directors.
Successful organizations must ensure that they have the proper
type of organizational structure. Furthermore, they must ensure
that their firm incorporates the necessary integrating and
processes so that the internal and external boundaries of the
firm are flexible and permeable. Such a need is increasingly
important, as the environments of firms become more complex,
rapidly changing, and unpredictable.
Organizations also need to follow strategies to develop cultures
and incentives that reward information and resource sharing as
well as support the goals of the corporation.
Strategic Management
Jeff Dyer
Third Edition
Chapter 14
Strategy and Society
Professor’s Goals for this Lecture
There are many types of problems that can be solved for a
company by doing a cost analysis. A cost analysis can be used
to solve problems as diverse as marketing (e.g., how much to
spend to acquire additional customers) or HR (how much labor
costs go down per unit with increases in volume). The principle
tools to be learned in this chapter are designed to help the
student examine the relationship between a company’s size

(measured in volumes produced or market share) and cost per
unit. This is primarily reinforced by teaching students how to
create a scale/experience curve (both done in the same way with
“cost per unit” on the “Y” axis but the scale curve uses volume
for a given year on the “X” axis whereas the experience curve
uses cumulative volume on the “X” axis. The students will have
the opportunity to examine the relationship between
scale/experience in the following assignments:
- the homework assignment involving calculating an experience
curve in semiconductors
- Fry’s Credit Card Mini-case (in lecture); considers the
relationship between total number of subscribers (X axis) and
cost per subscriber (Y axis)
- the Southwest Case (after lecture); considers the relationship
between total passengers flown (or market share) and
performance (profitability) in the industry
1
Three types of value
Economic Value—increases in income, wealth, or profit
Social Value—Increases in well-being in non-economic areas
Literacy
Health and sickness
Housing
Shared value--when creating economic value also creates social
value
2
Copyright ©2020 John Wiley & Sons, Inc.
I’d spend about 10 minutes here and invite student to think
about ways (and examples) in which
Economic value fails to enhance social value (perhaps the crisis

over fast food and soda leading to diabetes)
Situations where creating social value destroys economic value
(this might be housing projects that depress real estate values,
or education programs that fail to produce their own outcomes
but also leave students unprepared for jobs).
Situations where shared value might actually exist—this might
be Cisco Systems training academies that train low income
individuals to become Cisco certified engineers.
2
Sustainable stakeholder advantages
Social value organizations rely on repeat transactions
Universities and legacies
Community agencies and ongoing partners
The ability to consistently gather resources from key
stakeholders such as donors, volunteers, students, etc.
3
I’m going to spend about 5 minutes here helping students that
the ability to create meaningful and ongoing relationships with
stakeholders really matters, and that organizations only do that
when the create real, lasting value for that stakeholder.
The example here would be university donations. Ask the
students to think about a major donation or gift to the
university. Did it come from an Alumnus? (probably) Why?
(because the university created long term value—through
education and socialization—and maintained a long term
relationship with the donor)
3

Value Net
Value Net- A model of value creation that describes how an
organization
interacts with others in its environment to create value.
Customers- Individuals or groups that purchase, or receive, the
outputs of the organization.
Suppliers- Individuals, groups, or organizations that provide
important inputs for the organization.
Competitor- An individual or organization that makes customers
value the organization’s output less because it offers its own
product or service.
Complementor- An individual or organization that makes
customers value the organization’s output more because of its
product or service.
4
The value net consists of four elements: customers, suppliers,
competitors, and complementors
4
Figure 14.1: The value net
Customer
Organization
Competitor
Complementor
Supplier
5

20 Minutes here
The value of the value net is that it lets us think about
stakeholders as playing multiple roles. In a for-profit company,
stakeholders tend to play single roles (e.g., people who eat at
McDonalds rarely become suppliers, and Wendy’s is a
competitor to McDonalds, but rarely would they work together
to create joint value).
In the social sector, however, stakeholders tend to play multiple
roles. Think about you universities main rival (for BYU
students it’s probably the University of Utah). They are fierce
competitors, right? But did you know that faculty from these
schools also work together to advance research and share
resources? Or that their library systems are connected to allow
them to lower library costs?
I’m going to spend about 5 minutes on each element, defining it
(which the book does very well), but really trying to get
students to see that individual stakeholders often play multiple
roles.
It helps to ask students where they see stakeholders playing
multiple roles, and how organizations need to be careful to
maintain positive relationships with stakeholders as they engage
the organization in different ways.
5
Corporate Social Responsibility
Corporate Social Responsibility- Activities of companies
designed to further some social objective and that lie beyond

the direct economic interests of the organization.
Economic Responsibility- A firm’s obligation to generate
economic profits.
Legal Responsibility- A firm’s obligation to obey the written
and codified laws of the countries in which it operates.
Ethical Responsibility- A firm’s obligation to abide by the
unwritten ethical standards, norms, and values of the
communities in which it operates.
Philanthropic Responsibility- A firm’s obligation to contribute
to the enhancement of the communities in which it operates.
6
Figure 14.2:
CSR: A firm’s social obligations
7
I’m going to spend about 15 minutes here, just reviewing.
The example I might use would be Coke and Pepsi-
What are their economic responsibilities (to provide good jobs
for their employees, timely payments to suppliers, profits for
shareholders).
What are their legal responsibilities (to comply with all health
and safety regulations, including clean water, waste disposal,

and to comply with all labor laws. Recently some cities have
passed legislation prohibiting soda sales inside schools, or other
venues)
What about their ethical responsibilities (in September of 2014,
Coke, Pepsi, and other soda companies set a target to reduce the
calories consumed in soda. They said they would do so through
education, offering smaller portion sizes, and shifting the mix
of their products toward low calorie and water options)
Philanthropic responsibilities. Coca cola has its own
foundation, which in 2013 donated almost $100 Million to
causes around the world. See http://www.coca-
colacompany.com/our-company/the-coca-cola-foundation for a
complete description.
I’d ask the students what pressures they see on companies to
behave in socially responsible ways. They need to understand
that such pressure is rising, not falling, and they will face an
increasingly aware public as they enter the workforce. The
internet has empowered activist groups, and it has created
increased transparency regarding a company’s activities.
7
Philanthropic Responsibilities
Ethical Responsibilities
Legal Responsibilities
Economic Responsibilities

Social Entrepreneurship
Social Entrepreneurship- The use of innovative organizations
and business models to create shared value.
Social entrepreneurs create value in one of three ways: they
attempt to build capacity, they sell products or services, or they
drive institutional change:
Capacity Building- The transfer of skills and abilities from one
organization to another.
Institutional Change- When entrepreneurs strive to change the
way people and groups think about problems and they work to
create or change social institutions—from government policies
to social values and norms.
8
Skills of Social Entrepreneurs
Social Bricoleur - A social entrepreneur who creates something
new through the combination of diverse and different elements.
Social Constructor- A social entrepreneur who builds something
that did not exist before.
Social Engineer- A social entrepreneur who designs and creates
new social systems to create large-scale change.
9

Figure 14.3
Types of social entrepreneurshipFocus on SE ActivitiesRole of
social entrepreneur/ leaderExamplesCapacity BuildingSocial
bricoleur: Combines existing resources to focus value
creationHighlander Research and Education Center (USA):
adult education for community problem solving in Appalachia
BRAC (Bangladesh): organizes and trains poor communities to
create economic and social developmentProducts/
ServicesSocial constructor: Develops new models, products, or
servicesGrameen Bank (Bangladesh, Worldwide): developed
unique model for delivery/ repayment of micro-credit
Unilever (India): Project Shakti uses rural women to sell
hygiene products. Improves local health and
incomesInstitutional ChangeSocial engineers: agitate for
change, design more effective social systemsBono (Ireland):
becomes a voice for worldwide poverty alleviation
Nelson Mandela (South Africa): reconciliation commissions
allow wounds from apartheid to heal
10
I’d spend the last 20 minutes of class discussing social
entrepreneurship.
First, define a social entrepreneur as An individual or
organization that uses free market principles and create for -
profit businesses with the goal of creating value.
The important thing about this discussion is to help students

realize that there are different types of social entrepreneurship,
and that each type requires a different set of skills. To begin,
I’d ask them to list and describe different social ventures they
know about (and most of them will know about more than one).
Have them sort these into the different categories.
It’s most likely that they’ll list a number of ventures selling
products and services, because these are often the most
recognizable.
Capacity building organizations tend to operate below the radar;
however, there are likely to be several capacity building
organizations in your area. Think about private charter schools,
or schools targeting kids with Asperger's or Autism. These are
really examples of social bricoleurs because they aren’t really
bringing anything new to education, they are focusing resources
in a new area.
Martin Burt is a social engineer. He’s not only building his own
schools (capacity building) and providing micro-credit (through
Fundacion Paraguaya), he’s also trying to be an agent for global
change. You can have students look him up on the Web to see
how many different organizations he’s a part of, how many
fellowships he has.
10
Challenges in Social Entrepreneurship
Base of the Pyramid (BoP)- Describes those living in
conditions of extreme poverty around the world, usually defined
as less than $2 per day.
Hybrid Organization- An organization pursuing more than a
single goal; each goal has equal importance.
11

social entrepreneurs often work in difficult, unstable, and harsh
conditions
social entrepreneurs who want to combine a for-profit model
with a social
mission face the difficulty of managing a hybrid organization.
11
Summary
Strategy matters for social value organizations
Pressure for socially responsible behavior will continue to
increase as you enter the workforce
Social entrepreneurship represents a new way to make a
difference in the world
12
12
Copyright
Copyright © 2020 John Wiley & Sons, Inc.
All rights reserved. Reproduction or translation of this work
beyond that permitted in Section 117 of the 1976 United States
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assumes no responsibility for errors, omissions, or damages,
caused by the use of these programs or from the use of the

information contained herein.
13
13
Copyright
Copyright © 2020 John Wiley & Sons, Canada, Ltd.
beyond that permitted by Access Copyright (The Canadian
Copyright Licensing Agency) is unlawful. Requests for further
information should be addressed to the Permissions Department,
John Wiley & Sons Canada, Ltd. The purchaser may make back-
up copies for his or her own use only and not for distribution or
resale. The author and the publisher assume no responsibility
for errors, omissions, or damages caused by the use of these
programs or from the use of the information contained herein.
14
14
Strategic Management
Jeff Dyer
Third Edition
Chapter 13
Corporate Governance and Ethics

Professor’s Goals for this Lecture
There are many types of problems that can be solved for a
company by doing a cost analysis. A cost analysis can be used
to solve problems as diverse as marketing (e.g., how much to
spend to acquire additional customers) or HR (how much labor
costs go down per unit with increases in volume). The principle
tools to be learned in this chapter are designed to help the
student examine the relationship between a company’s size
(measured in volumes produced or market share) and cost per
unit. This is primarily reinforced by teaching students how to
create a scale/experience curve (both done in the same way with
“cost per unit” on the “Y” axis but the scale curve uses volume
for a given year on the “X” axis whereas the experience curve
uses cumulative volume on the “X” axis. The students will have
the opportunity to examine the relationship between
scale/experience in the following assignments:
- the homework assignment involving calculating an experience
curve in semiconductors
- Fry’s Credit Card Mini-case (in lecture); considers the
relationship between total number of subscribers (X axis) and
cost per subscriber (Y axis)
- the Southwest Case (after lecture); considers the relationship
between total passengers flown (or market share) and
performance (profitability) in the industry
1
Corporate Governance
Gubernare—a Latin word meaning to steer
3 questions:
Where to steer?
Who steers?
How to steer?

2
I’m going to spend just a few minutes here. I like the notion of
steering the ship because it creates a unifying image for things
that may seem quite disconnected. An important lesson about
ethics—and one reason for talking about it in this context—is
that many ethical problems arise in business when “ethics” is
seen as something disconnected from the regular operations of
the business.
That’s like when employees say: “I just spend a day doing
ethics training, but now I’m ‘back to my real work.’”
2
The Purposes of the Corporation
Corporate Governance- The processes and structures that
provide the ultimate decision making authority for the firm
Corporation- A legal structure for organizing where the
organization is a distinct and separate entity from its owners
Individual Proprietorship- A legal structure for organizing
where the same person owns and runs the business.
Partnerships- A legal structure for organizing where the owners
of a business share ownership
3

Where to Steer?
The Purposes of the Corporation
Shareholder Primacy model
The residual claimant, at risk
Legal owners
Financial capital the critical resource
A single objective to maximize
4
I’m going to spend between 15-20 minutes on the shareholder
vs. stakeholder debate.
I like to frame the debate about the purposes of the corpor ation
in terms of its history. Students need to understand that the
debate about whether business is good or evil isn’t new; the
criticisms they read about business activity and its negative
effects, or articles and reports that extol the virtues of the
market and business are all variations on a theme that goes back
to the earliest days of the Industrial Revolution.
Berle’s position embodies the classic, Chicago-School of
economics: Corporations are legal persons owned—in a very
real and legal sense—by their shareholders. Shareholders have
the most at risk because they get paid last; all other
stakeholders have contracted with the firm for a fixed return
(suppliers for contracted costs, employees for wages, etc.,).
Shareholders have agreed to put up their money, the most
critical resource the firm needs, without a guaranteed return, but
they take that risk because of the potential upside that “what’s
left” after all other stakeholders have been paid (the profit of
the business) might be quite large.

In fact, they will only be willing to take such a risk when the
corporation takes as its primary objective the maximization of
their return.
4
Shareholder Primacy Model
Shareholder Primacy-the belief that a corporation should be run,
primarily or exclusively, for the benefit of its shareholders.
Nexus Of Contracts- A model of the corporation suggesting that
the firm is the sum total of its contracts with different
stakeholders.
Property Rights- The rights of owners to: (1) claim the residual
earnings of the corporation, or the profits after all other
stakeholders have been paid, and/or (2) monitor the
management team to make sure that the team works in their best
interests.
5
Where to Steer?
The purposes of the corporation
The Stakeholder primacy model
Stakeholders have rights to voice
Describes what managers actually do
Stakeholders can assist in creating competitive advantage
6

Merrick Dodd, another attorney, took the opposite view. He
believed agreed with Dodd that corporations were legal entities
with obligations; however, he argued that the corporation could
not exist without a charter from the state, and therefore the
corporation’s first duty was to provide for the good of the
community.
Dodd’s view laid the foundation for a normative stakeholder
view, that the corporation has legal and moral obligations to
work for the benefit of all its stakeholders—customers have a
right to products that do no harm, employees have a right to fair
wages and safe working conditions, etc.
The stakeholder view, represented by Ed Freeman in his classic
1984 book, argues that, if we look at what managers actually
do, we find that they are constantly making decisions about how
to satisfy the needs and demands of different stakeholders. This
is the descriptive stakeholder model: since managers spend
most of their time managing stakeholders, they ought to learn
how to do it successfully.
A final version of the stakeholder view is instrumental and
argues that firms that learn how to effectively serve their
stakeholders create competitive advantages. Firms that manage
customers well tend to build a durable type of brand equity, or
in terms of employees, greater loyalty and productivity.
After introducing the Berle and Dodd positions, I’ll often invite
students to weigh in on this debate. I’ve always had fairly
lively debates as there will be a number of students on both
sides of the issue.
I don’t think there is any resolution; however, if we look at how
business works today versus a generation ago, there is clearly
more pressure on businesses to prove that they take the
legitimate concerns of their stakeholders into account.

6
Stakeholder Model
Stakeholder model- The belief that a corporation should be run
for the benefit of its entire stakeholder set, with no group
enjoying primacy in decision making.
Stakeholder- Any person or group that can affect or is affected
by the activities of the corporation.
7
Mapping Stakeholder Influence page 262.
7
A great place for Cases 1 and/or 2
8
If your discussion of these issues will include the cases, this is
a great place to use Case 1 (distributing corporate profits) or
Case 2 (staying open late).
Each case is designed to run for about 20 minutes, so if you are
combining the case and lecture, I’d suggest using only one case.
8
Governance: Boards and Incentives
Agency Problem- A consequence of the separation of ownership
(shareholders/principals) and control (managers/agents) in the
corporation. Agency problems occur when the goals or
principals differ from those of agents.

Principals- The owners of a resource or piece of property. In the
corporation, shareholders are considered principles.
Agents- Individuals or groups hired to administer the property
or resources of principals. The managers of a corporation are
considered to be agents of the
shareholders.
Tender Offer- An offer by those hoping to control the
corporation to purchase shares of dissatisfied investors.
Proxy Fight- An attempt by dissatisfied investors or
stakeholders to gain seats on the board of directors, or to
influence corporate policy.
9
9
Who steers?
The agency problem
Modern corporations
Owned by principles
Managed by agents
Interests may differ, hurting principles
How to solve?
Monitor the agents
Align incentives
10

This is usually the shortest section of the lecture, whether I’m
combining cases or doing a stand alone session.
If students have had a finance or accounting class, it’s likely
that they’ve been introduced to Agency Theory. A useful
engagement strategy is to have a student describe the basics of
agency theory and the agency problem.
Student descriptions usually leave out the last bullet point.
Some students will remember stock payments and aligning
incentives, but the last bullet point makes a great place for the
instructor to enter and lead the discussion.
10
The agency problem
Shareholders:
Return on Investment
Suppliers:
Reliable partner
Customers:
Reliable Products
Employees:
Stable Jobs
Government:
Good Citizen
Natural Environment:
Sustainable Practices
Managers:
Maximize Utility
?
11

I’ll spend a few minutes here.
This slide helps as a review of the agency problem, but it’s also
useful because it helps students see that the agency problem is
independent of whether the corporation is run for shareholders
or stakeholders.
The challenge is that executives and managers, those who run
the corporation, want to maximize their own utility (which may
include income, security, power, and social status). They may
choose to do so in ways counter to the interests of other
stakeholders for two reasons:
They have more knowledge of the business, its markets, and
organizational needs. This means that they can justify their
decisions in terms that sound like they are working for the good
of the business, but they are really working for their own gain.
It’s difficult and expensive for individual stakeholders (this is
especially true for shareholders) to get information about
managerial actions and to monitor those actions.
11
One solution: The board of directors
Appointed by principles
Two fiduciary duties
Loyalty
Care
Inside directors bring expertise
Outside directors bring expertise and objectivity
12

I’ll review this slide for just a couple of minutes. I’m going to
give a brief overview of the roles and functions of the board—to
provide both expertise and resources to the organization and to
monitor corporate activities.
What’s most important for students to understand on this slide
is the directors have TWO fiduciary duties, each of equal
importance at law. They are obligated to work for the benefit of
the principles, or the duty of loyalty. This duty underpins the
shareholder primacy model and justifies the board being very
concerned about maximizing the returns the business earns.
The second duty is the duty of care; this means that the Board is
obligated to steer the corporation away from undue risk, peril,
or harm. It is this duty that enables the board to scrutinize the
financial affairs of the company, to weigh in on major decisions
such as new strategic initiatives, and to be involved in major
activities such as mergers, acquisitions, or sales.
12
Board of Directors
Board Of Directors- A group of individuals who monitor the
executive team of the corporation and ensure that those
executives are acting in the best interests of
the shareholders.
Fiduciary Duty- The legal obligation of an agent, a fiduciary, to
act in the best interests of the principal, or owner. Fiduciary
duties include the duty of loyalty, to work for the optimal good
of the owner, and the duty of care, to not take undue risk
that would jeopardize the principal.
Inside Directors- Executives or managers working inside the

company who also hold seats on the board of directors.
Outside Directors- Members of the board of directors not
employed by the corporation in any other role.
13
Another solution: Incentives
Agents will act like principles if they have the same interests
Pay for performance, compensation at risk
Bonuses
Stock Options
Stock Grants
14
If I’m going to linger in this section, it’s on this slide. I’ll
briefly explain what each type of incentive is:
Bonuses are extra cash payments for hitting pre-defined targets
Stock options are legal instruments that give holders the
privilege of purchasing shares at a pre-specified price (the
strike price). This price may or may not equal the market price
when the option is exercised.
Stock grants are gifts of shares to an individual.
I’ll ask students to Google the latest data on the gap between
CEO compensation and average worker pay. I’ll then allow a
discussion of up to 10 minutes about 1) is such an arrangement
fair?, 2) how does such a gap benefit our society? (largely by

encouraging innovation and risk taking), and 3) what risks does
such a gap pose?
This brief discussion provides a nice transition to the next
discussion on ethics.
14
Incentives
Pay For Performance- Variable or contingent compensation that
focuses managers on key variables, designed to align their
interests with the shareholders.
Bonuses- Additional compensation paid to executives,
managers, and employees when they meet certain performance
objectives.
Stock-based Compensation- Payment to organizational members
in the form of shares in the corporation.
Stock Option- The right to buy a certain number of the
corporation’s shares at a specified future date for a specified
price.
Stock Grant- A gift, or grant, of stock given to organizational
members, primarily executives.
15
How to Steer?
Four ethical views
Utilitarianism (John Stuart Mill)
Greatest good for the greatest number
Rights (Immanuel Kant)
Treat everyone as an end, never a means

Liberty (Robert Nozick)
Freedom of expression
Ethic of Care (Carol Gilligan)
Relationships matter most
16
This next discussion can be kind of tricky. Depending on how
you’ve arrayed the previous discussion, you may have 20-40
minutes remaining. If I’m running short on time, I’ll skip this
slide and move right on to the next one.
If students have had an ethics course before, then this slide will
serve as a brief review. I like this slide because it helps
students crystalize in their minds the four major schools of
ethical thought that weigh in for business decision making.
Utilitarianism underlies economic versions of the good society.
When faced with an ethical decision, one counts up the potential
benefits that will accrue to individuals for each alternative.
Then one subtracts the harms that follow such a decision, for
each alternative. The alternative that provides the greatest net
benefit is the most ethical choice.
Deontology (labeled Rights in the slide) holds that as one faces
ethical choices, one makes sure that no fundament rights are
violated for anyone. Kant also believed that decision makers
should never choose alternatives that use people as a means to
an end. For example, placing workers in dangerous working
conditions in order to cut costs and increase profits is immoral
on two counts: 1) it violates an individual’s right to personal
safety, and 2) it treats them as merely a means of making money
and diminishes their intrinsic worth as people.

Liberty, or libertarianism, argues that the ethical choice is the
one that preserves human freedom. The ethical imperative for
libertarians is freedom of choice and expression; therefore,
actions by others (including but not limited to governments)
that restrict human freedom are morally questionable, if not
downright wrong. For example, employer policies that allow
supervisors to monitor the computer usage of their employees
constitutes a violation of privacy.
The Ethic of Care holds that the ethical choice is the one that
preserves, nurtures, and sustains human relationships, conceived
of as both small and large. Kindness, concern for others, and
the positive treatment of all stakeholders becomes a moral
imperative. The ethic of care shares much in common with the
Rights view and both of these schools of thought support a
stakeholder view of business.
16
Corporate Ethics
Ethical Values- Values that define for an individual, group, or
society things that are morally right or wrong.
A good society creates the greatest good for the greatest number
of people.
The good society ensures a basic set of rights for its citizens.
The good society creates the most freedom for people to act as
they please.
In a good society, individuals care for each other, exhibit
empathy with others, and focus on meaningful relationships.
17
Corporate Culture and Ethics

Culture- A pattern of behaviors and beliefs that are considered
appropriate and correct for organizational members.
Mission Statement- A formal declaration of a company’s core
values, business objectives, and ethical aspirations.
18
4 ethical concerns
Avoiding harm to individuals
Fairness and honesty
Recognition of sacred/ transcendent
Liberty and overcoming oppression
19
So, what do all these abstract ethical have to say about the types
of actions businesses engage in? What types of ethical
challenges do managers face, and what issues should they be
most concerned about?
Avoiding harm—managers need to very concerned, both legally
and morally, about engaging in activities that create harm. That
harm may come through unsafe products (think about all the
auto recalls over the last few years), services (such as false or
deceptive advertising), or processes (working conditions or
compensation policies).
Fairness and honesty—this ethical concern underlies our beliefs
about the value of competition; as long as firms don’t cheat or
take unfair advantage, then competition tends to produce great

outcomes because they are fair. Concerns about honesty
underpin our entire system of financial reporting and corporate
accountability.
Recognition of sacred/transcendent—for managers this has
relevance in terms of the natural environment (which many
people believe is sacred, whether they are religious or not), and
the cultural sensitivity around the world. Companies that fail to
understand the transcendent nature of local cultures and
traditions run into serious legal and stakeholder challenges.
Liberty and overcoming oppression—This doesn’t seem to apply
to business, until one things about issues such as technology
and compensation. The chapter contains a nice vignette on
Google in China: would the company allow the government to
filter (censor) web content? If so, how did the company
reconcile censorship with its stated goal of “do no harm?”
The four concerns have been adapted from
Jonathan Haidt, The Righteous Mind: Why Good People Are
Divided by Politics and Religion (New York: Vintage Books,
2013). See also Geert H Hofstede, Culture’s Consequences :
Comparing Values, Behaviors, Institutions, and Organizations
across Nations (Thousand Oaks, CA: Sage Publications, 2001).
19
Ethics along the value chainValue Chain elementEthical
ChallengesMoral Dimension ExampleFirm InfrastructureHonest
accounting and record keepingFairness/cheatingFinancial fraud
at Enron, and World Com (2001)Human ResourcesWhistle
blower policiesLiberty/ OppressionBrad Birkenfeld reporting
tax fraud at UBS (2005)Technology DevelopmentElectronic
monitoring, information securityLiberty/oppressionCisco selling
routers to China (2011)ProcurementWorking conditions at
subcontractorsFairness/ Avoiding harmNike and working

conditions in Vietnam (1996)LogisticsTransportation
safetySanctity/degradationExxon Valdez oil spill
(1989)OperationsWorking hours and housing Fairness/ Avoiding
harmWorker housing at Foxconn (Apple)
(2012)Marketing/salesTruth in
advertisingFairness/cheatingHorse meat in hamburgers at
Burger King (2013)After Sales ServiceProduct recallsAvoiding
HarmToyota recall for braking systems (2009)
20
This table can be a time sink, or it can be a great opportunity to
engage your students. I like to have them think of additional
examples of each of the value chain challenges described in the
table. You can prime them by discussing one or two of them, or
by giving them a few minutes to use the internet to find related
scandals.
This is a great place to finish out the theoretical and
lecture/based version of this chapter. It helps students see that
abstract ethical issues influence, and are influenced by, the
firms purpose and strategy.
If you have chosen to do this all in one day, you can use the
final 10-20 minutes of the course to discuss one or two of the
final vignettes. Vignette 3 (The plant location decision) allows
students to apply the abstract concepts presented in the last 2
slides in a very practical setting. This vignette combines
avoiding harm with a company’s production process.
Vignette 4 (Using products as intended) to highlight issues of
doing harm, honesty and reporting. It also takes place in the
sales and marketing area of the value chain, which allows
students (many of whom will end up in sales positions) to work

through some of the ethical issues involved in this function.
20
Copyright
Copyright © 2020 John Wiley & Sons, Inc.
beyond that permitted in Section 117 of the 1976 United States
Act without the express written permission of the copyright
owner is unlawful. Request for further information should be
addressed to the Permissions Department, John Wiley & Sons,
Inc. The purchaser may make back-up copies for his/her own
use only and not for distribution or resale. The Publisher
assumes no responsibility for errors, omissions, or damages,
caused by the use of these programs or from the use of the
information contained herein.
21
21
Copyright
Copyright © 2020 John Wiley & Sons, Canada, Ltd.
beyond that permitted by Access Copyright (The Canadian
Copyright Licensing Agency) is unlawful. Requests for further
information should be addressed to the Permissions Department,
John Wiley & Sons Canada, Ltd. The purchaser may make back-
up copies for his or her own use only and not for distribution or
resale. The author and the publisher assume no responsibility
for errors, omissions, or damages caused by the use of these
programs or from the use of the information contained herein.

22
22
Unit 6: Discussion 1
Directions
After completing the text readings, find a stock owned
organization whose web site mentions corporate governance
(search “corporate governance at _XYZ_”).
How does the organization appear to ensure that the
organization’s goals are aligned with the those of the
shareholders? Are stakeholders (employees, vendors,
customers, communities) also addressed? Do you think the
organization is doing a poor, fair or excellent job of balancing
the interests of shareholders and stakeholders?
Support your opinions with information from the organization’s
web site or articles about their structure and governance.

CJ 510 Module Six Inte

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