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Chapter01–EthicsandBusiness

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Copyright?McGraw-HillEducation.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducation.

IMChapter1:

EthicsandBusiness

ChapterObjectives

Afterreadingthischapter,youwillbeableto:

1.Explainthreelevelsatwhichethicaldecisionsgetmadeinbusiness.

2.Explainthenatureofbusinessethicsasanacademicdiscipline.

3.Explainwhyethicsisimportantinthebusinessenvironment.

4.Explainwhyethicalresponsibilitiesgobeyondlegalcompliance.

5.Distinguishtheethicsofpersonalintegrityfromtheethicsofsocialresponsibility.

6.Distinguishethicalnormsandvaluesfromotherbusiness-relatednormsandvalues.

7.Describeethicaldecisionmakingasaformofpracticalreasoning.

OpeningDecisionPoint-WellsFargo

TheWellsFargocasecanbeusedtointroducearangeoftopicsthatwillemergethroughoutthisbook.Thecaseinvolvesdecisionmakingatanumberoflevels,fromindividualentry-levelemployees(likemanyofourstudents),tobranchmanagers,tomid-levelmanagement,seniorexecutives,andtheboardofdirectors.Agooddiscussioncanbegeneratedbyaskingstudentstoassignresponsibility,bothintermsofwhoisatfault(whoisaccountable?)andwhatcouldbeonetopreventitfromre-occurring(whatcausedit?).

Thesediscussionscaneasilyleadintothedecision-makingmodelthatwillbeintroducedlateinthechapter.Whatfactswouldbehelpfultomakethesejudgmentsofresponsibility?Whatfactswouldchangeyourdecision?Whoarethestakeholdersinvolved,rangingfromentry-levelemployees,tocustomers,tostockholders,tocompetitors.Whatstake,exactly,dothesegroupshaveinthiscase?Howweretheyharmed?How,ifatall,weretheirinterestsrepresentedintheprocess?

Thisisalsoagoodcasewithwhichtointroducethetopicsofcorporatecultureandleadership.Howwerethedecisionsmadebyindividualsinfluencedbythesurroundingculture,andhowdidthatcultureemergeatWellsFargo?Howfreewereemployeesateverylevel,includingseniorexecutives,todivergefromtheprevalentculture?Howmightthatinstitutionalculturebechanged?Whoisresponsibleforinstitutionaldecisions?Whichinstitutionalpoliciesandpracticesenabledthisscandal?Howmighttheybechangedtoavoidare-occurrence?

Anothertopicthatcanbeintroducedinvolvesprofessionalresponsibilitiesofbankersandfinancialprofessionals.ThisdiscussioncanbehelpfulinsettingthestageforChapter5andthegeneraltopicofcorporatesocialresponsibility.Adiscussionoffiduciarydutiescanintroduceseveralimportantquestions.Whatresponsibilitiesdomanagers,perhapsespeciallyseniorexecutives,havetostockholders?Howmighttheseresponsibilitiesconflictwiththeirresponsibilitiesasfinancialprofessionals?

Thiscasecanalsointroducethequestionofgovernmentregulationwithinamarketeconomy.Whatistheproperroleforgovernmentagencies,bothintermsoffsettingstandardstopreventmisconduct,andinenforcingsanctionsafterthefact?Howdoesthisinfluencethe“freemarket”system?

Introduction:GettingComfortablewiththeTopic

Itisnotuncommonforstudentstoenterabusinessethicsclasswithsomedegreeofdoubt,confusion,andapprehensionaboutthetopic.Thisopeningchapteraimstorelievethoseconcernsbyintroducingbusinessethicsasanunavoidableandnon-threateningpartofbusiness(andlife).

Thetopicisintroducedbyreviewingsomeofthepastandrecentwell-knownscandals,butalsopointingoutsomewell-knownexamplesofcommendablecorporateethics.Itcanbeworthwhiletoremindstudentsofbestcaseexamplesasameanstoremindingthemthatbusinessethicsdoesnotassumethatonlythebadcasesdeserveattention.

Wealsoremindstudentsthatbusinessethicsisnotlimitedtothetypeofmajorcorporatedecisionswithdramaticsocialconsequences.Atsomepointeveryworker,andcertainlyeveryoneinamanagementrole,willbefacedwithanissuethatwillrequireethicaldecision-making.

Thisopeningsectionidentifies5generalgoalsforabusinessethicsclass:

1.Developtheknowledgebaseandskillsneededtoidentifyethicalissues.

2.Understandhowandwhypeoplebehaveunethically.

3.Decidehowweshouldact,whatweshoulddo,andthetypeofpersonweshouldbeasindividuals.

4.Createethicalorganizations.

5.Thinkthroughthesocial,economic,andpoliticalpoliciesthatweshouldsupportascitizens.

*RealityCheck:PsychologicalEgoism”providesabriefphilosophicalrefutationofacommonassumptionthatunderliesmuchoftheskepticismaboutbusinessethics,includingtheseparationthesis.Thatassumptionistheviewthatallhumanbehaviorismotivatedbyselfishinterest,otherwiseknownas“psychologicalegoism.”

MakingtheCaseforBusinessEthics

The“Separationthesis”describedacommonwhichholdsthatethicalstandardsareseparatefromthestandardsthatapplyinbusinessactivities.Thisviewholdsthatbusinesshasitsownrulesthatgovernhowthegameisplayedand,therefore,businessisexemptfromordinaryethicaljudgments.

ThisseparationthesisisrepresentedprominentlyinMiltonFreidman’sfamousessay,“TheSocialResponsibilityofBusinessistoIncreaseitsprofits.”Thisverycommonperspectivecanbeseeninmanycasesdiscussedthroughoutthistext,andshouldbecontrastedwiththe“stakeholdertheory”describedinChapter5.

Relationshipbetweeneconomicandmoralvalues:Howshouldweconceiveoftherelationshipbetweenbusinessandmarketactivity,ontheonehand,andethicalconcerns,ontheother?Thisisnotanewquestion,butonethatcanbefoundsincetheverydawnofmoderncapitalism.

TherelationshipbetweenAdamSmith’stwobooks,TheWealthofNationsandTheTheoryofMoralSentiments,canbeseenasrepresentingthisquestion.

Theissueoftherelationshipofeconomicandmoralvaluesisaddressedinthestudyofbusinessethics.

Asrecentlyasthemid-1990s,articlesinsuchmajorpublicationsasTheWallStreetJournal,theHarvardBusinessReview,andU.S.NewsandWorldReportquestionedthelegitimacyandvalueofteachingclassesinbusinessethics.

Leadersrealizethattheycannolongeraffordthisapproachincontemporarybusiness.Thedirectcostsofunethicalbusinesspracticearemorevisibletodaythanperhapstheyhaveeverbeenbefore.

Thefirstdecadeofthenewmillenniumwasriddledwithhighly-publicizedcorporatescandals,theeffectsofwhichdidnotescapepeopleofanysocialorincomeclass.Moreover,wesawtheeconomybeginadownwardspiralintooneofthelargestfinancialcrisesofthelast80years.

Theselendingandtradingeffortsencouragedbaddebttoappreciatebeyondlevelsthatthemarketcouldbear.Theinevitablecorrectioncausedrealestatevaluesinmostmarketstodeclinesharply,domesticcreditmarketstofreeze,andthefederalgovernmenttointervenewitharescuepackage.

Economicturmoilincitesmisconduct;thereisasignificantbumpinobservedworkplacemisconductduringtimesofeconomicchallenges.Somemoney-savingstrategiesdeployedbystrugglingcompanies,suchascompensation/benefitreductionsandhiringfreezes,havebeenfoundtoincreasemisconductbymorethan35percent.

*ChapterObjective1AddressedBelow*

Tounderstandtheoriginsoftheshiftfromwhetherethicsorvaluesshouldplayaroleinbusinessdecisionstothealmostfranticsearchforhowmosteffectively(andquickly!)todoit,considertherangeofpeoplewhowereharmedbytheWellsFargoscheme:Customers,employees,investors,competitors,andthecommunitiesinwhichthesepeoplelive.

Expansionofethicallyresponsiblebusinessdecision-making:Ethicallyresponsiblebusinessdecision-makingmustmovebeyondanarrowconcernwithstockholders,andconsidertheimpactthatdecisionswillhaveonawiderangeofstakeholders.Inageneralsense,abusinessstakeholderwillbeanyoneaffected,forbetterorworse,bydecisionsmadewithinthefirm.

*Reference:“RealityCheck-WhyBeEthical?BecausetheLawRequiresIt”*(describessomelegalrequirementsthathavebeencreatedsincetheEnronfiasco)

Reasonstobeconcernedwithethicalissues:Beyondspecificlegalobligations,contemporarybusinessmanagershavemanyotherreasonstobeconcernedwithethicalissues.

Unethicalbehaviornotonlycreateslegalrisksforabusiness,itcreatesfinancialandmarketingrisksaswell.

Managingtheserisksrequiresmanagersandexecutivestoremainvigilantabouttheircompany’sethics.

Afirm’sethicalreputationcanprovideacompetitiveadvantage,ordisadvantage,inthemarketplaceandwithcustomers,suppliers,andemployees.

Managingethicallycanalsopaysignificantdividendsinorganizationalstructureandefficiency.

Trust,loyalty,commitment,creativity,andinitiativearejustsomeoftheorganizationalbenefitsthataremorelikelytoflourishwithinethicallystableandcredibleorganizations

*Reference:“RealityCheck-WhyBeGood?”*

Reasonstobeconcernedwithethicalissuesforbusinessstudents:Theneedtostudyethicsshouldbeasclearastheneedtostudytheothersub-fieldsofbusinesseducation.Withoutthisbackground,studentssimplywillbeunpreparedforacareerincontemporarybusiness.

But,evenforstudentsnotanticipatingacareerinbusinessmanagementorbusinessadministration,familiaritywithbusinessethicsisjustascrucial.

Asleadersandasemergingleaders,weneedtoexplorehowtomanagetheethicalbehaviorofotherssothatwecanimpacttheirdecisionsandencouragethemtomakeethical,ormoreethical,decisions.

Thecaseforbusinessethicsisclearandpersuasive.Businessmusttakeethicsintoaccountandintegrateethicsintoitsorganizationalstructure.Studentsneedtostudybusinessethics.

BusinessEthicsasEthicalDecision-making

Sowhatisthepointofabusinessethicscourse?

Asthetitleofthisbooksuggests,ourapproachtobusinessethicswillemphasizeethicaldecision-making.

HistoricalContext:Ononehand,ethicsreferstoanacademicdisciplinewithacenturiesoldhistoryandwemightexpectknowledgeaboutthishistorytobeamongtheprimarygoalsofaclassinethics.

Thus,inanethicscourse,studentsmightbeexpectedtolearnaboutthegreatethicistsofhistorysuchasAristotle,JohnStuartMill,andImmanuelKant.Ashappensinmanyothercourses,thisapproachtoethicswouldfocusontheinformationalcontentoftheclass.

*ChapterObjective2AddressedBelow*

EthicalBehavior/NormativeContent:Yet,accordingtosomeobservers,learningaboutethicaltheoriesandgainingknowledgeaboutthehistoryofethicsisbesidethepoint.

Manypeople,rangingfrombusinesseslookingtohirecollegegraduatestobusinessstudentsandteachersthemselves,expectanethicsclasstoaddressethicalbehavior,notjustinformationandknowledgeaboutethics.

Afterall,shouldn’tanethicsclasshelppreventfutureMadoffs?Ethicsrefersnotonlytoanacademicdiscipline,buttothatarenaofhumanlifestudiedbythisacademicdiscipline,namely,howhumanbeingsproperlyshouldlivetheirlives.

TheRoleofInfluence...Yet,thereisanappropriatecautionaboutinfluencingbehaviorwithinaclassroom.

Partofthishesitationinvolvesthepotentialforabuse;expectingteacherstoinfluencebehaviormaybeviewedaspermissionforteacherstoimposetheirownviewsonstudents.

Manybelievethatteachersshouldremainvalue-neutralintheclassroomandrespectastudent’sownviews.

Anotherpartofthisconcernisthattherecanbeanarrowlinebetweenmotivatingstudentsandmanipulatingstudents.

Therearemanywaystoinfluencesomeone’sbehavior,includingthreats,guilt,pressure,bullying,andintimidation.

Someoftheexecutivesinvolvedintheworstoftherecentcorporatescandalswereverygoodatusingsomeofthesemeanstomotivatethepeoplewhoworkedforthem.

Presumably,noneoftheseapproachesbelonginacollegeclassroom,andespeciallynotinanethicalclassroom.[TeachingNote:thiswouldbeagoodopportunitytodiscussappropriateandinappropriatemeansforgettingstudentstocompletetheirhomeworkassignments.Whatteachingmethodsrespectstudents?Whichdisrespectthem?Why?Contrastthistomanagerialinfluence:aretheresomeinappropriatewaysformanagerstogetworkerstocompleteatask?]

Butnotallformsofinfluencingbehaviorraisesuchconcerns.Thereisamajordifferencebetweenmanipulatingsomeoneandpersuadingsomeone,betweenthreatsandreasons.Thistextbookresolvesthetensionbetweenknowledgeandbehaviorbyemphasizingethicaljudgment,ethicaldeliberation,andethicaldecision-making.

Weagreewiththosewhobelievethatanethicsclassshouldstrivetoproducemoreethicalbehavioramongthestudentswhoenroll.

Butwebelievethattheonlyacademicallyandethicallylegitimatewaytodothisisthroughcarefulandreasoneddecision-making.

Ourfundamentalassumptionisthataprocessofrationaldecision-making,aprocessthatinvolvescarefulthoughtanddeliberation,canandwillresultinbehaviorthatisbothmorereasonableandmoreethical.

RoleofaCourse:Teachingethicsmust,onthisview,involvestudentsthinkingforthemselves.

BusinessEthicsasPersonalIntegrityandSocialResponsibility

Socialcircumstancesareanotherelementofourenvironmentthatimpactourethicaldecision-makingandbehavior.

SocialContext:Anindividualmayhavecarefullythoughtthroughasituationandhavedecidedwhatisright,andthenmaybemotivatedtoactaccordingly.Butthecorporateorsocialcontextsurroundingtheindividualmaycreateseriousbarrierstobehaveinthatway.

Asindividuals,weneedtorecognizethatoursocialenvironmentwillgreatlyinfluencetherangeofoptionsthatareopentousandcansignificantlyinfluenceourbehavior.

Peoplewhoareotherwisequitedecentcan,underthewrongcircumstances,engageinunethicalbehaviorwhilelessethically-motivatedindividualscan,intherightcircumstances,dothe“rightthing.”

EthicalLeadership:

Businessleadersthereforehavearesponsibilityforthebusinessenvironmentthattheycreate;whatweshalllaterrefertothisenvironmentasthe“corporateculture.”Theenvironmentcanthereforestronglyencourageordiscourageethicalbehavior.

Ethicalbusinessleadershipispreciselythisskill:tocreatethecircumstanceswithinwhichgoodpeopleareabletodogood,andbadpeoplearepreventedfromdoingbad.

TheEnroncaseprovidesanexample.TheDecisionPointincludedbelow(takenfromapreviouseditionofthisbook)describedthecaseofSherronWatkins,anEnronvicepresident.Sheseemedtounderstandfullythecorruptionanddeceptionthatwasoccurringwithinthecompany,andshetooksomesmallstepstoaddresstheproblemswithintheEnronenvironment.Butwhenitbecameclearthatherbossmightuseherconcernsagainsther,shebackedoff.ThesamecircumstanceswereinvolvedinconnectionwithsomeoftheArthurAndersenauditors.WhensomeindividualsraisedconcernsaboutEnron’saccountingpractices,theirsupervisorspointedoutthatthe$100millionannualrevenuesgeneratedbytheEnronaccountprovidedgoodreasonstobackoff.The“SherronWatkins”DecisionPoint,below,exemplifiestheculturepresentatEnronduringtheheatofitsdownfallandthisexamplemightbeusedasaclassdiscussiontopicorevenapaperassignmenttopic.

DecisionPoint

SherronWatkins

SherronWatkins,aVPatEnron,sentamemotoCEOKenLayexpressingconcernsaboutthecompany’squestionableaccountingpractices.Shewashopingtoturnthingsaroundinordertorightthewrongsbeforetheywereexposedtothepublic.Shebroughttohisattentionthefactthatmanypeopleknewabout,orweresuspiciousabout,theinappropriatebehavioroccurringatthefirmandthattheywouldnotbeabletohideitmuchlonger.ShealsovoicedherconcernfortheinvestorsaswellasfortheEnronemployeesthatsheknewwereawareofthesituationandwerealmostdesperateforthecompanytogetcaught.

WatkinswasfeaturedonthecoverofTimemagazineafterEnron’scollapseandhonoredasacorporatewhistleblower,althoughsheneversharedherconcernswithanyoneotherthanKenLaybefore“blowingthewhistle.”WasWatkinsanethicalherointakingthesesteps?Shouldshehavegonefurtherinreportingpotentialwrongdoingtooutsideauthorities?AsinthecaseofAaronFeuerstein,Thiscanbeanotheropportunitytoraisethedistinctionbetweenethicallyobligatoryactsandheroicacts(ethicallypraiseworthy,butnotrequired).

StudentsareaskedtoconsiderthefollowingquestionsindeterminingwhetherWatkinswasanethicalhero:

WhatfactswouldyouwanttoknowbeforemakingajudgmentaboutWatkins?Whatethicalissuesdoesthissituationraise?

BesidesKennethLay,whoelsemighthavehadaninterestinhearingfromWatkins?Whoelsemighthavehadarighttobeinformed?DidWatkinshavearesponsibilitytoanyoneotherthanLay?

OtherthaninformingLay,whatotheralternativesmighthavebeenopentoWatkins?

Whatmighttheconsequencesofeachofthesealternativeshadbeen?

Fromthissectionofthememo,howwouldyoucharacterizeWatkins’motivation?

Whatfactorsseemtohavemotivatedhertoact?

IfyouwereKenLayandhadreceivedthememo,whatoptionsfornextstepsmightyouhaveperceived?Whymightyouhavechosenoneoptionoveranother?

DoyouthinkWatkinsshouldhavetakenherconcernsbeyondKennethLaytooutsidelegalauthorities?

*ChapterObjective3AddressedBelow*

TheEthicalQuestion:Ethicsinvolveswhatisperhapsthemostmonumentalquestionanyhumanbeingcanask:Howshouldwelive?

Ethicsis,inthissense,practical,havingtodowithhowweact,choose,behave,anddothings.

Philosophersoftenemphasizethatethicsisnormative,whichmeansthatitdealswithourreasoningabouthowweshouldact.

Socialsciencessuchaspsychologyandsociologyalsoexaminehumandecisionmakingandactions,butthesesciencesaredescriptiveratherthannormative.Whenwesaythattheyaredescriptive,werefertothefacethattheyprovideanaccountofhowandwhypeopledoactthewaytheydo;asanormativediscipline,ethicsseeksanaccountofhowandwhypeopleshouldact,ratherthanhowtheydoact.

Howshouldwelive?Thisfundamentalquestionofethicscanbeinterpretedintwoways.

"We"canmeaneachoneofusindividually,oritmightmeanallofuscollectively.

Inthefirstsense,thisisaquestionabouthowIshouldlivemylife,howIshouldact,whatIshoulddo,andwhatkindofpersonIshouldbe.Thismeaningofethicsisbasedonourvaluestructures,definedbyourmoralsystems;and,therefore,itissometimesreferredtoasmorality.Itistheaspectofethicsthatwerefertobythephrase“personalintegrity.”Ifmoralsrefertotheunderlyingvaluesonwhichourdecisionsarebased,ethicsreferstotheapplicationsofthosemoralstothedecisionsthemselves.

Inthesecondsense,“Howshouldwelive?”referstohowwelivetogetherinacommunity.Thisisaquestionabouthowasocietyandsocialinstitutionssuchascorporationsoughttobestructuredandabouthowweoughttolivetogether.Thisareaissometimesreferredtoassocialethicsanditraisesquestionsofjustice,publicpolicy,law,civicvirtues,organizationalstructure,andpoliticalphilosophy.

Inthissense,businessethicsisconcernedwithhowbusinessinstitutionsoughttobestructured,aboutwhethertheyhavearesponsibilitytothegreatersociety(corporatesocialresponsibilityorCSR),aboutmakingdecisionsthatwillimpactmanypeopleotherthantheindividualdecisionmaker.

Werefertothisbroadersocialaspectofethicsasdecision-makingforsocialresponsibility.

TeachingNote:Thefollowinghypotheticalcasecanbeusedtohighlightthedistinctionbetweentheethicsofindividualintegrityandthesocialjustice.ImagineanHRmanagerwhoishiringtwoemployees.Assumethatthetoptwocandidates,onemaleandonefemale,areequallyqualifiedandthattheHRmanagerwishestohireboth.AssumethattheHRmanagerhimselfwillgetevaluated,inpart,byhowwellhecontrolscompensationexpenses.Asaresult,hehasbothaprofessionalandpersonalresponsibilitytopaythelowestsalarythatisnecessarytogetthecandidatetoaccepttheposition.Atthelastinterview,themanageraskseachabouttheirsalaryexpectations.Imaginethatthefemalecandidateasksforasalarythatissubstantiallybelowwhatthemaleasks.Heknowsthatthemalemaynotacceptthejobofferatalowersalary,andknowsthatthefemaleiswillingtoaccepttheloweroffer.WhatresponsibilitydoestheHRmanagerhaveforpayingequallyqualifiedemployees?Ifthemanagerpaysthefemaleless,wouldyoucharacterizehimassexist?Isthisdecisionunfairworkplacediscrimination?ImaginenowthattheHRmanagerisawoman?Wouldthischangeyourjudgment?Agooddiscussioncanfollowonhowparticularsocialcontextscanshapedecisionsand,despitethebestintentionsofindividualsinvolved,resultinsociallyundesirableconsequences.

DecisionPoint

ManagementandEthics

Imaginethatyouareexaminingthischapter’sopeningscenarioinoneofyourclassesonOrganizationalBehaviororManagerialFinance.WhatadvicewouldyouoffertoSodexo?Whatjudgmentwouldyoumakeaboutthiscasefromafinancialperspective?Afterofferingyouranalysisandrecommendations,reflectonyourownthinkinganddescribewhatvaluesunderliethoserecommendations.

? Whatfactswouldhelpyoumakeyourdecision?

? Doesthescenarioraisevaluesthatareparticulartomanagers?

? Whatstakeholdersshouldbeinvolvedinyouradvice?

? Whatvaluesdoyourelyoninofferingyouradvice?

EthicalDecision-Making:Withinabusinesssetting,individualswillconstantlybeaskedtomakedecisionsaffectingboththeirownpersonalintegrityandtheirsocialresponsibilities.

Eachdecisionmadebyabusinessmanagerinvolvesnotonlyapersonaldecision,butalsoadecisiononbehalfof,andinthenameof,anorganizationthatexistswithinaparticularsocial,legal,andpoliticalenvironment.

Whateverdecisionbusinessmanagersmake,theywillhavetakenastandonanethicalissue,atleastimplicitly.

Theactionseachoneofustakesandthelivesweleadgiveverypracticalandunavoidableanswerstofundamentalethicalquestions.

DecisionPoint

EthicsAfteranOilSpill

ThefollowinganswersarelengthierthanthosethatfollowintherestofthisInstructors’Manualinordertogiveabitofguidanceattheoutset.

EthicsAfteranOilSpill

In2011,anoilpipelineownedbytheenergycompanyEnbridgesprungaleaknearthetownofWrigleyintheCanadianNorthwestTerritory.ThecitizensofWrigleymaintainatraditionalstyleoflifethatdependsonthehealthoflocalforestsandwaterways.Environmentalprotectionisn’tjustaquestionofprincipleforthepeopleofWrigley;it’samatterofsurvival.Enbridgedevisedadetailedcleanupplan-acomplextechnicaldocument600pageslong.Whenthecompanyoffered$5,000sothatthecommunitycouldhireitsownexpertstoevaluatetheplan,localswereoffendedbysuchatinypayment.ThiswasasignificantblowtoEnbridge’simage,comingshortlyafteranotherEnbridgepipelinerupturedinMichigan.Andatthesametime,Enbridgewasinthemidstoftryingtowinapprovalforanewprojectinthefaceofoppositionfromenvironmentalgroups.

ThecompanyfacedanumberofdifficultissuesinthewakeoftheWrigleyspill.First,Enbridgehadtocleanupthespilledoil.Then,theyhadtoconsidertheissueofremediation–therestorationthepollutedlandbacktosomethinglikeitsoriginalstate.Further,therewasthequestionofcompensationtothelocalcommunityforthepollutionandlossofuseofsomeoftheirtraditionalhuntinggrounds.Allofthiswassetagainstabackdropofcontroversysurroundingtheimpactthatoilpipelineshaveonthelandsandcommunitiesthroughwhichtheyrun.

Whatdoyouthinkmotivatedthecompany’sdecisiontoofferthecommunity$5,000tohireitsownexpert?Whydoyouthinkthecommunitywasinsulted?Ifyouwerethecompany’slocalmanager,whatwouldyouhavedone?

Thiscaseprovidesanopportunitytoaccomplishseveralintroductorygoals.Inthemostgeneralterms,thisdiscussionhelpsinexploringwiththestudentspriortochapterstwoandthreethesource/originsofourvaluesorstronglyheldbeliefs,whatencouragesustomakethedecisionsthatwemake,the“whys”behindourchoices.

Onecanusethecaseasameansfordiscussingdecision-making:WhatoptionsareavailabletoEnbridge?Howwoulditdecide?Whatfactorsarerelevanttothedecision?Whatisarationaldecision?Askstudentstotakevariouspointsofview—Enbridge,itsfinancialadvisor,thecity’smayor,Wrigley’scitizens—andcontrastlikelyalternativedecisions.

Onecanalsousethecasetosubtlyintroducevariousperspectivesonethics:whatisthedifferencebetweendoingsomethingethicallyrequiredanddoingsomethingheroicorcharitable?OnwhatgroundsdoyoureachyourownopinionaboutEnbridge?Whattypeofcompanyisit,andwhatisitscorporatecharacter?

Thiscasealsoallowsforanintroductiontothebasicdebateaboutcorporatesocialresponsibility:Whatresponsibilitiesdoesacompanyhavetothecommunityinwhichitislocated?Forwhosebenefitoughtacompanybeoperated?Enbridgeisapubliclytradedcorporation.Howmightthefactorsconsideredinitsdecision-makingchangeifitwereprivatelycontrolled?

Whatfactswouldbehelpfultoyou,asanoutsider,inevaluatingthecompany’sbehaviorafterthespill?

Itwouldbehelpfultoknowthebusiness’financialsituationbeforetheoilspill,thecompany’senvironmentalrecordpriortothespill,anypriorrelationshipthecompanyhadtoWrigley,whatalternativeswereavailableandhowfeasibleeachwouldbe.Inaddition,didthefirmhaveamissionstatement,oranyotherobligationstoWrigleyorothersthatthestudentsbelieveshouldbeupheld?Whatareotherpossiblesourcesof“obligations?”

Whatvaluesareinvolvedinthissituation?HowwouldEn

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