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Notes from class on 8/1 and 8/3

by: Morgan Anderson

Notes from class on 8/1 and 8/3 MGMT 202

Marketplace > University of Arizona > Business, management > MGMT 202 > Notes from class on 8 1 and 8 3
Morgan Anderson
GPA 3.0
Ethical Issues in Business
Dr. Paul Melendez

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About this Document

In-depth and clear notes taken during class on the "History of Business Ethics".
Ethical Issues in Business
Dr. Paul Melendez
Class Notes
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This 4 page Class Notes was uploaded by Morgan Anderson on Sunday September 13, 2015. The Class Notes belongs to MGMT 202 at University of Arizona taught by Dr. Paul Melendez in Fall 2015. Since its upload, it has received 30 views. For similar materials see Ethical Issues in Business in Business, management at University of Arizona.

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Date Created: 09/13/15
Morgan Anderson September 1 2015 September 3 2015 History of Business Ethics 1 Pre 1960 ethics in business a Role of religious leaders i Significant ii Philosophers and theologians in US society were our conscience 1 Asking the tough ethical questions in business NOT businesses i Result of the stock market crash i 1950s 1 United Fruit becomes concerned with pres in Guatemala a Because he was friendly with the soviets amp major land reform b United fruit was going to take over mass land for banana production 0 Secretary of state trained people to over thrown the Guatemalan government 1 Peasant revolt in Honduras led to united fruit losing labor 2 1960s rise of social issues a Steel coal financial issues b Antibusiness climate i For 3 reasons 1 Rise of Military industrial complex ie rise of defense industry a Government had too much power fraud 2 Inner decay of cities a White Flight more races come to cities and white leave to more suburban areas b Animosity aimed at businesses due to socioeconomically 3 Environmental damage a Acid rain b Unsafe products 0 Lead to Pres Kennedy i 4 parts 1 1 to be safe 2 2nd to be informed a Must show info in label must be backed by science 3 3rd to be able to choose a Basically saying they don t want monopolies 4 4th to be heard a If unhappy with product or service and nothing is done by seller one should be able to take their concerns elsewhere ie BBB wrote Unsafe At Any Speed 1 Criticized GM for puts profit and style in front of safety 2 Found of engineer brought safety concerns to corporate and corporate said no to changes because it would cost too much money 3 1970s Ethics as an emerging eld a Emergence of CSR i 1st time really being heard ii Academic wrote about it Milton Friedman Melendez s favorite iii Company not only has responsibility to maximize for its shareholders but also to minimize bad to all stakeholders iv Foundational work laid for fair wages etc V Watergate Scandal 1 Pres Nixon 2 Biggest thing to happen in 70s 3 Wiretapping scandal that led to Nixon s impeachment b Passage of t FCPA i Made it illegal for US citizens who worked for US based company to bribe foreign official 1 Was very common before in business a Ranged from bombs to bananas b Ie Chiquita bananas was caught bribing high ranking government official in Honduras to get them to lower corporate taxes c Scandal i Issue with gas in rear end leading to explosions ii Letter written from Ford to National highway safety corporation 1 Asking for an exception in safety to make changes that would cost them money iii Many lawsuits iv Grism vs Ford 1 LOOK INTO 4 1980s Consolidation a Many new business ethics courses in schools b Companies had become away that their company would be damaged by say a product re call i Companies started Ethics and Social Policies Committees c Establishment ofthe i 18 defense contractors got together and changed ethics requirements changed procedures to make sure they were accountable to the public ii Good defense contractors try to govern themselves with ethics and requirements by establishing codes of conduct best practice approach 1st pro leader i When Reagan became president ii A massive philosopher change all answers are in the free markets problems and efficiencies are in the government sector iii Liberalism to liberalize to be open to free trade iv Deregulation banking deregulation in particular contributed to scandal in future V Privatization take something that was once delivered or paid for by government and take it into the private sector 1 Making trash collection a private company job instead of government e Scandal i US based company ii Made pesticides 1 India was a lucrative market for because agriculture is huge market iii Cyanide gas was leaked into town 1 4000 died 2 Caused future generations to be born with birth defects iv Took Indian government to get justice 1 Union carbide paid 500 million 2 But still has not been cleaned up today 5 Quandary for US Companies Whom to Bribe a More than 1 in 4 people around the world report having paid a bribe b Legislation wasn t clear for whom a foreign official was and so they were bribing normal employees and so case had to be thrown out c Lindsay Manufacturing was bribing in Mexico LOOK INTO d US Chamber of Congress i Laid out 4 different suggests for dealing with an antiquated law 1 Anything below 250000 shouldn t matter 6 1990s institutionalization of Ethics a Continuance of selfregulation and free trade i Pres Clinton 1 NAFTA N American Free Trade Agreement a USA Mexico and Canada 2 Largest reduction in federal work employment levels 3 Attempted to nationalize healthcare 4 Tobacco industry attack a No advertising on TV sporting events etc b No vending machines b Passage of the i Defense industry initiative ii Willful neglect iii Whistle blower tells against crimes with name attached vs anonymous c scandal i Over the course of 4 years they prebooked sales for imaging equipment for 35B and also increased pretax earnings for 5B ii Pay over 10B in fines 7 The twenty rst century a new focus a The fall i One of the Big 5 accounting firms ii After Enron accounting scandal they were gone 1 Shredded documents iii Not only did company go bankrupt by Arthur Anderson did too iv Other Arthur Anderson scandals WorldCom Halliburton and Sunbeam chainsaw al V Went to supreme court b Passage of the i Creation of accounting oversight boards ii Greater transparency in financial reports iii Executives sign off on firms financial reports iv Fines and jail time if executives misrepresent their financial position 1 Bernard Ebbers WorldCom a False financial reporting b httpsenwikipediaorgwikiBernard Ebbers V Requires executives to disclose stock sales immediately 1 Sam Waksal Imclone a CEO of biopharmaceutical company b Insider trading scandals c Martha Stewart d httpsenwikipediaorgwikiSamuel D Waksal vi Prohibited firms from giving loans to executives 1 Dennis Kozlowski Tyco a Received over 81M in unauthorized bonuses from Tyco b httpsenwikipediaorgwikiDennis Kozlowski a JP Morgan Chase i Dealings with China ii Foreign corrupt practices act is against giving away careers as a bribe iii If a company is investigated for nepotism 3 things need to be answered 1 Is it a realjob 2 Make sure the employee is qualified for the job 3 Make sure employee has had performance evaluations


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