Business Ethics: Case Studies and Selected Readings, 7th ed.san.edu.mn/wp-content/uploads/2016/10/Бизнесийн-ёс... · Reading 1.2 The Parable of the Sadhu 4 Reading 1.3

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Business EthicsCase Studies and Selected Readings

SEVENTH EDITION

MARIANNE MOODY JENNINGSArizona State University

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Business Ethics: Case Studies andSelected Readings, Seventh EditionMarianne M. Jennings

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Brief Contents

Preface xiiiAcknowledgments xxviii

UNIT 1Ethical Theory, Philosophical Foundations, Our Reasoning Flaws, and Types ofEthical Dilemmas 1

SECTION A Defining Ethics 3SECTION B Resolving Ethical Dilemmas 29

UNIT 2 Solving Ethical Dilemmas and Personal Introspection 45SECTION A Business and Ethics: How Do They Work Together? 47SECTION B What Gets in the Way of Ethical Decisions in Business? 59SECTION C Resolving Ethical Dilemmas in Business 71

UNIT 3 Business, Stakeholders, Social Responsibility, and Sustainability 89SECTION A Business and Society: The Tough Issues of Economics, Social Responsibility, and

Business 91SECTION B Applying Social Responsibility and Stakeholder Theory 132SECTION C Social Responsibility and Sustainability 149

UNIT 4 Ethics and Company Culture 157SECTION A Temptation at Work for Individual Gain and That Credo 159SECTION B The Organizational Behavior Factors 164SECTION C The Structural Factors: Governance, Example, and Leadership 212SECTION D The Industry Practices and Legal Factors 257SECTION E The Fear-and-Silence Factors 279

UNIT 5 Ethics in International Business 313SECTION A Conflicts Between the Corporation’s Ethics and Business Practices in

Foreign Countries 315SECTION B Bribes, Grease Payments, and When in Rome . . . 340

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UNIT 6 Ethics, Business Operations, and Rights 351SECTION A Workplace Safety 353SECTION B Workplace Loyalty 356SECTION C Workplace Conflicts 361SECTION D Workplace Diversity and Atmosphere 373SECTION E Workplace Privacy and Personal Lives 385SECTION F Workplace Confrontation 395SECTION G Workplace and the Environment 405

UNIT 7 Ethics and Products 423SECTION A Advertising Content 425SECTION B Product Safety 441SECTION C Product Sales 464SECTION D Contracts 478SECTION E Products and Social Issues 487

UNIT 8 Ethics and Competition 493SECTION A Covenants Not to Compete 495SECTION B All’s Fair, or Is It? 505SECTION C Intellectual Property and Ethics 514

UNIT 9 Ethics and Government 523SECTION A Government Employees 525SECTION B Government Contracts 542SECTION C Government Responsibilities 551

UNIT 10 Ethics and Nonprofits 557SECTION A Nonprofits and Fraud 559SECTION B Nonprofits and Management 565

Alphabetical Index 571Business Discipline Index 575Product/Company/Individuals/Subject Index 582Topic Index 603

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Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiiiAcknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxviii1

U N I T Ethical Theory, Philosophical Foundations, Our ReasoningFlaws, and Types of Ethical Dilemmas

SECT ION A

Defining Ethics 3Reading 1.1 You, Your Values, and a Credo 3Reading 1.2 The Parable of the Sadhu 4Reading 1.3 What Are Ethics? From Line-Cutting to Kant 10Reading 1.4 The Types of Ethical Dilemmas: From Truth to Honesty to Conflicts 17Reading 1.5 On Rationalizing and Labeling: The Things We Do That Make

Us Uncomfortable, but We Do Them Anyway 22Reading 1.6 The Slippery Slope, the Blurred Lines, and How We Never Do Just

One Thing 26Case 1.7 Hank Greenberg and AIG 27

SECT ION B

Resolving Ethical Dilemmas 29Reading 1.8 Some Simple Tests for Resolving Ethical Dilemmas 29Reading 1.9 Some Steps for Analyzing Ethical Dilemmas 34Case 1.10 The Little Teacher Who Could: Piper, Kansas, and Term Papers 34Case 1.11 The Movie Ticket 37Case 1.12 Puffing Your Résumé 37Case 1.13 Dad, the Actuary, and the Stats Class 39Reading 1.14 On Plagiarism 40Case 1.15 Wi-Fi Piggybacking 41Case 1.16 The Ethics Officer and First Class for TSA 41Case 1.17 Speeding on the Job: Obeying the Rules: Why We Do and Don’t 42Case 1.18 The Pack of Gum 432

U N I T Solving Ethical Dilemmas and Personal Introspection

SECT ION A

Business and Ethics: How Do They Work Together? 47Reading 2.1 What’s Different about Business Ethics? 47Reading 2.2 The Ethics of Responsibility 48Reading 2.3 Is Business Bluffing Ethical? 49

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SECT ION B

What Gets in the Way of Ethical Decisions in Business? 59Reading 2.4 How Leaders Lose Their Way: What Price Hubris? 59Reading 2.5 Moral Relativism and the Either/or Conundrum 61Reading 2.6 P=f(x) The Probability of an Ethical Outcome Is a Function of the Amount

of Money Involved: Pressure 62Case 2.7 Martha Stewart: Not Such a Good Thing 63Case 2.8 On Leaving to Spend More Time with Family 69

SECT ION C

Resolving Ethical Dilemmas in Business 71Reading 2.9 The Areas of Ethical Challenges in Business 71Reading 2.10 A Structured Approach for Solving Ethical Dilemmas and Trying Out Your

Ethical Skills on Some Business Cases 72Case 2.11 What Was Up with Wall Street? The Goldman Standard and

Shades of Gray 73Case 2.12 What Happens in Boulder Stays in Boulder: Cell Phone Alibis 84Case 2.13 Travel Expenses: A Chance for Extra Income 84Case 2.14 Do Cheaters Prosper? 85Case 2.15 The Rigged Election 86Case 2.16 West Virginia University and the Governor’s Daughter 863

U N I T Business, Stakeholders, Social Responsibility, and Sustainability

SECT ION A

Business and Society: The Tough Issues of Economics,Social Responsibility, and Business 91Reading 3.1 The Social Responsibility of Business Is to Increase Its Profits 91Reading 3.2 A Stakeholder Theory of the Modern Corporation 96Reading 3.3 Business with a Soul: A Reexamination of What Counts in

Business Ethics 101Reading 3.4 Appeasing Stakeholders with Public Relations 104Reading 3.5 Michael Novak on Capitalism and the Corporation 105Reading 3.6 Marjorie Kelly and the Divine Right of Capital 108Reading 3.7 Schools of Thought on Social Responsibility 111Case 3.8 Adelphia: Good Works via a Hand in the Till 113Reading 3.9 The Regulatory Cycle, Social Responsibility, Business Strategy,

and Equilibrium 117Case 3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market:

Of Moral Hazards 121

SECT ION B

Applying Social Responsibility and Stakeholder Theory 132Case 3.11 Whole Foods, John Mackey, and Health Care Debates 132Case 3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 133Case 3.13 Baseball and Steroids 138Case 3.14 Michael Vick, Dogs, Rush Limbaugh, and the NFL 145Case 3.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the

Bell Ringers 146

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SECT ION C

Social Responsibility and Sustainability 149Reading 3.16 The New Environmentalism 149Case 3.17 Herman Miller and Its Rain Forest Chairs 151Case 3.18 The Death of the Great Disposable Diaper Debate 1534

U N I T Ethics and Company Culture

SECT ION A

Temptation at Work for Individual Gain and That Credo 159Reading 4.1 The Moving Line 159Reading 4.2 Not All Employees Are Equal When It Comes to Moral Development 160

SECT ION B

The Organizational Behavior Factors 164Reading 4.3 Why Corporations Can’t Control Chicanery 164Reading 4.4 The Effects of Compensation Systems: Incentives, Bonuses,

Pay, and Ethics 172Reading 4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 176Case 4.6 HealthSouth: The Scrushy Way 183Case 4.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale:

Compensation-Fueled Dishonesty 192Case 4.8 Royal Dutch and the Reserves 199Reading 4.9 Stock Options, Backdating, and Disclosure Options:

What Happened Here? 200Case 4.10 FINOVA and the Loan Write-Off 206

SECT ION C

The Structural Factors: Governance, Example, and Leadership 212Reading 4.11 A Primer on Sarbanes–Oxley 212Case 4.12 Bank of America: The Merrill Takeover, the Disclosures, and the Board 216Case 4.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 218Case 4.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 228Case 4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural

Gas and Electricity 233Case 4.16 Arthur Andersen: A Fallen Giant 246Reading 4.17 The New Shareholder: Taking Over to Change the Culture 253

SECT ION D

The Industry Practices and Legal Factors 257Reading 4.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 257Reading 4.19 A Primer on Accounting Issues and Ethics and Earnings Management 262Case 4.20 The Ethics of Bankruptcy 272Case 4.21 The Ethics of Walking Away 275

SECT ION E

The Fear-and-Silence Factors 279Reading 4.22 The Options for Whistle-Blowers 279Case 4.23 Beech-Nut and the No-Apple-Juice Apple Juice 280Case 4.24 NASA and the Space Shuttle Booster Rockets 285

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Case 4.25 Westland/Hallmark Meat Packing Company and the Cattle Standers 288Reading 4.26 Getting Information from Employees Who Know to Those Who Can

and Will Respond 289Case 4.27 WorldCom: The Little Company That Couldn’t After All 293Case 4.28 Bernie Madoff: Just Stay Away from the 17th Floor 3115

U N I T Ethics in International Business

SECT ION A

Conflicts Between the Corporation’s Ethics and Business Practicesin Foreign Countries 315Reading 5.1 Why an International Code of Ethics Would Be Good for Business 315Case 5.2 Chiquita Banana and Mercenary Protection 319Case 5.3 Transnational Shipping and the Pirates 322Case 5.4 The Former Soviet Union: A Study of Three Companies: PwC,

Ikea, and AES 323Case 5.5 Product Dumping 325Case 5.6 On Sweatshops, Nike, and Kathie Lee 326Case 5.7 Bhopal: When Safety Standards Differ 333Case 5.8 Nestlé: When Products Translate Differently 335Case 5.9 Google, Yahoo, and Human Rights in China 337

SECT ION B

Bribes, Grease Payments, and When in Rome . . . 340Reading 5.10 A Primer on the FCPA 340Case 5.11 Siemens and Bribery, Everywhere 342Case 5.12 Salt Lake City, the Olympics, and Bribery 3446

U N I T Ethics, Business Operations, and Rights

SECT ION A

Workplace Safety 353Reading 6.1 Two Sets of Books on Safety 353Case 6.2 Sleeping on the Job and on the Way Home 353Case 6.3 Cintas and OSHA 354

SECT ION B

Workplace Loyalty 356Case 6.4 Aaron Feuerstein and Malden Mills 356Case 6.5 Plant Closings, Downsizings, Company Closings,

Government Takeovers, Bankruptcies, and Pensions 358

SECT ION C

Workplace Conflicts 361Case 6.6 JCPenney and Its Wealthy Buyer 361Case 6.7 The Trading Desk, Perks, and “Dwarf Tossing” 362Case 6.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 363Case 6.9 The Analyst Who Needed a Preschool 367Case 6.10 Julie Roehm: The Walmart Ad Exec with Expensive Tastes 370

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SECT ION D

Workplace Diversity and Atmosphere 373Case 6.11 English-Only Employer Policies 373Case 6.12 On-the-Job Fetal Injuries 374Reading 6.13 The Benefits of Diversity: Remarks of Doug Daft, Former

CEO of Coca-Cola 376Case 6.14 Seinfeld in the Workplace 380Case 6.15 Toyota, the CEO, the Assistant, and Inaction 381Case 6.16 Arizona Senate Bill 1070: Immigration Laws, Employers, Enforcement,

and Emotion 382

SECT ION E

Workplace Privacy and Personal Lives 385Case 6.17 Facebook MySpace, and YouTube Screening of Employees 385Case 6.18 Bloggers, Chat Rooms, and E-Mail: Your Employer Is Watching 386Case 6.19 Jack Welch and the Harvard Interview 387Reading 6.20 Is It None of Our Business? 390

SECT ION F

Workplace Confrontation 395Reading 6.21 The Glowing Recommendation 395Reading 6.22 The Ethics of Confrontation 396Case 6.23 Ann Hopkins and Price Waterhouse 399

SECT ION G

Workplace and the Environment 405Case 6.24 Exxon and Alaska 405Case 6.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 4117

U N I T Ethics and Products

SECT ION A

Advertising Content 425Case 7.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly

Felled an Industry 425Case 7.2 Spring Break, Beer, and Alcohol on Campus 430Case 7.3 Cheerios and Cholesterol and Rice Krispies and Immunity 432Case 7.4 Subprime Loans—The Under-the-Radar Loans That Felled a Market 434Case 7.5 Hollywood Ads 438Case 7.6 Kraft, Barney Rubble, and Shrek 438Case 7.7 Craigslist and Ad Screening 439

SECT ION B

Product Safety 441Reading 7.8 A Primer on Product Liability 441Case 7.9 Tylenol: Decades of Dilemmas 444Case 7.10 Merck and Vioxx 447Case 7.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas

Tank Problem 452

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Case 7.12 Toyota: Sudden Acceleration or Bad Drivers or Pesky Floor Mats? 458Case 7.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 461Case 7.14 Peanut Corporation of America and Salmonella 462

SECT ION C

Product Sales 464Case 7.15 Pfizer and the $2.3 Billion Fine for Sales Tactics 464Case 7.16 The Mess at Marsh McLennan 465Case 7.17 Frozen Coke and Burger King and the Richmond Rigging 468Case 7.18 Slotting: Facilitation, Costs, or Bribery? 472

SECT ION D

Contracts 478Case 7.19 Intel and the Chips: When You Have Made a Mistake 478Case 7.20 Sears and High-Cost Auto Repairs 481

SECT ION E

Products and Social Issues 487Case 7.21 The Mommy Doll 487Case 7.22 Stem-Cell Research 487Case 7.23 Toro and Its Product Liability Program 489Case 7.24 Fast Food Liability 4908

U N I T Ethics and Competition

SECT ION A

Covenants Not to Compete 495Reading 8.1 A Primer on Covenants Not to Compete: Are They Valid? 495Case 8.2 Boeing, Lockheed, and the Documents 496Case 8.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 501

SECT ION B

All’s Fair, or Is It? 505Reading 8.4 Adam Smith: An Excerpt from The Theory of Moral Sentiments 505Case 8.5 The Coke Employee Who Offered Inside Information to Pepsi 506Case 8.6 The Compliance Officer Who Strayed 508Case 8.7 Jonathan Lebed: The Middle School Tycoon 510Case 8.8 Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them 511

SECT ION C

Intellectual Property and Ethics 514Case 8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 514Case 8.10 Copyright, Songs, and Charities 518Case 8.11 Microsoft vs. Google and “Snippets” of Books 519Case 8.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520

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9U N I T Ethics and Government

SECT ION A

Government Employees 525Reading 9.1 The Fish Bowl Existence of Government 525Case 9.2 The Minerals Management Service: The Arms-Length Affairs with

Oil Executives 527Case 9.3 Kodak, the Appraiser, and the Assessor: Lots of Back Scratching

on Valuation 531Case 9.4 The Governor and a Senate Seat Vacated by a President 532Case 9.5 The Man Who Writes the Internal Revenue Code Has Tax Issues: The Rangel

Round-Up 534Case 9.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal

Opinions in the Conduct of Organizations 536Case 9.7 Paul Wolfowitz and the World Bank 538Case 9.8 Hiding the Slip-Up on Oil Lease Accounting: Interior Motives 540Case 9.9 Joe the Plumber, Child Support Records, and the Public

Official’s Disclosure 540

SECT ION B

Government Contracts 542Case 9.10 Stanford University and Government Overhead Payments 542Case 9.11 Yale University and the Compensation of Professors for

Government Research: Double-Dipping or Confusion? 545Case 9.12 Minority-Owned Businesses and Reality 545Case 9.13 The My Tai Concession and the County Supervisor 546Case 9.14 Government Pricing and Finding a Way Around It 546Case 9.15 Taser and Stunning Behavior 547Case 9.16 Boeing and the Recruiting of the Government Purchasing Agent 548

SECT ION C

Government Responsibilities 551Case 9.17 The Prosecutors Who Withheld Evidence: The Senator’s Trial 551Case 9.18 The Duke Lacrosse Team and the Prosecutor 551Case 9.19 FEMA, Hurricane Katrina, and the Dilemmas of

Regulation versus Human Life 55410U N I T Ethics and Nonprofits

SECT ION A

Nonprofits and Fraud 559Case 10.1 New Era: If It Sounds Too Good to Be True, It Is Too Good to Be True 559Case 10.2 The Baptist Foundation: Funds of the Faithful 562

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SECT ION B

Nonprofits and Management 565Case 10.3 ACORN: Community Organizers, Undercover Videos, and Advice 565Case 10.4 Giving and Spending the United Way 566Case 10.5 The Red Cross, New York, and Ground Zero 568Case 10.6 The Cornell Researchers Funded by the Foundation 569

Alphabetical Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571Business Discipline Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575Product/Company/Individuals/Subject Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 582Topic Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603

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PrefaceT he Josephson Institute released its data for 2008 on cheating in high school and

found that 64 percent of the students surveyed say that they have cheated on anexam in the past year, and 82 percent say that they have lied to a teacher in the

past year. When asked if they had copied another’s homework, 82 percent said that theyhad but did not consider it cheating. “Team work” was their label for this practice. TheCenter for Academic Integrity at Clemson University and Professor Donald McCabe ofRutgers report that college cheating has grown from 11 percent in 1963 to 49 percent in1993 to 75 percent in 2006.1 Professor McCabe also found that MBAs have the highestrate of self-reported academic dishonesty (57 percent) of all graduate disciplines. Longi-tudinally, it would seem we have a decline. Many argue that there is no decline; rather,they offer, we are simply more honest about our ethical breaches. There is little comfortin this reassurance that we’re more honest about our cheating. And there remains a dis-connect between this conduct and an understanding of what ethics is. The JosephsonInstitute also found that the high school students who report that they cheat feel verycomfortable about their behavior, with 92 percent saying they are satisfied with theircharacter and ethics and 83 percent believing that they would be listed by their friendsas one of the most ethical people they know. Perhaps we are more honest about ourcheating. But perhaps that honesty results from our belief that cheating is not an ethicalissue.

Research indicates that if students cheat in high school, they will bring the practicesinto college. And if they cheat in college, they will bring those practices into the work-place. A look at some of the events in business since the publication of the sixth editionof this book tells us that we are not quite there yet in terms of helping businesspeopleunderstand when they are in the midst of an ethical dilemma and how those dilemmasshould be resolved. The following list indicates that we did not make it 5 years from thetime of the post-Enron Sarbanes–Oxley fundamental changes in the way we were doingbusiness to another crisis that demands even more reforms:

• Beginning in 2007, a financial crisis that nearly felled the stock market began as we realized thatthe housing boom may have been fueled partially by mortgages given to those who were probablynot qualified, who falsified their applications, and who benefited from inflated property appraisals.Based on those mortgages, secondary bundled financial instruments made their way into invest-ment banks’ portfolios and ours. When those mortgage-backed instruments had to be writtendown, asset values plummeted, stock portfolios tanked, and Wall Street teetered so much that thefederal government had to provide a bail-out to banks and insurers. As more of the story unfolds,we realize that bankers, analysts, and others were aware of what was a house of cards but rode thefinancial wave while it lasted. Sadly, evidence has emerged that some of the banks may have beenbetting against their own clients and stacking the mortgage instrument deck against them. Siemenspaid the largest fine in the history of the Foreign Corrupt Practices Act for what was an interna-tional practice of bribery to at least 10 nations over a 4-year period. Bernie Madoff was able topull over a $50-billion Ponzi scheme for 18 years; even Steven Spielberg and Kevin Bacon lostmoney to Bernie as he escaped detection despite three Securities and Exchange Commission inves-tigations into his operations. Craig’s List made its way into the headlines because of a murder thatresulted from the racy portions of its online classified advertising. The fines companies have paidfor ethical and legal lapses continue to hover at the $1 billion mark as a matter of course:

“Never trust the people youcheat with. They will throwyou under the bus. Just askMichael Vick.”

—Marianne M. Jennings

“Three people can keep asecret if two are dead.”

—Hell’s Angels (quoting BenFranklin)

“Ethical standards andpractices in the workplaceare the pillars of successfulemployment and ultimatelythe benchmark for a strongbusiness.”—Franklin Raines, former CEO of

Fannie Mae (ousted in 2005);with a $6 billion restatement of

its financials, the boardconcluded that “[management

was] manipulating earnings andcreating an ‘unethical and

arrogant culture.’”

“We are doing God’s work.”—Jeffrey Skilling, former CEO of

Enron (completing a 24.6-yearsentence for fraud)

—Lloyd Blankfein, CEO ofGoldman Sachs

1The Center for Academic Integrity study has been conducted by Professor Donald McCabe on a regular basis overthe years. This survey had 4,500 student respondents. For more information on Professor McCabe and his work onacademic integrity and the Center for Academic Integrity, go to http://www.cai.org.

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• Pfizer paid a $2.3 billion fine for its sales reps crossing the line on how drugs can be marketed• Siemens paid a $5.8 billion fine for bribery• Citigroup set aside $5.8 billion for losses on mortgage-backed securities• Merrill Lynch set aside $10 billion for losses

And then there are those events that fall short of criminal conduct or civil fines mis-conduct. These are the day-to-day ethical breaches that capture media headlines andcause continuing concerns about the ethical culture of business. There are the employeeswho left Starwood Hotels for Hilton Hotels, along with documents, plans, and strategiesthat found their way into Hilton’s plans for a new hotel chain. Toyota recalled millions ofcars over a yet-to-be-solved phenomenon of sudden acceleration in its cars. We alldebated the issues of waterboarding and interrogation techniques by governmentemployees and whether following orders was ethical. The world of sports brought usquestions about how sports teams should deal with a player such as Michael Vick, whopleaded guilty to federal charges in a dog-fighting enterprise. BP’s spill from the Deep-water Horizon rig off the coast of Louisiana resulted in a $20-billion down payment bythe company on damages, and the questions raised about BP in the sixth edition are thesame issues we see in its latest accident—did keeping costs low trump decisions aboutrisk and company practices? From analysts to the factory workers producing peanutbase for cookies and crackers, pressure often got in the way of moral clarity in businessdecisions. Those pressures then translated into ethical lapses that involve everything frompushing the envelope on truth to earnings management that crosses over into cookingthe books and fraud. Weak product designs and products’ defects often produce achain of memos or e-mails in the company that reflect employee concerns about productsafety. College sports, baseball, and politics all have their ethical issues. The cyclesbetween major ethical and financial collapses seem to be growing shorter. Businesses doexist to make a profit, but business ethics exists to set parameters for earning that profit.Business ethics is also a key element of business decision processes and strategies becausethe cases in this book teach us that the long-term perspective, not the sort-term fix,serves businesses better in that profit role. This book of readings and cases exploresthose parameters and their importance. This book teaches, through detailed study ofthe people and companies, that business conducted without ethics is a nonsustainablecompetitive model. Ethical shortcuts translate into a short-term existence. Initially,these shortcuts produce a phenomenon such as those seen with Lehman Brothers, MerrillLynch, and Peanut Corporation of America. These companies are no longer viable enti-ties because they crossed ethical lines. For a time, they were at the top of their game—flummoxing their competitors on how they were able to do what they were doing, and soprofitably. But then that magnificent force of truth finds its way to the surface, and thecompany that does not factor in the ethics of its decisions and conduct finds itself fallingto the earth like a meteor’s flash. Long-term personal and business success demandethics. This edition takes a look at everything from the subprime lending market, a mar-ket that brought easy pickings in terms of profit so long as real-estate values held firm, tothe world of sports and the downfall of so many. This book connects the moral senti-ments of markets with the wealth of nations. Business without ethics is self-destructive.

New to This Edition

A Slightly New Structure and Approach to Address the Chronic Repetitionof the Ethical LapsesWe’ve been down this road before, and the historic patterns are now emerging for studyand insight. In 1986, before Ivan Boesky was a household name and Michael Douglaswas Gordon Gekko in Wall Street, I began teaching a business ethics course in the

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MBA program in the College of Business at Arizona State University. The course was anelective. I had trouble making the minimum enrollments. However, two things changed:my enrollments and my fate. First, the American Association of Collegiate Schools ofBusiness (AACSB) changed the curriculum for graduate and undergraduate businessdegree programs and required the coverage of ethics. The other event actually was aseries of events. Indictments, convictions, and guilty pleas by major companies and theirofficers—from E.F. Hutton to Union Carbide to Beech-Nut to Exxon—brought nationalattention to the need to incorporate values in American businesses and instill them inbusiness leaders.

Whether out of fear, curiosity, or the need for reaccreditation, business schools andstudents began to embrace the concept of studying business ethics. My course went froma little-known elective to the final required course in the MBA program. In the yearssince, the interest in business ethics has only increased. Following junk bonds and insidertrading, we rolled into the savings and loan collapses; and once we had that straightenedout, we rolled into Enron, WorldCom, HealthSouth, Tyco, and Adelphia, and we evenlost Martha Stewart along the way. We were quite sure, what with all the Sarbanes–Oxley changes and demands on boards, CEO, CFOs, and auditors that we were throughwith that level of misconduct. We were, however, wrong. New Century Financial, one ofthe first of the subprime lenders to collapse, found one angry bankruptcy trustee. Thetrustee’s report concluded that he found the acquiescence of the auditor to the client’srefusal to write down the bad loans astonishing in what he called “the post-Enron era.”The Lehman Brothers bankruptcy trustee found a letter from a risk officer at the invest-ment banker who tried to warn the CEO and CFO that the firm’s financial reports vio-lated its code of ethics. The trustee also found that the risk officer was fired.

Three decades plus after Boesky we have the Galleon hedge fund insider trading webemerge in 2009 with a staggering repetitiveness that finds us wondering, “Do they not seethe ethical and legal issues? Do they just not know that they are crossing these line?Do they see the patterns from business history?” The good thing about repetitive patternsis that we gain insight into the paths, the reasoning, and the pressures of those involved.The key is to bring out those patterns and train our new business leaders to recognizethem and, most importantly, to stop the train of self-destruction those patterns set off.This edition is reorganized to offer greater insights, knowledge, and perspective on thesepatterns for a new generation of leaders. Today, nearly 100 percent of the Fortune500 companies have a code of ethics. We are up to over 75 percent of companies havingsome form of ethics training. But, we are not quite there until our business leaders graspthe perspective of ethics and its relationship to economics, organizational behavior, com-pany culture, reputation, and financial performance. This edition is structured to walk usthrough all aspects and types of ethical dilemmas and how we can cope with the pres-sures that often deprive us of good ethical analysis.

Unit 1: Our EthicsUnit 1 addresses the questions of: What is this ethics thing? How do I manage to workphilosophy into my decision processes? How do I find solutions to ethical dilemmas?How do I know when I am really analyzing as opposed to rationalizing or succumbingto pressure? A change to this unit is a right-out-of-the-blocks focus on developing acredo—a way of helping us to think about ethical issues in advance and decide what wewould and would not do in a situation. If we think about issues in advance, then whenthe pressure hits we at least have the cognitive dissonance of realizing that we did see theissues differently when we were not under so much pressure.

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Unit 2: Business and EthicsOnce we have focused on ourselves and our ethical standards, we move into analysis ofethical issues in business. This unit offers the introspection of this question: Are my per-sonal ethical standards different when I am at work? Should they be? Why are they dif-ferent? Further, the magnitude of the mistakes that business-people continued to make,despite all the warnings from ongoing debacles, did not indicate that these were closecalls. Something had gone awry in their ethics training in business school for them todrift so far from virtue. I continue to emphasize in teaching, consulting, and writingthat helping students and businesspeople see that personal ethics and business ethicsare one and the same is critical to making virtue a part of business culture. Virtue isthe goal for most of us in all aspects of our lives. Whether we commit to fidelity in apersonal relationship or take the laundry detergent back into the store to pay becausewe forgot it was on the bottom of our grocery cart, we show virtue. Ethics in businessis no different, and we need not behave differently at work than we do in that grocerystore parking lot as we make the decision to be honest and fair with the store owner.Substitute a shareholder and the disclosure of option dates and true costs, and we haveour laundry detergent example with a stock market twist.

New to this unit is a focus on the patterns that interfere with good ethical analysis inbusiness such as pressure, hubris, and a singular focus on moral relativism as opposed to adeeper look at the consequences of reliance on that model. In this unit, there is evidenceof a change in overall structure. Rather than having a large grouping of cases focused onfinancial issues, the cases are spread throughout the units to show that the issues andpatterns in financial cases are no different from those in product liability or employeerights cases. Instructors and students tended to skim over the financial cases because,“They are covered in other courses,” or “We are not really comfortable with finance.”We study these cases in ethics for the patterns of culture, hubris, and poor ethical analysis.So, Martha Stewart is in this unit along with Goldman Sachs. The financial markets issuesare not front and center as we focus on the psychology of their decision processes ratherthan on the substance of the underlying transactions. This unit also includes the overarch-ing theme of the book over all of its editions: plenty of real-life examples from newspa-pers, business journals, and my experiences as a consultant and board member. Knowingthat other instructors and students were in need of examples, I have turned my experi-ences into cases and coupled them with the most memorable readings in the field to pro-vide a training and thought-provoking experience on business ethics.

Unit 3: Social Responsibility and EthicsUnit 3 offers us the bigger perspective—once we slog through the decision processes offraud, embezzlement, puffing resumes, and cheating on our travel expenses, we move todiscussion and understanding of the role of business in society. The cases in this unit arebroken into an introduction to business and society, the obligations of business towardour moral ecology, and the issues of the environment and sustainability.

Unit 4: Company Culture, Individual Pressures, and EthicsUnit 4 is the psychology section that tackles companies’ ethical lapses, with the realiza-tion that beyond individual ethical lapses (as with one bad apple), there are barrel factorsthat must be addressed to prevent ethical lapses. This section, through the finance casesand the weaving in of corporate governance, explores those barrel factors with the recog-nition that beyond individual lapses there are company, industry, and societal norms thatdo cause companies and individuals to move that line away from ethical standards to“everybody does it” here at the company, in our industry, and in society. The cases

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here explore how business incentives, organizational behavior practices and processes,reporting mechanisms, industry practices, and societal norms contribute to poor ethicalanalysis, decisions, and that self-destructive behavior. Recognizing and addressing thosebarrel issues is the theme of Unit 4.

Unit 5: International Business and EthicsUnit 5 is new to this edition, with a call-out of international issues. This unit helps stu-dents to understand the need for better and deeper ethical analysis of the issues in inter-national business and the importance of analyzing the countries and their ethicalstandards prior to doing business there. The section addresses the risks and costs of ethi-cal lapses and succumbing to local standards as opposed to establishing company stan-dards prior to those pressure points that occur in international competition.

Unit 6: Employment Issues and EthicsUnit 6 is a combination unit that draws together cases from units in the sixth edition tobring together all the workplace issues that affect employees and managers, from safety toconflicts, to privacy, to the lost art of confrontation about employee conduct, this section isthe one for understanding how ethics bumps shoulders with technology, profits, and privacy.

Unit 7: Products and EthicsUnit 7 is yet another newly combined unit that addresses all the issues related to productdevelopment, sales, safety, and advertising. From recalls to racy dolls to advertising to thecontracts themselves, this section focuses on the ethical issues that involved the how,what, and where of sales of products.

Unit 8: Competition and EthicsUnit 8 has the luxury of focusing entirely on competition. With the contracts issuesgrouped in Unit 7 on products, this unit has expanded coverage of the ever-growingconcerns about covenants not to compete and employee breaches of those covenants.The societal issues of infringement are emphasized as students analyze cases that illus-trate the costs of not honoring intellectual property rights.

Unit 9: Government and EthicsUnit 9 is a slightly expanded government ethics unit because, well, there have been somany fascinating ethical issues involving and affecting government agencies and employ-ees. From the CIA waterboarding to the behavior of the Minerals Management Serviceswith oil company executives, this unit carries a great deal of drama, but also some terrificteaching moments on the parallels between behaviors in business and government.

Unit 10: Nonprofits and EthicsUnit 10 on nonprofits includes two new cases on research funding disclosures as well as acase on an undercover investigation of ACORN that is an excellent case for weighing theviolation of the law in the interest of exposing an ethical breach by an organization.

For more on organization of a course using the new structure, refer to the followingdiscussion of Ethical Common Denominators.

And, for the seventh edition, we have more and new cases in the government andnonprofit sections. As it turns out, the patterns in culture and misconduct are the sameacross organizations. These updated and expanded sections prepare students for interac-tion in organizations that have different accounting processes but still face the same

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pressures employees feel in business. Their pressures are not those of profit, but of dead-lines, fundraising, rankings, and even just hubris, the classic component in the Greektragedies by which heroes fall.

The seventh edition continues the features students and instructors embraced in thefirst six editions, including both short and long cases, discussion questions, hypotheticalsituations, and up-to-the-moment current, ongoing, and real ethical dilemmas. Some ofthe long-standing favorites are back by popular demand—such as the Nestlé infant for-mula experience and Union Carbide in Bhopal, with their long-standing lessons in doingthe right thing. There are so many “oldies but goodies” when it comes to ethics cases, butlength constraints do not allow me to continue to include in this book all the oldies alongwith the new cases that promise to be oldies but goodies. Check out the availability ofcustom options noted at the end of this section. Now there are further opportunities tointegrate cases from previous editions into your course.

The seventh edition continues the new training tool introduced in the previous editionto help businesspeople who are working their way through an ethical dilemma. In thediscussion questions for many of the cases the “Compare and Contrast” questions con-tinue. These are questions that provide an example of a company that made a decisiondifferent from the one made by management in the case at hand. For example, in theTylenol case (Case 7.9—an oldie but goodie that has been updated for this edition), thestudents will find a question that highlights this company’s past conduct in comparisonwith its conduct in a current situation in which the FDA has accused the company ofsurreptitiously buying up tainted product in order to avoid a recall. There is a contrastbetween its recall of the 1980s, which was so rapid and received so much acclaim, andits behavior in this event. Why do some companies choose one path while others succumbto pressure? What was different about their decision-making processes? What did they seethat the other companies and their leaders did not take into account? This feature is aresponse to those who worry that students are not given examples of “good companies.”The problem with touting goodness is that it is impossible to know everything a companyis or is not doing. For example, Fannie Mae was named the most ethical company inAmerica for 2 years running. Yet it had to do a $7-billion restatement of earnings and isnow defunct as a shored-up government entity. BP was an environmental darling fornearly a decade for its responsible environmental programs. However, recent events castdoubt on how much environmental and safety dedication the company had. There is a riskin learning of goodness if that goodness is superficial or limited. Studying individual sce-narios of contrasting behavior is the learning tool, not the touting of a single company thatcan always have a lapse. There are no saints in this journey and keeping the text crediblerequires a recognition of that limitation but uses it to emphasize the vigilance we all need,as individuals and in business, to avoid lapses and progress in moral development.

Finding and Studying the Cases and ReadingsThe seventh edition continues the classic readings in business ethics that provide insightinto the importance of ethics in business and how to resolve ethical dilemmas. Theseventh edition also continues the presence of integrated readings throughout the bookto provide substantive thoughts on the particular areas covered in each section. The orga-nizational structure and indexes, continued from the sixth edition, make material, com-panies, people, and products easy to locate. A case can be located using the table ofcontents, the alphabetical index, the topical index, the people index, or the productindex, which lists both products and companies by name. An index for business disci-plines groups the cases by accounting, management, and the other disciplines in collegesof business.

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How to Use the “Ethical Common Denominators acrossBusiness Topics Chart”New to this edition is the Ethical Common Denominators across Business Topics chart,or simply, the ECD chart. This chart addresses that slight discomfort some instructorshave with the financial cases and helps students understand that underlying every ethicaldilemma are the common patterns of psychology and pressure as well as the need forsolid ethical analysis. The facts change, but the issues and analysis do not. The ECDchart provides various ways for instruction, according to instructor preference, needs,and time constraints. The chart groups the cases by the usual business and ethics topics.If, for example, you wanted to cover the environmental cases all in one fell swoop, youcould do so by focusing on the cases listed under the Business, Social Responsibility, andSustainability Unit (3), focusing on Section C, Social Responsibility and Sustainability.However, the reading in that section, “The New Environmentalism” is a terrific one forteaching students about leadership, the regulatory cycle, and how businesses really com-pete more effectively if they address societal concerns before a crisis or demands for reg-ulation. Adam Smith and his theories on markets appears in Section 8, but there is noreason he could not be shifted back to the coverage of the philosophical foundations. Aninstructor can mix in all the sections on ethical analysis. Note that there is a case fromeach unit there because you can pick and choose what topics to cover as you teach howto analyze. The ECD chart allows you to introduce that broad exposure to the pervasive-ness of ethical issues early in your course, or you can simply use the cases in that unitand go on to topical areas. The ECD chart allows you to break up the finance cases intoareas of discussion on psychology, culture, organizational behavior, hubris, and pressure.You need not focus on the structure of CDOs and secondary instruments markets tounderstand the culture at Lehman and how its culture led its sales force and managersdown a path that proved to be self-destructive. Likewise, you can mix in a Ponzi schemein a nonprofit with Bernie Madoff to help students understand how similar the cases arein the issues missed as they pursued a business model that could not be sustained overtime. The case on the undercover investigation of ACORN is a great nonprofit case, butit would fit well in Unit 1 as you ask students to deal with whether breaking the lawwould be justified to expose illegal conduct. The ECD chart allows a mix-and-matchapproach or a straight topical approach—both of which allow us to see that the factschange but good ethical analysis applies, always.

The EDC Chart—Ethical Common Denominators across Business TopicsDescription Subcategories Cases Readings

OVERALL THEME AREAS

Philosophicalfoundations

Case/readingaffords opportunityfor exploring ethicaltheories

Utilitarianism; moralrelativism; egoism;divine command;rights; justice; virtueethics

Case 1.7Case 3.8Case 3.10Case 5.6Case 5.8Case 5.9Case 6.12Case 6.16Case 7.22Case 8.8Case 9.6

Reading 1.1Reading 1.2Reading 1.3Reading 2.2Reading 2.3Reading 3.1Reading 3.2Reading 3.3Reading 3.4Reading 3.5Reading 3.6Reading 3.7Reading 4.5Reading 4.18Reading 8.4

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Description Subcategories Cases Readings

OVERALL THEME AREAS

Ethical analysis Case/reading pro-vides opportunityfor logical walk-through of ethicaldilemmas and theirresolution

Either/or conun-drum; models fordecision-making

Case 1.7Case 1.10Case 1.11Case 1.12Case 1.13Case 1.15Case 1.16Case 4.21Case 5.3Case 5.4Case 5.12Case 6.5Case 7.22Case 7.24Case 8.8Case 9.6Case 10.3

Reading 1.4Reading 1.8Reading 1.9Reading 1.14Reading 2.1Reading 2.2Reading 2.3Reading 2.10Reading 4.18Reading 6.21

Psychology ofdecision-making

Case/reading pro-vides insight intopsychological fac-tors that overpowerethical reasoning

Pressure; financialconstraints; hubris;rationalizations; dri-vers; enablers

Case 3.10Case 4.8Case 4.10Case 4.24Case 4.28Case 5.2Case 6.9Case 7.14Case 8.2Case 8.3Case 8.5Case 9.16Case 9.17Case 10.1Case 10.2

Reading 1.5Reading 2.3Reading 3.9Reading 4.1

Culture/organiza-tional behavior

Case/reading pro-vides insight intohow the organiza-tion and cultureoverpower ethicalreasoning; the badapple vs. bad barrelsyndrome

Compensation sys-tems; enforcement;confrontation; raisingethical issues; fearand silence inorganizations

Case 3.8Case 4.6Case 4.8Case 4.10Case 4.16Case 4.23Case 4.24Case 4.25Case 4.27Case 4.28Case 5.11Case 6.3Case 6.10Case 6.14Case 6.25Case 7.10Case 7.12Case 8.2Case 8.3Case 9.2Case 9.4Case 9.8Case 10.1Case 10.2

Reading 2.4Reading 2.6Reading 4.3Reading 4.4Reading 4.26Reading 6.1Reading 6.21Reading 6.22Reading 6.23

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OVERALL THEME AREAS

Economic theory Case/reading pro-vides backdrop fordiscussion of rela-tionship betweenethics andeconomics

Fair trade; livingwage; downsizing;property rights;laissez-faire; moralhazard; nature ofmarkets; effects ofdemand and supply

Case 1.15Case 2.11Case 4.20Case 4.21Case 5.6Case 6.4Case 6.5Case 7.16Case 7.18Case 7.24Case 8.8Case 9.14

Reading 3.1Reading 3.9Reading 4.5Reading 5.1Reading 8.1Reading 8.4

Personal intro-spection; credo

Case/reading pro-vides an opportunityfor students to putthemselves in theposition of thosefacing the dilemmas;developing tools forresisting pressure

Personal ethics vs.business ethics; thelines you would nev-er cross to get a job,to keep a job, to earna bonus, to meetgoals

Case 1.10Case 1.17Case 2.7Case 2.12Case 4.7Case 4.21Case 6.4Case 7.16Case 7.17Case 8.2Case 8.6Case 8.7Case 9.6Case 9.16Case 10.4

Reading 1.1Reading 1.2Reading 1.3Reading 1.6Reading 3.3Reading 4.1Reading 4.2

Socialresponsibility

Case/reading pro-vides opportunity fordiscussion of therole of business insociety

Pension betweenprofits and impact onsociety; the role ofphilanthropy bybusiness; tensionbetween short-termgains and long-termimpacts; balancingsocial and publicpolicy issues withbusiness activities

Case 3.8Case 3.10Case 3.11Case 3.12Case 3.13Case 3.14Case 3.15Case 3.16Case 3.17Case 5.2Case 5.3Case 5.5Case 5.7Case 5.8Case 5.9Case 6.4Case 6.24Case 6.25Case 7.1Case 7.2Case 7.6Case 7.7Case 7.21Case 7.22Case 7.24Case 8.8Case 9.15Case 10.3

Reading 3.1Reading 3.2Reading 3.3Reading 3.4Reading 3.5Reading 3.6Reading 3.7Reading 4.17Reading 6.21

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OVERALL THEME AREAS

Stakeholder theory Case/reading pro-vides opportunityfor learning how tolist stakeholdersand examine theirperspectives on anethical dilemma

Systemic effects;who is affected bydecision and/oraction; implicationsif everyone choseyour course ofbehavior

Case 1.11Case 1.17Case 2.12Case 3.17Case 3.18Case 5.8Case 5.9Case 6.4Case 6.5Case 6.24Case 6.25Case 7.4Case 7.21Case 7.23Case 7.24Case 7.21Case 7.24Case 8.8Case 9.10Case 9.13Case 9.17Case 10.4Case 10.5

Reading 3.2Reading 3.3Reading 3.4Reading 3.7Reading 3.16Reading 4.17Reading 6.21Reading 6.22

Moral ecology Case/reading pro-vides an opportunityfor analyzing effectof business conducton fabric of society

Health harms frombusiness activity;tension betweenfreedom of speechand impact ofspeech; personalconduct of businessleaders

Case 3.12Case 3.13Case 3.14Case 5.6Case 5.9Case 6.19Case 7.21Case 8.2Case 9.4Case 10.4

Reading 3.5Reading 6.20

Leadership Case/reading pro-vides an opportunityfor understandingthe role of managersin company cultureand decisions

Tone-at-the-top; ex-ample; conduct ofmanagers andsupervisors; man-ager’s responses toemployee concerns

Case 2.11Case 3.8Case 3.10Case 3.13Case 4.8Case 4.25Case 6.25Case 7.9Case 7.23Case 8.2Case 9.5Case 9.7Case 9.9Case 9.10Case 9.18Case 10.4

Reading 2.3Reading 2.4Reading 3.2Reading 3.5Reading 3.16Reading 4.9Reading 4.26Reading 6.20Reading 6.21Reading 6.22

Governance Case/reading pro-vides an opportunityfor examining therole of the board andcorporate process-es on culture andethical analysis anddecision-making

Compensation sys-tems; compliance;internal controls

Case 3.10Case 4.12Case 4.13Case 4.15Case 4.27Case 5.4Case 6.15Case 7.19

Reading 4.4Reading 4.9Reading 4.11Reading 4.17Reading 4.26

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OVERALL THEME AREAS

Case 8.2Case 9.5Case 9.7Case 9.10Case 10.4

Whistle-blowing Case/reading ex-amines individualactions in dealingwith ethical issues

Speaking up; ap-proaches to raisingissues

Case 3.10Case 4.6Case 4.12Case 4.23Case 4.24Case 6.25Case 7.10Case 7.11Case 7.15Case 7.17Case 8.2Case 9.2Case 9.14Case 10.2


The gray area Case/reading fo-cuses on law vs.ethics—can vs.should. Theloophole

Regulatory cycle; in-dustry behaviors;slippery slope; grayarea



Categories of ethi-cal dilemmas

Case/reading helpsto illustrate whereethical dilemmasexist

Honesty; false im-pression; balancingethical issues; con-flicts of interest;taking unfairadvantage

Case 1.12Case 2.11Case 3.11Case 4.28Case 5.3Case 5.4Case 5.8Case 6.8Case 6.25Case 7.4Case 7.5Case 7.17Case 8.5Case 8.9Case 9.3Case 9.4Case 9.13Case 9.15Case 10.5Case 10.6


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THE BUSINESS TOPIC AREAS

Financial reporting/accounting

Case/reading in-volves FASB,GAAP issues, andinterpretation ofrules

Red flags; materiali-ty; EBITDA; loadingdock behaviors;cookie-jar reserves;spring-loading


Reading 4.3Reading 4.9Reading 4.11

Product liability Case/reading in-volves decision onproduct quality/safety

Design defects; re-calls; product dump-ing; risk tolerance;low-probabilityevents


Reading 7.8

Technology Case/reading in-volves ethical di-lemmas that arisedue to newtechnologies

Privacy of indivi-duals; privacy ofemployees; socialnetworking; theft;screening; testing


Supply chain Case/reading in-volves issues incontracts, relation-ships with vendors,purchasingmanagers

Conflicts of interest;commercial bribery;contracts



Marketing andsales

Case/reading in-volves ethical is-sues in advertising,pricing, productdistribution

Antitrust issues; PR;framing issues; psy-chological tools ofmarketing; servicesmarketing

Case 2.11Case 3.18Case 4.28Case 5.8Case 6.7Case 6.8Case 7.1Case 7.2Case 7.3Case 7.5Case 7.6Case 7.7


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Marketing andsales (continued)

Case 7.15Case 7.16Case 7.17Case 7.18Case 7.20Case 8.5Case 10.5

Governmentactivities

Case/reading in-volves business re-lationships with andwithin government

Bribery, conflicts ofinterest, public is-sues and debate;PACs; governmentcontracting



Sustainability Case/reading in-volves business re-lationship withenvironment

Climate issues;pollution; carbonfootprints

Case 3.17Case 3.18Case 5.7Case 6.24Case 6.25Case 9.2

Reading 3.16

Discrimination Case/reading dealswith issues in equalopportunity

Affirmative action;sexual harassment;diversity in theworkforce; HRpolicies

Case 6.11Case 6.12Case 6.14Case 6.15Case 6.16Case 6.23Case 9.12

Reading 6.13

Intellectualproperty

Case/reading dealswith ownership ofproperty and com-petitors’ access

Copyrights; trade-marks; reverse engi-neering; anti-compete clauses;downloading; soft-ware copies

Case 1.10Case 8.2Case 8.3Case 8.5Case 8.9Case 8.10Case 8.11Case 8.12Case 9.12

Internationalbusiness

Case/reading cov-ers ethical issues inoperating multi-nationally

FCPA; bribery; prod-uct dumping, livingwage, factory condi-tions, geopolitical is-sues; fair trade;human rights viola-tions; mercenaryissues



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Financial markets Case/reading fo-cuses on issues inthe capital markets

Insider trading, shortsales, risk; disclo-sure; hedge funds



Employee rightsand responsibilities

Case/reading fo-cuses on employeework and employersupervision

Employee privacy;employee productivi-ty; personal activity(net-surfing); em-ployer monitoring;employer use of so-cial networks

Case 2.8Case 2.13Case 5.9Case 6.2Case 6.3Case 6.4Case 6.5Case 6.17Case 6.18Case 6.19Case 6.23Case 6.24Case 8.2Case 8.3Case 9.8Case 9.9Case 10.2


Operations Case/reading fo-cuses on production

Safety; regulatorycompliance; training;work conditions


Reading 6.1

Informationsystems

Case/reading fo-cuses on data: de-velopment, use,access

Stats and interpreta-tion; role of dataprocessing indecision-making


Contract obliga-tions andperformance

Case/reading fo-cuses on legal andethical obligationsunder contracts

Performance; da-mages; breach;interpretation


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Nonprofitorganizations

Unique character ofnonprofits

Good intentions vs.good actions

Case 10.1Case 10.2Case 10.3Case 10.4Case 10.5Case 10.6

Supplements

Access to Companion Site ResourcesTo access additional course materials and companion resources, please visit www.cengagebrain.com. At the CengageBrain.com home page, search for this book’s ISBN(found on the back cover of your book) using the search box at the top of the page.This will take you to this book’s product page, where free companion resources can befound. Instructors must go to login.cengage.com for access to instructor materials.

Instructor’s Manual with Test BankThe instructor’s manual with Test Bank is updated with more sample test objective- andessay-answer questions of varying lengths and structures. The questions have been codedfor topic and even some for case-specific questions so that exams can be created by sub-ject area. The PowerPoint package, which includes illustrative charts to assist instructorsin walking classes through the more complex cases, has been updated and expanded.Instructors can access the Instructor’s Manual with Test Bank at login.cengage.com.

PowerPoint SlidesDeveloped by the author, Microsoft PowerPoint slides are available for use by students asan aid to note-taking, and by instructors for enhancing their lectures. Instructors canaccess PowerPoint files at login.cengage.com.

Business Law Digital Video LibraryThis dynamic video library features more that sixty video clips that spark class discussionand clarify core legal principles. The library is organized into five series: Legal Conflictsin Business (includes specific modern business and e-commerce scenarios); Ask theInstructor (presents straightforward explanations of concepts for student review);Drama of the Law (features classic business scenarios that spark classroom participation);Real World Legal (explores conflicts that arise in a variety of business environments), andLawFlix (contains clips from many popular films). Access for students is provided via acode when bundled with a new textbook, or it can be purchased at www.cengagebrain.com.

Customized Selections of Case Studies and ReadingsInstructors always have the option to customize your choice of cases and readings. Casestudies and readings from both the fifth and sixth editions of Jennings’s Business Ethicscan be found by visiting www.textchoice.com/collections. Select the Business Ethicsoption. This collection includes intuitive browse and search features, allowing you toquickly and easily find the content you need. Selections can be used to create an afford-able course companion or to integrate material into your customized textbook. Now youhave choices and a rich resource to tap into so that you can tailor topics and depth ofcoverage for your own course needs.

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Acknowledgments

T his book is not mine. It is the result of the efforts and sacrifices of many. I amgrateful to the reviewers for their comments and insights. Their patience, exper-tise, and service are remarkable. I have many colleagues around the world who

continue to provide me with insights, input, and improvements, but my colleagues listedbelow provided the time and effort of a page-by-page review.

John W. Baker, Jr.Northwest Missouri State University

Cheryl L. BernierCentral New Mexico Community College

Jeff CohuRochester College

Jeffrey Douglas PenleyCatawba Valley Community College

Teressa ElliottNorthern Kentucky University

Charlene Y. FitzwaterImmaculata University

Andy GarciaBowling Green State University

Glenn M. GreenfieldLawrence Technological University

Steven P. GunningCurry College, Milton, MA

Thomas L. JacksonBenedictine University at Springfield

Steven JordanWalsh College

Gene R. LaczniakMarquette University

Joseph W. LeonardMiami University

William A. MoreheadDelta State University

Thomas OxenreiderMontreat College

Rod ThirionPikes Peak Community College

Gary J. ValcanaAthens State University

Miriam WeismannSuffolk University

Teri WhildenNorthwest Nazarene University

Jason K. WolinsHumphreys College, Stockton, CA

I am grateful for the students and professors who continue to help me with ideas for newcases, corrections (those typos!), and insights that help me as I work on each edition.

I am fortunate to have Laura Bofinger Ansara continuing as my developmental editorfor this edition. She has a tall order, this one of reining in an author who would have a700-page book if she could. I am grateful for the time she takes to understand the casesand all my pedagogical goals. She continues to come back with those important e-mailsthat say, “But what about this? Could we do it this way? Would this be better?” I daresayshe is right when she does so. I am grateful to Vicky True-Baker and Rob Dewey for theircontinuing support of all my work. I continue to love editors. Where I see only deadlines,they see both the big picture of the book and its details: They have vision. I am gratefulfor their vision in supporting this book at a time when ethics was not on the tip of

xxviii Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).


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everyone’s SOXs and tongues. They trusted me and understood the role of ethics in busi-ness and supported a project that was novel and risky.

I am grateful to my parents for the values they inculcated in me. Their ethical perspec-tive has been an inspiration, a comfort, and, in many cases, the final say in my decision-making processes. I am especially grateful to my father for his continual research on andquest for examples of ethical and not-so-ethical behavior in action in the world of busi-ness. I am grateful for my family’s understanding and support. I am most grateful for thereminder their very presence gives me of what is truly important. In a world that mea-sures success by “stuff” acquired, they have given me the peace that comes from devo-tion, decisions, and actions grounded in a personal credo of “others first.” This road lesstaken offers so many rich intangibles that we can, with that treasure trove, take or leave“the stuff.” My hope is that those who use this book gain and use the same perspective on“stuff.”

Marianne M.Jennings

Professor of Legal and Ethical Studies in BusinessW.P. Carey School of Business

Arizona State University

[email protected]

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Alphabetical Index

Aaron Feuerstein and Malden Mills (Case 6.4) 356–358ACORN: Community Organizers, Undercover Videos, and Advice (Case 10.3) 565–566Adam Smith: An Excerpt from The Theory of Moral Sentiments (Reading 8.4) 505–506Adelphia: Good Works via a Hand in the Till (Case 3.8) 113–117The Analyst Who Needed a Preschool (Case 6.9) 367–370Ann Hopkins and Price Waterhouse (Case 6.23) 399–404Appeasing Stakeholders with Public Relations (Reading 3.4) 104–105The Areas of Ethical Challenges in Business (Reading 2.9) 71–72Arizona Senate Bill 1070: Immigration Laws, Employers, Enforcement, and Emotion (Case 6.16) 382–384Arthur Andersen: A Fallen Giant (Case 4.16) 246–253

Bank of America: The Merrill Takeover, the Disclosures, and the Board (Case 4.12) 216–217The Baptist Foundation: Funds of the Faithful (Case 10.2) 562–564Baseball and Steroids (Case 3.13) 138–145Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism (Case 4.14) 228–233Beech-Nut and the No-Apple-Juice Apple Juice (Case 4.23) 280–285The Benefits of Diversity: Remarks of Doug Daft, Former CEO of Coca-Cola (Reading 6.13) 376–380Bernie Madoff: Just Stay Away from the 17th Floor (Case 4.28) 311–312Bhopal: When Safety Standards Differ (Case 5.7) 333–334Bloggers, Chat Rooms, and E-Mail: Your Employer Is Watching (Case 6.18) 386–387Boeing, Lockheed, and the Documents (Case 8.2) 496–501Boeing and the Recruiting of the Government Purchasing Agent (Case 9.16) 548–550BP: Pipeline, Refinery, and Offshore-Drilling Safety (Case 6.25) 411–422Business with a Soul: A Reexamination of What Counts in Business Ethics (Reading 3.3) 101–104

Cheerios and Cholesterol and Rice Krispies and Immunity (Case 7.3) 432–434Chiquita Banana and Mercenary Protection (Case 5.2) 319–322Cintas and OSHA (Case 6.3) 354–355The Coke Employee Who Offered Inside Information to Pepsi (Case 8.5) 506–508The Compliance Officer Who Strayed (Case 8.6) 508–510Copyright, Songs, and Charities (Case 8.10) 518–519The Cornell Researchers Funded by the Foundation (Case 10.6) 569Craigslist and Ad Screening (Case 7.7) 439–440

Dad, the Actuary, and the Stats Class (Case 1.13) 39Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell Ringers (Case 3.15) 146The Death of the Great Disposable Diaper Debate (Case 3.18) 153–155Dennis Kozlowski: Tyco and the $6,000 Shower Curtain (Case 4.13) 218–228Do Cheaters Prosper? (Case 2.14) 85Docs, Pharmas, Medical Journals, Funded Research, and Pizza (Case 6.8) 363–366The Duke Lacrosse Team and the Prosecutors (Case 9.18) 551–554

E. coli, Jack-in-the-Box, and Cooking Temperatures (Case 7.13) 461–462The Effects of Compensation Systems: Incentives, Bonuses, Pay, and Ethics (Reading 4.4) 172–176English-Only Employer Policies (Case 6.11) 373–374Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity (Case 4.15) 233–246The Ethics of Bankruptcy (Case 4.20) 272–274The Ethics of Confrontation (Reading 6.22) 396–399The Ethics of Responsibility (Reading 2.2) 48–49The Ethics of Walking Away: Buyers Have No Moral Duty to Lender (Case 4.21) 275–278The Ethics Officer and First Class for TSA (Case 1.16) 41–42Exxon and Alaska (Case 6.24) 405–411

Facebook, MySpace, and YouTube Screening of Employees (Case 6.17) 385–386Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards (Case 3.10) 121–132Fast Food Liability (Case 7.24) 490–492

571 Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).


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FEMA, Hurricane Katrina, and the Dilemmas of Regulation versus Human Life (Case 9.19) 554–555FINOVA and the Loan Write-Off (Case 4.10) 206–211The Fish Bowl Existence of Goverment (Reading 9.1) 525–527Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem (Case 7.11) 452–458The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES (Case 5.4) 323Frozen Coke and Burger King and the Richmond Rigging (Case 7.17) 468–471

Getting Information from Employees Who Know to Those Who Can and Will Respond (Reading 4.26) 289–293Giving and Spending the United Way (Case 10.4) 566–568The Glowing Recommendation (Reading 6.21) 395–396Google, Yahoo, and Human Rights in China (Case 5.9) 337–339Government Pricing and Finding a Way Around It (Case 9.14) 546–547The Governor and a Senate Seat Vacated by a President (Case 9.4) 532–534

Hank Greenberg and AIG (Case 1.7) 27–28HealthSouth: The Scrushy Way (Case 4.6) 183–192Herman Miller and Its Rain Forest Chairs (Case 3.17) 151–153Hiding the Slip-Up on Oil Lease Accounting: Interior Motives (Case 9.8) 540Hollywood Ads (Case 7.5) 438How Leaders Lose Their Way: What Price Hubris? (Reading 2.4) 59–61

“I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal Opinions in theConduct of Organizations (Case 9.6) 536–538

Ice-T, the Body Count Album, and Shareholder Uprising (Case 3.12) 133–138If It’s Legal, It’s Ethical; and Besides, Everyone Does It (Reading 4.18) 257–262Intel and the Chips: When You Have Made a Mistake (Case 7.19) 478–481Is Business Bluffing Ethical? (Reading 2.3) 49–58Is It None of Our Business? (Reading 6.20) 390–394

Jack Welch and the Harvard Interview (Case 6.19) 387–390JCPenney and Its Wealthy Buyer (Case 6.6) 361–362Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty (Case 4.7) 192–199Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry (Case 7.1) 425–430Joe the Plumber, Child Support Records, and the Public Official’s Disclosure (Case 9.9) 540–541Jonathan Lebed: The Middle School Tycoon (Case 8.7) 510–511Julie Roehm: The Walmart Ad Exec with Expensive Tastes (Case 6.10) 370–372

Kodak, the Appraiser, and the Assessor: Lots of Back Scratching on Valuation (Case 9.3) 531–532Kraft, Barney Rubble, and Shrek (Case 7.6) 438–439

The Little Intermittent Windshield Wiper and Its Little Inventor (Case 8.12) 520–521The Little Teacher Who Could: Piper, Kansas, and Term Papers (Case 1.10) 34–37

The Man Who Writes the Internal Revenue Code Has Tax Issues: The Rangel Round-Up (Case 9.5) 534–536Marjorie Kelly and the Divine Right of Capital (Reading 3.6) 108–111Martha Stewart: Not Such a Good Thing (Case 2.7) 63–69Merck and Vioxx (Case 7.10) 447–452The Mess at Marsh McLennan (Case 7.16) 465–468Michael Novak on Capitalism and the Corporation (Reading 3.5) 105–108Michael Vick, Dogs, Rush Limbaugh, and the NFL (Case 3.14) 145–146Microsoft vs. Google and “Snippets” of Books (Case 8.11) 519–520The Minerals Management Service: The Arms-Length Affairs with Oil Executives (Case 9.2) 527–531Minority-Owned Businesses and Reality (Case 9.12) 545–546The Mommy Doll (Case 7.21) 487Moral Relativism and the Either/or Conundrum (Reading 2.5) 61–62The Movie Ticket (Case 1.11) 37The Moving Line (Reading 4.1) 159–160The My Tai Concession and the County Supervisor (Case 9.13) 546

NASA and the Space Shuttle Booster Rockets (Case 4.24) 285–288Nestlé: When Products Translate Differently (Case 5.8) 335–337The New Environmentalism (Reading 3.16) 149–151New Era: If It Sounds Too Good to Be True, It Is Too Good to be True (Case 10.1) 559The New Shareholder: Taking Over to Change the Culture (Reading 4.17) 253–256Not All Employees Are Equal When It Comes to Moral Development (Reading 4.2) 160–163

On Leaving to Spend More Time with Family (Case 2.8) 69–70On Plagiarism (Reading 1.14) 40–41

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On Rationalizing and Labeling: The Things We Do That Make Us Uncomfortable, but WeDo Them Anyway (Reading 1.5) 22–26

On Sweatshops, Nike, and Kathie Lee (Case 5.6) 326–332On-the-Job Fetal Injuries (Case 6.12) 374–376The Options for Whistle-Blowers (Reading 4.22) 279

P=f(x) The Probability of an Ethical Outcome Is a Function of the Amount of Money Involved:Pressure (Reading 2.6) 62–63

The Pack of Gum (Case 1.18) 43The Parable of the Sadhu, Pressure, Small Windows of Opportunity, and Temptation (Reading 1.2) 4–10Paul Wolfowitz and the World Bank (Case 9.7) 538–540Peanut Corporation of America and Salmonella (Case 7.14) 462–463Pfizer and the $2.3 Billion Fine for Sales Tactics (Case 7.15) 464–465Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and

Pensions (Case 6.5) 358–360A Primer on Accounting Issues and Ethics and Earnings Management (Reading 4.19) 262–272A Primer on Covenants Not to Compete: Are They Valid? (Reading 8.1) 495–496A Primer on Product Liability (Case 7.8) 441–443A Primer on Sarbanes–Oxley (Reading 4.11) 212–216A Primer on the FCPA (Reading 5.10) 340–342Product Dumping (Case 5.5) 325–326The Prosecutors Who Withheld Evidence: The Senator’s Trial (Case 9.17) 551Puffing Your Resume (Case 1.12) 37–38

The Red Cross, New York, and Ground Zero (Case 10.5) 568The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium (Reading 3.9) 117–121The Rigged Election (Case 2.15) 86Royal Dutch and the Reserves (Case 4.8) 199–200

Salt Lake City, the Olympics, and Bribery (Case 5.12) 344–350School of Thought on Social Responsibility (Reading 3.7) 111–113Sears and High-Cost Auto Repairs (Case 7.20) 481–486Seinfeld in the Workplace (Case 6.14) 380–381Siemens and Bribery, Everywhere (Case 5.11) 342–344Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them (Case 8.8) 511–513Sleeping on the Job and on the Way Home (Case 6.2) 353–354The Slippery Slope, the Blurred Lines, and How We Never Do Just One Thing (Reading 1.6) 26–27Slotting: Facilitation, Costs, or Bribery? (Case 7.18) 472–477The Social Responsibility of Business Is to Increase Its Profits (Reading 3.1) 91–96Some Simple Tests for Resolving Ethical Dilemmas (Reading 1.8) 29–34Some Steps for Analyzing Ethical Dilemmas (Reading 1.9) 34Speeding on the Job: Obeying the Rules: Why We Do and Don’t (Case 1.17) 42–43Spring Break, Beer, and Alcohol on Campus (Case 7.2) 430–432A Stakeholder Theory of the Modern Corporation (Reading 3.2) 96–101Stanford University and Government Overhead Payments (Case 9.10) 542–545Starwood, Hilton, and the Suspiciously Similar New Hotel Designs (Case 8.3) 501–504Stem-Cell Research (Case 7.22) 487–489Stock Options, Backdating, and Disclosure Options: What Happened Here? (Reading 4.9) 200–206A Structured Approach for Solving Ethical Dilemmas and Trying Out Your Ethical Skills onSome Business Cases (Reading 2.10) 72–73

Subprime Loans: The Under-the-Radar Loans That Felled a Market (Case 7.4) 434–437The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs (Reading 4.5) 176–183

Taser and Stunning Behavior (Case 9.15) 547–548Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs (Case 8.9) 514–518Toro and Its Product Liability Program (Case 7.23) 489–490Toyota, the CEO, the Assistant, and Inaction (Case 6.15) 381–382Toyota: Sudden Acceleration or Bad Drivers or Pesky Floor Mats? (Case 7.12) 458–461The Trading Desk, Perks, and “Dwarf Tossing” (Case 6.7) 362–363Transnational Shipping and the Pirates (Case 5.3) 322–323Travel Expenses: A Change for Extra Income (Case 2.13) 84–85Two Sets of Books on Safety (Reading 6.1) 353Tylenol: Decades of Dilemmas (Case 7.9) 444–447The Types of Ethical Dilemmas: From Truth to Honesty to Conflicts (Reading 1.4) 17–22

Alphabetical Index | 573



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West Virginia University and the Governor’s Daughter (Case 2.16) 86–87Westland/Hallmark Meat Packing Company and the Cattle Standers (Case 4.25) 288–289What Are Ethics? From Line-Cutting to Kant (Reading 1.3) 10–17What Happens in Boulder Stays in Boulder: Cell Phone Alibis (Case 2.12) 84What Was Up with Wall Street? The Goldman Standard and Shades of Gray (Case 2.11) 73–84What’s Different about Business Ethics? (Reading 2.1) 47–48Whole Foods, John Mackey, and Health Care Debates (Case 3.11) 132–133Why an International Code of Ethics Would Be Good for Business (Reading 5.1) 315–319Why Corporations Can’t Control Chicanery (Reading 4.3) 164–172Wi-Fi Piggybacking (Case 1.15) 41WorldCom: The Little Company That Couldn’t after All (Case 4.27) 293–310

Yale University and the Compensation of Professors for Goverment Research: Double-Dipping orConfusion? (Case 9.11) 545

You, Your Values, and Credo (Reading 1.1) 3–4

574 | Alphabetical Index



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Business Discipline Index

Accounting3.8 Adelphia: Good Works via a Hand in the Till 1134.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 1924.8 Royal Dutch and the Reserves 1994.10 FINOVA and the Loan Write-Off 2064.11 A Primer on Sarbanes–Oxley 2124.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 2184.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 2284.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2334.16 Arthur Andersen: A Fallen Giant 2464.27 WorldCom: The Little Company That Couldn’t After All 2936.23 Ann Hopkins and Price Waterhouse 3999.5 The Man Who Writes the Internal Revenue Code Has Tax Issues: The Rangel Round-Up 5349.8 Hiding the Slip-Up on Oil Lease Accounting: Interior Motives 5409.10 Stanford University and Government Overhead Payments 5429.11 Yale University and the Compensation of Professors for Government Research: Double-Dipping or Confusion? 54510.1 New Era: If It Sounds Too Good to Be True, It Is Too Good to Be True 55910.2 The Baptist Foundation: Funds of the Faithful 56210.4 Giving and Spending the United Way 566

Advertising3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 1335.8 Nestlé: When Products Translate Differently 3357.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 4257.2 Spring Break, Beer, and Alcohol on Campus 4307.3 Cheerios and Cholesterol and Rice Krispies and Immunity 4327.5 Hollywood Ads 4387.6 Kraft, Barney Rubble, and Shrek 4387.7 Craigslist and Ad Screening 4397.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 461

Business Communications3.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell-Ringers 1464.8 Royal Dutch and the Reserves 1994.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 2004.24 NASA and the Space Shuttle Booster Rockets 2854.26 Getting Information from Employees Who Know to Those Who Can and Will Respond 2896.21 The Glowing Recommendation 3957.19 Intel and the Chips: When You Have Made a Mistake 478

Business Law3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 1334.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1764.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 2574.20 The Ethics of Bankruptcy 2725.2 Chiquita Banana and Mercenary Protection 3195.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 3235.10 A Primer on the FCPA 3405.11 Siemens and Bribery, Everywhere 3425.12 Salt Lake City, the Olympics, and Bribery 3446.6 JCPenney and Its Wealthy Buyer 3616.7 The Trading Desk, Perks, and “Dwarf Tossing” 3626.11 English-Only Employer Policies 3736.12 On-the-Job Fetal Injuries 374



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6.13 The Benefits of Diversity: Remarks of Doug Daft, Former CEO of Coca-Cola 3766.14 Seinfeld in the Workplace 3806.16 Arizona Senate Bill 1070: Immigration Laws, Employers, Enforcement, and Emotion 3826.18 Bloggers, Chat Rooms, and E-Mail: Your Employer Is Watching 3866.21 The Glowing Recommendation 3956.23 Ann Hopkins and Price Waterhouse 3996.24 Exxon and Alaska 4057.8 A Primer on Product Liability 4417.9 Tylenol: Decades of Dilemmas 4447.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 4527.12 Toyota: Sudden Acceleration or Bad Drivers or Pesky Floor Mats? 4587.16 The Mess at Marsh McLennan 4657.18 Slotting: Facilitation, Costs, or Bribery? 4727.19 Intel and the Chips: When You Have Made a Mistake 4787.20 Sears and High-Cost Auto Repairs 4818.1 A Primer on Covenants Not to Compete: Are They Valid? 4958.5 The Coke Employee Who Offered Inside Information to Pepsi 5068.6 The Compliance Officer Who Strayed 5088.8 Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them 5118.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 5148.10 Copyright, Songs, and Charities 5188.11 Microsoft vs. Google and “Snippets” of Books 5198.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520

Compliance Programs1.17 Speeding on the Job: Obeying the Rules: Why We Do and Don’t 423.14 Michael Vick, Dogs, Rush Limbaugh, and the NFL 1454.2 Not All Employees Are Equal When It Comes to Moral Development 1604.11 A Primer on Sarbanes–Oxley 2128.6 The Compliance Officer Who Strayed 508

Conflicts of Interest2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 734.16 Arthur Andersen: A Fallen Giant 2466.6 JCPenney and Its Wealthy Buyer 3616.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 3636.9 The Analyst Who Needed a Preschool 3676.10 Julie Roehm: The Walmart Ad Exec with Expensive Tastes 3706.19 Jack Welch and the Harvard Interview 3878.2 Boeing, Lockheed, and the Documents 4968.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 5019.3 Kodak, the Appraiser, and the Assessor: Lots of Back Scratching on Valuation 5319.5 The Man Who Writes the Internal Revenue Code Has Tax Issues: The Rangel Round-Up 5349.7 Paul Wolfowitz and the World Bank 5389.13 The My Tai Concession and the County Supervisor 54610.6 The Cornell Researchers Funded by the Foundation 569

Corporate Governance4.2 Not All Employees Are Equal When It Comes to Moral Development 1604.3 Why Corporations Can’t Control Chicanery 1644.4 The Effects of Compensation Systems: Incentives, Bonuses, Pay, and Ethics 1724.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 1924.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 2004.10 FINOVA and the Loan Write-Off 2064.11 A Primer on Sarbanes–Oxley 2124.12 Bank of America: The Merrill Takeover, the Disclosures, and the Board 2164.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 2184.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 2284.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2334.17 The New Shareholder: Taking Over to Change the Culture 2534.27 WorldCom: The Little Company That Couldn’t After All 2935.3 Transnational Shipping and the Pirates 3226.1 Two Sets of Books on Safety 3536.2 Sleeping on the Job and on the Way Home 353

576 | Business Discipline Index



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6.3 Cintas and OSHA 3546.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 4118.2 Boeing, Lockheed, and the Documents 4968.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 5018.4 Adam Smith: An Excerpt from The Theory of Moral Sentiments 5059.16 Boeing and the Recruiting of the Government Purchasing Agent 548

Cyberlaw1.15 Wi-Fi Piggybacking 416.17 Facebook, MySpace, and YouTube Screening of Employers 3856.18 Bloggers, Chat Rooms, and E-Mail: Your Employer Is Watching 3868.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 514

Economics2.6 P=f(x) The Probability of an Ethical Outcome Is a Function of the Amount of Money Involved: Pressure 622.13 Travel Expenses: A Chance for Extra Income 843.1 The Social Responsibility of Business Is to Increase Its Profits 913.2 A Stakeholder Theory of the Modern Corporation 967.4 Subprime Loans—The Under-the-Radar Loans That Felled a Market 4327.18 Slotting: Facilitation, Costs, or Bribery? 4728.4 Adam Smith: An Excerpt from The Theory of Moral Sentiments 5058.8 Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them 511

Finance2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 733.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 1214.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1764.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 1924.10 FINOVA and the Loan Write-Off 2064.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2334.17 The New Shareholder: Taking Over to Change the Culture 2534.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 2574.19 A Primer on Accounting Issues and Ethics and Earnings Management 2624.20 The Ethics of Bankruptcy 2724.21 The Ethics of Walking Away 2754.27 WorldCom: The Little Company That Couldn’t After All 2934.28 Bernie Madoff: Just Stay Away from the 17th Floor 3116.7 The Trading Desk, Perks, and “Dwarf Tossing” 3628.7 Jonathan Lebed: The Middle School Tycoon 510

Government3.9 The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium 1174.24 NASA and the Space Shuttle Booster Rockets 2858.2 Boeing, Lockheed, and the Documents 4969.1 The Fish Bowl Existence of Government 5259.2 The Minerals Management Service: The Arms-Length Affairs with Oil Executives 5279.3 Kodak, the Appraiser, and the Assessor: Lots of Back Scratching on Valuation 5319.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal Opinions in the

Conduct of Organizations 5369.8 Hiding the Slip-Up on Oil Lease Accounting: Interior Motives 5409.9 Joe the Plumber, Child Support Records, and the Public Official’s Disclosure 5409.10 Stanford University and Government Overhead Payments 5429.11 Yale University and the Compensation of Professors for Government Research: Double-Dipping or Confusion? 5459.12 Minority-Owned Businesses and Reality 5459.14 Government Pricing and Finding a Way Around It 5469.15, Taser and Stunning Behavior 5479.17 The Prosecutors Who Withheld Evidence: The Senator’s Trial 5519.18 The Duke Lacrosse Team and the Prosecutor 5519.19 FEMA, Hurricane Katrina, and the Dilemmas of Regulation versus Human Life 554

Health Care3.11 Whole Foods, John Mackey, and Health Care Debates 1324.6 HealthSouth: The Scrushy Way 183

Business Discipline Index | 577



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5.7 Bhopal: When Safety Standards Differ 3336.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 3586.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 3636.12 On-the-Job Fetal Injuries 3747.9 Tylenol: Decades of Dilemmas 4447.10 Merck and Vioxx 4477.15 Pfizer and the $2.3 Billion Fine for Sales Tactics 4647.22 Stem-Cell Research 487

International Operations3.9 The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium 1175.1 Why an International Code of Ethics Would Be Good for Business 3155.2 Chiquita Banana and Mercenary Protection 3195.3 Transnational Shipping and the Pirates 3225.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 3235.5 Product Dumping 3255.6 On Sweatshops, Nike, and Kathie Lee 3265.7 Bhopal: When Safety Standards Differ 3335.8 Nestlé: When Products Translate Differently 3355.9 Google, Yahoo, and Human Rights in China 3375.10 A Primer on the FCPA 3405.11 Siemens and Bribery, Everywhere 3425.12 Salt Lake City, the Olympics, and Bribery 3446.13 The Benefits of Diversity: Remarks of Doug Daft, Former CEO of Coca-Cola 3766.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 4118.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 5149.7 Paul Wolfowitz and the World Bank 538

Labor Law5.6 On Sweatshops, Nike, and Kathie Lee 3265.7 Bhopal: When Safety Standards Differ 3336.1 Two Sets of Books on Safety 3536.3 Cintas and OSHA 3546.4 Aaron Feuerstein and Malden Mills 3566.11 English-Only Employer Policies 3736.12 On-the-Job Fetal Injuries 3746.13 The Benefits of Diversity: Remarks of Doug Daft, Former CEO of Coca-Cola 3766.14 Seinfeld in the Workplace 3806.16 Arizona Senate Bill 1070: Immigration Laws, Employers, Enforcement, and Emotion 3826.23 Ann Hopkins and Price Waterhouse 3996.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 411

Management2.4 How Leaders Lose Their Way: What Price Hubris? 593.11 Whole Foods, John Mackey, and Health Care Debates 1323.13 Baseball and Steroids 1384.3 Why Corporations Can’t Control Chicanery 1644.26 Getting Information from Employees Who Know to Those Who Can and Will Respond 2894.27 WorldCom: The Little Company That Couldn’t After All 2934.28 Bernie Madoff: Just Stay Away from the 17th Floor 3116.4 Aaron Feuerstein and Malden Mills 3566.9 The Analyst Who Needed a Preschool 3676.10 Julie Roehm: The Walmart Ad Exec with Expensive Tastes 3706.23 Ann Hopkins and Price Waterhouse 3996.24 Exxon and Alaska 4057.16 The Mess at Marsh McLennan 46510.4 Giving and Spending the United Way 566

Marketing3.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 1013.4 Appeasing Stakeholders with Public Relations 1043.12 Ice-T, the Body Count Album, and Shareholder Uprisings 1333.18 The Death of the Great Disposable Diaper Debate 1535.5 Product Dumping 3255.8 Nestlé: When Products Translate Differently 335




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6.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 3636.24 Exxon and Alaska 4057.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 4257.2 Spring Break, Beer, and Alcohol on Campus 4307.3 Cheerios and Cholesterol and Rice Krispies and Immunity 4327.4 Subprime Loans—The Under-the-Radar Loans That Felled a Market 4327.15 Pfizer and the $2.3 Billion Fine for Sales Tactics 4647.17 Frozen Coke and Burger King and the Richmond Rigging 4687.19 Intel and the Chips: When You Have Made a Mistake 4789.15 Taser and Stunning Behavior 547

Nonprofit Management9.10 Stanford University and Government Overhead Payments 54210.1 New Era: If It Sounds Too Good to Be True, It Is Too Good to Be True 55910.2 The Baptist Foundation: Funds of the Faithful 56210.3 ACORN: Community Organizers, Undercover Videos, and Advice 56510.4 Giving and Spending the United Way 56610.5 The Red Cross, New York, and Ground Zero 56810.6 The Cornell Researchers Funded by the Foundation 569

Operations1.13 Dad, the Actuary, and the Stats Class 394.8 Royal Dutch and the Reserves 1994.23 Beech-Nut and the No-Apple-Juice Apple Juice 2805.2 Chiquita Banana and Mercenary Protection 3195.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 3236.21 The Glowing Recommendation 3956.24 Exxon and Alaska 4056.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 4117.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 4617.14 Peanut Corporation of America and Salmonella 4627.19 Intel and the Chips: When You Have Made a Mistake 478

Organizational Behavior1.10 The Little Teacher Who Could: Piper, Kansas, and Term Papers 352.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 733.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 1213.13 Baseball and Steroids 1383.14 Michael Vick, Dogs, Rush Limbaugh, and the NFL 1454.3 Why Corporations Can’t Control Chicanery 1644.4 The Effects of Compensation Systems: Incentives, Bonuses, Pay, and Ethics 1724.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1764.6 HealthSouth: The Scrushy Way 1834.10 FINOVA and the Loan Write-Off 2064.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 2184.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 2284.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2334.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 2576.10 Julie Roehm: The Walmart Ad Exec with Expensive Tastes 3706.14 Seinfeld in the Workplace 3806.20 Is It None of Our Business? 3906.23 Ann Hopkins and Price Waterhouse 3999.7 Paul Wolfowitz and the World Bank 5389.9 Joe the Plumber, Child Support Records, and the Public Official’s Disclosure 54010.3 ACORN: Community Organizers, Undercover Videos, and Advice 565

Purchasing4.23 Beech-Nut and the No-Apple-Juice Apple Juice 2805.6 On Sweatshops, Nike, and Kathie Lee 3266.6 JCPenney and Its Wealthy Buyer 3619.14 Government Pricing and Finding a Way Around It 546

Quality Management4.23 Beech-Nut and the No-Apple-Juice Apple Juice 2804.24 NASA and the Space Shuttle Booster Rockets 285




Licensed to:

4.25 Westland/Hallmark Meat Packing Company and the Cattle Standers 2885.5 Product Dumping 3257.9 Tylenol: Decades of Dilemmas 4447.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 4527.12 Toyota: Sudden Acceleration or Bad Drivers or Pesky Floor Mats? 4587.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 4617.14 Peanut Corporation of America and Salmonella 4627.20 Sears and High-Cost Auto Repairs 481

Regulation2.7 Martha Stewart: Not Such a Good Thing 634.4 The Effects of Compensation Systems: Incentives, Bonuses, Pay, and Ethics 1724.6 HealthSouth: The Scrushy Way 1834.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 2004.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 2284.20 The Ethics of Bankruptcy 2724.25 Westland/Hallmark Meat Packing Company and the Cattle Standers 2885.2 Chiquita Banana and Mercenary Protection 3195.5 Product Dumping 3255.11 Siemens and Bribery, Everywhere 3427.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 4257.3 Cheerios and Cholesterol and Rice Krispies and Immunity 4327.5 Hollywood Ads 4387.7 Craigslist and Ad Screening 4398.7 Jonathan Lebed: The Middle School Tycoon 5108.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 5149.13 The My Tai Concession and the County Supervisor 546

Social Responsibility2.8 On Leaving to Spend More Time with Family 693.1 The Social Responsibility of Business Is to Increase Its Profits 863.2 A Stakeholder Theory of the Modern Corporation 963.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 1013.8 Adelphia: Good Works via a Hand in the Till 1133.9 The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium 1173.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 1213.11 Whole Foods, John Mackey, and Health Care Debates 1323.12 Ice-T, the Body Count Album, and Shareholder Uprisings 1333.14 Michael Vick, Dogs, Rush Limbaugh, and the NFL 1453.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell-Ringers 1463.16 The New Environmentalism 1493.17 Herman Miller and Its Rain Forest Chairs 1513.18 The Death of the Great Disposable Diaper Debate 1534.17 The New Shareholder: Taking Over to Change the Culture 2535.6 On Sweatshops, Nike, and Kathie Lee 3265.7 Bhopal: When Safety Standards Differ 3335.8 Nestlé: When Products Translate Differently 3356.2 Sleeping on the Job and on the Way Home 3536.4 Aaron Feuerstein and Malden Mills 3566.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 3586.24 Exxon and Alaska 4056.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 4117.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 4257.2 Spring Break, Beer, and Alcohol on Campus 4307.6 Kraft, Barney Rubble, and Shrek 4387.7 Craigslist and Ad Screening 4397.21 The Mommy Doll 4877.22 Stem-Cell Research 4877.23 Toro and Its Product Liability Program 4897.24 Fast Food Liability 4908.10 Copyright, Songs, and Charities 5189.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal Opinions in the

Conduct of Organizations 536




Licensed to:

Strategy2.5 Moral Relativism and the Either/or Conundrum 612.15 The Rigged Election 863.12 Ice-T, the Body Count Album, and Shareholder Uprisings 1333.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell-Ringers 1463.17 Herman Miller and Its Rain Forest Chairs 1513.18 The Death of the Great Disposable Diaper Debate 1534.3 Why Corporations Can’t Control Chicanery 1646.24 Exxon and Alaska 4057.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 4257.2 Spring Break, Beer, and Alcohol on Campus 4307.9 Tylenol: Decades of Dilemmas 4447.10 Merck and Vioxx 4447.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 4527.12 Toyota: Sudden Acceleration or Bad Drivers or Pesky Floor Mats? 4587.17 Frozen Coke and Burger King and the Richmond Rigging 4687.18 Slotting: Facilitation, Costs, or Bribery? 4727.19 Intel and the Chips: When You Have Made a Mistake 4788.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 5018.5 The Coke Employee Who Offered Inside Information to Pepsi 5068.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520

Supply Chain Management4.23 Beech-Nut and the No-Apple-Juice Apple Juice 2805.5 Product Dumping 3255.6 On Sweatshops, Nike, and Kathie Lee 3266.6 JCPenney and Its Wealthy Buyer 3617.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 4617.17 Frozen Coke and Burger King and the Richmond Rigging 468

Whistle-Blowing4.22 The Options for Whistle-Blowers 2794.23 Beech-Nut and the No-Apple-Juice Apple Juice 2804.24 NASA and the Space Shuttle Booster Rockets 2854.25 Westland/Hallmark Meat Packing Company and the Cattle Standers 2884.26 Getting Information from Employees Who Know to Those Who Can and Will Respond 2894.28 Bernie Madoff: Just Stay Away from the 17th Floor 3116.15 Toyota, the CEO, the Assistant, and Inaction 3816.19 Jack Welch and the Harvard Interview 3877.15 Pfizer and the $2.3 Billion Fine for Sales Tactics 4647.17 Frozen Coke and Burger King and the Richmond Rigging 4689.2 The Minerals Management Service: The Arms-Length Affairs with Oil Executives 5279.14 Government Pricing and Finding a Way Around It 54610.1 New Era: If It Sounds Too Good to Be True, It Is Too Good to Be True 559




Licensed to:

Product/Company/Individuals/Subject Index

AAP (American Academy of Pediatrics)5.8 Nestlé: When Products Translate Differently 336

ABA (American Bar Association)9.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal

Opinions in the Conduct of Organizations 537

ACORN (Association of Community Organizations for Reform Now)10.3 ACORN: Community Organizers, Undercover Videos, and Advice 565

Adelphia3.8 Adelphia: Good Works via a Hand in the Till 113

AES Company5.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 324

Aguirre, Fernando5.2 Chiquita Banana and Mercenary Protection 321

AICPA (American Institute of Certified Public Accountants)4.19 A Primer on Accounting Issues and Ethics and Earnings Management 267

AIG (American International Group)1.7 Hank Greenberg and AIG 274.4 The Effects of Compensation Systems: Incentives, Bonuses, Pay, and Ethics 172

Alderson, Sandy3.13 Baseball and Steroids 138

AMA (American Medical Association)6.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 3647.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 426

American Academy of Pediatrics (AAP)5.8 Nestlé: When Products Translate Differently 336

American Bar Association (ABA)9.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal Opinions

in the Conduct of Organizations 537

American Institute of Certified Public Accountants (AICPA)4.19 A Primer on Accounting Issues and Ethics and Earnings Management 267

American International Group (AIG)1.7 Hank Greenberg and AIG 274.4 The Effects of Compensation Systems: Incentives, Bonuses, Pay, and Ethics 172

American Medical Association (AMA)6.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 3647.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 426

American Medical Students Association (AMSA)6.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 365

American Society of Composers, Authors & Publishers (ASCAP)8.10 Copyright, Songs, and Charities 518



Licensed to:

American Union Carbide Corporation5.7 Bhopal: When Safety Standards Differ 333

AMSA (American Medical Students Association)6.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 365

Anheuser-Busch7.2 Spring Break, Beer, and Alcohol on Campus 431

Aristotle1.3 What Are Ethics? 15

Arthur Andersen2.4 How Leaders Lose Their Way: What Price Hubris? 594.3 Why Corporations Can’t Control Chicanery 1654.16 Arthur Andersen: A Fallen Giant 246

ASCAP (American Society of Composers, Authors & Publishers)8.10 Copyright, Songs, and Charities 518

Association of Community Organizations for Reform Now (ACORN)10.3 ACORN: Community Organizers, Undercover Videos, and Advice 565

AT&T6.9 The Analyst Who Needed a Preschool 367

Atkins Diet4.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 231

Bacanovic, Peter2.7 Martha Stewart: Not Such a Good Thing 63

Bank of America4.12 Bank of America: The Merrill Takeover, the Disclosures, and the Board 2164.19 A Primer on Accounting Issues and Ethics and Earnings Management 263

Baptist Foundation of Arizona (BFA)10.2 The Baptist Foundation: Funds of the Faithful 562

Baridis, Marisa8.6 The Compliance Officer Who Strayed 508

Barings Bank4.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 192

Barnes, Brenda C.2.8 On Leaving to Spend More Time with Family 69

Barnes, Roger3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 126

Bausch & Lomb4.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 228

Baxter, J. Clifford4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 241

Bayer9.14 Government Pricing and Finding a Way Around It 546

Bear Stearns4.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 2594.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 176

Beech-Nut4.23 Beech-Nut and the No-Apple-Juice Apple Juice 280

Product/Company/Individuals/Subject Index | 583



Licensed to:

Ben & Jerry’s3.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 103

Bennett, John G. Jr.10.1 New Era: If It Sounds Too Good to Be True, It Is Too Good to Be True 559

Bentham, Jeremy1.3 What Are Ethics? 13

Berkshire Hathaway Company4.10 FINOVA and the Loan Write-Off 210

BFA (Baptist Foundation of Arizona)10.2 The Baptist Foundation: Funds of the Faithful 562

Bilzerian, Paul A.4.20 The Ethics of Bankruptcy 273

Blackstone Group8.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 501

Blagojevich, Rod9.4 The Governor and a Senate Seat Vacated by a President 532

Blanchard, Kenneth1.8 Some Simple Tests for Resolving Ethical Dilemmas 31

Blankfein, Lloyd2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 77

Blumenthal, Richard1.5 On Rationalizing and Labeling 22

Body Shop International (“BSI”)3.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 103

Boeing6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 3596.20 Is It None of Our Business? 3908.2 Boeing, Lockheed, and the Documents 4969.16 Boeing and the Recruiting of the Government Purchasing Agent 548

Boisjoly, Roger4.24 NASA and the Space Shuttle Booster Rockets 286

Borden7.18 Slotting: Facilitation, Costs, or Bribery? 475

BP6.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 4119.2 The Minerals Management Service: The Arms-Length Affairs with Oil Executives 529

Brabbs, Steven4.27 WorldCom: The Little Company That Couldn’t after All 300

Brennan, Edward A.7.20 Sears and High-Cost Auto Repairs 482

Bresch, Heather2.16 West Virginia University and the Governor’s Daughter 86

Brewer, Jan6.16 Arizona Senate Bill 1070: Immigration Laws, Employers, Enforcement, and Emotion 382

Brown, Michael9.19 FEMA, Hurricane Katrina, and the Dilemmas of Regulation versus Human Life 554

584 | Product/Company/Individuals/Subject Index



Licensed to:

Browne, John6.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 412

“BSI” (Body Shop International)3.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 103

Bud Light7.2 Spring Break, Beer, and Alcohol on Campus 431

Buffett, Warren1.8 Some Simple Tests for Resolving Ethical Dilemmas 32

Bullock, Ken5.12 Salt Lake City, the Olympics, and Bribery 346

Burberry8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 517

Burger King7.17 Frozen Coke and Burger King and the Richmond Rigging 468

Burke, Edmund6.22 The Ethics of Confrontation 398

Burnham, Daniel P.2.8 On Leaving to Spend More Time with Family 69

Canseco, Jose3.13 Baseball and Steroids 138

Capellas, Michael D.4.27 WorldCom: The Little Company That Couldn’t after All 307

Carlin, Wayne3.8 Adelphia: Good Works via a Hand in the Till 115

Carnation5.8 Nestlé: When Products Translate Differently 336

Carr, Albert Z.2.3 Is Business Bluffing Ethical? 49

Cartier8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 514

Caterpillar6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 359

Causey, Richard4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2434.16 Arthur Andersen: A Fallen Giant 247

CDOS (Collateralized Debt Obligations)4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 176

Ceconi, Margaret4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 239

Cell Phones2.12 What Happens in Boulder Stays in Boulder: Cell Phone Alibis 84

Chevrolet Malibu7.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 457

China5.9 Google, Yahoo, and Human Rights in China 337




Licensed to:

Chiquita Banana5.2 Chiquita Banana and Mercenary Protection 319

Chrysler8.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520

CIA9.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal Opinions

in the Conduct of Organizations 536

Cintas6.3 Cintas and OSHA 354

Cioffi, Ralph R.4.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 259

Cisco6.18 Bloggers, Chat Rooms, and E-Mail: Your Employer Is Watching 386

Citigroup4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1766.9 The Analyst Who Needed a Preschool 367

Clemens, Roger1.5 On Rationalizing and Labeling 22

Coca-Cola, Inc.6.13 The Benefits of Diversity: Remarks of Doug Daft, Former CEO of Coca-Cola 3767.17 Frozen Coke and Burger King and the Richmond Rigging 4688.5 The Coke Employee Who Offered Inside Information to Pepsi 506

Collateralized Debt Obligations (CDOs)4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 176

Collins, Stephen2.8 On Leaving to Spend More Time with Family 70

Conference Board2.9 The Areas of Ethical Challenges in Business 71

Conran, Jim7.20 Sears and High-Cost Auto Repairs 482

Consumer Product Safety Commission5.5 Product Dumping 325

Coors Light7.2 Spring Break, Beer, and Alcohol on Campus 431

Copyright8.10 Copyright, Songs, and Charities 518

Cornell University10.6 The Cornell Researchers Funded by the Foundation 569

Corporate and Criminal Fraud Accountability Act of 20024.11 A Primer on Sarbanes–Oxley 215

Corzine, Jon2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 77

Countrywide2.4 How Leaders Lose Their Way: What Price Hubris? 593.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 129

COX-2 Inhibitors7.10 Merck and Vioxx 448




Licensed to:

Craigslist7.7 Craigslist and Ad Screening 439

Cramer, Jim2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 77

Cuneo, Dennis6.15 Toyota, the CEO, the Assistant, and Inaction 381

Daft, Doug6.13 The Benefits of Diversity: Remarks of Doug Daft, Former CEO of Coca-Cola 376

Dayton-Hudson Corporation3.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell Ringers 146

de Tocqueville, Alexis3.5 Michael Novak on Capitalism and the Corporation 108

Delainey, David4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 242

Delta6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 359

Divine Command Theory1.3 What Are Ethics? 12

Drexel Burnham4.3 Why Corporations Can’t Control Chicanery 165

Drucker, Peter1.8 Some Simple Tests for Resolving Ethical Dilemmas 292.2 The Ethics of Responsibility 48

Duke Lacrosse Team9.18 The Duke Lacrosse Team and the Prosecutor 551

Duncan, David4.16 Arthur Andersen: A Fallen Giant 247

Ebay8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 514

Ebbers, Bernard J.4.27 WorldCom: The Little Company That Couldn’t after All 293

EBIT (Earnings Before Interest and Taxes)4.19 A Primer on Accounting Issues and Ethics and Earnings Management 267

EBITDA (Earnings before Interest Taxes, Depreciation, and Amortization)4.19 A Primer on Accounting Issues and Ethics and Earnings Management 267

E. F. Hutton4.3 Why Corporations Can’t Control Chicanery 165

Employee Retirement Income Security Act (ERISA)6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 358

Enron4.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 2014.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2336.20 Is It None of Our Business? 391

Entine, Jon3.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 101




Licensed to:

Entitlement Theory (Rights Theory)1.3 What Are Ethics? 14

Erisa (Employee Retirement Income Security Act)6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 358

Esrey, William T.4.27 WorldCom: The Little Company That Couldn’t after All 295

Ethical Egoism Theory1.3 What Are Ethics? 12

Exxon3.16 The New Environmentalism 1516.24 Exxon and Alaska 405

Fair Isaac Co. (FICO)7.4 Subprime Loans—The Under-the-Radar Loans That Felled a Market 434

Faneuil, Douglas2.7 Martha Stewart: Not Such a Good Thing 63

Fannie Mae3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 121

FASB (Financial Accounting Standards Board)4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 234

Fastow, Andrew1.3 What Are Ethics? 154.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 242

Fastow, Lea4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 242

FCPA (Foreign Corrupt Practices ACT)5.10 A Primer on the FCPA 340

Fehr, Don3.13 Baseball and Steroids 138

FEMA (Federal Emergency Management Agency)9.19 FEMA, Hurricane Katrina, and the Dilemmas of Regulation versus Human Life 554

Feuerstein, Aaron6.4 Aaron Feuerstein and Malden Mills 356

FICO (Fair Isaac Co.)7.4 Subprime Loans—The Under-the-Radar Loans That Felled a Market 434

Fidelity Investments6.7 The Trading Desk, Perks, and “Dwarf Tossing” 362

Financial Accounting Standards Board (FASB)4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 234

Finova Group, Inc.4.10 FINOVA and the Loan Write-Off 206

Fiorina, Carly2.8 On Leaving to Spend More Time with Family 70

Firestone6.22 The Ethics of Confrontation 397




Licensed to:

Fisher, George3.9 The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium 117

Foley, Bill3.17 Herman Miller and Its Rain Forest Chairs 151

Ford6.22 The Ethics of Confrontation 3977.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 4528.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520

Ford, John N.2.8 On Leaving to Spend More Time with Family 69

Foreign Corrupt Practices Act (FCPA)5.10 A Primer on the FCPA 340

Fox, Neal3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 134

Freeman, R. Edward3.2 A Stakeholder Theory of the Modern Corporation 96

Friedman, Milton3.1 The Social Responsibility of Business Is to Increase Its Profits 91

Frierson, James3.9 The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium 117

Frito-Lay7.18 Slotting: Facilitation, Costs, or Bribery? 472

GAAP (Generally Accepted Accounting Principles)3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 1254.19 A Primer on Accounting Issues and Ethics and Earnings Management 267

Galesi, Francesco4.27 WorldCom: The Little Company That Couldn’t after All 302

Galleon Group Hedge Fund4.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 260

Gandhi, Mahatma1.8 Some Simple Tests for Resolving Ethical Dilemmas 32

Geffen, David3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 134

Gellerman, Saul4.3 Why Corporations Can’t Control Chicanery 164

General Mills7.3 Cheerios and Cholesterol and Rice Krispies and Immunity 432

Generally Accepted Accounting Principles (GAAP)3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 1254.19 A Primer on Accounting Issues and Ethics and Earnings Management 267

GFC (Greyhound Financial Corporation)4.10 FINOVA and the Loan Write-Off 206

Giambi, Jason3.13 Baseball and Steroids 138

Glisan, Ben4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 243




Licensed to:

GM (General Motors)6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 3587.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 452

Goldman Sachs2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 73

Google1.4 The Types of Ethical Dilemmas: From Truth to Honesty to Conflicts 215.9 Google, Yahoo, and Human Rights in China 3378.11 Microsoft vs. Google and “Snippets” of Books 519

Gorelick, Jamie3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 124

Green, Dianna1.12 Puffing Your Résumé 38

Greenberg, Hank1.7 Hank Greenberg and AIG 27

Greenfield, Jerry3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 134

Greenpeace3.16 The New Environmentalism 149

Greyhound Financial Corporation (GFC)4.10 FINOVA and the Loan Write-Off 206

Grubman, Jack4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1796.9 The Analyst Who Needed a Preschool 367

Guardiola, Jose5.6 On Sweatshops, Nike, and Kathie Lee 332

Gucci8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 517

Gunty, Murry2.15 The Rigged Election 86

Halfon, Robert3.4 Appeasing Stakeholders with Public Relations 104

Hatsopoulos, John W.3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 134

Healthsouth4.6 HealthSouth: The Scrushy Way 1836.20 Is It None of Our Business? 391

Henze, Diana4.6 HealthSouth: The Scrushy Way 185

Herman Miller, Inc.3.17 Herman Miller and Its Rain Forest Chairs 151

Heston, Charlton3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 133

Hilton8.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 501




Licensed to:

Hopkins, Ann6.23 Ann Hopkins and Price Waterhouse 399

Howard, J. Timothy3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 124, 126

Hoyvald, Nils4.23 Beech-Nut and the No-Apple-Juice Apple Juice 281

Hurricane Katrina9.19 FEMA, Hurricane Katrina, and the Dilemmas of Regulation versus Human Life 554

IBM7.19 Intel and the Chips: When You Have Made a Mistake 478

ICE-T3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 133

Ikea5.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 323

Intel7.19 Intel and the Chips: When You Have Made a Mistake 478

Iroquois Brands, Ltd.4.17 The New Shareholder: Taking Over to Change the Culture 253

IRS2.13 Travel Expenses: A Chance for Extra Income 84

Jack-in-the-Box7.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 461

JCPenney6.6 JCPenney and Its Wealthy Buyer 361

Jeffries & Co.6.7 The Trading Desk, Perks, and “Dwarf Tossing” 362

Jennings, Marianne M.3.16 The New Environmentalism 1493.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 101

Jett, Joseph4.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 192

Johnson, David R.5.12 Salt Lake City, the Olympics, and Bribery 345

Johnson, James A.3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 124

Johnson & Johnson7.9 Tylenol: Decades of Dilemmas 444

Johnson Controls, Inc.6.12 On-the-Job Fetal Injuries 374

Jones, Charles4.23 Beech-Nut and the No-Apple-Juice Apple Juice 281

Kant, Immanuel1.3 What Are Ethics? 13

Kearns, Robert W.8.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520




Licensed to:

Kellett, Stiles A. Jr.4.27 WorldCom: The Little Company That Couldn’t after All 302

Kellogg7.3 Cheerios and Cholesterol and Rice Krispies and Immunity 433

Kelly, Marjorie3.6 Marjorie Kelly and the Divine Right of Capital 108

KELP (Key Employee Corporate Loan Program), TYCO4.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 222

Kerviel, Jérôme4.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 192

Kessel, Richard7.20 Sears and High-Cost Auto Repairs 482

Key Employee Corporate Loan Program (KELP), TYCO4.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 222

Khan, Roomy4.2 Not All Employees Are Equal When It Comes to Moral Development 160

Kidder Peabody4.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 192

King, Martin Luther, Jr.1.8 Some Simple Tests for Resolving Ethical Dilemmas 32

Kmart7.18 Slotting: Facilitation, Costs, or Bribery? 477

Kobayashi, Sayaka6.15 Toyota, the CEO, the Assistant, and Inaction 381

Kodak9.3 Kodak, the Appraiser, and the Assessor: Lots of Back Scratching on Valuation 531

Koenig, Mark4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 243

Konheim, Bud3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 134

Kopchinski, John7.15 Pfizer and the $2.3 Billion Fine for Sales Tactics 464

Kopper, Michael J.4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 243

Kozlowski, Dennis4.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 218

Kraft7.6 Kraft, Barney Rubble, and Shrek 438

Krispy Kreme4.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 228

Lavery, John4.23 Beech-Nut and the No-Apple-Juice Apple Juice 280

Lay, Kenneth4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 234




Licensed to:

LDDS (Long Distance Discount Service)4.27 WorldCom: The Little Company That Couldn’t after All 293

Lebed, Jonathan8.7 Jonathan Lebed: The Middle School Tycoon 510

Lee, Kathie5.6 On Sweatshops, Nike, and Kathie Lee 326

Lee, Matthew4.26 Getting Information from Employees Who Know to Those Who Can and Will Respond 289

Leeson, Nick4.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 192

Lefcoe, George4.1 The Moving Line 159

Lehman Bros4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 176

Lehman Brothers4.26 Getting Information from Employees Who Know to Those Who Can and Will Respond 289

Leucadia National Corporation4.10 FINOVA and the Loan Write-Off 210

Levin, Robert J.3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 124

Levitt, Arthur4.19 A Primer on Accounting Issues and Ethics and Earnings Management 262

Lewis, Kenneth D.4.12 Bank of America: The Merrill Takeover, the Disclosures, and the Board 217

Licari, Jerome J.4.23 Beech-Nut and the No-Apple-Juice Apple Juice 280

Lie, Erik4.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 204

Locke, Charles S.4.24 NASA and the Space Shuttle Booster Rockets 287

Locke, John1.3 What Are Ethics? 14

Lockheed8.2 Boeing, Lockheed, and the Documents 496

Locklear, Jim G.6.6 JCPenney and Its Wealthy Buyer 361

Long Distance Discount Service (LDDS)4.27 WorldCom: The Little Company That Couldn’t after All 293

Louis Vuitton8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 514

Lucent Technologies6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 359

Mackey, John3.11 Whole Foods, John Mackey, and Health Care Debates 132




Licensed to:

Maclean, Richard3.16 The New Environmentalism 149

Madoff, Bernie4.28 Bernie Madoff: Just Stay Away from the 17th Floor 311

Malden Mills6.4 Aaron Feuerstein and Malden Mills 356

Malibu7.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 457

Managerial Capitalism3.2 A Stakeholder Theory of the Modern Corporation 97

Manfred, Robert3.13 Baseball and Steroids 138

Markoff, Philip H.7.7 Craigslist and Ad Screening 440

Marks, Bruce3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 129

Mark-to-Market Accounting4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 234

Marsh McLennan (MMC)7.16 The Mess at Marsh McLennan 465

Mayopoulos, Timothy J.4.12 Bank of America: The Merrill Takeover, the Disclosures, and the Board 216

McCoy, Bowen H. (BUZZ)1.2 The Parable of the Sadhu 42.5 Moral Relativism and the Either/or Conundrum 61

McDonald, Allan4.24 NASA and the Space Shuttle Booster Rockets 286

McDonald’s6.2 Sleeping on the Job and on the Way Home 3537.24 Fast Food Liability 490

McGuire, William W.4.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 202

McGwire, Mark3.13 Baseball and Steroids 138

MCI4.27 WorldCom: The Little Company That Couldn’t after All 294

McNeil Consumer Products, Inc.7.9 Tylenol: Decades of Dilemmas 444

Merck7.10 Merck and Vioxx 447

Merrill Lynch4.3 Why Corporations Can’t Control Chicanery 1704.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1764.12 Bank of America: The Merrill Takeover, the Disclosures, and the Board 2164.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2366.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 359

Mervyn’s8.8 Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them 511




Licensed to:

Microsoft8.11 Microsoft vs. Google and “Snippets” of Books 519

Mill, John Stuart1.3 What Are Ethics? 13

Miller Brewing Company6.14 Seinfeld in the Workplace 380

Miller Lite7.2 Spring Break, Beer, and Alcohol on Campus 431

Minerals Management Service (MMS)9.2 The Minerals Management Service: The Arms-Length Affairs with Oil Executives 527

MMC (Marsh McLennan)7.16 The Mess at Marsh McLennan 465

MMS (Minerals Management Service)9.2 The Minerals Management Service: The Arms-Length Affairs with Oil Executives 527

Mohebbi, Afshin2.8 On Leaving to Spend More Time with Family 69

Moore, Demi7.5 Hollywood Ads 438

Morgan Stanley4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1768.6 The Compliance Officer Who Strayed 508

Moynihan, Daniel Patrick2.3 Is Business Bluffing Ethical? 53

Mozilo, Angelo3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 129

Mudd, Daniel H.3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 126

Myers, David4.27 WorldCom: The Little Company That Couldn’t after All 300

MySpace6.17 Facebook, MySpace, and YouTube Screening of Employees 385

Nader, Ralph7.8 A Primer on Product Liability 442

NADS (National Association of Diaper Services)3.18 The Death of the Great Disposable Diaper Debate 154

NASA (National Aeronautics and Space Administration)4.24 NASA and the Space Shuttle Booster Rockets 285

Nash, Laura1.8 Some Simple Tests for Resolving Ethical Dilemmas 29

Nathanson, Marc B.3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 135

Neighborhood Assistance Corporation3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 129




Licensed to:

Nestlé5.8 Nestlé: When Products Translate Differently 335

New Era Philanthropy10.1 New Era: If It Sounds Too Good to Be True, It Is Too Good to Be True 559

NFL3.14 Michael Vick, Dogs, Rush Limbaugh, and the NFL 145

Nifong, Michael B.9.18 The Duke Lacrosse Team and the Prosecutor 552

Nike5.6 On Sweatshops, Nike, and Kathie Lee 326

Non-GAAP Measures4.19 A Primer on Accounting Issues and Ethics and Earnings Management 267

Novak, Michael3.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 1033.5 Michael Novak on Capitalism and the Corporation 104

Nozick, Robert1.3 What Are Ethics? 14

Oliver, Michael1.12 Puffing Your Résumé 38

Olson, John4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 236

O’Neal, Stan4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 179

OSHA6.3 Cintas and OSHA 354

Otaka, Hideaki6.15 Toyota, the CEO, the Assistant, and Inaction 381

Palm, Gregory K.2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 82

Palmeiro, Rafael3.13 Baseball and Steroids 138

Partow, Kourosh7.4 Subprime Loans—The Under-the-Radar Loans That Felled a Market 434

Paulson, Henry2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 77

PCAOB (Public Company Accounting Oversight Board)4.11 A Primer on Sarbanes–Oxley 212

Peale, Norman Vincent1.8 Some Simple Tests for Resolving Ethical Dilemmas 31

Peanut Corporation of America7.14 Peanut Corporation of America and Salmonella 462

Pelton, Christine1.10 The Little Teacher Who Could: Piper, Kansas, and Term Papers 34

Pepsi8.5 The Coke Employee Who Offered Inside Information to Pepsi 506




Licensed to:

Pfizer7.15 Pfizer and the $2.3 Billion Fine for Sales Tactics 464

Philip Morris7.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 427

Pinto7.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 452

Pirates5.3 Transnational Shipping and the Pirates 322

PIW (Public Interest Watch)3.16 The New Environmentalism 151

Planned Parenthood3.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell Ringers 146

Plato1.3 What Are Ethics? 15

Ponzi Scheme4.28 Bernie Madoff: Just Stay Away from the 17th Floor 311

Poseley, Tara2.8 On Leaving to Spend More Time with Family 69

Prada8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 517

Price Waterhouse6.23 Ann Hopkins and Price Waterhouse 399

PriceWaterhouseCoopers (PWC)5.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 323

Prince, Chuck4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 179

Procter & Gamble3.18 The Death of the Great Disposable Diaper Debate 153

Public Company Accounting Oversight Board (PCAOB)4.11 A Primer on Sarbanes–Oxley 212

Public Interest Watch (PIW)3.16 The New Environmentalism 151

Putnam Investments7.16 The Mess at Marsh McLennan 466

PWC (PriceWaterhouseCoopers)5.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 323

Quattrone, Frank4.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 258

Raff, Beryl B.2.8 On Leaving to Spend More Time with Family 69

Raines, Franklin D.3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 124

Rainforest Alliance5.2 Chiquita Banana and Mercenary Protection 319




Licensed to:

Rajappa, Sampath3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 123

Rajaratnam, Raj4.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 260

Rand, Ayn1.3 What Are Ethics? 12

Rangel, Charlie9.5 The Man Who Writes the Internal Revenue Code Has Tax Issues: The Rangel Round-Up 534

Rawls, John1.3 What Are Ethics? 14

Red Cross10.5 The Red Cross, New York, and Ground Zero 568

Reynolds, Burt4.20 The Ethics of Bankruptcy 273

Rice, Kenneth D.4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 243

Rigas, John3.8 Adelphia: Good Works via a Hand in the Till 113

Rights Theory (Entitlement Theory)1.3 What Are Ethics? 14

RJR (R.J. Reynolds)7.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 425

Roehm, Julie6.10 Julie Roehm: The Walmart Ad Exec with Expensive Tastes 370

Romney, Mitt5.12 Salt Lake City, the Olympics, and Bribery 347

Royal Dutch/Shell Group4.8 Royal Dutch and the Reserves 199

Rubin, Robert2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 774.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 182

Safeway6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 359

Salomon Brothers/Salomon Smith Barney4.27 WorldCom: The Little Company That Couldn’t after All 2956.9 The Analyst Who Needed a Preschool 367

Salquist, Roger3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 133

Sanborn, George3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 135

Sanders, Teresa4.6 HealthSouth: The Scrushy Way 187

Sarbanes–Oxley Act (2002)4.11 A Primer on Sarbanes–Oxley 212




Licensed to:

Scally, Raouf5.12 Salt Lake City, the Olympics, and Bribery 345

Schenkkan, Dick7.20 Sears and High-Cost Auto Repairs 482

Schilling, Curt3.13 Baseball and Steroids 138

Scrushy, Richard1.4 The Types of Ethical Dilemmas: From Truth to Honesty to Conflicts 214.6 HealthSouth: The Scrushy Way 183

Sears7.20 Sears and High-Cost Auto Repairs 481

Siemens5.11 Siemens and Bribery, Everywhere 342

Simmons Mattress Company8.8 Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them 511

Skilling, Jeffrey2.8 On Leaving to Spend More Time with Family 694.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 236

Skyy Blue Malt Liquor7.2 Spring Break, Beer, and Alcohol on Campus 431

Small, Lawrence M.3.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Hazards 124

Smith, Adam1.3 What Are Ethics? 128.4 Adam Smith: An Excerpt from The Theory of Moral Sentiments 505

Social Contract (Theory of Justice)1.3 What Are Ethics? 14

Société Générale4.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 192

Solomon, Robert1.3 What Are Ethics? 15

Sosa, Sammy3.13 Baseball and Steroids 138

Southwest Airlines6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 359

Spitzer, Eliot7.16 The Mess at Marsh McLennan 466

Stanford University9.10 Stanford University and Government Overhead Payments 542

Starwood8.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 501

Steel, Robert2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 77

Stem-Cell Research7.22 Stem-Cell Research 487




Licensed to:

Steroids3.13 Baseball and Steroids 138

Stevens, Ted9.17 The Prosecutors Who Withheld Evidence: The Senator’s Trial 551

Stewart, Martha2.7 Martha Stewart: Not Such a Good Thing 63

Stubbs, Stoney M. Jr.3.12 Ice-T, the Body Count Album, and Shareholder Uprisings 135

Sullivan, Scott4.27 WorldCom: The Little Company That Couldn’t after All 298

Sunbeam, Inc.4.19 A Primer on Accounting Issues and Ethics and Earnings Management 265

Swartz, Mark4.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 226

Sysco7.18 Slotting: Facilitation, Costs, or Bribery? 477

Tannin, Matthew M.4.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 259

Target3.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell Ringers 146

Taser9.15 Taser and Stunning Behavior 547

Taylor, Henry2.3 Is Business Bluffing Ethical? 49

Tenneco4.19 A Primer on Accounting Issues and Ethics and Earnings Management 263

Thain, John2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 77

Theory of Justice (Social Contract)1.3 What Are Ethics? 14

Thomas, Frank3.13 Baseball and Steroids 138

Thomson, Todd S.4.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 179

Thornburgh, Richard4.27 WorldCom: The Little Company That Couldn’t after All 299

Tiffany8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 514

Toro Company7.23 Toro and Its Product Liability Program 489

Tourre, Fabrice2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 79

Towers, Kevin3.13 Baseball and Steroids 138




Licensed to:

Toyota6.15 Toyota, the CEO, the Assistant, and Inaction 3817.12 Toyota: Sudden Acceleration or Bad Drivers or Pesky Floor Mats? 458

Transnational Shipping5.3 Transnational Shipping and the Pirates 322

Tyco4.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 2016.20 Is It None of Our Business? 392

Tyco International4.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 218

Tylenol7.9 Tylenol: Decades of Dilemmas 444

United Airlines (UA)3.9 The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium 1196.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 358

United Way10.4 Giving and Spending the United Way 566

UnitedHealth Group4.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 202

Van de Vijver, Walter4.8 Royal Dutch and the Reserves 199

Vericon Resources, Inc.1.12 Puffing Your Résumé 38

Verizon6.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 359

Vick, Michael3.14 Michael Vick, Dogs, Rush Limbaugh, and the NFL 145

Villy Nielsen, APS7.21 The Mommy Doll 487

Viniar, David2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 79

Vinson, Betty4.27 WorldCom: The Little Company That Couldn’t after All 306

Vioxx7.10 Merck and Vioxx 447

Waldron, John5.6 On Sweatshops, Nike, and Kathie Lee 332

Walmart6.10 Julie Roehm: The Walmart Ad Exec with Expensive Tastes 370

Watkins, Philip4.6 HealthSouth: The Scrushy Way 189

Watkins, Sherron4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2394.16 Arthur Andersen: A Fallen Giant 248




Licensed to:

Watts, Philip4.8 Royal Dutch and the Reserves 199

Welch, Jack6.19 Jack Welch and the Harvard Interview 387

Westland/Hallmark Meat Packing Company2.1 What’s Different about Business Ethics? 474.25 Westland/Hallmark Meat Packing Company and the Cattle Standers 288

Whistle-Blowers4.22 The Options for Whistle-Blowers 279

White, Brent T.4.21 The Ethics of Walking Away 275

White-Collar Crime Penalty Enhancement Act of 20024.11 A Primer on Sarbanes–Oxley 216

Whole Foods3.11 Whole Foods, John Mackey, and Health Care Debates 132

Wilberforce, William2.4 How Leaders Lose Their Way: What Price Hubris? 61

Winkelried, Jon2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 82

Wolfowitz, Paul9.7 Paul Wolfowitz and the World Bank 538

Woods, Tiger1.4 The Types of Ethical Dilemmas: From Truth to Honesty to Conflicts 20

World Bank9.7 Paul Wolfowitz and the World Bank 538

Worldcom4.3 Why Corporations Can’t Control Chicanery 1654.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 2014.27 WorldCom: The Little Company That Couldn’t after All 2936.20 Is It None of Our Business? 3916.9 The Analyst Who Needed a Preschool 367

Wurzelbacher, Joseph9.9 Joe the Plumber, Child Support Records, and the Public Official’s Disclosure 540

Yahoo!5.9 Google, Yahoo, and Human Rights in China 337

Yale University9.11 Yale University and the Compensation of Professors for Government Research:

Double-Dipping or Confusion? 545

Yoo, John9.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of

Legal Opinions in the Conduct of Organizations 536

Young, Frank7.9 Tylenol: Decades of Dilemmas 444

YouTube6.17 Facebook, MySpace, and YouTube Screening of Employees 385




Licensed to:

Topic Index

Advertising7.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 4257.2 Spring Break, Beer, and Alcohol on Campus 4307.3 Cheerios and Cholesterol and Rice Krispies and Immunity 4327.4 Subprime Loans–The Under-the-Radar Loans That Felled a Market 4347.5 Hollywood Ads 4387.6 Kraft, Barney Rubble, and Shrek 4387.7 Craigslist and Ad Screening 439

Affirmative Action6.12 On-the-Job Fetal Injuries 3746.13 The Benefits of Diversity: Remarks of Doug Daft, Former CEO of Coca-Cola 376

Agency6.6 JCPenney and Its Wealthy Buyer 361

Appropriation8.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520

Auditors3.9 The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium 1174.3 Why Corporations Can’t Control Chicanery 1644.16 Arthur Andersen: A Fallen Giant 2464.27 WorldCom: The Little Company That Couldn’t After All 293

Bankruptcy4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2334.20 The Ethics of Bankruptcy 2724.27 WorldCom: The Little Company That Couldn’t After All 2938.8 Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them 511

Bribery5.1 Why an International Code of Ethics Would Be Good for Business 3155.3 Transnational Shipping and the Pirates 3225.10 A Primer on the FCPA 3405.11 Siemens and Bribery, Everywhere 3425.12 Salt Lake City, the Olympics, and Bribery 344

Categorical Imperative1.3 What Are Ethics? From Line-Cutting to Kant 10

Christian Consequentialism5.6 On Sweatshops, Nike, and Kathie Lee 3266.19 Jack Welch and the Harvard Interview 387

Compensation4.4 The Effects of Compensation Systems: Incentives, Bonuses, Pay, and Ethics 1724.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 1924.10 FINOVA and the Loan Write-Off 2064.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 2186.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 358

Competition7.16 The Mess at Marsh McLennan 4657.18 Slotting: Facilitation, Costs, or Bribery? 472



Licensed to:

8.1 A Primer on Covenants Not to Compete: Are They Valid? 4958.2 Boeing, Lockheed, and the Documents 4968.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 5018.4 Adam Smith: An Excerpt from The Theory of Moral Sentiments 5058.5 The Coke Employee Who Offered Inside Information to Pepsi 506

Conflicts of Interest6.6 JCPenney and Its Wealthy Buyer 3616.10 Julie Roehm: The Walmart Ad Exec with Expensive Tastes 3708.2 Boeing, Lockheed, and the Documents 4969.16 Boeing and the Recruiting of the Government Purchasing Agent 54810.6 The Cornell Researchers Funded by the Foundation 569

Contracts4.21 The Ethics of Walking Away 2757.19 Intel and the Chips: When You Have Made a Mistake 4787.20 Sears and High-Cost Auto Repairs 4818.1 A Primer on Covenants Not to Compete: Are They Valid? 4958.3 Starwood, Hilton, and the Suspiciously Similar New Hotel Designs 501

Contributions3.8 Adelphia: Good Works via a Hand in the Till 1133.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell Ringers 14610.1 New Era: If It Sounds Too Good to Be True, It Is Too Good to Be True 55910.2 The Baptist Foundation: Funds of the Faithful 56210.4 Giving and Spending the United Way 56610.5 The Red Cross, New York, and Ground Zero 568

Cookie Jar Reserves4.19 A Primer on Accounting Issues and Ethics and Earnings Management 262

Copyright Infringement8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 5148.10 Copyright, Songs, and Charities 5188.11 Microsoft vs. Google and “Snippets” of Books 5198.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520

Corporate Governance2.4 How Leaders Lose Their Way: What Price Hubris? 592.6 P = f(x) The Probability of an Ethical Outcome Is a Function of the Amount of Money Involved: Pressure 624.3 Why Corporations Can’t Control Chicanery 1644.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1764.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 2004.11 A Primer on Sarbanes–Oxley 2124.12 Bank of America: The Merrill Takeover, the Disclosures, and the Board 2164.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 2284.17 The New Shareholder: Taking Over to Change the Culture 2534.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 2574.26 Getting Information from Employees Who Know to Those Who Can and Will Respond 2894.28 Bernie Madoff: Just Stay Away from the 17th Floor 3115.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 3236.1 Two Sets of Books on Safety 3536.3 Cintas and OSHA 3546.16 Arizona Senate Bill 1070: Immigration Laws, Employers, Enforcement, and Emotion 3828.4 Adam Smith: An Excerpt from The Theory of Moral Sentiments 505

Deontology6.18 Bloggers, Chat Rooms, and E-Mail: Your Employer Is Watching 3866.23 Ann Hopkins and Price Waterhouse 399

Discrimination6.11 English-Only Employer Policies 3706.12 On-the-Job Fetal Injuries 3746.16 Arizona Senate Bill 1070: Immigration Laws, Employers, Enforcement, and Emotion 3826.23 Ann Hopkins and Price Waterhouse 399

604 | Topic Index



Licensed to:

Divine Command1.3 What Are Ethics? From Line-Cutting to Kant 101.8 Some Simple Tests for Resolving Ethical Dilemmas 29

Downsizing6.4 Aaron Feuerstein and Malden Mills 3566.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 358

EBITA4.19 A Primer on Accounting Issues and Ethics and Earnings Management 2624.27 WorldCom: The Little Company That Couldn’t After All 293

Egoism1.3 What Are Ethics? From Line-Cutting to Kant 104.27 WorldCom: The Little Company That Couldn’t After All 293

Environment3.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 1013.16 The New Environmentalism 1493.17 Herman Miller and Its Rain Forest Chairs 1513.18 The Death of the Great Disposable Diaper Debate 1536.24 Exxon and Alaska 4056.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 411

Equity4.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 2334.20 The Ethics of Bankruptcy 2728.8 Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them 511

Executive Compensation2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 733.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Standards 1214.3 Why Corporations Can’t Control Chicanery 1644.4 The Effects of Compensation Systems: Incentives, Bonuses, Pay, and Ethics 172

Finance2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 733.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Standards 1214.5 The Subprime Saga: Bear Stearns, Lehman, Merrill, and CDOs 1764.11 A Primer on Sarbanes–Oxley 2124.16 Arthur Andersen: A Fallen Giant 2464.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 2574.21 The Ethics of Walking Away 2754.27 WorldCom: The Little Company That Couldn’t After All 2934.28 Bernie Madoff: Just Stay Away from the 17th Floor 3116.7 The Trading Desk, Perks, and “Dwarf Tossing” 3626.9 The Analyst Who Needed a Preschool 3677.4 Subprime Loans–The Under-the-Radar Loans That Felled a Market 434

Foreign Countries–Differing Business Practices5.1 Why an International Code of Ethics Would Be Good for Business 3155.2 Chiquita Bananas and Mercenary Protection 3195.4 The Former Soviet Union: A Study of Three Companies: PwC, Ikea, and AES 3235.5 Product Dumping 3255.6 On Sweatshops, Nike, and Kathie Lee 3265.7 Bhopal: When Safety Standards DIffer 3335.9 Google, Yahoo, and Human Rights in China 3375.12 Salt Lake City, the Olympics, and Bribery 344

Gifts4.1 The Moving Line 1595.12 Salt Lake City, the Olympics, and Bribery 3446.7 The Trading Desk, Perks, and “Dwarf Tossing” 3626.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 3639.2 The Minerals Management Service: The Arms-Length Affairs with Oil Executives 527

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Government Contracts4.11 A Primer on Sarbanes–Oxley 2124.27 WorldCom: The Little Company That Couldn’t After All 2938.2 Boeing, Lockheed, and the Documents 4969.10 Stanford University and Government Overhead Payments 5429.11 Yale University and the Compensation of Professors for Government Research: Double-Dipping or Confusion? 5459.12 Minority-Owned Businesses and Reality 5459.13 The My Tai Concession and the County Supervisor 5469.14 Government Pricing and Finding a Way Around It 5469.15 Taser and Stunning Behavior 5479.16 Boeing and the Recruiting of the Government Purchasing Agent 548

Government Employees1.17 Speeding on the Job: Obeying the Rules: Why We Do and Don’t 429.1 The Fish Bowl Existence of Government 5259.2 The Minerals Management Service: The Arms-Length Affairs with Oil Executives 5279.3 Kodak, the Appraiser, and the Assessor: Lots of Back Scratching on Valuation 5319.4 The Governor and a Senate Seat Vacated by a President 5329.5 The Man Who Writes the Internal Revenue Code Has Tax Issues: The Rangel Round-Up 5349.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal Opinions

in the Conduct of Organizations 5369.7 Paul Wolfowitz and the World Bank 5389.8 Hiding the Slip-Up on Oil Lease Accounting: Interior Motives 5389.9 Joe the Plumber, Child Support Records, and the Public Official’s Disclosure 540

Government Responsibilities9.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of Legal Opinions

in the Conduct of Organizations 5369.17 The Prosecutors Who Withheld Evidence: The Senator’s Trial 5519.18 The Duke Lacrosse Team and the Prosecutor 5519.19 FEMA, Hurricane Katrina, and the Dilemmas of Regulation versus Human Life 554

Grease Payments5.1 Why an International Code of Ethics Would Be Good for Business 3155.10 A Primer on the FCPA 3405.12 Salt Lake City, the Olympics, and Bribery 344

Health3.11 Whole Foods, John Mackey, and Health Care Debates 1323.13 Baseball and Steroids 1384.6 HealthSouth: The Scrushy Way 1835.8 Nestlé: When Products Translate Differently 3356.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 3637.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 4257.2 Spring Break, Beer, and Alcohol on Campus 4307.3 Cheerios and Cholesterol and Rice Krispies and Immunity 4327.9 Tylenol: Decades of Dilemmas 4447.10 Merck and Vioxx 4477.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 4617.14 Peanut Corporation of America and Salmonella 4627.15 Pfizer and the $2.3 Billion Fine for Sales Tactics 4647.22 Stem-Cell Research 4877.24 Fast Food Liability 490

Honesty1.10 The Little Teacher Who Could: Piper, Kansas, and Term Papers 341.15 Wi-Fi Piggybacking 411.16 The Ethics Officer and First Class for TSA 412.2 The Ethics of Responsibility 482.3 Is Business Bluffing Ethical? 492.7 Martha Stewart: Not Such a Good Thing 632.13 Travel Expenses: A Chance for Extra Income 842.15 The Rigged Election 864.7 Jett and Kidder, Leeson and Barings, Kerviel and Société Générale: Compensation-Fueled Dishonesty 192

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4.8 Royal Dutch and the Reserves 1994.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 2004.11 A Primer on Sarbanes–Oxley 2124.20 The Ethics of Bankruptcy 2726.6 JCPenney and Its Wealthy Buyer 3616.21 The Glowing Recommendation 3956.22 The Ethics of Confrontation 396

Inside Information2.7 Martha Stewart: Not Such a Good Thing 632.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 734.2 Not All Employees Are Equal When It Comes to Moral Development 1604.18 If It’s Legal, It’s Ethical; and Besides, Everyone Does It 2578.6 The Compliance Officer Who Strayed 508

Internal Audit/Controls2.13 Travel Expenses: A Chance for Extra Income 844.10 FINOVA and the Loan Write-Off 2064.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 2184.14 Bausch & Lomb and Krispy Kreme: Channel Stuffing and Cannibalism 2284.15 Enron: The CFO, Conflicts, and Cooking the Books with Natural Gas and Electricity 233

Mergers and Acquisitions4.13 Dennis Kozlowski: Tyco and the $6,000 Shower Curtain 2184.27 WorldCom: The Little Company That Couldn’t After All 2938.8 Simmons, Mervyn’s, and the Private Equity Firms That Bankrupt Them 511

Misrepresentation2.16 West Virginia University and the Governor’s Daughter 867.20 Sears and High-Cost Auto Repairs 481

Moral Responsibility1.13 Dad, the Actuary, and the Stats Class 394.21 The Ethics of Walking Away 2756.20 Is It None of Our Business? 3907.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 4527.12 Toyota: Sudden Acceleration or Bad Drivers or Pesky Floor Mats? 4587.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 4617.14 Peanut Corporation of America and Salmonella 4629.6 “I Was Just Following Orders”: The CIA, Interrogations, and the Role of

Legal Opinions in the Conduct of Organizations 536

NGOs3.16 The New Environmentalism 149

Nonprofit Organizations10.1 New Era: If It Sounds Too Good to Be True, It Is Too Good to Be True 55910.2 The Baptist Foundation: Funds of the Faithful 56210.3 ACORN: Community Organizers, Undercover Videos, and Advice 56510.4 Giving and Spending the United Way 56610.5 The Red Cross, New York, and Ground Zero 56810.6 The Cornell Researchers Funded by the Foundation 569

Options4.9 Stock Options, Backdating, and Disclosure Options: What Happened Here? 200

Plant Closings6.4 Aaron Feuerstein and Malden Mills 3566.5 Plant Closings, Downsizings, Company Closings, Government Takeovers, Bankruptcies, and Pensions 358

Pricing7.16 The Mess at Marsh McLennan 465

Privacy5.9 Google, Yahoo, and Human Rights in China 3376.18 Bloggers, Chat Rooms, and E-Mail: Your Employer Is Watching 386

Topic Index | 607



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6.20 Is It None of Our Business? 39010.3 ACORN: Community Organizers, Undercover Videos, and Advice 565

Product Quality4.23 Beech-Nut and the No-Apple-Juice Apple Juice 2804.24 NASA and the Space Shuttle Booster Rockets 2854.25 Westland/Hallmark Meat Packing Company and the Cattle Standers 2885.5 Product Dumping 3257.9 Tylenol: Decades of Dilemmas 444

Product Safety7.8 A Primer on Product Liability 4417.9 Tylenol: Decades of Dilemmas 4447.10 Merck and Vioxx 4477.11 Ford and Its Pinto and GM and Its Malibu: The Repeating Exploding Gas Tank Problem 4527.12 Toyota: Sudden Acceleration or Bad Drivers or Pesky Floor Mats? 4587.13 E. coli, Jack-in-the-Box, and Cooking Temperatures 4617.14 Peanut Corporation of America and Salmonella 462

Property Rights8.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 5148.12 The Little Intermittent Windshield Wiper and Its Little Inventor 520

Purchasing Agents6.6 JCPenney and Its Wealthy Buyer 3616.8 Docs, Pharmas, Medical Journals, Funded Research, and Pizza 3636.9 The Analyst Who Needed a Preschool 3677.17 Frozen Coke and Burger King and the Richmond Rigging 4689.14 Government Pricing and Finding a Way Around It 546

Securities Fraud2.7 Martha Stewart: Not Such a Good Thing 638.7 Jonathan Lebed: The Middle School Tycoon 510

Sexual Harassment6.14 Seinfeld in the Workplace 3806.15 Toyota, the CEO, the Assistant, and Inaction 3816.21 The Glowing Recommendation 395

Shareholder Rights2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 733.2 A Stakeholder Theory of the Modern Corporation 963.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 1013.4 Appeasing Stakeholders with Public Relations 1043.5 Michael Novak on Capitalism and the Corporation 1053.6 Marjorie Kelly and the Divine Right of Capital 1083.7 Schools of Thought on Social Responsibility 1113.8 Adelphia: Good Works via a Hand in the Till 1133.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Standards 1213.12 Ice-T, the Body Count Album, and Shareholder Uprisings 1334.17 The New Shareholder: Taking Over to Change the Culture 253

Social Responsibility2.8 On Leaving to Spend More Time with Family 693.1 The Social Responsibility of Business Is to Increase Its Profits 913.2 A Stakeholder Theory of the Modern Corporation 963.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 1013.4 Appeasing Stakeholders with Public Relations 1043.5 Michael Novak on Capitalism and the Corporation 1053.6 Marjorie Kelly and the Divine Right of Capital 1083.7 Schools of Thought on Social Responsibility 1113.8 Adelphia: Good Works via a Hand in the Till 1133.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Standards 1213.11 Whole Foods, John Mackey, and Health Care Debates 1323.13 Baseball and Steroids 138

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3.14 Michael Vick, Dogs, Rush Limbaugh, and the NFL 1453.15 Dayton-Hudson’s Contributions to Planned Parenthood, and Target and the Bell Ringers 1465.2 Chiquita Bananas and Mercenary Protection 3195.3 Transnational Shipping and the Pirates 3225.6 On Sweatshops, Nike, and Kathie Lee 3265.7 Bhopal: When Safety Standards DIffer 3335.8 Nestlé: When Products Translate Differently 3356.2 Sleeping on the Job and on the Way Home 3537.1 Joe Camel: The Cartoon Character Who Sold Cigarettes and Nearly Felled an Industry 4257.2 Spring Break, Beer, and Alcohol on Campus 4307.21 The Mommy Doll 4877.22 Stem-Cell Research 4877.23 Toro and Its Product Liability Program 4897.24 Fast Food Liability 490

Stakeholders2.11 What Was Up with Wall Street? The Goldman Standard and Shades of Gray 733.1 The Social Responsibility of Business Is to Increase Its Profits 913.2 A Stakeholder Theory of the Modern Corporation 963.3 Business with a Soul: A Reexamination of What Counts in Business Ethics 1013.5 Michael Novak on Capitalism and the Corporation 1053.6 Marjorie Kelly and the Divine Right of Capital 1083.9 The Regulatory Cycle, Social Responsibility, Business Strategy, and Equilibrium 1173.10 Fannie, Freddie, Wall Street, Main Street, and the Subprime Mortgage Market: Of Moral Standards 1214.17 The New Shareholder: Taking Over to Change the Culture 253

Technology1.15 Wi-Fi Piggybacking 415.9 Google, Yahoo, and Human Rights in China 3376.17 Facebook, MySpace, and YouTube Screening of Employees 3856.18 Bloggers, Chat Rooms, and E-Mail: Your Employer Is Watching 3868.9 Tiffany, Louis Vuitton, eBay, Landlords, and Knock-Offs 5148.11 Microsoft vs. Google and “Snippets” of Books 519

Telecommunications4.27 WorldCom: The Little Company That Couldn’t After All 293

Utilitarianism1.3 What Are Ethics? From Line-Cutting to Kant 106.4 Aaron Feuerstein and Malden Mills 356

Whistle-Blowing4.16 Arthur Andersen: A Fallen Giant 2464.22 The Options for Whistle-Blowers 2794.23 Beech-Nut and the No-Apple-Juice Apple Juice 2804.24 NASA and the Space Shuttle Booster Rockets 2854.25 Westland/Hallmark Meat Packing Company and the Cattle Standers 2884.26 Getting Information from Employees Who Know to Those Who Can and Will Respond 2894.28 Bernie Madoff: Just Stay Away from the 17th Floor 3116.19 Jack Welch and the Harvard Interview 3876.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 4117.15 Pfizer and the $2.3 Billion Fine for Sales Tactics 4649.14 Government Pricing and Finding a Way Around It 546

Workplace Safety4.22 The Options for Whistle-Blowers 2796.1 Two Sets of Books on Safety 3536.2 Sleeping on the Job and on the Way Home 3536.3 Cintas and OSHA 3546.16 Arizona Senate Bill 1070: Immigration Laws, Employers, Enforcement, and Emotion 3826.25 BP: Pipeline, Refinery, and Offshore-Drilling Safety 411

Topic Index | 609



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