Business Ethics

W. Michael Hoffman is the founding Executive Director of the Center for Business Ethics at Bentley University in Waltham, Massachusetts. Dr. Hoffman is also the Hieken Professor of Business and Professional Ethics at Bentley University and is the author or editor of 16 books.Robert E. Frederick is professor of philosophy and chair of the Philosophy Department at Bentley University in Waltham, Massachusetts. He is also Research Scholar at the Center for Business Ethics at Bentley and editor of the Center’s journal Business and Society Review.Mark S. Schwartz is a professor of business ethics and corporate social responsibility at the School of Administrative Studies at York University (Toronto, Canada), and is a Research Fellow for the Center for Business Ethics at Bentley University. He has published in a range of journals, including the Journal of Business Ethics, Business Ethics Quarterly, and Business & Society.

• About the Editors xiPreface xiiGeneral Introduction: The Nature of Business Ethics 1Part 1 Ethics and Business: From Theory to Practice 37Introduction 371 Theories of Economic Justice 43Justice as Fairness 43John RawlsDistributive Justice 49Robert NozickDistributive Justice and Utilitarianism 55J. J. C. SmartThe “Invisible Hand” 59Jan NarvesonCorporate Ethics in a Devilish System 70Kent GreenfieldQuestions for Discussion 772 Ethics and Business Decision Making 78Teaching Ethical Decision Making and Principled Reasoning 78Michael JosephsonBusiness Ethics and Moral Motivation: A Criminological Perspective 86Joseph HeathEthical Leadership and the Psychology of Decision Making 105David M. Messick and Max H. BazermanCost-Benefit Analysis: An Ethical Critique 120Steven KelmanCost-Benefit Analysis Defended 127Herman B. Leonard and Richard J. ZeckhauserQuestions for Discussion 130Cases for Part 1 131Mini-Cases 131MBA Student Mini-Dilemmas 132CasesThe Parable of the Sadhu 133Bowen H. McCoyThe Ford Pinto 139W. Michael HoffmanThe Analyst’s Dilemma (A) 145Joseph L. Badaracco Jr. and Jerry UseemWalk Away From Your Mortgage! 149Roger LowensteinThe Ok Tedi Copper Mine 150Manuel G. VelasquezPart 2 The Nature of the Corporation 157Introduction 1573 Agency, Legitimacy, and Responsibility 163Can a Corporation Have a Conscience? 163Kenneth E. Goodpaster and John B. Matthews Jr.Is Business Bluffing Ethical? 172Albert Z. CarrThe Social Responsibility of Business is to Increase its Profits 180Milton FriedmanStakeholder Theory of the Modern Corporation 184R. Edward FreemanEthics in Business: Two Skeptical Challenges 192Robert E. FrederickCommentary on the Social Responsibility of Corporate Entities: Bad and Not-so-Bad Arguments for Shareholder Primacy 202Lynn A. StoutQuestions for Discussion 2154 Corporate Governance and Accountability 216Who Rules the Corporation? 216Ralph Nader, Mark Green, and Joel SeligmanPower and Accountability: The Changing Role of the Corporate Board of Directors 224Irving S. ShapiroWho Should Control the Corporation? 231Henry MintzbergTone at the Top: An Ethics Code for Directors? 243Mark S. Schwartz, Thomas W. Dunfee, and Michael J. KlineDo CEOs Get Paid Too Much? 264Jeffrey MoriartyQuestions for Discussion 274Cases for Part 2 275Mini-Cases 275MBA Student Mini-Dilemmas 277CasesFire Destroys Malden Mills 277AnonymousMerck & Co., Inc. (A) 279David Bollier and Stephanie WeissBailouts and Bonuses on Wall Street 284Kirsten Martin and Michael ScottoCitigroup’s Chief Rebuffed on Pay by Shareholders 297Jessica Silver-Greenberg and Nelson D. SchwartzPart 3 Work in the Corporation 301Introduction 3015 Employee Rights and Duties 307Employee Rights 307Ronald DuskaHuman Rights, Workers’ Rights, and the “Right” to Occupational Safety 316Tibor R. MachanWhistle-Blowing 320Richard T. De GeorgeThe Morality of Whistleblowing: A Commentary on Richard T. De George 338W. Michael Hoffman and Mark S. SchwartzConflicts of Interest 350Thomas L. CarsonThe Moral Problem in Insider Trading 368Alan StrudlerQuestions for Discussion 3826 The Modern Workplace: Obligations and Limits 383A Kantian Theory of Meaningful Work 383Norman E. BowieOrganization of Work in the Company and Family Rights of the Employees 392Domènec MeléWorkplace Wars: How Much Should I be Required to Meet the Needs of Your Children? 401Claudia MillsDiscrimination, Harassment, and the Glass Ceiling: Women Executives as Change Agents 407Myrtle P. Bell, Mary E. McLaughlin, and Jennifer M. SequeiraThe Debate Over the Prohibition of Romance in the Workplace 418Colin BoydQuestions for Discussion 431Cases for Part 3 432Mini-Cases 432MBA Student Mini-Dilemmas 433CasesThe Case of the Mismanaged Ms. 434Sally SeymourHeineken NV: Workplace HIV/AIDS Programs in Africa (A) 439Diana Barrett and Daniella BallouBanking: A Crack in the Swiss Vault 450Andy Court and Keith SharmanWill Rewards for Whistleblowers Encourage Ethical Behavior? 454Matthew Gilley and W. Michael HoffmanBoeing Chief is Ousted after Admitting Affair 455Leslie WayneAbuse Scandal Inquiry Damns Paterno and Penn State 457Ken BelsonTimeline: The Penn State Scandal 460Justin Sablich, Ford Fessenden, and Alan McLeanYou’ve Been Tagged! (Then Again, Maybe Not): Employers and Facebook 463William P. Smith and Deborah L. KidderPart 4 The Corporation in Society 475Introduction 4757 The Consumer 481The Dependence Effect 481John Kenneth GalbraithThe Non Sequitur of the “Dependence Effect” 485F. A. von HayekThe Ethics of Consumer Protection 488Manuel G. VelasquezMarketing and the Vulnerable 504George G. BrenkertQuestions for Discussion 5138 The Environment and Sustainability 514Morality, Money, and Motor Cars 514Norman BowieBusiness and Environmental Ethics 520W. Michael HoffmanCreating Sustainable Value 529Stuart L. Hart and Mark B. MilsteinRethinking the Concept of Sustainability 542Alexis J. Bañon Gomis, Manuel Guillén Parra, W. Michael Hoffman, and Robert E. McNultyQuestions for Discussion 5529 International Business 553Ethical Dilemmas for Multinational Enterprise: A Philosophical Overview 553Richard T. De GeorgeInternational Business, Morality, and the Common Good 557Manuel G. VelasquezValues in Tension: Ethics Away from Home 567Thomas DonaldsonThe Case for Leveraged-Based Corporate Human Rights Responsibility 576Stepan WoodWhat’s Wrong with Bribery 602Scott TurowCapitalism with a Human Face: The UN Global Compact 604Klaus M. LeisingerQuestions for Discussion 620Cases for Part 4 621Mini-Cases 622MBA Student Mini-Dilemmas 623CasesThe Ethics of Marketing: Nestlé’s Infant Formula 624James E. PostTransAuto Corporation Trade-offs 629Rewritten by Mark S. SchwartzSony Online Entertainment: EverQuest® or EverCrack? 632Judith W. Spain and Gina VegaDicing with Death? A Case Study of Guidant Corporation’s Implantable Defibrillator Business 636Martin E. SandbuChiquita Accused of Funding Colombia Terrorists 642Curt AndersonWal-Mart Hushed Up a Vast Mexican Bribery Case 644David BarstowYahoo! and Google in China 656John M. KlineGoogle Softens Tone on China 661Amir Efrati and Loretta ChaoPart 5 Challenges and Emerging Issues 665Introduction 66510 Challenges and Emerging Issues 669What’s the Matter with Business Ethics? 669Andrew StarkDeveloping and Sustaining an Ethical Corporate Culture: The Core Elements 677Mark S. SchwartzThe Ethics Officer as Agent of the Board: Leveraging Ethical Governance Capability in the Post-Enron Corporation 689W. Michael Hoffman and Mark RoweCan a Company be Too Ethical? 699Andrew W. SingerGod as a Managerial Stakeholder? 705Mark S. SchwartzThe Fortune at the Bottom of the Pyramid 720C. K. Prahalad and Stuart L. HartQuestions for Discussion 733Business Ethics in Hollywood Movies 733Mark S. SchwartzCases for Part 5 735Mini-Cases 735CasesGlobal Corporation: Running a Global Ethics and Compliance Program 736Lisa A. StewartBarrick’s Tanzanian Project Tests Ethical Mining Policies 743Geoffrey YorkAn Ethical Approach to Crisis Management 749Mark S. Schwartz, Wesley Cragg, and W. Michael HoffmanWhy I Am Leaving Goldman Sachs 756Greg Smith

“Masterful combination of theory and practice, classic and cutting-edge, giving us the perfect tool for preparing the next generation of business leaders.”  —Thomas I. White, Loyola Marymount University  “This new edition of Business Ethics: Readings and Cases in Corporate Morality is an interesting and unique collection of articles and cases—many of which have not appeared in other anthologies in business ethics. The cases, in particular, provide the reader with thoughtful examples that illustrate the theoretical readings.”  —Patricia H. Werhane, DePaul University