Dynamic Business Law The Essentials 4th Edition Kubasek Solutions Manual
Dynamic Business Law The Essentials 4th Edition Kubasek Solutions Manual
Chapter 2 explains the issues of right and wrong in business conduct and the role that the profit
motive plays in nearly all business ethics decisions. This explanation begins with the
fundamentals of business ethics and social responsibility and provides a framework that allows
students to engage with ethics and social responsibility material. This framework is important
because it takes away students’ tendency to believe questions of ethics are simply matters of
opinion. Consider asking your students to use the “WH framework” throughout the course.
2. LEARNING OBJECTIVES
After reading this chapter, students will be able to answer the following questions:
a. In the news…
Teaching tip: For each chapter, consider asking students to relate current news items to material
from the chapter.
In addition to ideas students come up with on their own, consider weaving in news stories
provided by the McGraw-Hill. Stories are available via a McGraw-Hill DVD, and on the
publisher’s web site.
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Chapter 02 – Business Ethics and Social Responsibility
“Smoke & Mirrors: Tobacco Companies Have Been Steadily Adding More Nicotine to Cigarettes
to Make Them More Addictive, Especially to Teenagers.”
Apply the WH framework to the decisions tobacco companies are making.
Is it “socially responsible” for tobacco companies to add nicotine to cigarettes?
Should legal rules provide additional protections to vulnerable consumers, such as
teenagers?
Business ethics is the use of ethics and ethical principles to solve business dilemmas.
An ethical dilemma is a question about how one should behave that requires one to reflect on the
advantages and disadvantages of the optional choices for various stakeholders.
The social responsibility of business consists of the expectations that the community places on
the actions of firms inside that community’s borders.
Teaching tip: How are the concepts of ethics and social responsibility different? Do they
overlap?
d. How do values provide a starting point for thinking about business ethics?
Values are essential for our clarifying why something is deemed good or bad. An understanding
of values is necessary to begin using the WH framework for ethical business decisions.
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Chapter 02 – Business Ethics and Social Responsibility
Teaching tip: Choose a current ethical dilemma from the newspaper and ask students to apply
the WH framework to the dilemma.
Point/Counterpoint: Teaching tip: Here are some questions to help you tie the
Do a firm's ethical Point/Counterpoint into class discussion:
responsibilities extend Does the responsibility lie with a business to act ethically, or with
beyond maximization of government to regulate business in order to curb unethical
profits? behavior?
Do we and/or should we hold businesses to different ethical
standards than we would an individual?
4. TEACHING IDEAS
Connecting to the Core One way to connect to the core expands the chapter’s discussion of ethics
and accounting. You may want to obtain and show your class a PBS
videotape called “Bigger than Enron,” available at:
http://www.pbs.org/wgbh/pages/frontline/shows/regulation/
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Chapter 02 – Business Ethics and Social Responsibility
environmental effects that their behavior had on the citizens and community of
Ecuador.
1. If an American business manager was working in another country and was questioning
engaging in a behavior that is ethical in that country, but unethical in the United States, that
manager could apply the Public Disclosure Test. Specifically, the manager may want to
think about whether the behavior would be considered ethical if it were to be broadcast in
the country where she is working.
2. The legality of a decision or behavior is the minimal standard that must be met. The
existence of this minimal standard is essential for developing ethical business decisions.
Overall, law and business ethics serve as an interactive system- informing and affecting
each other.
3. The legality of a decision is the minimal standard that must be met. The law both affects
and is affected by evolving ethical patterns.
4. The WH framework provides practical steps for responding to an ethical dilemma. The W
refers to who would the decision affect such as stakeholders and their interests. The H refers
to how we make ethical decisions, specifically, those principles and beliefs that guide our
decisions.
5. Mitsubishi’s violation of the NDA would likely cause tech companies to be very cautious
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distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Dynamic Business Law The Essentials 4th Edition Kubasek Solutions Manual
about how they approach potential investors. These companies may disclose less amounts of
sensitive information to potential investors out of fear that the investor would later disclose
the information or use it themselves without benefiting the company.
However, Mitsubishi’s actions can be argued to be quite unethical under the WH framework
when interpreted differently. After all, Mitsubishi essentially benefited from Stern’s ideas
without Stern getting any credit or compensation. Stern was a stakeholder who was
negatively affected in this instance. Mitsubishi’s actions also violate some of the How’s of
the WPH framework, such as the Golden Rule. It’s doubtful that Mitsubishi would have
appreciated Stern using its ideas for his own gain without permission, so arguably it’s
unethical that Mitsubishi used Stern’s ideas without permission.
6. Presumably Kozlowski would have conducted himself differently if his actions were subject
to public disclosure. The same result would entail from the universalization test as no one
would want Kozlowski’s behavior to serve as an example for others nor did it make the
world a better place.
7. The WH framework calls for students to apply the whom, purpose and how tests. Students
should determine the stakeholders affected by the decisions made by the state and the
pharmaceutical companies, the values underlying these decisions and the principles
applicable to making the decision in reaching their conclusions.
8. This law is intended to protect arrestees from predatory sales practices of bail bondsmen.
Without the law, a bail bondsman can sell their services to individuals immediately after
they’ve been arrested, which gives the arrestee virtually no time to collect their thoughts and
make a decision that truly reflects their interests. By allowing solicitation of bail bond
services only after an arrestee has made a “bona fide request,” the law can be more certain
that an arrestee actually wants bail services and isn’t simply acting out of the initial panic
that may come from being arrested. Within the context of the WH framework, this law
ensures that the purposes behind the solicitation are sound in order to protect the arrestee
stakeholders in this situation.
9. Obviously, the executives and shareholders of Dragon are some of the stakeholders
negatively affected by the ordeal because due to the L & H shares being worthless. The less
obvious stakeholders, however, include the employees of Dragon. Even if the Dragon didn't
go completely under and displace all of its employees, there was likely plenty of downsizing
to help cover the cost of repairing Dragon's financial situation.
Going by the Golden Rule standard within the WH framework, the decision of Goldman
Sachs' team to not inform Dragon about the status of L & H because Dragon didn't ask is
highly unethical. Surely, Goldman Sachs would not have appreciated if Dragon was in their
position and didn't inform them of a poor business partner, so it's hardly ethical that
Goldman Sachs did just that. Ideally, a business should go as far to fulfill a contract as they
would want the other party to go in fulfilling the contract. Both businesses must try to strike
a fair balance between serving both their own interests and the interest of the other party.
10. Values that may be at odds include freedom, justice and efficiency.
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
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