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Business Ethics
CASE STUDY (20 Marks)
Perhaps a most pleasant surprise was listening to a lead M&A investment banker
making the case for ethical boardroom behavior, citing a string of recent Delaware court
cases in the realm of investment banking rules that even the appearance of a conflict is
problematic for bankers being hired to work on deals. This standard, one I am familiar
with from print journalism, has not been widely accepted in banking but appears to be
on the rise of normative behavior, based on discussions I listened to at Stanford's
Director's college. One panelist pointed the audience to the work of Western Kentucky
University's Jan Garrett, "Toward an Ethics of Right Relations." This work (and others)
makes the case that to behave ethically requires us to consider the role we are acting in
at the time and the covenants, rather than contracts, we have as a result of the
relationships being entered into in that role. It was a refreshing conversation in a
discussion about dealmaking and one that trustees engaged in fully in related dialogue.
Throughout the winter and spring, trust and transparency have been words du jour for
those trying to capture the current expectations held for those in governance roles.
Increasingly, board directors, typically noted for their reticence and ability to hold
confidential information, are suggesting sharing as much as possible as early and often
as possible as one important corporate behavior to rebuild public trust in business.
Along with these hot topics, the very definition of governance itself is shifting. Strategic
direction has typically been an accepted area for boards to engage. Increasingly, how the
boards are structured and run have themselves become tools of strategy, based on the
anecdotes and data shared by directors and management alike. CEOs appear to be
increasingly receptive to the notion that a more engaged board is today's business
reality, and they are looking for the most effective way to capture that engagement to the
benefit of the company's interests. If I had to make a slide to summarize simply the
trends in governance so far in 2015, it would include these: • Multiple stakeholders
matter • Political ability is valued • Right relations count • There are ethics of matching
supply and demand • Governance is a tool of strategy Compared to 10 years ago, overall,
I believe there is a shift in governance emphasis from compliance to ethics. In my
opinion, that's a positive trend, requiring a board director able to handle more
complexity.
Answer the following question.
Q1. Why ‘right relations’ are valued? Discuss,
Q2. What are the new trends in governance? Elaborate.

2. CASE STUDY (20 Marks)
Binge drinking and partying—just a part of college, right? Nowadays, when envisioning
the college social scene, we see red cups, handles of liquor, and jampacked frat parties.
In an attempt to end self destructive and harmful habits, universities like Dartmouth
have decided to ban hard alcohol on campus. But, we must ask ourselves, what’s the root
of the problem? According to the US Center for Disease Prevention and Control, binge
drinking accounts for nearly 90percent of the alcohol consumed by youth under the age
of 21. Binge drinking comes with unintentional injuries, risk of sexually transmitted
diseases, and sexual assault. What’s to blame for the unhealthy drinking culture? When
my parents discuss their college years, sure, drinking comes into the conversation—
but not to the extent that we see today. The excessive shots and frequent “black outs”
seem to be a trait of our generation, a commonality among the millennial. Similarly,
while studying abroad in Spain, I noticed a distinct difference in how young people
handled themselves with alcohol. Although the Spaniards stayed out late partying and
dancing in the discotheques, severe intoxication took a backseat to responsible, social
drinking. Some argue that the drinking age causes binge drinking; students must “hide”
their behavior, and therefore abuse alcohol. Kids should enter college having tried
alcohol and practiced drinking responsibly in their homes. In contrast, the opposing
side deems lowering the drinking age as medically irresponsible. Drinking at eighteen
only legalizes a higher volume at risk of dangerous situations in clubs, at parties, and on
the roads. What are the ethical implications of lowering the drinking age? Who’s
accountable? Although illegal, is underage drinking unethical? In our new Big Q
experiment with YikYak posting, I posed a questions surrounding binge drinking and
the legal age. One student responded in favor of lowering the drinking age, writing, “As
someone who comes from a country where the drinking age is 18. I never encountered
binge drinking until now. I grew up having a glass of wine with my parents all the time. I
learned.” Another student answered, “It’s just a part of college culture.” Although the
YikYak community seemed overwhelmingly in favor a legal age of eighteen, we must
consider the ethics behind both sides of the debate.
Answer the following question.
Q1. Lowering the drinking age puts more people at risk of injury. Explain.
Q2. Give an overview of the case.
CASE STUDY (20 Marks)
Annapolis, Sept. 9: Nudists not only get more complete sun tans but seem to have lower
blood pressure than people who wear clothes, according to the Central Maryland
Chapter of the American Heart Association. Mr. Morris Lieberman, a spokesman for the
Association, said tests performed on members of the Pine Tree Associates Nudist Camp
in Crowns Ville, Maryland, over the past two years showed that Nudists had fewer cases
of high blood pressure than the national average. He said that while the average
nationally is 17 percent, the 1977 sampling found seven percent of the 163 Nudists tested
had high blood pressure. In 1976, he said, only two percent of 150 Nudists tested had
high blood pressure. One member of the Association suggested that “the only reason

3. we’ve come up with is because the members are less inhabited. They have a tendency to
lower blood pressure because of a lack of inner pressures and a feeling of total freedom.”
Answer the following question.
Q1. Do you agree with the above case? What are your viewpoints for the
same on the ethical issues?
Q2. Help to find out the facts of the above case and comment on the
unethical issues
CASE STUDY (20 Marks)
The notion of corporate moral responsibility has expanded significantly in the past few
decades, according to Manuel Velasquez, chair of the Santa Clara University
Management Department. The Charles Dirksen Professor in Ethics provided a
theoretical look at the topic in a presentation for the June 13, 2006, meeting of the
Business and Organizational Ethics Partnership. Katie Tillman Buck, associate director
of corporate affairs and ethics at Affymetrix, followed Velasquez with a description of
how her company, a leading supplier of genetic diagnostic research equipment,
approaches corporate moral responsibility. Moral responsibility can be interpreted two
ways, Velasquez said: in terms of obligation or duty; or in terms of culpability. "The
notion of moral responsibility that we have, both in the law and in our everyday lives, is
fairly straight forward," Velasquez explained. "A person or an agent or a party is morally
responsible for an injury if 1) they caused it, 2) they knew what they were doing, and 3)
they could have prevented it." This concept applies to corporations as well.
Traditionally, a company was morally responsible for injuries it inflicted provided the
same three factors held. However, the idea of moral responsibility has been expanding
over the years. "During the second half of the 20th
century, a company was held
responsible for injuries users of its products inflicted on themselves," he said. "The
company is held morally responsible provided they knew about it in some way, or
should have known about it, and it could have prevented it." This interpretation
expanded even further with the idea of strict liability. "A company is now held
responsible also for injuries users inflicted on themselves, even when the company could
not have prevented it," Velasquez said. Over the last couple of years, a company's scope
of moral responsibility has even extended upstream (to suppliers) as well as
downstream (to endusers). "During the last 20 years or so, there are a number of
companies that have been held morally responsible not legally but in the eyes of the
public have been held morally responsible for injuries that their suppliers have inflicted
on some third party," he noted. Companies in the apparel industry, toy manufacturing,
electronics assembly, and others have been perceived as accessories to the mistreatment
of workers by their suppliers, even if they have not been directly involved. Many now try
to prevent that by doing onsite inspections. Downstream responsibility has also
expanded in the last two decades or so. "Companies have been held morally responsible
for injuries which they did not inflict on somebody else, injuries in which their product
was not defective, but injuries in which one of their customers used one of their
products to inflict an injury on a third party," he said. Gun manufacturers and bar
owners are two notable examples. "It's odd when you think about it, because this differs
pretty substantially from that first notion of moral responsibility with which we began,
where a party is morally responsible for an injury they inflict on another person

4. knowingly and being able to prevent it. This is a very stretched notion of moral
responsibility that's being used today," he said. This brings up two theoretical questions:
1) To what extent is a company morally responsible for the way in which its customers
use its products? 2) How can a company minimize its exposure to this kind of moral
responsibility? The second question is commonly dealt with before the fact by
monitoring who buys the products (for example, checking the background of potential
gun buyers) or after the fact by using publicists and lawyers. But as one attendee of the
BOEP meeting noted, many companies do not want to answer the first question because
they are afraid of the answer. By asking the question, they become responsible for
monitoring their product's use. Such reluctance has not been the case with the Santa
Clara, Calif., company Affymetrix. "There's this awareness in the general technology, for
example, can put 6.5 million discrete pieces of genetic information on a single chip. "It
can be used for a lot of great things, and it can probably be used for a few bad things."
According to Buck, Affimetrix understands that exploring the ethics of how its chips are
used is ultimately in the company's best interests. "Our interests looking into these
issues of moral responsibility, looking at these ethical issues, really melds very well with
what our business goals are," Buck explained. "We're at the stage where not being
thorough, getting embroiled in something that just feels bad to people, would be bad for
us and would be bad for the technology's ability to address all those markets we want to
be in." The company has taken a proactive approach to these concerns, setting up an
Ethics Advisory Committee to address moral and ethical issues. The committee consists
of seven external participants who have varied backgrounds, including law,
anthropology, genetics, bioethics, and sociology. They offer independent, noncorporate
views on the issues. "They're very different. We actually picked them not with the idea
that they wouldn't get along, but with the idea that they wouldn't agree. Our goal at
these meetings is to really get everything out on the table," she said. The committee
meets four times a year. "We always have two or three executives in the room, as well as
a selection of people from throughout the organization," Buck said. Her goal over the
past five years has been to embed the idea in the corporate culture that ethics are
important and that this committee is available to people throughout the organization.
Discussions vary at the meetings. "A lot of what we talk about at the Ethics Advisory
Committee is completely hypothetical. It's becoming less hypothetical over time. It's
becoming more and more realistic now," she said. "But we're really trying to get ahead of
the ball." One issue the committee has looked at has been newborn screening the
practice of automatically testing newborns for existing diseases and conditions before
they leave the hospital. Even though Affymetrix products are not currently used in
newborn screening, they could be, so the committee has addressed issues such as
informed consent, genetic privacy, storage of samples, the need for federal regulations,
etc. Putting ethics into practice The committee has discussed less hypothetical situations
as well. For example, the company received a proposal from an Israeli company that
intended to use an Affymetrix chip to test for disorders common to that population,
including TaySachs disease. It included several other disorders, as well, both treatable
and untreatable, in addition to lateonset diseases, with no indication of when the testing
would be done. The proposal also indicated that the company intended to market a
Palestinian chip, and even a Swedish chip. The red flags this project raised (possible
geopolitical implications and questionable genetics, among others) concerned
Affymetrix. Additionally, Affymetrix determined that the company was more of a
marketing firm than a genetic testing company, so they declined to be involved with the
project. "That wasn't really the first thing we wanted to do coming out of the gate, so we
passed on that," Buck said. The constant emergence of new markets for genetic

5. technology means new questions every day. "This is a new industry. This is new research
people are doing," Buck noted. Taking part not only in internal discussions about moral
responsibility, but national discussions as well, "being informed on what's going on and
weighing in on the things that are particular to the kinds of data that we're generating"
is a way of helping shape the moral climate of the industry as well.
Answer the following question.
Q1. Discuss the Ethics of Product Usage.
Q2. How the Moral responsibility can be interpreted. Explain.
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6. technology means new questions every day. "This is a new industry. This is new research
people are doing," Buck noted. Taking part not only in internal discussions about moral
responsibility, but national discussions as well, "being informed on what's going on and
weighing in on the things that are particular to the kinds of data that we're generating"
is a way of helping shape the moral climate of the industry as well.
Answer the following question.
Q1. Discuss the Ethics of Product Usage.
Q2. How the Moral responsibility can be interpreted. Explain.
Need Answer Sheet of this Question paper, contact
aravind.banakar@gmail.com
www.mbacasestudyanswers.com
ARAVIND – 09901366442 – 09902787224