What are the 3 Ethical Theories?
1) Utilitarianism: Greatest good for the greatest number of people.
2) Deontology: You have a duty, and your decisions need to follow that duty.
3) Virtue: Your decisions must line up with the person that you want to become.
What are the 3 Ethical Guidelines?
1) Universalization Test: What would happen if everyone made the same decision as you?
2) Golden Rule: Treat others how you want to be treated.
3) Public Disclosure Test: How would the public react if your decision got out?
What are the major points in the Parable of the Sadhu?
Buzz McCoy is a senior executive for Morgan Stanley and an Elder at his church. When faced with the moral dilemma of helping the Sadhu on his hike in the himalayas, he decides to just check for a pulse and then leave the man. Other groups are on the hike, but no one really does anything because they want to finish the hike.
What are the 5 parts of the Ethical Framework or FILOP?
Facts: Relevant information to the case.
Issues: Should statements that highlight the ethical dilemma. The more issues you have, the more options you have.
Laws: Not just state and federal laws, but could be accounting laws or company laws.
Options: At least three of these, never just yes or no.
Principles: Values like integrity, loyalty.
What are the major points for Peter Green’s First Day and Moral Courage?
He is married, a recent college graduate, and also is a new father. Not exactly with the most financially stable situation, because it is his first day at a new job. Asked to declare material that is completely fine defective so that this major supplier can get free shipping on their carpeting. Know how to do a FILOP analysis on this case study.
Who are the SEC?
Police of the accounting world. They get all the financial statements from the external auditors and check to make sure everything is legal.
What is GAAP?
They are the domestic accounting rules and policies that firms must follow.
Who is the FASB?
The FASB creates GAAP and therefore sets the accounting rules and standards.
What is the IFRS?
The international accounting rules and standards that international companies must comply with.
Who is the IASB?
The IASB creates the international accounting standards or IFRS for international companies.
What is the Sarbanes Oxley?
Due to lots of accounting fraud, SOX was put in place. It forced companies to have a separate audit committee and gave checks and balances, so that accounting fraud could be kept in house. Also forces CEO and CFO to be legally responsible for their financials, because they have the final sign off.
What are the characteristics of the audit committee according to SOX?
The audit committee cannot own stock, and act as consultants for the company. Has to have at least 3 people, and meets at least 4 times per year.
Who are the Board of Directors?
People elected by shareholders to oversee the company. Are paid in cash or stock by the company, and meet several times per year.
What is the Foreign Corrupt Practices Act?
You cannot break American laws abroad. If you’re not allowed to do it on American soil, you can’t do it on foreign soil, even if it’s acceptable behavior over there.
What is Dodd Frank and what are two of its provisions?
Deals with mortgages and executive compensation. It goes with your proxy statement. Say on Pay provision states that stockholders are allowed to vote on whether the executive compensation is acceptable of not. Clawback provision says that executives need to pay back all the money that you may’ve stolen to the company if you’re caught.
What are the 5 characteristics of the Moral Mentor?
1) Demonstrates integrity
2) Brings out moral excellence in others
3) Welcomes dissent (open to criticism)
4) Acts on values that show highest regard for others
5) Demonstrates behavior that can stand the test of time
What are the 5 characteristics of the Charismatic Tyrant?
1) Simple and Absolute Terms
2) Narcissistic (obsessed with themselves)
3) Treats others poorly
4) Demands conformity
5) Lacks key business skills
What is the summary of Aaron Feuerstein and Malden Mills?
Aaron was the CEO of Malden mills who made some rubber textile, and the factory burned down in Massachusetts. He got a $300 million package from his insurance company and he could’ve taken the money for himself, or rebuilt the factory overseas. Instead he decided to rebuild the factory locally and pay employees while it was being built, because he supplied so many jobs in the area.
Who is Milton Friedman and what are his thoughts on Corporate Social Responsibility?
Milton Friedman is a famous economist who believes that a corporation has one goal: to make money (either in the short term or the long term). He believes that you should only make decisions that benefit the shareholders, as long as it’s legal of course. He believes corporate social responsibility is pointless unless it benefits the company long term through brand image.
What are the basic points of the Bangladesh Fires, and China’s Environmental Policies?
China’s environmental policies are improving, but they are still awful. In Bangladesh companies like Nike use third party sweat shops so that they can stay away from being responsible for fires like the major one in Bangladesh. Leads us to want to make Nike responsible, but they don’t own the sweat shops.
What are the 3 Behavioral Shortcomings?
1) Bystander Effect- The more people around you, the less likely you are to do something.
2) Motivated Blindness- You only see what you want to see
3) Normalcy Bias- Something bad is happening but you just go on your way as if everything is normal. Battered woman syndrome (someone you love beats you and you just pretend that its normal).
What are the major points to the Penn State Scandal?
There is a lack of leadership, with Joe Paterno and his inability to handle the situation. Know about the Janitor and McQuearey, who witnessed Sandusky committing the abuse but not doing anything about it. In McQuearey’s case, talking to his dad and then not talking to Paterno until the next day. Also the police cheif for calling it a “misunderstanding” to hug a kid in the shower.
What is the basic dilemma for the Washington Redskins and the College Shame of Sports?
Washington Redskins- Should they change the name or not?
CSoS- Are they athletes or students if they spend more time at football and doing football things, then on schoolwork. They are also recruited at bigger schools, solely for their athletic ability.
What are the arguments for and against Snowden?
He’s a traitor: He ratted out of the government, and bailed on his job. He signed a contract that said he wouldn’t expose these secrets no matter what.
He’s a whistleblower: He disclosed information that showed the government was doing some things that were not exactly 100% legal.
What is the main plot of A Civil Action?
Details the story of a lawyer named Jan (John Travolta) who decides to take a lawsuit case against two large chemical companies that are behaving unethically. He ends up getting so deep in the case, because the companies spend so much money stalling the lawsuit. Showed a David vs. Goliath case.
What is the main plot of Thirteen Days?
Details the Cuban missile crisis, and the resolution that ended up being negotiating with Russia to dismantle all of their nuclear weapons in exchange for the U.S. deciding to never invade Cuba.
What is the main plot of Margin Call?
Housing crisis is occurring, and a company has a ton of mortgage backed assets. They then start to sell off their assets at a discount rate, because they know that their assets will go to zero if they don’t.