Q#3)

There are three following different situations regarding fairness and perceptions about fairness. You need to discuss the situations with the perspective of underlying theory of Perceived Fairness by emphasizing its consequences and implications on managerial decision-making. Also generate an integrated discussion with the domain of Bounded Ethicality.

Situation 1

You are graduating from a good MBA program. Following your discussions with a number of firms, one of your preferred companies makes you an offer of $90,000 a year, stressing that the amount is not negotiable. You like the people. You like the job. You like the location. However, you find out that the same company is offering $95,000 to some graduating MBAs from similar-quality schools. Will you accept the offer?

Situation 2

Hurricane Katrina hits southern Louisiana, leaving many people homeless. For many commodities such as building materials, demand is up and supply is down. This is a condition that leads economists to predict an increase in prices. In fact, in the aftermath of the hurricane, a small building-supply company more than doubles its prices on many items that are in high demand, such as lumber. Are the price increases ethical? Are they rational?

Situation 3

You are traveling on an airplane, sitting in an aisle seat next to an eccentric-looking woman (Vivian) in the middle seat. Next to her, in the window seat, is a rather formal-looking businessperson (Mark). About thirty minutes into the flight, Vivian interrupts you and Mark. She explains that she is quite wealthy, that she becomes bored on flight, and that she likes to pass the time by playing games. She then pulls fifty $100 bills out of her wallet and makes the following proposition: I will give the two of you this $5,000 provided that you can agree on how to split the money. In splitting up the money, however, I will impose two rules. First, Mark must decide how the $5,000 is to be split between the two of you. Then, you [the reader] will decide whether to accept the split. If you do accept, then you and Mark will receive the portion of the $5,000 based on Marks allocation. If you do not accept the split, then you and Mark will each receive nothing. Both you and Mark agree to play the game. Mark thinks for a moment and then says, I propose that the $5,000 be split as follows: I get $4,900 and you get $100. Now it is up to you: Will you agree to this split?