Business Ethics Decision Making for Personal Integrity and Social

Business Ethics Decision Making for Personal Integrity and Social

Responsibility

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BUSINESS ETHICS: DECISION MAKING FOR PERSONAL INTEGRITY AND SOCIAL RESPONSIBILITY, FIFTH EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2021 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2018, 2014, and 2011. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

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ISBN 978-1-260-26049-6 (bound edition) MHID 1-260-26049-6 (bound edition) ISBN 978-1-260-51293-9 (loose-leaf edition) MHID 1-260-51293-2 (loose-leaf edition) Director: Michael Ablassmeir Associate Portfolio Manager: Laura Hurst Spell Marketing Manager: Lisa Granger Content Project Managers: Melissa M. Leick; Emily Windelborn; Karen Jozefowicz Buyer: Susan K. Culbertson Design: Beth Blech Content Licensing Specialist: Brianna Kirschbaum Cover Image: Arrows: Pixel-Shot/Shutterstock; arrow sign: ©RTimages/Shutterstock; landscape: ©imagedepotpro/E+/Getty Images; compass: ©Design Pics/Kristy-Anne Glubish

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To Rachel and Emma. —Laura Hartman

To Michael and Matthew. —Joseph DesJardins

To Georgia. —Chris MacDonald

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About the Authors

Laura P. Hartman The School of Choice/L’Ecole de Choix (Haiti) Laura Pincus Hartman is Executive Director of the School of Choice Education Organization, a U.S.–based nonprofit that she cofounded, which oversees the School of Choice/L’Ecole de Choix, a unique leadership development education program in Haiti that serves children and families living in extreme conditions of poverty.

Hartman also is professor emerita at DePaul University. She held a number of roles during her almost three-decade career there, including Associate Vice President for Academic Affairs, Vincent de Paul Professor of Business Ethics at DePaul University’s Driehaus College of Business, and Director of its Institute for Business and Professional Ethics. From 2015– 2017, Hartman also served as the inaugural Director of the Susilo Institute for Ethics in the Global Economy at Boston University and Clinical Professor of Business Ethics in BU’s Department of Organizational Behavior. She has been privileged to serve as an Associated Professor at the Kedge Business School (Marseille, France) and has taught as a visiting professor at INSEAD

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(France), HEC (France), the Université Paul Cezanne Aix Marseille III, the University of Toulouse, and the Grenoble Graduate School of Business, and served as the Gourley Professor of Ethics at the Melbourne Business School.

Hartman is past president of the Society for Business Ethics and established its Professional Mentorship Program. She is the coauthor of Employment Law for Business (McGraw-Hill). Hartman graduated magna cum laude from Tufts University and received her law degree from the University of Chicago Law School. She divides her time between Haiti and Sint Maarten, and has been a mother to two daughters.

Joseph DesJardins College of St. Benedict/St. John’s University Joseph DesJardins holds the Ralph Gross Chair in Business and the Liberal Arts and is professor of philosophy at the College of St. Benedict and St. John’s University in Minnesota. His other books include An Introduction to Business Ethics; Environmental Ethics: An Introduction to Environmental Philosophy; Environmental Ethics: Concepts, Policy & Theory; Contemporary Issues in Business Ethics (coeditor with John McCall); and Business, Ethics, and the Environment: Imagining a Sustainable Future. He has served as president and executive director of the Society for Business Ethics and has published and lectured extensively in the areas of business ethics, environmental ethics, and sustainability. He received his BA from Southern Connecticut State University and his MA and PhD from the University of Notre Dame.

Chris MacDonald Ryerson University Chris MacDonald is an associate professor and director of the Ted Rogers Leadership Centre at Ryerson University’s Ted Rogers School of Management in Toronto, Canada, and a senior nonresident fellow at Duke University’s Kenan Institute for Ethics. His peer-reviewed publications range across business ethics, professional ethics, bioethics, the ethics of technology, and moral philosophy, and he is coauthor of a best-selling textbook called The Power of Critical Thinking (4th Canadian Edition, 2016). He is cofounder and coeditor of both the Business Ethics Journal Review and the news and commentary aggregator site Business Ethics Highlights. He is perhaps best known for his highly respected blog, The Business Ethics Blog, which is carried by Canadian Business magazine.

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Preface

We began writing the first edition of this textbook in 2006, soon after a wave of major corporate scandals had shaken the financial world. Headlines made the companies involved in these ethical scandals household names: Enron, WorldCom, Arthur Andersen, KPMG, J.P. Morgan, Merrill Lynch, Morgan Stanley, Citigroup, Salomon Smith Barney. At that time, we suggested that, in light of such significant cases of financial fraud, mismanagement, criminality, and deceit, the relevance of business ethics could no longer be questioned.

Sadly, as we enter the fifth edition of this book, these same issues are as much alive today as they were a decade ago. While our second edition was preceded by the unprecedented financial meltdown in 2008–2009 and the ethical problems faced by such companies as AIG, Countrywide, Lehman Brothers, Merrill Lynch, and Bear Stearns, this current edition continues to witness financial and ethical malfeasance of historic proportions and the inability of market mechanisms, internal governance structures, or government regulation to prevent it.

But the story is not all bad news. While cases of corporate fraud continue to make headlines (think of the recent Volkswagen, Wells Fargo, and Facebook scandals), countless small and large firms provide examples of highly ethical—and profitable—business enterprises. The emergence of benefit corporations (see Chapter 5 for examples) is only one instance of corporations dedicated to the common good. In this edition, we aim to tell the stories of both the good and the bad in business.

As we reflect on both the ethical corruption and the ethical success stories of the past decade, the importance of ethics is all too apparent. The questions today are less about whether ethics should be a part of business strategy and, by necessity, the business school curriculum, than about which values and principles should guide business decisions and how ethics should be

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integrated within business and business education. This textbook provides a comprehensive, yet accessible introduction to

the ethical issues arising in business. Students who are unfamiliar with ethics will find that they are as unprepared for careers in business as students who are unfamiliar with accounting and finance. It is fair to say that students will not be fully prepared, even within traditional disciplines such as accounting, finance, human resource management, marketing, and management, unless they are sufficiently knowledgeable about the ethical issues that arise specifically within and across those fields.

Whereas other solid introductory textbooks are available, several significant features make this book distinctive. We emphasize a decision- making approach to ethics, and we provide strong pedagogical support for both teachers and students throughout the entire book. This decision-making approach balances the goals of helping student reach conclusions without imposing someone else’s answers on them. Our goal is to help students make responsible decisions for themselves. But ethical decision making is no small feat, especially in an area that is necessarily multidisciplinary. Numerous small cases and examples aim to help teachers and students integrate concepts and material from philosophy, law, economics, management, finance, and marketing with the very practical goal of making real-life decisions. We aim to bring students into these discussions by regularly grounding our discussions in issues with which they are already familiar, thus approaching them through subjects that have already generated their interest.

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New to the Fifth Edition

While our goal for the fifth edition remains the same as for the first—to provide “a comprehensive yet accessible introduction to the ethical issues arising in business”—readers will notice a few changes. As always, the primary incentive of a new edition is to update the text with new and timely cases and topics. Readers will find new discussions of such companies as Facebook and Wells Fargo, as well as such topics as the #MeToo movement and digital privacy. Perhaps the most noticeable change, however, is the elimination of end-of-chapter readings, and this deserves some explanation.

When the first edition was published, our goal was to be as current and timely as possible, not only by including up-to-date examples throughout each chapter, but also through the end-of-chapter readings. Our thinking was that these readings would allow students and teachers to dive more deeply into the subject matter and access perspectives to broaden the scope of the conversation. They also could serve as convenient topics for written assignments or in-class discussions. However, at this point, accessing these perspectives has become so easy through the internet and other means that including them is no longer necessary to achieve our original goals. In fact, our choices instead can limit rather than broaden the range of ideas available.

Further, the increasing costs of textbooks are a serious concern for everyone in education. Students should know that while they are most directly affected by rising costs, teachers, authors, and, yes, even publishers are also troubled by this and regularly look for ways to reduce the costs of education. As we (the authors and our publisher, McGraw-Hill) looked for ways to control costs, the end-of-chapter readings stood out. Permission fees for reprinting readings have increased significantly in recent years, especially in this era of electronic and custom publishing, and the additional length added by the readings contributes to increasing production costs. We decided that these added costs were no longer justified by the benefits, especially

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considering that the readings are often readily available online, typically at no costs to students under the “fair use” copyright guidelines. The readings were always included only as a means to supplement the core text, and we have now concluded that students would be better served by eliminating the readings and focusing this edition more on the core text itself. In several cases, we have been able to integrate the content of the reading within the text as a Reality Check or Decision Point.

We have retained the same logical structure and chapter organization of previous editions because we have heard from many colleagues and reviewers that this structure works well for a semester-long course in business ethics. But every chapter has been revised to include new and updated material, cases, topics, and readings. Importantly, we continue to provide increased international perspectives, with particular references to Canadian and UK legislation and institutions.

Among the changes to this edition are the following: New or revised Opening Decision Points for every chapter, including new cases or in-depth discussions on:

▸ Wells Fargo ▸ Job security and confidentiality ▸ Executive compensation ▸ Free expression in the workplace ▸ Facebook ▸ Digital marketing ▸ The business of food

New cases, Reality Checks, or Decision Points within the text on such companies and topics as:

▸ Mylan Epi-Pen ▸ Greed ▸ #MeToo movement ▸ Tesla

▸ Uber ▸ Marijuana in the workplace ▸ Digital privacy ▸ Gender and sexual identity

As always, we reviewed and revised the entire text for accessibility, consistency, and clarity.

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Acknowledgments

A textbook should introduce students to the cutting edge of the scholarly research that is occurring within a field. As in any text that is based in part on the work of others, we are deeply indebted to the work of our colleagues who are doing this research. Our book is a more effective tool for both students and faculty because of their generosity.

In particular, thanks to Ryerson students Stefania Venneri, Tanya Walia, and Daniel Marotta for their useful suggestions, and to Katrina Myers at the University of Chicago and to Summer Brown at DePaul University for their exceptional research and editing assistance. In addition, we wish to express our deepest gratitude to the reviewers and others whose efforts served to make this manuscript infinitely more effective:

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