Understanding Business Ethics

Peter A. Stanwick is an associate professor emeritus in the Department of Management and Entrepreneurship at Auburn University. His research has been published in various journals, including The Journal of Business Ethics, Management Decision, The Journal of Corporate Citizenship, The Journal of Corporate Accounting and Finance, Business Strategy and the Environment, Eco-Management and Auditing, American Business Review, International Journal of Commerce and Management, Southern Business Review, International Journal of Management, Journal of Business Strategies, Journal of Organizational Change Management, Journal of Business and Economic Perspectives, Journal of Hospital Marketing, and The International Journal of Organizational Analysis. In addition, Dr. Stanwick served as a reviewer for the Journal of Business Ethics. He was invited to present papers in 2004 and 2011 at Oxford University. Dr. Stanwick has received two grants from the Daniel F. Breeden Endowments for Faculty Enhancement and a Pursell Ethics Grant. In 1995, Dr. Stanwick received the Graduate Faculty Member Award for Excellence by the Association of Graduate Business Students at Auburn University. Dr. Stanwick taught strategic management at the undergraduate and graduate level, international management at the undergraduate level, and business ethics at the undergraduate and graduate levels. In addition, Dr. Stanwick was the College of Business Advisor for Sigma Iota Epsilon (The National Honorary and Professional Management Fraternity) and the Committee of 19, which addresses the social problems of hunger.Sarah D. Stanwick is associate professor emerita in the School of Accountancy at Auburn University. Her research has been published in various journals, including The Journal of Business Ethics, Advances in Accounting, The Accounting Educators’ Journal, The Journal of Corporate Accounting and Finance, The CPA Journal, The Journal of Corporate Citizenship, Business Strategy and the Environment, Eco-Management and Auditing, and the International Journal of Commerce and Management. While at Auburn University, she has received two Daniel F. Breeden Endowments for Faculty Enhancement and a Pursell Ethics Grant. In addition, she received a grant from the World Resources Institute to write an instructional case on the pulp and paper industry in Alabama. She has taught financial and managerial/cost accounting at the undergraduate and graduate levels. She has also taught accounting ethics at the graduate level. Her research interests include the areas of environmental accounting, ethical issues for managers and accountants, and social responsibility issues. She has served as the College Diversity Officer, the advisor for the Auburn University chapter of Beta Gamma Sigma (the international honor society for achievement in the study of business) and the advisor for the Auburn University Women in Business Organization. During her tenure at Auburn, she has directed a successful community outreach program on financial literacy, Tiger$ense. She is a retired certified public accountant. Together, Sarah and Peter have two adult children, Olivia and John, and one faithful miniature dachshund, Belle.

• Chapter 1: The Foundation of Ethical ThoughtIntroductionThe Role of MoralsThe Foundation of Ethical TheoryTeleological FrameworksDeontological FrameworksSeven Guiding Principles to Support Ethical ActionsThe Seven Deadly SinsThe Trolley ProblemGlobal Business Standards CodexChapter 2: The Evolving Complexities of Business EthicsThe Global Complexity of Business EthicsHistory of Business EthicsThe Role of IntegritySpecific Behaviors of High IntegrityIs Everyone Unethical?The Cheating CultureGrade Inflation and the Institutional Pressure to CheatThe Role of Technology and CheatingGenerational Differences Pertaining to EthicsThe Role of Trust in Ethical ConductChapter 3: Stakeholders and Corporate Social ResponsibilityWhat Is a Stakeholder?Management’s Response to StakeholdersThe Ability to Build Trust with the StakeholdersThe Role of Stakeholder CommunicationsTriple Bottom Line ReportingThe Benefit CorporationSuppliers as StakeholdersCustomers as StakeholdersGovernment as a StakeholderNGOs as StakeholdersLocal Community and Society as StakeholdersThe Role of Corporate Social ResponsibilityAlternative Firm Configurations to Address Stakeholder IssuesThe Role of Corporate ReputationThe Role of Corporate PhilanthropyPart II: Internal Focus of Ethical IssuesChapter 4: Ethics and Financial ReportingEthics and Financial ReportingThe Role of Creative AccountingThe History of Ponzi SchemesThe Role Of Insider Trading As An Ethical IssueEthical Philosophies and Accounting IssuesThe Role of Financial ReportingThe Objectives of Financial ReportingWhere Were the Auditors?Responsibilities of ManagementThe Use of Heuristics in AuditingResponsibilities of AuditorsResponsibilities of Audit CommitteesAICPA Code of Professional ConductComponents of the Sarbanes-Oxley ActPublic Company Accounting Oversight BoardSection 404—Internal ControlsA Comprehensive Model of Top Management FraudAccounting Shenanigans or Tricks of the TradeChapter 5: Ethical Leadership and Corporate GovernanceEthical LeadershipA Manager’s Ability to Develop Trust, Commitment, and EffortThe Responsibility of ManagersThe Transformation From Moral Person to Ethical LeaderEthics and Corporate GovernanceBoard of DirectorsThe Role of the Board of DirectorsA Contingent Perspective of Corporate GovernanceEthics and the Structure of the Board of DirectorsThe Benefits of a Strong Board of DirectorsCEO Compensation and Ethical ReputationEthical Viewpoints Explaining CEO CompensationCorporate Governance and StakeholdersChapter 6: Strategic Planning, Corporate Culture, and Corporate ComplianceEthics and Strategic PlanningThe Ethical CycleUsing Strategic Ethical Decisions to Build CharacterIs There a Link Between Strategic Planning and an Ethical Culture?How to Address Strategic Ethical Decision Making From a Global PerspectiveHow to Address Ethical Crisis and Disaster RecoveryCorporate CultureEvaluation of Corporate CultureUsing Organizational Integrity to Link Corporate Culture to Corporate ComplianceEthics and Corporate ComplianceThe U.S. Federal Sentencing Guidelines for OrganizationsThe Challenge of ComplianceCorporate Compliance Systems and Global CorruptionChapter 7: Decision Making and Human Resource IssuesEthical Decision Making: Kohlberg’s Six Stages of Moral DevelopmentThe Role of Emotion in Moral Decision MakingRationalizing Unethical BehaviorsEthical Decision Making and Moral IntensityThe Role of Power and Influence in Ethical DecisionsHuman Resource IssuesThe Role of Workplace DiversityEthical Climate and Organizational MisbehaviorSexual Harassment and Sexual DiscriminationOffice BullyingEmployee MonitoringThe Ethical Issues Related to Extreme JobsPart III: External Focus of Ethical IssuesChapter 8: Ethics and the EnvironmentThe Tragedy of the CommonsNatural Environment as a StakeholderNatural Environment as a Competitive AdvantageVoluntary Environmental ComplianceWhat Does It Mean to Be Green?Employees as Environmental StakeholdersNGOs as Environmental StakeholdersCommunicating the Firm’s Environmental Commitment to Its StakeholdersUnited States Government RegulationsEnvironmental Accounting IssuesEnvironmental JusticeEnvironmental SustainabilityEthics and Climate ChangeClimate Change as a Strategic OptionThe Effects of Climate Change on the FirmA Firm’s Carbon FootprintChapter 9: Ethics and Information TechnologyWhy Are Information Technology Ethical Issues Important?Management Issues and Policy Areas for Information TechnologyThe Next Step: Critical AnalysisPrivacy of EmployeesTypes of Computer MonitoringTelephone MonitoringPrivacy of CustomersThe Challenge of TechnologyThe Role of Government RegulationsThe Volunteer Censoring of Internet Search InformationTechnology-Based FraudInternet AttacksThe USA PATRIOT ActChapter 10: Marketing and AdvertisingAlternative Views of the Foundation of Marketing and AdvertisingGreen MarketingEthical Consumer BehaviorRelationship Marketing and PrivacyThe Role of Consumer BoycottsThe Ethical Challenges of Product RecallsThe Reasons for RecallsThe Steps of a RecallFinancial Costs of a RecallThe Ethics of Fair PricingEthics of Purchasing and SalesFalse and Misleading AdvertisingThe Eventual Truth in AdvertisingAdvertising to ChildrenThe Sydney PrinciplesThe Magic of DisneyChapter 11: Ethical Issues in the Developing WorldThe Bottom of the PyramidNew Generation Business Strategies for the Bottom of the PyramidSocial EntrepreneurshipFair TradeHuman RightsPoverty and HungerFood Versus FuelThe UN Millennium Development GoalsPart IV: Developing and Evaluating a Strong Ethical FocusChapter 12: Establishing a Code of Ethics and Ethical GuidelinesRole of a Code of EthicsCode of Ethics and StakeholdersBenefits of a Code of EthicsContent of a Code of EthicsThe Role of Total Responsibility Management and a Code of EthicsSteps for an Effective Code of EthicsValue of a Code of EthicsHow to Make a Code of Ethics More EffectiveExamples of Codes of EthicsRole of Government RegulationsGlobal Code of EthicsChapter 13: Evaluating Corporate EthicsWhy Firms Need Ethics Training ProgramsEstablishing an Ethics Training ProgramEstablishing a Global Ethics Training ProgramBenefits of an Ethics Training ProgramEnforcement and the Ethics Training ProgramSending the Right Message to the EmployeesCorporate Ethics OfficersEthical AuditingComponents of the Ethical AuditWhistle-BlowingHotlinesGovernment Regulations and Whistle-BlowingEvaluation of Ethics and StakeholdersPart V: CasesCase 1: Bernard Madoff: How “One Big Lie” Can Destroy Thousands of LivesCase 2: Siemens: How the Greased Wheels Slid off the Ethical TrackCase 3: TOMS Shoes: Helping Soles All Over the WorldDisney Citizenship: Lending a Mouse Ear to Hear How to Help SocietyCase 4: World Food Programme: A Quarter a Day Keeps the Hunger AwayCase 5: Rupert Murdoch and News Corporation: All the News That’s Fit to HackCase 6: Enron: Were They the Crookedest Guys in the Room?Case 7: Google: Don’t Be Evil Unless?.?.?.Case 8: HealthSouth: The Rise and Fall of the Scrushy EmpireCase 9: De Beers and the Conflict Diamonds: A Monopoly Doesn’t Last ForeverCase 10: Interface: More Than Just a Carpet CompanyCase 11: Facebook and Privacy: Big Brother “Likes” UsCase 12: Outsourcing at Mattel: Elmo Sad?.?.?.?Elmo Covered in Lead PaintCase 13: GM and the Ignition Switch: It Is Deja Vu All Over AgainCase 14: McWane: A Dangerous BusinessCase 15: Merck’s Vioxx: How Would You Interpret the Data?Case 16: Music Industry: Ethical Issues in a Digital AgeCase 17: Apple Outsourcing in China: iSweatshop?Case 18: Patagonia: Don’t Buy Our StuffCase 19: Tokyo Electric Power and the Fukushima Daiichi Nuclear Power Disaster: A Tsunami of ProblemsCase 20: Tyco: I’m Sure That It’s a Really Nice Shower CurtainCase 21: Olympus: A Corporate Governance Picture That Was Out of FocusCase 22: Wal-Mart: But We Do Give Them a 10% Employee DiscountCase 23: WorldCom: Can You Hear the Lawsuits Now?Case 24: BP and the Deepwater Horizon Disaster: “I Would Like My Life Back”Case 25: Greyston Bakery: The Zen of Philanthropy

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