Business ethics ethical deciison making and cases 11e ferrel

www.downloadslide.net www.downloadslide.net ELEVENTH EDITION BUSINESS ETHICS Ethical Decision Making and Cases O.C Ferrell Belmont University John Fraedrich Southern Illinois University—Carbondale Linda Ferrell Belmont University Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net This is an electronic version of the print textbook Due to electronic rights restrictions, some third party content may be suppressed Editorial review has deemed that any suppressed content does not materially affect the overall learning experience The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest Important Notice: Media content referenced within the product description or the product text may not be available in the eBook version Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Business Ethics: Ethical Decision Making & Cases, 11e O.C Ferrell, John Fraedrich and Linda Ferrell Vice President, General Manager, Social Science & Qualitative Business: Erin Joyner Product Director: Jason Fremder Product Manager: Mike Roche Content Developer: Zach Fleischer Product Assistant: Brian Pierce Marketing Director: Kristen Hurd Marketing Manager: Emily Horowitz © 2017, 2015 Cengage Learning WCN: 02-200-203 ALL RIGHTS RESERVED No part of this work covered by the copyright herein may be reproduced or distributed in any form or by any means, except as permitted by U.S copyright law, without the prior written permission of the copyright owner For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, 1-800-354-9706 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com Marketing Coordinator: Christopher Walz Art and Cover Direction, Production Management, and Composition: Cenveo Publisher Services Intellectual Property   Analyst: Diane Garrity   Project Manager: Sarah Shainwald Manufacturing Planner: Ron Montgomery Cover Image(s): © Kenneth Keifer / Shutterstock.com Library of Congress Control Number: 2015955985 ISBN 13: 978-1-305-50084-6 Cengage Learning 20 Channel Center Street Boston, MA 02210 USA Cengage Learning is a leading provider of customized learning solutions with employees residing in nearly 40 different countries and sales in more than 125 countries around the world Find your local representative at www.cengage.com Cengage Learning products are represented in Canada by Nelson Education, Ltd To learn more about Cengage Learning Solutions, visit www.cengage.com Purchase any of our products at your local college store or at our preferred online store www.cengagebrain.com Printed in Canada Print Number: 01 Print Year: 2015 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net To James Collins Ferrell and   George Collins Ferrell To Emma, Matthew, Hyrum, and Ammon To Brett Nafziger —O.C Ferrell —John Fraedrich —Linda Ferrell Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net BRIEF CONTENTS PART 1: An Overview of Business Ethics   1: The Importance of Business Ethics   4: Sustainability Challenges in the Gas and Oil Industry 427  2: Stakeholder Relationships, Social Responsibility, and Corporate Governance  28  5: New Belgium Brewing: Engaging in Sustainable Social Responsibility 437  6: National Collegiate Athletic Association Ethics and Compliance Program  447 PART 2: Ethical Issues and the Institutionalization of Business Ethics  59  7: Google: The Quest to Balance Privacy with Profit  461  3: Emerging Business Ethics Issues  59  8: Zappos: Stepping Forward in Stakeholder Satisfaction 483  4: The Institutionalization of Business Ethics  93 PART 3: The Decision-Making Process  127  9: Enron: Questionable Accounting Leads to Collapse 496  5: Ethical Decision Making  127  6: Individual Factors: Moral Philosophies and Values 153 10: Lululemon: Encouraging a Healthier Lifestyle  508  7: Organizational Factors: The Role of Ethical Culture and Relationships  183 12: Insider Trading at the Galleon Group  528 11: Frauds of the Century  517 13: Whole Foods Strives to Be an Ethical Corporate Citizen 537 PART 4: Implementing Business Ethics in a Global Economy  215 14: Apple Inc.’s Ethical Success and Challenges  551 15: PepsiCo’s Journey Toward an Ethical and Socially Responsible Culture  566  8: Developing an Effective Ethics Program  215  9: Managing and Controlling Ethics Programs  241 16: Ethical Leadership at Cardinal IG: The Foundation of a Culture of Diversity  581 10: Globalization of Ethical Decision Making  274 11: Ethical Leadership  310 17: Belle Meade Plantation: The First Nonprofit Winery Engages in Social Entrepreneurship  590 12: Sustainability: Ethical and Social Responsibility Dimensions 345 PART 5: Cases  380 18: Managing the Risks of Global Bribery in Business 599  1: Monsanto Attempts to Balance Stakeholder Interests 382 19: Multilevel Marketing under Fire: Herbalife Defends Its Business Model  611  2: Starbucks Mission: Social Responsibility and Brand Strength 396 20: The Mission of CVS: Corporate Social Responsibility and Pharmacy Innovation  631  3: Walmart Manages Ethics and Compliance Challenges 407 Index I-643 iv Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net CONTENTS PART 1: AN OVERVIEW OF BUSINESS ETHICS  Chapter 2: Stakeholder Relationships, Social Responsibility, and Corporate Governance  28 Chapter 1: The Importance of Business Ethics  Stakeholders Define Ethical Issues in Business  30 Chapter Objectives, 28 | Chapter Outline, 28 | An Ethical Dilemma 29 Identifying Stakeholders, 32 • A Stakeholder Orientation, 33 Chapter Objectives, | Chapter Outline, An Ethical Dilemma Social Responsibility and Business Ethics  36 Business Ethics Defined  Issues in Social Responsibility  38 Why Study Business Ethics?  Social Responsibility and the Importance of a Stakeholder Orientation 40 A Crisis in Business Ethics, • Specific Issues, • The Reasons for Studying Business Ethics, Corporate Governance Provides Formalized Responsibility to Stakeholders  41 The Development of Business Ethics  Before 1960: Ethics in Business, • The 1960s: The Rise of Social Issues in Business, 10 • The 1970s: Business Ethics as an Emerging Field, 11 • The 1980s: Consolidation, 11 • The 1990s: Institutionalization of Business Ethics, 12 • The Twenty-First Century of Business Ethics, 12 Views of Corporate Governance, 44 • The Role of Boards of Directors, 45 • Greater Demands for Accountability and Transparency, 46 • Executive Compensation, 47 Implementing a Stakeholder Perspective  48 Step 1: Assessing the Corporate Culture, 48 • Step 2: Identifying Stakeholder Groups, 48 • Step 3: Identifying Stakeholder Issues, 49 • Step 4: Assessing Organizational Commitment to Stakeholders and Social Responsibility, 49 • Step 5: Identifying Resources and Determining Urgency, 50 • Step 6: Gaining Stakeholder Feedback, 50 Developing an Organizational and Global Ethical Culture 14 The Benefits of Business Ethics  15 Ethics Contributes to Employee Commitment, 16 • Ethic Contributes to Investor Loyalty, 17 •  Ethics Contributes to Customer Satisfaction, 18 • Ethics Contributes to Profits, 19 Contributions of a Stakeholder Perspective  50 Summary 51 Our Framework for Studying Business Ethics, 19 Important Terms for Review, 53 | Resolving Ethical Business Challenges, 54 | Check Your EQ, 55 Summary 22 Important Terms for Review, 23 | Resolving Ethical Business Challenges, 24 | Check Your EQ, 25 v Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net viContents PART 2: ETHICAL ISSUES AND THE INSTITUTIONALIZATION OF BUSINESS ETHICS  59 Core or Best Practices  114 Voluntary Responsibilities, 114 • Cause-Related Marketing, 115 • Strategic Philanthropy, 116 • Social Entrepreneurship, 116 Chapter 3: Emerging Business Ethics Issues 59 The Importance of Institutionalization in Business Ethics 117 Chapter Objectives, 59 | Chapter Outline, 59 | An Ethical Dilemma 60 Summary 118 Recognizing an Ethical Issue (Ethical Awareness)  61 Important Terms for Review, 120 | Resolving Ethical Business Challenges, 121 | Check Your EQ,122 Foundational Values for Identifying Ethical Issues  63 Integrity, 63 • Honesty, 63 • Fairness, 64 Ethical Issues and Dilemmas in Business  65 Misuse of Company Time and Resources, 66 • Abusive or Intimidating Behavior, 66 • Lying, 69 • Conflicts of Interest, 69 • Bribery, 70 • Corporate Intelligence, 71 • Discrimination, 72 • Sexual Harassment, 74 • Fraud, 75 • Consumer Fraud, 79 • Financial Misconduct, 80 • Insider Trading, 81 • Intellectual Property Rights, 81 • Privacy Issues, 82 The Challenge of Determining an Ethical Issue in Business 83 Summary 84 Important Terms for Review, 85 | Resolving Ethical Business Challenges, 87 | Check Your EQ, 88 Chapter 4: The Institutionalization of Business Ethics 93 Chapter Objectives, 93 | Chapter Outline, 93 | An Ethical Dilemma 94 Managing Ethical Risk through Mandated and Voluntary Programs 95 Mandated Requirements for Legal Compliance  97 Laws Regulating Competition, 99 • Laws Protecting Consumers, 101 • Laws Promoting Equity and Safety, 104 The Sarbanes–Oxley (SOX) Act  105 Public Company Accounting Oversight Board, 107 • Auditor and Analyst Independence, 107 • Whistle-Blower Protection, 107 • Cost of Compliance, 108 Dodd–Frank Wall Street Reform and Consumer Protection Act 108 Financial Agencies Created by the Dodd–Frank Act, 108 • Consumer Financial Protection Bureau, 109 • Whistle-Blower Bounty Program, 109 Laws That Encourage Ethical Conduct  110 Federal Sentencing Guidelines for Organizations  111 PART 3: THE DECISIONMAKING PROCESS  127 Chapter 5: Ethical Decision Making 127 Chapter Objectives, 127 | Chapter Outline, 127 An Ethical Dilemma 128 A Framework for Ethical Decision Making in Business 129 Ethical Issue Intensity, 129 • Individual Factors, 131 • Organizational Factors, 133 • Opportunity, 136 • Business Ethics Intentions, Behavior, and Evaluations, 138 Using the Ethical Decision-Making Model to Improve Ethical Decisions  139 Normative Considerations in Ethical Decision Making 140 Institutions as the Foundation for Normative Values, 141 • Implementing Principles and Core Values in Ethical Decision Making, 143 Understanding Ethical Decision Making  145 Summary 146 Important Terms for Review, 147 | Resolving Ethical Business Challenges, 148 | Check Your EQ, 149 Chapter 6: Individual Factors: Moral Philosophies and Values 153 Chapter Objectives, 153 | Chapter Outline, 153 An Ethical Dilemma 154 Moral Philosophy Defined  155 Moral Philosophies  157 Instrumental and Intrinsic Goodness, 157 • Teleology, 159 • Deontology, 161 • Relativist Perspective, 163 • Virtue Ethics, 164 • Justice, 166 Applying Moral Philosophy to Ethical Decision Making 167 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net vii Contents Cognitive Moral Development and Its Problems  169 White-Collar Crime  171 Individual Factors in Business Ethics  174 An Ethics Program can Help Avoid Legal Problems, 222 • Values versus Compliance Programs, 224 Codes of Conduct  225 Summary 175 Ethics Officers  228 Important Terms for Review, 177 | Resolving Ethical Business Challenges, 178 | Check Your EQ, 179 Systems to Monitor and Enforce Ethical Standards  231 Chapter 7: Organizational Factors: The Role of Ethical Culture and Relationships 183 Chapter Objectives, 183 | Chapter Outline, 183 An Ethical Dilemma 184 Defining Corporate Culture  185 The Role of Corporate Culture in Ethical Decision Making 187 Ethical Frameworks and Evaluations of Corporate Culture, 189 • Ethics as a Component of Corporate Culture, 190 • Compliance versus Values-Based Ethical Cultures, 191 • Differential Association, 193 • WhistleBlowing, 194 Leaders Influence Corporate Culture  197 Power Shapes Corporate Culture, 198 • Motivating Ethical Behavior, 200 • Organizational Structure, 201 Group Dimensions of Corporate Structure and Culture 203 Types of Groups, 204 • Group Norms, 205 Variation in Employee Conduct  206 Can People Control Their Actions within a Corporate Culture? 208 Summary 209 Important Terms for Review, 210 | Resolving Ethical Business Challenges, 211 | Check Your EQ, 212 Ethics Training and Communication  228 Continuous Improvement of an Ethics Program, 232 • Common Mistakes in Designing and Implementing an Ethics Program, 233 Summary 235 Important Terms for Review, 236 | Resolving Ethical Business Challenges, 237 | Check Your EQ, 238 Chapter 9: Managing and Controlling Ethics Programs  241 Chapter Objectives, 241 | Chapter Outline, 241 An Ethical Dilemma 242 Implementing an Ethics Program  243 The Ethics Audit  245 Benefits of Ethics Auditing  246 Ethical Crisis Management and Recovery, 249 • Measuring Nonfinancial Ethical Performance, 250 • Risks and Requirements in Ethics Auditing, 253 The Auditing Process  254 Secure Commitment of Top Managers and Board of Directors, 256 • Establish a Committee to Oversee the Ethics Audit, 256 • Define the Scope of the Audit Process, 257 • Review Organizational Mission, Values, Goals, and Policies and Define Ethical Priorities, 257 • Collect and Analyze Relevant Information, 259 • Verify the Results, 262 • Report the Findings, 263 The Strategic Importance of Ethics Auditing  264 Summary 267 PART 4: IMPLEMENTING BUSINESS ETHICS IN A GLOBAL ECONOMY  215 Important Terms for Review, 268 | Resolving Ethical Business Challenges, 269 | Check Your EQ, 270 Chapter 8: Developing an Effective Ethics Program 215 Chapter Objectives, 274 | Chapter Outline, 274 Chapter Objectives, 215 | Chapter Outline, 215 Global Culture, Values, and Practices  276 An Ethical Dilemma 216 Economic Foundations of Business Ethics  279 The Responsibility of the Corporation to Stakeholders  217 Chapter 10: Globalization of Ethical Decision Making 274 An Ethical Dilemma 275 Economic Systems, 281 The Need for Organizational Ethics Programs  219 Multinational Corporations  285 An Effective Ethics Program  221 Global Cooperation to Support Responsible Business  287 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net viiiContents International Monetary Fund, 287 • United Nations Global Compact, 288 • World Trade Organization, 289 Global Ethics Issues  290 Global Ethical Risks, 290 • Bribery, 291 • Antitrust Activity, 293 • Internet Security and Privacy, 294 • Human Rights, 295 • Health Care, 296 • Labor and Right to Work, 298 • Compensation, 298 • Consumerism, 299 Chapter 12: Sustainability: Ethical and Social Responsibility Dimensions 345 Chapter Objectives, 345 | Chapter Outline, 345 An Ethical Dilemma 346 Defining Sustainability  347 How Sustainability Relates to Ethical Decision Making and Social Responsibility  348 The Importance of Ethical Decision Making in Global Business 301 Global Environmental Issues  350 Summary 303 Environmental Legislation  357 Important Terms For Review, 304 | Resolving Ethical Business Challenges, 305 | Check Your EQ, 306 Chapter 11: Ethical leadership 310 Chapter Objectives, 310 | Chapter Outline, 310 An Ethical Dilemma 311 Defining Ethical Leadership  312 Requirements for Ethical Leadership  315 Benefits of Ethical Leadership  317 Ethical Leadership and Organizational Culture  318 Managing Ethical Business Conflicts  320 Conflict Management Styles, 321 Ethical Leaders Empower Employees  323 Ethical Leadership Communication  324 Ethical Leadership Communication Skills, 325 Atmospheric, 350 • Water, 352 • Land, 354 Environmental Protection Agency (EPA), 358 • Environmental Regulations,  358 Alternative Energy Sources  363 Wind Power, 363 • Geothermal Power, 364 • Solar Power, 364 • Nuclear Power, 364 • Biofuels, 365 • Hydropower, 365 Business Response to Sustainability Issues  366 Green Marketing, 367 • Greenwashing, 368 Strategic Implementation of Environmental Responsibility 369 Recycling Initiatives, 369 • Stakeholder Assessment, 370 • Risk Analysis, 371 • The Strategic Environmental Audit, 372 Summary 373 Important Terms for Review, 374 | Resolving Ethical Business Challenges, 375 | Check Your EQ, 376 Leader–Follower Relationships  328 Ethics Programs and Communication, 329 • Power Differences and Workplace Politics, 330 • Feedback, 330 Leadership Styles and Ethical Decisions  331 The RADAR Model  334 Summary 336 Important Terms for Review , 338 | Resolving Ethical Business Challenges, 339 | Check Your EQ, 340 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net 640 Part 5: Cases safety, management system and environment, as well as operational, financial, and legal risks, to assure that employees’ rights are not being invaded This program was fully expanded to factories in countries considered to be at high risk for such violations, and it is in the process of implementing full social audits for subcontractors in these areas In addition, CVS works with globally recognized organizations including Worldwide Responsible Accredited Production (WRAP) and Social Accountability International (SAI) to ensure its measurements are relevant and effective Finally, partnerships with Intertek’s GSV program maintains the company’s certification status with the U.S Customs-Trade Partnership Against Terrorism (C-TPAT) program to ensure quality of products made in countries such as China Environmental Impact Environmental impact is also important to CVS The company records its progress on this front in its annual Corporate Social Responsibility (CSR) Report It has set a carbon intensity reduction goal of 15 percent by 2018, and through energy efficiency upgrades have been able to address percent of that goal to date CVS opened its first Leadership in Energy and Environmental Design (LEED) Platinum store, which will serve as a test site to determine the most effective and relevant environmental innovations for the company’s environmental operations goals This information will be used to set best practices before constructing other stores CVS expanded its Energy Management System (EMS), which is designed to ISO (International Organization for Standardization) specifications This digital system tracks and manages energy use, so that each store can be continually monitored and adjusted according to each location’s needs It is also in the process of upgrading lighting in the stores by including more energy efficient bulbs Increasing water use was identified as a significant inefficiency, and CVS has responded by eliminating irrigation at retail locations and opting for less water-intensive landscapes Finally, CVS offers customers ways to recycle and properly dispose of expired, unused, or unwanted medications, which benefit both human and environmental well-being CONCLUSION CVS is implementing strategies and allocating resources in the hope of achieving an ethical culture that benefits all stakeholder groups This helps CVS to maximize ethical decision making and remain sustainable for years to come It seems the company has learned from previous ethical lapses by being aware of addiction problems within its communities In 2014 CVS voluntarily opted to stop selling some cold medications in West Virginia and surrounding areas as more methamphetamine labs and corresponding stimulant abuse became more prominent throughout the state The company’s impact on the environment is one of the next big challenges it will have to overcome As one of the largest pharmacies in the United States, CVS has a long way to go to reduce its overall footprint However, the company is on the right track, having set goals and implementing action steps to achieve these goals With the mission of helping people live healthier lives and innovating the pharmacy industry, CVS has a great responsibility in developing a business model allowing the company to remain competitive while acting ethically at the same time Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Case 20: The Mission of CVS: Corporate Social Responsibility and Pharmacy Innovation 641 QUESTIONS FOR DISCUSSION How has CVS handled its ethical challenges? Evaluate CVS’s decision to no longer sell tobacco products What is the future of CVS in positioning itself as a health care company based on its decision to be socially responsible? 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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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net 642 Part 5: Cases Pharmacies 20 Times Average,” USA Today, February 7, 2012, http://usatoday30.usatoday.com/money/industries/ health/story/2012-02-06/dea-cvs-oxycodone-raid/52994168/1 (accessed August 4, 2014); Natasha Leonard, “Homeless man Choked to Death after Shoplifting Toothpaste,” Salon, January 18, 2013, http://www.salon com/2013/01/18/homeless_man_choked_to_death_after_shoplifting_toothpaste/ (accessed August 4, 2014); “The Long-Term Incentive Plan,” CVS Carenark, March 24, 2009, http://www.wikinvest.com/stock/CVS_Caremark_ Corporation_(CVS)/Long-term_Incentive_Plan (accessed 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orlandosentinel.com/2012-10-28/news/os-cvs-dea-oxycodone-ban-20121028_1_sanford-cvs-sanford-pharmaciessanford-stores (accessed August 4, 2014); Amy Pavuk, “Two Sanford Pharmacies Banned from Selling Oxycodone, Controlled Substances,” Orlando Sentinel, September 12, 2012, http://articles.orlandosentinel.com/2012-09-12/ news/os-sanford-cvs-caremark-revoke-drugs-20120912_1_revokes-prescription-drug-abuse-oxycodone-andother-prescription (accessed August 4, 2014); PR Newswire, “CVS Health Reports Third Quarter Results,” CVS Health, November 4, 2014, http://www.cvshealth.com/newsroom/press-releases/quarterly-earnings/cvs-healthreports-third-quarter-results (accessed March 16, 2015); “Press Release: More Partnerships between Doctors and Hospitals Strengthen Coordinated Care for Medicare Beneficiaries,” Centers for Medicare and Medicaid Services Press Release, December 23, 2013, http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-Releases/2013Press-Releases-Items/2013-12-23.html (accessed August 4, 2014); “Quality,” CVS MinuteClinic, http://www.cvs com/minuteclinic/visit/about-us/quality (accessed August 4, 2014); “Services,” CVS MinuteClinics, http://www cvs.com/minuteclinic/services (accessed August 4, 2014); Kyle Stock, “Pediatricians Seek Risk-to Kids and Themselves-in DrugStore Health Clinics,” Bloomberg Businessweek, February 24, 2014, http://www.businessweek com/articles/2014-02-24/pediatricians-see-risk-to-kids-and-themselves-in-drug-store-health-clinics (accessed June 6, 2014); “We’re a Pharmacy Innovation Company and Every Day We’re Working to Make Health Care Better,” About CVS Caremark, http://info.cvscaremark.com/about-us/our-purpose-building-bridge-better-health (accessed August 5, 2014); Jessica Wohl, “CVS Cuts Off Docs Who Prescribe Too Many Narcotics,” NBC News, August 22, 2013, http://www.nbcnews.com/health/health-news/cvs-cuts-docs-who-prescribe-too-manynarcotics-f6C10975693 (accessed August 4, 2014) Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net INDEX A Abusive or intimidating behavior, 66–68 Accenture, 248 Accountability, 43, 46–47 Accounting fraud, 76–77 Accounting scandals, 12–13 Acid rain, 351 Ackman, William, 523–524, 619–622 Act deontologists, 162–163 Active bribery, 70 Act utilitarians, 160 Acuity, 166 “Adopt a Pilot” program, 185 Adverse opinion, 264 Affirmative action programs, 73 Affordable Care Act, 410 Age discrimination, 73 Age Discrimination Act, 1975, 105(table) Age Discrimination in Employment Act, 1967, 73, 105 (table) Agent Orange, 383, 389 Agricultural Appropriations Bill of 2013, 385 Air pollution, 350 Alibaba, 6, 41–42 All-China Federation of Trade Unions (ACFTU), 411–412 Alternative energy sources biofuels, 365 geothermal power, 364 hydropower, 365 nuclear power, 364–365 solar power, 364 wind power, 363–364 Alyeska Pipeline Service Co., 428–429 Amazon.com, 294 American Association for the Advancement of Science, 386 American Association of Retired People (AARP), 32 American Business Ethics Award, 196 American Customer Satisfaction Index, 410 American Express, 134 American Institute of CPAs Code of Professional Conduct and Bylaws, 221 Americans under the Affordable Care Act (ACA), 635 Americans with Disabilities Act, 1990, 104, 105 (table) Antitrust activity, 293–294 Antitrust Improvements Act, 1976 (table), 101 Apathetic culture, 189 Apple Inc., 35, 248 aggressiveness on patent protection, 558 Apple Lisa, 551 Apple Pay, 555 “closed door” policy, 552 commitment to sustainability, 553 concept of evangelism in, 553 corporate culture, 553–554 culture of innovation, 560 e-book prices for the iPad, 555–556 ethical issues at, 554–560 ethics, 554 FLA’s recommendations and, 560 history of, 551–552 iCloud, 555 intellectual property theft and, 557–558 iPhone and iPod, 552, 555 iTunes store, 552, 555 lawsuit against HTC Corporation, 558 lawsuit between Samsung and, 558 LEED certification, 554 Mac computer line, 552 organizational structure, 552 price fixing, 555–556 privacy, ethical issue, 554–555 product components, 554 retail employees of, 553 rioting, at stores, 556 “Supplier Code of Conduct,” 554 suppliers of, 559 supply chain management issues, 559–560 sustainability, 556–557 threats to other companies, 558–559 trademark lawsuit, 558 Archer Daniels Midland, 249 Aristotle, 157, 164 Arntson, Mike, 585 Arthur Andersen, 12 Association of Southeast Asian Nations (ASEAN), 282 Association to Advance Collegiate Schools of Business (AACSB) International, 289 Auditing process, 254–264 collect/analyze relevant information, 259–262 committee to oversee, establish, 256–257 define scope of, 257 framework, 254–255 model corporate social responsibility structure (figure), 255 organizational mission, values, goals, policies, priorities, review, define, 257–259 report findings of, 263–264 results, verify, 262–263 top managers/board of directors, secure commitment of, 256 Authentic leadership, 333–334 B Balanced scorecard, 250, 251 (table) Bald assertions (nonestablishment claims), 78 Bank of America, 253 Barney & Barney LLC, 264 Bayer, 386 Bechtel Corporation, 146 Behavioral economics, 283 I-643 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-644Index Belichick, Bill, 64 Belle Mead Plantation, 117 annual revenues, 596 approaching challenges facing, 597 brief history of, 591–592 Groupon promotion of, 596 Harding House Restaurant, 591 nonprofits with social entrepreneurship, 592–593 nonprofit winery, 593–595 pro forma income statement (table), 596 Progressive Wine Tour, 597 sources of funding for, 590 Southern culinary experience, 596 success with social media, 597 tours and tastings, 595–597 Ben & Jerry’s, 189 Berkshire Hathaway, 61, 221 Better Business Bureau (BBB), 96 Better Business Bureau’s Torch Award criteria for ethical companies (table), 265–266 Beversluis, Eric, 63 Bezos, Jeff, 487 Bharara, Preet, 534 BICEP’s Climate Declaration in 2013, 442 Bill of Rights, 476 Bimodal wealth distribution, 282 Biodiversity, 356 Biofuels, 365 Bloomberg, Martin, 571 Blue Buffalo, BMW, 248 BNP Paribas, 222 Boards of directors, 45–46 Boeing, 248 Boston Consulting Group (BCG), 190 Boyatzis, Richard, 332 Bradham, Caleb, 566 Branson, Richard, 66 Bravo Zulu Award, 190 Bribery, 42, 70–71, 130, 145, 160, 172, 291–293, 322 Alstom, 605–606 companies accused of violating the FCPA (table), 603 defined, 599 in different cultures and countries, 599 economic costs of corruption, 606 Federal Corrupt Practices Act of the United States, 600 form and frequency of, 599 impact of, national institutions and, 606–607 OECD Anti-Bribery Convention, 600 penalties under U.S FCPA and U.K Bribery Act, 602–606 Pfizer Inc., 603 political and social costs of, 606 prosecutions under the U.K Bribery Act, 604–605 Ralph Lauren, 604 Siemens, 603–604 ten countries most likely to use bribery in business (table), 607 United Kingdom Bribery Act, 599–602 U.S Foreign Corrupt Practices Act of 1977 (FCPA), 599–601 Walmart Stores, Inc., 407, 414–415 Buddhist cultures, 279 Buffett, Warren, 61, 221, 334 Bullying, 67–68 actions associated with bullies (table), 68 helping employees understand, 68 steps to minimize workplace, 68 Burgundy Book, 253 Burlington Northern Santa Fe, 221 BurnLounge decision, 624–625 Burns & McDonnell, 16 Bush, George W., 12 Business ethics See also Corporate social responsibility benefits of, 15–19 crisis in, 5–6 customer satisfaction, in terms of, 18–19 defined, 4–5 development of, 9–14 economic foundations of, 279–285 employee commitment and, 16–17 ethical decision-making process, 11 ethical issues, 6–7 global trust, in industry sectors (figure), individual factors in, 174–175 institutionalization of, 12 prior to 1960 and in 1960s, 9–10 profits, in terms of, 19 program See Organizational ethics programs Reagan–Bush era, 12 reasons for studying, 7–9 rise of social issues and, 10 role organizational ethics in performance (figure), 16 shareholder loyalty and, 17 social responsibility and, 36–38 timeline of ethical and socially responsible concerns (table), 10 twenty-first century, 12–14 Business for Innovative Climate & Energy Policy (BICEP), 442 Business for Social Responsibility (BSR), 287 Business Software Alliance, 221 “Buy American” campaign, 410 Buy One Give One initiative, 115 C Camden Property Trust, 141 Campaign for Tobacco-Free Kids, 30 Campbell Soup Co., 115 Canadian Space Agency (CSA), 260, 263–264 Cancun Package, 352 Capitalism, 284 conflict between socialism and, 284 economic capitalism country differential (figure), 283 free-market, 155–156, 284 Capital One, 173 Cardinal Glass Industries, Inc., 581 Cardinal Insulating Glass (Cardinal IG) background, 581 balance of discipline and respect/caring of individual team members, 586 code of conduct, 583 countries represented at, 587 culture of discipline and respect, 585–586 Employee Handbook of, 585 ethical expectations, 586 founding story, 581–582 incentives, rewards, recognition, 586–587 leadership through a multilevel team structure, 584–585 manufacturing divisions of the company, 584 mission and vision of, 582–583 philosophy of leadership, 584 profit-sharing plan at, 587 synergy through diversity, 587–588 values, principles, and behavior, 583 Caremark Rx, Inc., 632 Caring culture, 189 Carson, Rachel, 358 Silent Spring, 358 Case studies Apple Inc., 551–561 Belle Mead Plantation, 590–597 bribery, 599–608 Cardinal Glass Industries, Inc., 581–589 Consumer Value Store (CVS), 631–640 Enron, 496–505 Galleon Group, 528–534 Gas and Oil industry, 427–434 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-645 Index Google, 461–477 Herbalife International, 611–627 Lululemon Athletica, 508–515 Monsanto, 382–392 National Collegiate Athletic Association (NCAA), 447–458 New Belgium Brewing Company, Inc., 437–444 PepsiCo, 566–578 Ponzi schemes, 517–525 Starbucks, 396–403 Walmart Stores, Inc., 407–422 Whole Foods, 537–548 Zappos, 483–493 Catcher Technology Co., 35 Categorical imperative, 161 Caterpillar, 11, 248 Cause-related marketing, 115–116 Celler–Kefauver Act, 1950 (table), 101 Centralized organization, 201–203 Charles Schwab & Co., 136 Charney, Dov, 31 Chase Manhattan Bank, 521 Chernobyl nuclear disaster, 365 Chesapeake Energy, 100 Chevrolet Cobalt, 160 Chief financial officer (CFO), 329 Children’s Online Privacy Protection Act (COPPA), 1998, 102(table), 103 China Chinese cultures, 279 climate treaty, 352 combating copyright violations, 221 compliance programs in, 220–221 consumerism in, 300 Google in, 295, 474–475 Lumber Liquidators, case of, 249 national capitalism and free enterprise in, 156 Nu Skin, case of, 261 Christian cultures, 279 Cisco’s Network Academy, 116 Cisco Systems, 285 Civil law, 98 Civil Rights Act, 1991, 105(table) Clayton Act, 1914 (table), 101 Clean Air Act (CAA), 1970, 357, 359 (table), 360 Clean Water Act (CWA), 1972, 10, 361, 442 Climate change, 351–352 Cloud computing, 14 Coalition for Environmentally Responsible Economies (CERES), 350 Coastal Zone Management Act, 1972 (table), 359 Coca-Cola, 66, 287, 370 Code of Business Conduct, 222, 225–227 benefits of, 227 (table) developing and implementing, 227 (table) Code of ethics, 225–226 Keurig Green Mountain Inc.’s (table), 260 Codes of global ethical conduct, 302 Coercive power, 198–199 Cole, James, 606 Collaborative leaders, 323 Collegiate football programs, 447–449 See also National Collegiate Athletic Association (NCAA) Colligan, Edward, 558 Collusion, 79 Colt, Sam, 159, 162, 164, 166 Commission lying, 69 Committees, 204 Communication skills for leadership, 324–328 ethics programs and, 329–330 Compensation, 298–299 Competing leaders, 321 Competitive global economy, 355 Compliance culture, 191–193 minimum requirements for compliance program, 223 (table) vs values-based ethical cultures, 191–193, 224–225 Compliance management systems (CMSs), 245 Compliance orientation, 224 Comprehensive Environmental Response, Compensation, and Liability Act, 1980 (table), 360 Compromising leaders, 322 Conflict management styles, 321–323 Conflict of interest, 69–70, 130 Confucian concept of honesty, 63 Consequentialism, 159 Consumer Financial Protection Bureau (CFPB), 80–81, 109 Consumer fraud, 79 types of (table), 79 Consumer Goods Pricing Act, 1975, 101(table)–102 (table) Consumerism, 10, 299–301 Consumer Leasing Act, 1976, 102 (table) Consumer Product Safety Act, 1972, 102 (table) Consumer protection, 39 Dodd–Frank Wall Street Reform and Consumer Protection Act, 13, 80–81, 95, 102, 108–109 FTC Bureau of Consumer Protection, 103 Telephone Consumer Protection Act, 1991, 102(table) United Nations guidelines for, 166 Consumer safety, 97 Consumers’ Bill of Rights, 10 Consumer Value Store (CVS) Accountable Care Organizations (ACO) program, 636 acquisitions, 631–632 Code of Conduct, 638 commitment to employees, 638 community engagement and philanthropic endeavors, 639 criticism against, 637 DEA’s investigation on oxycodone tablets, 634 death of a shoplifter, 635 Energy Management System (EMS) of, 640 ExtraCare Card loyalty program, 631 functions for shareholders, 638–639 growth and expansion, 631 health care programs and services, 635–636 HIPAA privacy case of 2009, 632–633 lawsuit involving deceptive business practices, 633 Leadership in Energy and Environmental Design (LEED) Platinum store, 640 legal and ethical challenges of, 632–635 PharmaCare program, 631 rebranding efforts, 636 stakeholder orientation, 637–640 suppliers of, 639 tobacco-free, 636–637 Controlling the Assault of Non-Solicited Pornography and Marketing Act (CANSPAM), 2003 (table), 101 Cook, Tim, 559–560 Copyright Act of 1976, 81 Core or best practices, 114–117 Core practices, 96 Corporate accountability and transparency, 32 Corporate and Criminal Fraud Accountability Act (CCFA), 194 Corporate Average Fuel Economy (or CAFE) standards, 359 Corporate citizenship, 37 Corporate culture, 17, 134– 135, 218–219 centralized and decentralized, 203 compliance vs values-based ethical cultures, 191–193 control of actions with, 208–209 defined, 185–187 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-646Index differential association, 193 ethical decision making and, 187–197 ethical frameworks and evaluations of, 189–190 ethics as a component of, 190–191 ethics audit, 192 (table) forms of expression, 187–188 group dimensions of, 203–206 leaders’ influence, 197–203 organization’s structure and, 201–203 power, role of, 198–200 variation in employee conduct, and, 206–208 whistle-blowing, 194–197 Corporate culture, 324 Corporate espionage (table), 72 Corporate governance, 39, 41–48, 96 accountability, transparency, demands for greater, 46–47 accountability in, 43 board of directors, role of, 45–46 changes in (table), 44 developing, 48–50 development of a stakeholder orientation, 43 executive compensation and, 47–48 shareholder model of, 44 stakeholders, formalized responsibility and, 41–48 topics (table), 43 views of, 44–45 Corporate intelligence (CI), 71–72 acceptable strategies and practices in, 71 Corporate psychopaths, 174 Corporate reputation, 37–38 Corporate social responsibility, 11, 191, 284, 333 See also Social responsibility business ethics and, 36–38 growth in global corporate responsibility reporting, 233 (figure) Herbalife International, 625–626 Monsanto, 382, 390–392 PepsiCo, 574–577 structure, model (figure), 255 Walmart Stores, Inc., 420–422 Corporate trade secrets (table), 72 Countrywide Financial, 189 Cox, Christopher, 521 Craven’s Holding Corp., 566 See also PepsiCo Credit Card Accountability Responsibility and Disclosure Act, 2009, 102(table) Criminal law, 98 CrossCountry Energy Corporation, 503–504 Cultural audit, 190 Cultural relativism, 279 Cybersecurity, 250 Cybersecurity, 42 D Day, Christine, 512–513 Decentralized organization, 202–203 Deepwater Horizon oil spill, BP, 347, 430–432 aftermath, 431–432 causes of, 430–431 repercussions of, 431 Defense Advanced Research Projects Agency (DARPA), 386 Defense Industry Initiative on Business Ethics and Conduct (DII), 11–12 Deferred prosecution agreements (DPAs), 246 Deforestation, 355–356 Dell, 364 Deontology, 161–163 Descriptive relativism, 163 Descriptive stakeholder theory, 31 Dewey, John, 158, 164 Diamond Foods, 249 Differential association, 193 Digital copyrights, 82 Digital Millennium Copyright Act, 1998, 81, 101(table) Digital Theft Deterrence and Copyright Damages Improvement Act of 1999, 81–82 Dilemma, ethical business See Ethical dilemmas in business Directors, 42 Direct sales communication, 78 Direct Selling Association’s Code of Ethics, 617, 619 Dirks test, 81 Disclaimer of opinion, 264 Discrimination, 72–74 Dishonesty, 64 Distributive justice, 166 Dodd–Frank Wall Street Reform and Consumer Protection Act, 13, 80–81, 95, 102 (table), 196, 217, 254 Consumer Financial Protection Bureau (CFPB), 109 financial agencies created by, 108–109 whistle-blower bounty program, 109 Dodge v Ford Motor Co., 41 Doha Gateway Agreement, 352 Do Not Call Implementation Act, 2003, 102 (table) Dow Chemical, 198, 387 Dream Machine recycling initiative, 577 Dual relationship, 74 Dudley, William, 244 Duke, Mike, 409, 414, 417 Dumping, 290 Dumpster diving, 72 Duplicity, 79 DuPont, 98, 287, 389 Duty of diligence, 42 Duty of loyalty, 42 Dysfunctional leaders, 199 E EBay, 68, 78 Ebbers, Bernie, 249 Eckard, Cheryl D., 195 Economic stability, 280 Economic theories or systems, 281–285 Economic value orientation, 156 Edelman Trust Survey, 31 Edgar, David, 443 Effective leadership, attributes of, 188 (table) Egoism, 159 Electronic Communications Privacy Act of 1986, 82 Electronic monitoring, 83 Electronic Product Environmental Assessment Tool (EPEAT) rating system, 557 Electronic waste, 355 Eli Lilly, 296 Emergency Planning and Community Right-toKnow Act, 1986 (table), 360 Emotional intelligence, 332 Emotionally intelligent leader, 332 Employee commitment and business ethics, 16–17 Employee empowerment, 323–324 Employee feedback, 330–331 Endangered Species Act, 1973, 359 (table), 361 Energy Independence and Security Act, 2007 (table), 360 Energy Policy Act, 2005, 360 (table), 362–363 Energy Policy and Conservation Act, 1975 (table), 359 Enlightened egoism, 159 Enron Corporation, 12, 197– 198, 249, 321 accounting problems, 497–502 auditor, Arthur Andersen LLP, 502–503 Chair, Ken Lay, 501–502 Chief Executive Officer, Jeffrey Skilling, 500–501 Chief Financial Officer, Andrew Fastow, 499–500 corporate culture of, 497 creditors, 503–504 demise, causes of, 503–504 history of, 496–497 lawyers, Vinson & Elkins, 502 learning from, 504–505 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-647 Index Merrill Lynch, 502 off-the-balance-sheet partnerships, use of, 130 “special-purpose entities” or SPEs of, 497–498 whistleblower, Sherron Watkins, 498–499, 503 Entrepreneurship Bootcamp for Veterans with Disabilities (EBV), 577 Environmental legislation, 357–363 Clean Air Act (CAA), 360 Clean Water Act (CWA), 1972, 361 Endangered Species Act, 361 Energy Policy Act, 2005, 362–363 Food Quality Protection Act, 1996, 362 Pollution Prevention Act, 361–362 Toxic Substances Control Act (TSCA), 361 Environmental protection, 97 Environmental Protection Act, 357 Environmental Protection Agency (EPA), 358–359, 385 goals of (table), 359 Environmental responsibility, implementation of recycling initiatives, 369–370 risk analysis, 371 stakeholder assessment, 370–371 strategic approaches to (figure), 370 strategic environmental audit, 372 Equal Credit Opportunity Act, 1974, 105 (table) Equal Employment Opportunity Commission (EEOC), 73–74, 104 Equality, 64 Equal Pay Act of 1963, 105 (table) amended, 105 (table) Equity, 64 Ergen, Charlie, 321 Ernst & Young, 250 Ethanol, 365 Ethical awareness, 129 Ethical blindness, Ethical business conduct, global principles for (table), 302 Ethical business conflicts, 320–323 Ethical codes, 35 Ethical conduct, boundaries of, 95 Ethical corporate cultures, 32, 146 decline in (figure), 33 Ethical crisis management and recovery, 249–250 Ethical culture, 14–15, 17, 95, 135 elements of (figure), 97 misconduct and (figure), 99 Ethical decisions, 3, 11, 31, 37, 80 age, role in, 133 business ethics intentions, behavior, evaluations, 138–139 corporate culture, role in, 134 ethical issue intensity, 129–131 external control (externals), role in, 133 framework for, 129–139 group communication, 327 importance in global business, 301–303 individual factors, 131–133 internal control (internals), role in, 133 leadership styles and, 331–334 link between education and, 132 link between gender and, 132 locus of control, role in, 133 nationality, role of, 133 normative considerations in, 140–145 opportunity, 136–138 organizational factors, 133–135 principles and core values in, 143–145 understanding, 145–146 use model of, to improve, 139–140 Ethical dilemmas in business, 65–83 abusive or intimidating behavior, 66–68 case examples, 2, 29, 60, 94, 128, 154, 184, 216, 242, 275–276, 311, 346 challenge of determining, 83–84 conflict of interest, 69–70 consumer fraud, 79 corporate intelligence (CI), 71–72 financial misconduct, 80–81 fraud, 75–78 insider trading, 81 intellectual property rights, 81–82 lying, 69 misuse of company time and resources, 66 privacy issues, 82–83 racial and sexual discrimination, 72–74 sexual harassment, 74–75 shareholder issues (table), 65 Ethical disasters, 249 Ethical integrity, 286 Ethical issue awareness, 61 recognizing, 61–62 Ethical issue intensity, 129–131 Ethical issues, identifying discrimination, 73–74 fairness, 64–65 honesty, 63–64 integrity, 63 Ethical issues of acquisition and sales of information, 14 Ethical leaders, 321–323, 330 Ethical leadership, 30, 41–42, 47–48 benefits of, 317–318 communication, 324–328 defined, 312–314 empowering of employees, 323–324 leadership styles and ethical decisions, 331–334 managing ethical business conflicts, 320–323 organizational culture and, 318–320 RADAR model, 334–336 requirements for, 315–317 training for both managers and employees, 324 Ethical misconduct, 31 Ethical responsibility, 221 Ethical risk management, 95–97 Ethics, business, benefits of, 15–19 customer satisfaction, contribution to, 18–19 employee commitment, 16–17 investor loyalty, 17 profits, contribution to, 19 role of organizational ethics in performance (figure), 16 Ethics, defined, Ethics and Compliance Association (ECA), 262 Ethics and Compliance Officer Association, 146 Ethics audit auditing process, 254–264 benefits of, 246–254 defined, 245 of ethical work climate of an organization, 247 measuring nonfinancial ethical performance, 250–253 procedures and processes, 246 risks and requirements in, 253–254 strategic importance, 264–266 Ethics officers, 228 Ethics programs See also Organizational ethics programs communication and, 329–330 Ethics Resource Center, 66 Ethics training and communication, 228–230 Ethisphere’s “World’s Most Ethical Companies,” 15 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-648Index EU Data Protection Directive, 295 Exacting culture, 189 Executive compensation, 30, 299 Expert power, 199 External stakeholders, 30 Exxon Valdez oil spill, 428–430 aftermath, 429–430 response to the disaster, 428–429 F Facilitation payments, 70 Fair Credit Billing Act, 1974, 102(table) Fair Deal program, Fair Debt Collection Practices Act, 1978, 102(table) Fair Labor Association (FLA), 560 Fairness, 64–65 Fannie Mae, 80, 253 Fastow, Andrew, 249 Federal Communications Commission (FCC) charges against Apple, 555 Federal Copyright Office (FCO), 82 Federal False Claims Act, 195 Federal Hazardous Substances Labeling Act, 1960, 102 (table) Federal Insecticide, Fungicide, and Rodenticide Act, 1972 (table), 359 Federal Sentencing Guidelines for Organizations (FSGO), 12, 111–114, 130, 174, 194, 196, 217, 222–224, 232, 244, 247, 254 Federal Trade Commission (FTC) Act, 1914, 77, 101 (table) Bureau of Consumer Protection, 103 FTC Improvement Act, 1975 (table), 101 vs POM Wonderful, 103 Federal Trade Commission (FTC) charges against CVS, 633 against Google, 470–471 against Herbalife, 523–524 against Nex-Gen3000.com, 524 against pyramid schemes, 523–524 against Whole Foods, 545–546 Federal Trademark Dilution Act, 1995 (table), 101 Federal Water Pollution Control Act, 1972 (table), 359 FedEx, 190 Feedback, 330–331 Financial misconduct, 80–81 Firestone, 249 Fitch Ratings, 69 Fluor, 227 Food Quality Protection Act, 1996, 360 (table), 362 Ford, Henry, 186 Ford Motor Co., 186, 220, 264, 302 Ford Pinto case, 146 Foreign Corrupt Practices Act, 8, 137, 223 Foreign Corrupt Practices Act, 1977 (table), 101 Forest Stewardship Council (FSC), 355–356 Formal controls, ethics programs, 244 Formal groups, 204–205 Fortune Magazine’s “Best Companies to Work For,” 16 Foundation for Financial Service Professionals in 2014, 196 Fox, Philip G., Fraud, 75–78 Fraud Enforcement and Recovery Act, 2009 (table), 101 Fraud schemes, 172 (table) Freddie Mac, 80 Free-market capitalism, 155–156, 284 Friedman, Milton, 155, 281 Frito-Lay Company, 569, 572 See also PepsiCo G Galleon Group, 81, 249 accusations of insider trading at, 529–530 arrest and trial, 531–532 central players, in information network of (table), 530 companies affected by insider information network (table), 534 corporate culture at, 220 impact of case, 533–534 Rajat Gupta, 533 Raj Rajaratnam, 528–532 verdict, trial, 532 Gas and Oil industry about, 427–428 Deepwater Horizon oil spill, BP, 430–432 Exxon Valdez oil spill, 428–430 hydraulic fracturing, or fracking, 432–434 Gatorade, 569–570 See also PepsiCo Gebler, David, 175 GEICO, 221 Gender pay inequality, 298 General Agreement on Tariffs and Trade (GATT), 289 General Electric (GE), 11 General Motors (GM), 10–11, 160, 204 Board Audit Committee, 301 Genetically modified organisms (GMO), 356–357 Monsanto, 382–384 Whole Foods, 541 Geothermal power, 364 GlaxoSmithKline, 195 Global business, 276 Global common values, 279 Global environmental issues acid rain, 351 air pollution, 350 biodiversity, 356 deforestation, 355–356 genetically modified (GM) organisms, 356–357 global warming, 351–352 land pollution, 354 urban sprawl, 356 waste management, 354–355 water pollution, 353–354 water quantity, 354 Global Ethics and Compliance Department, 301 Global ethics issues antitrust activity, 293–294 bribery, 291–293 compensation, 298–299 consumerism, 299–301 gender pay inequality, 298 health care, 296–297 human rights, 295–296 internet security and privacy, 294–295 labor and right to work, 298 legal issues (table), 291 risks, 290–291 Global financial market, 280 Global health care fraud, 297 Global Reporting Initiative (GRI), 251, 264 Global Responsibility Report, 245 Global Sullivan Principles, 301 Global warming, 351–352 Goldman Sachs, 116, 253, 326 Goldstein, Sidney, 631 Goldstein, Stanley, 631 Goleman, Daniel, 332 Good community citizens, 331 Goodness theories, 158 Goodyear Tire & Rubber, 160 Google, 95, 99, 294 about, 461–462 advertising, 463–464 Android, 465, 475 approach to Internet privacy and collection of user information, 461 in China, 295, 474–475 Chrome Web Apps, 464 company culture, 462–463 “Do Not Track” option, 470, 475–476 employee charitable initiatives, 468 in European Union, 468– 469, 473–474 FCC charges, 471 FTC charges, 470–471 Gmail, 464 Google+, 465–466 Google Analytics, 466 Google Books, 468 Google Buzz, 471–472 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-649 Index Google Chrome, 464 Google Drive, 466 Google Glass, 466–467 Google Green, 467 Google Maps, 466 Google.org, 467–468 Google Ventures, startup funds, 467 Google X, 466 government response, privacy issues, 475–476 location-based network, 470 privacy, 468–469 privacy audits, 471–472 privacy policies, 472–473 “right to be forgotten” concept, 473–474 search engine, 463 search queries, 469–470 ten core principles, 462 tracking users, 470–471 unified privacy policy, 473 YouTube, 464–465 Grameen Bank, Bangladesh, 117 Granite Construction, 218 Grant, Hugh, 383 Greenhouse gas emissions, 352 Green marketing, 367–368 Green Mountain Coffee Roasters, 396–397 Greenwashing, 368–369 Group decision making, 327 Group norms, 205–206 Group polarization, 327 Groupthink, 327 Growth needs, 200 The Guerrilla Marketing Handbook and Sun Tsu: The Art of War for Managers, 64 Guile, 79 Gupta, Rajat, 81, 326, 331, 533 Gurley, Todd, 457 Guth, Charles, 566–567 H Hacking, 294 Halliburton, 12 Hazelwood, Joseph, 428 Health care, 296–297 Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule, 632–633 HealthSouth, 249 Healthy Weight Commitment Foundation (HWCF), 572 Hedonism, 158 Herbalife International, 523–524 Ackman’s accusations against, 619–621 business ethics, 626 Casa Herbalife program, 626 controversy, 623–625 Corporate Code of Business Conduct and Ethics, 626 corporate social responsibility of, 625–626 criticism against William Ackman, 621–622 direct sellers of, 615–618 DSM Nutritional Products, 626 Global Alliance for Improved Nutrition (GAIN), 626 Herbalife Family Foundation (HFF), 626 history of, 611–612 multilevel marketing, 613–615 “nutrition clubs,” 623 products, 612–613 Hershey Foods, 11, 134 Hewlett-Packard, 287 Hindu cultures, 279 Hoagland, Ralph, 631 Hofstede, Geert, 187, 277–278 Hogan, Shawn, 78 Home Depot, 16, 99 strategic philanthropy program, 116 Honesty, 63–64 Confucian concept, 63 Honeybee population, Roundup impact on, 386 Hostile environment, 67 Hostile work environment, 74 H.R 933, 385 Hsieh, Tony, 162, 483, 489 Human rights, 295–296 Hydraulic fracturing, or fracking, 432–434 economic benefits of, 432 emissions from, 433 environmental risks of, 432 health and safety issues, 433 Hydropower, 365 I IBM, 11, 134, 187, 248, 294 Business Conduct Guidelines, 187 Ichan, Carl, 524 Idealism, 156 IKEA, 285 Ikea, 193 Illegal insider trading, 81 Immediate job context, 136 Immigration Reform and Control Act, 1986, 105(table) Implied falsity, 78 Individualism/collectivism dimension of culture, 277 Informal groups, 205 Insider trading, 81 at Galleon Group See Galleon Group Institutionalized business ethics core practices, 96, 114–117 Dodd–Frank Wall Street Reform and Consumer Protection Act, 95, 108–109 ethical risk management, 95–97 federal sentencing guidelines for organizations (FSGO), 111–114 importance of, 117–118 laws, encourage ethical conduct, 110 legal compliance, 97–105 method of resolving conflicts and serious business ethics disputes, 98 Sarbanes–Oxley Act in 2002, 95, 105–108 through the U.S Sentencing Guidelines for Organizations, 110 (table) Instrumentalists, 158 Instrumental stakeholder theory, 31 Integrative culture, 189 Integrity, 63, 250, 286 Intel, 364 Intellectual property rights, 81–82 Intense competition, 100 Interactional justice, 167 Interlocking directorate, 46 Internal stakeholders, 30 International Monetary Fund (IMF), 287–288 International Organization for Standardization ISO 14000, 301, 372 ISO 19600, 252, 301 ISO 26000, 301 Internet security and privacy, 294–295 Interpersonal communication, 326, 329 J Job performance, 200 Jobs, Steve, 551, 559 Johnson, Michael, 626 Johnson & Johnson, 364 Jones, Lisa, 199–200 Jordan, Kim, 333, 439 JP Morgan, 132, 253 Judaism, 279 Jumpstart Our Business Startups (JOBS) Act, 106 Justice, 64, 166–167 types, 167 (table) K Kant, Immanuel, 157, 162 Kelleher, Herb, 185 Kelley, Alton, 590, 594 Kelley, Sheree, 590, 594–595 Kellogg, 78 Kennedy, John F., 10 Keurig Green Mountain Inc., 259–260 Keynes, John Maynard, 281 Khan, Roomy, 529–530 Knight, Phil, 188 Kohl, 364 Kohlberg’s model of cognitive moral development (CMD), 169–171 Koscot Test, 523, 618 Kozlowski, Dennis, 249, 333 KPMG International Survey of Corporate Responsibility Reporting, 266 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-650Index Kroger, 115 Kyoto Protocol, 351–352 L Labeling issue, 78 Labeling issues, 78 Labor and right to work, 298 Laissez-faire economics, 281, 283 Land pollution, 354 Lanham Act, 1946 (table), 101 Latte Method, 333 Laws See also Environmental legislation Dodd–Frank Wall Street Reform and Consumer Protection Act, 13, 80–81, 95, 102, 108–109 FTC Bureau of Consumer Protection, 103 promoting equity and safety, 104–105 protecting consumers, 101–104 regulating competition, 99–101 Telephone Consumer Protection Act, 1991, 102(table) that encourage ethical conduct, 110–111 Lay, Ken, 321 Leader–exchange theory, 328 Leader–follower congruence, 328 Leader–follower relationships, 328–331 Leadership in Energy and Environment Design for Existing Buildings (LEED-EB) pilot program, 442 Leadership in Energy & Environmental Design (LEED), 362 Apple Inc., 554 CVS Platinum store, 640 Whole Foods, 544 Leadership styles and ethical decisions, 331–334 Lebesch, Jeff, 439 Legal compliance, 97–105 laws regulating competition, 99–101 Legal insider trading, 81 Legitimate power, 199 Lehman Brothers, 249 Lemley, Andrew, 442 Levi Strauss & Co., 287 Liar loans, 80 Listening, 328 Literally false, 78 Living wage, 9, 298–299 Lockheed Martin, 203 Lululemon Athletica background, 509–510 black Luon yoga pants, issues with, 512 commitments toward customer needs, 513 contributions to local charities, 513–514 corporate culture, 511–512 criticisms against, 513 customer privacy at, 512–513 donations to Dalai Lama Center for Peace and Education, 511 employee satisfaction, 514 ethical risks and challenges, 510–511 “Fund a Goal” program for high-performing employees, 514 growth and expansion, 508 hiring process at, 514 Landmark Forum of, 514 misleading advertising, 511–513 mission of, 509 positive ethical practices, 513–514 relationships with employees, 514 Vedic philosophy of, 511 VitaSea products, criticism against, 511 Lying, 69 M Ma, Jack, 41 Mackey, John, 537–539, 541, 545–547 Made-to-break, 300 Madoff, Bernard L., 168, 195, 517, 520–521 Madoff Securities International Ltd., 521 Mandated boundaries, 96 March Madness, 66 Marketing fraud, 77 Marriot International, 145, 248 core values of, 145 (table) Martoma, Matthew, 172 Marx, Karl, 282 Maslow, Abraham, 513 McClendon, Aubrey, 100 McCormick & Schmick’s Seafood Corporation, 73 McDonald’s, 67 McKee, Annie, 332 McKinsey Company, 326 McNerney, Jr., W James, 203 Megargel, Roy C., 566 Merck, 222 Merlo, Larry J., 638 Merrill Lynch, 249 Meta-ethical relativism, 163 Micromanaged employees, 329 Microsoft, 198, 220, 294 Midwest Hardware, 161 Military ethics, MinuteClinics, 632, 636–637 Misconduct ethics culture and (figure), 261 most common employee observed forms of misconduct at Fortune 500© companies, 218 (figure) penalties for, 224 (table) percentage of employees who experience retaliation after reporting, 196 (table) reporting of, 197 (table) specific types of, 62 (table) willingness to misstate financial performance, 223 (figure) Mitsubishi Motors, 249 Monists, 158 Monopolistic bullying, 68 Monsanto, 285 about, 382 action in addressing environmental and health concerns, 387 biotechnology, emphasis on, 384–388 biotechnology products, 383 charitable giving of, 392 Chemical Company, 383 corporate responsibility at, 382, 390–392 criticism against, 382 crop resistance, to pesticides/herbicides, 387–388 diverse products of, 383 environmental concerns, products of and, 386–387 food, safety of GM, 385–386 genetically modified (GM) seeds of, 382–384 history of, 383–384 lawsuit with DuPont, 98 legal issues of, 383, 389–390 organizational ethical issues, 388–390 patent issues of, 388–389 pledge, 391 scandals and stakeholder uncertainty, 383–384 sustainable agriculture, 390–392 Monsanto Protection Act, 386 Moody’s, 69 Moral intensity, 131 Moral philosophy cognitive moral development, issues with, 169–171 comparison of philosophies used in business decisions, 158 (table) defined, 155–157 deontology, 161–163 ethical decision making and, 167–169 individual factors, in business ethics, 174–175 instrumental/intrinsic goodness, 157–159 justice, 166–167 relativist perspective, 163–164 teleological philosophies, 159–161 virtue ethics, 164–166 white-collar crime (WCC), 171–174 Morals, Moral values, Motivation, 200–201 Motorola, 198 Moyer, Randy, 433 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-651 Index Multilevel marketing, 613–615 Multinational corporations (MNCs), 277, 285–287 comparison between countries and corporations based on gross domestic products and revenues (table), 286 criticisms, 285 developing countries model of, 287 ethical problems of, 287 issue of a living wage, 299 issues of unfair competition, 286 risk management and global ethics, 301 U.S model of, 287 N Nader, Ralph Unsafe at Any Speed, 10, 102 National Advertising Division (NAD), 96 National Ambient Air Quality Standards (NAAQS), 360 National Business Ethics Survey (NBES), 5–6, 62 National Collegiate Athletic Association (NCAA) academic misconduct and, 456 challenges for ethics and compliance in college football, 453–456 enforcement of rules, 451 Ohio State scandal, 455–456 overview of, 449–453 penalization of University of Alaska Fairbanks, 456 Penn State football scandal, 453–455 principles for conduct of intercollegiate athletics, 450 self-reporting, monitoring, student athletes, 456–457 types of violations and corresponding penalties, 451 unethical practices prohibited by, 452 value of major-conference college-football programs, 448–449 National culture, 277 National Environmental Policy Act, 1970 (table), 359 National Football League (NFL), 7, 64, 335 NetJets, 61 New Belgium Brewing Company, Inc., 333, 367 adoption of Sustainable Purchasing Guidelines, 442 employee concerns, 440–441 energy-saving technologies, 441 ethical culture, 439–444 history of, 437–439 life-cycle analysis, 442 organizational success, 443–444 Philanthropy Committee, 443 POSSE, 441 purpose and core beliefs, 440 social concerns, 442–443 support for environmental protections, 442 sustainability and philanthropic initiatives, 443–444 sustainability concerns, 441–442 sustainability efforts, 441 triple bottom-line (TBL) approach to business, 440 NexGen3000.com, 524 Nike, 188, 248, 285 NiSource, 15–16 Noise Pollution Control Act, 1972 (table), 359 Nonconsequentialism, 161 Nonverbal communication, 328 Nooyi, Indra, 220, 568, 572, 574 Nordstrom, 248 Normative approaches, in ethical decision making, 140–145 defined, 140 institutions, as foundation for normative values, 141–143 principles/core values in, 143–145 Normative relativism, 163 Normative stakeholder theory, 31 North American Free Trade Agreement (NAFTA), 282, 296 Nuclear power, 364–365 Nu Skin, 261 Nutritional Labeling and Education Act, 1990, 102(table) implementing, 243–245 mistakes in designing and implementing an ethics program, 233–234 systems to monitor and enforce ethical standards, 231–234 Organizational risk management, 250 (table) Output controls, ethics programs, 244 O P Obama, Barack, 13, 249 Obama, Michelle, 420 Obedience to authority, 135 Obligation theories, 159 Occupational frauds (table), 76 Occupational Safety and Health Act, 1970, 105(table) Occupational Safety and Health Administration (OSHA), 104 Oil Pollution Act, 1990 (table), 360 Old Navy, 31 Omission lying, 69 Open Compliance Ethics Group (OCEG), 243, 252–253 Open Market software, 488 Opportunity, 136–138 for unethical behavior, 136–137 Optimization, 65 Organisation for Economic Cooperation’s antibribery convention, 100 Organizational culture, 185 ethical leadership and, 318–320 Organizational ethics programs, 219–221 benchmarks for ethical performance, 231 code of business conduct, 225–227 compliance- and valuesbased approaches to, 224–225 corrective actions, 231–232 effective, 221–225 ethics audit See Ethics audit ethics training and communication, 228–230 Paralanguage, 328 Parmalat, 13 Passive bribery, 70 Password guessing, 72 Pension Reform Act, 1974, 105 (table) PepsiCo, 220 building a brand, 567 celebrity endorsements, 567–568 Code of Conduct, 576 company and marketing history, 566–568 criticisms, 570–574 Diet Pepsi, 571 divisions and brands, 568–570 Dream Machine recycling initiative, 577 employees, support of and commitment to, 576 guiding principles, 574–575 health concerns, 571–573 labeling and packaging issues, 573–574 Matching Gifts Program, 577 Naked juices, 573–574 overview, 566 product positioning, 567 promoting careers for veterans, 577 Safe Water Network of, 577 slogans, 567 social responsibility and sustainability, 574–577 sustainability efforts, 575–576 water conservation, 575 PepsiCo Foundation, 576–577 Petters, Tom, 519–520 Petters Company Inc (PCI), 520 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-652Index Petters Group Worldwide (PGW), 519–520 Philanthropic responsibility, 37 Philanthropy, 95 Phone eavesdropping, 72 Pillsbury, 186 Pillsbury, Charles, 186 Pinder, Dave, 581–588 Planned obsolescence, 300 Pluralists, 158 Pollution Prevention Act, 1990, 360 (table), 361–362 Ponzi, Charles, 519 Ponzi schemes, 168, 172, 195 Bernard L Madoff, 517, 520–521 Charles Ponzi, 519 detrimental impact on society, 518–522 pyramid schemes, 522–524 R Allen Stanford, 521–522 Tom Petters, 519–520 Power, 198–200 differences between managers and employees, 330 Power distance dimension, 277 Pregnancy Discrimination Act, 1978, 105 (table) Primary stakeholders, 32 Principles, Privacy issues, 82–83 conflicts over privacy in the workplace, 134 Procedural justice, 166 Process controls, ethics programs, 244 Procompetitive legislation, 100 Procter & Gamble, 134, 204, 248, 261 Public Company Accounting Oversight Board (PCAOB), 77, 106–107 Public sector corruption (figure), 280 Puffery, 77 Pure Food and Drug Act, 1906, 102 (table) Pyramid schemes, 522–524, 618–619 Q Qualified opinion, 264 Qualitative hedonists, 158 Quantitative hedonists, 158 Qui tam relator, 195 Qwest, 249 R Racial and sexual discrimination, 72–74 Radiation Control for Health and Safety Act of 1968, 10 Rajaratnam, Raj, 81, 220, 249, 326, 528–532 Ralph Lauren Corp., 70 Rand, Ayn Atlas Shrugged, 510–511 Rational economics, 282 Rawl, Lawrence, 429 Rawls, John, 143–144 Realism, 156 Reciprocity, 64 Referent power, 199–200 Relatedness needs, 200 Relativist perspective, 163–164 Religious cultures, 279 Reporting, 325 Reputation corporate, 37–38 role in consumers’ perceptions of product, 31 Resonant leaders, 332 Resource Conservation and Recovery Act, 1976 (table), 360 Responsive processes of an organization, 35–36 Revco stores, 631 Reward power, 198 “Right to be forgotten” concept, 473–474 Risk compartmentalization, 280 Rite Aid, 249 Robb, Walter, 545 Robinson–Patman Act, 1936, 100, 101 (table) Rockwell Automation, Inc., 264 Roosevelt, Franklin Delano, 14, 281 Roundup Ready, 386–387 Royal Ahold, 13 Rugged individualism, 511 Rule deontology, 162 Rule utilitarians, 160 S S C Johnson & Son, Inc., 11 SAC Capital Advisors, 172 Safe Drinking Water Act, 1974 (table), 359 Sarbanes–Oxley 404, 186 Sarbanes–Oxley Act in 2002, 13–14, 42, 77, 95, 194, 196, 217, 250 auditor and analyst independence, 107 cost of compliance, 108 Public Company Accounting Oversight Board, 106–107 whistle-blower protection, 107 Saturn Ion, 160 Save Our Crops, 387 Save the Children and American Forests, 193 Schmidt, Eric, 469 Schultz, Howard, 396, 399–400, 402–403 Scott, Lee, 413 Secondary stakeholders, 32 Securities and Exchange Act of 1934, 13 Self-actualization, 513 Self-reference criterion (SRC), 278 Sexual harassment, 67, 74–75, 130 Shared values, ethics programs, 243 Shareholder loyalty and business ethics, 17 Shareholder model of corporate governance, 44 Sharp, Frank Chapman, Sherman Antitrust Act, 1890, 100, 100 (table), 101, 294 Shoplifting, 79 Sierra Nevada, 367 Significant others, 135 Simmons, Keith Franklin, 172 Simon, Bill, 420 Six Sigma, 250, 251 (table) Skilling, Jeff, 321 Small group communication, 327 Smith, Adam, 155, 281 free-market capitalism, 155–156 Inquiry into the Nature and Causes of the Wealth of Nations, 155 SNC-Lavalin, 222 Social Accountability International (SAI), 640 Social audit, 245 Social democracy, 282 Social entrepreneurship, 116–117 strategic philanthropy and, 117 Socialism, 282, 284 conflict between capitalism and, 284 Socially responsible investing, 17 Social responsibility, 36 See also Corporate social responsibility issues in, 38–39 levels of, 36 stakeholder orientation and, 38, 40–41 steps of (figure), 36 Solar power, 364 Southwest Airlines, 134, 185, 248 Stakeholder(s), 138 approaches to stakeholder theory, 31 assessment, 370–371 associated measures of corporate impacts and (table), 34 conceptualization of the relationship between businesses and (figure), 35 conflicts with, and damage to reputations and shareholder confidence, 31 contributions of, 50–51 corporate governance mechanisms and, 39, 41–48 defined, 30 dissemination of stakeholder intelligence, 35 framework to manage responsibility and business ethics, 48–50 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-653 Index generating data about, 33 interaction model, 32 issues, identifying stakeholder, 32 model of corporate governance, 45 orientation, 33–36 responsibility of the corporation to, 217–219 Standard & Poor’s, 69 Stanford, R Allen, 521–522 Stanford Financial Group, 521–522 Starbucks, 134, 189, 220 brand evolution, 402 brief history, 396–397 Coffee and Farmer Equity Practices (C.A.F.E.), 400 common criticism of, 397, 402 communities, 401 corporate social mission of, 399–401 culture, 398–399 customers, 401 employees of, 399–400 environmental priorities and goals, 399 Environmental Starbucks Coffee Company Affairs team, 399 Fair Trade Certified coffee of, 402 “Green Team” initiatives, 399 National Salt Reduction Initiative, 401 new product offerings, 397–398 partnerships, 396–397 principle of “people first, profits last,” 400 products and licenses, 396 retail location, 396–397 social development programs of, 400 strategies for enhancing customer experience, 401 success and challenges, 402–403 suppliers of, 400 “Thrive Wellness” program, 400 U.K Food Standards Agency Salt Campaign, 401 Statement of values, 225–226 Stewardship, 331 Strategic business units (SBU), 193 Strategic environmental audit, 372 Strategic philanthropy, 116 Subway, 67 Success, defined, 139 Sundown rule, 407 Sustainability See also Alternative energy sources; Environmental legislation business response to, 366–369 defined, 347–348 to ethical decision making and social responsibility, relation to, 348–349 positive links between environmental and economic performance (table), 367 risk analysis, 371 strategic implementation of environmental responsibility, 369–372 strategic sustainability audit (table), 372 Sustainability Consortium, 419 Sustainability Index, 419 Sustainable development, 347 T Target, 146 Teleology, 159–161 Telephone Consumer Protection Act, 1991, 102(table) Tests prove (establishment claims), 78 Texas Instruments, 220, 286–287 Time theft, 130 Title IX of Education Amendments of 1972, 105(table) Title VII of the Civil Rights Act of 1964, 104, 105(table) Toxic Substances Control Act (TSCA), 1976, 10, 360 (table), 361 Toyota, 198, 248 Toy Safety Act, 1984, 102(table) Trademark Counterfeiting Act, 1980 (table), 101 Trademark Law Revision Act, 1988 (table), 101 Transactional leaders, 333 Transformational leaders, 333 Transparency, 46–47, 325 Transparency International and Business Ethics Leadership Alliance, 146 Triple Bottom Line, 250, 251 (table) Trojan horses, 294 Truman, Harry S., TRUSTe, 83 Truth in Lending Act, 1968, 102 (table) Tyco, 249 U Uber, 278–279 U.K.’s Bribery Act, 292 Uncertainty avoidance, 277 United Food and Commercial Workers International Union (UFCW), 412–413 United Kingdom’s Serious Fraud Office (SFO), 605 United Nations consumer protection guidelines, 166 United Nations Global Compact, 288–289, 301 United Nations Human Rights Declaration, 301 United Nations World Commission on Environment and Development, 347 United Parcel Systems, 189, 248 Universal Declaration of Human Rights, 296–297 Article 23 of, 298 Article 25 of, 298 Unqualified opinion, 264 Uranium, 364 Urban Growth Boundary, 356 Urban sprawl, 356 U.S bank’s principles for integrity, 187 (table) U.S Customs-Trade Partnership Against Terrorism (C-TPAT) program, 640 U.S Department of Health & Human Services (HHS), 633 U.S Foodservice, 249 U.S Foreign Corrupt Practices Act (FCPA), 70, 292, 415 “Best Practices” for Compliance Guidelines (table), 293 U.S Sentencing Commission, 223 Utilitarianism, 159 V Values, orientation, 224 statements, 225–226 Values-based ethical cultures, 191–193, 224–225, 324 Veil of ignorance, 143 Verification, 262–263 Vertical system, 294 Vietnam Era Veterans Readjustment Act, 1974, 105 (table) Vinson, Betty, 199 Virgin Group, 66 Virtua Joint Replacement Institute, 96 Virtue ethics, 164–166 virtues that support business transactions, 165 (table) Vocational Rehabilitation Act, 1973, 105 (table) Voluntary practices, 95 Voluntary responsibilities, 114–115 benefits of, 114–115 W Walmart Foundation, 115, 407 Walmart Stores, Inc., 7, 99, 115, 285 advertising campaign, 417–418 The Associates in Critical Need Trust, 420 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net I-654Index bribery scandal, 190, 407, 414–415 competitive stakeholders, effects of, 408 concept of “being green,” 419 criticism and controversies, 417 disaster management projects and economic empowerment for women, 420 employee benefits, 410–411 employee minimum wage rate, 411 energy conservation initiative, 418 ethical issues, employee stakeholders and, 410–413 ethical leadership issues, 413–414 ethical reciprocity, 64–65 ethics and social responsibility, 420–422 “everyday low prices” (EDLPs), 408 future of, 422 Global Compliance Program Report, 420 Global Responsible Sourcing Initiative, 409 governance, 413–414 growth of, 407–417 industry power, 419 Organization United for Respect at, 412–413 relationships with supplier stakeholders, 408–410 responding to stakeholder concerns, 417–419 safety issues, 416–417 stance on unions, 411–412 Subject Matter Leaders and Subject Matter Experts, 420 suppliers, 419 sustainability leadership, 418–419 sustainability plan, 409 today, growth and issues of, 421 workplace conditions and discrimination, 412–413 zero waste goals, 419 Walt Disney Co., 134 Washington Mutual, 249 Waste management, 354–355 Waste Management, Inc., 249, 577 Water pollution, 353–354 Water quantity, 354 Wells Fargo & Co., 115 Westinghouse, 204 Whacking, 72 Wheeler–Lea Act, 1938 (table), 101 Whistle-blower bounty program, 109 claims, 42, 498–499, 503 protection, 107 Whistle-blowing, 194–197 questions to ask before engaging in external, 195 (table) White-collar crime (WCC), 171–174 common justifications for, 174 (table) reasons for, 173–174 U.S consumer fraud complaints, 173 (table) Whole Foods, 99, 220, 364 acquisitions of, 545–546 brief historical background, 538 core values (table), 539 customers, commitment to, 539–541 deal with FTC, 545–546 Eco-Scale™ rating system, 541 employees, commitment to, 541–542 ethical issues, 545–547 GMO food products and GMO labeling, 541 Leadership in Energy and Environmental Design (LEED) certification, 544 LunchBox Project, 543 mission statement, 539 quality standards of, 540–541 reaction toward competitors, 545–546 stakeholder orientation at, 537 stakeholders, commitment to, 542–544 supplier certification program, 543 sustainability, commitment to, 544–545 Team Member Healthy Discount Incentive Program, 542 unions, health care and, 546–547 veered off-course, 546 Whole Kids Foundation, 543 Whole Planet Foundation, 542 workforce of, 542 Wholesome Meat Act of 1967, 10 Wigand, Jeffery, 162 Wilson, Chip, 509–511 Wind power, 363–364 Wine and Grape Act of 1977, 593 Wine industry in Tennessee, 593 W.L Gore & Associates, 324 “Women Owned” logo, 420 Wong, Michael, 199 Work groups, 204–205 Workplace politics, 330 WorldCom, 12, 199, 249 World Health Organization (WHO), 386 World Trade Organization (WTO), 289–290 Worldwide Responsible Accredited Production (WRAP), 640 Wozniak, Steve, 551 X XetaWave, 433 Y Yahoo!, 320 Yangtze River Dolphin, 356 Yunus, Muhammad, 117 Yuspeh, Alan, 197–198 Z Zappos, 162 about, 483 benefits to employees, 487–488 call-center employees of, 488 core values, 484 corporate culture at, 487 customer-focused business model, 485–486 customer service representatives, 485–486 hiring and training, 487 history of, 483–484 inventory and shipping systems, 485 mission, 486 organizational structure, 489–490 Satisfaction Guaranteed Return Policy of, 485 shopping experience, 485 transparency of, 486 use of Facebook and Twitter, 486 work environment, 487–490 work-life integration at, 488–489 Zappos Insights, 486 Copyright 2017 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) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it ... of Business Ethics: Ethical Decision Making and Cases Our text has become the most widely used business ethics book, with approximately one out of three business ethics courses in schools of business. .. Studying Business Ethics The Development of Business Ethics Before 1960: Ethics in Business The 1960s: The Rise of Social Issues in Business THE IMPORTANCE OF BUSINESS ETHICS The 1970s: Business Ethics. .. analyze, and understand how businesspeople make ethical decisions and deal with ethical issues Chapter 5, ? ?Ethical Decision Making, ” has been revised and updated to reflect current research and understanding