While discussing the scenarios in the boards, please try to steer away from generalities and ordinary observations regarding the characters.The scenarios are designed to relate to your reading assignments in your textbook and the lecture notes.If you havenotdone the reading, it will certainly show in the discussion boards.For example, simply agreeing with one of your classmates, or observing that a character has behaved badly and is in trouble, will earn you no credit.But if you can demonstrate that you have read the appropriate passages in the textbook and lecture notes, and can relate how the principles you have learned apply to the facts in the scenarios, you will prosper.
Topic.
Crosby Stills & Nash
Attorneys at law
1968 Marrakech Expressway
Woodstock. New York
David Crosby Branch offices:
Stephen Stills
Graham Nash Buffalo Springfield
Neil Young (of counsel)
October 22, 2012
My Dear Associates:
We represent a company called Infidelity Investments. Infidelity offers investment products to consumers including stock and bond portfolios, financial advice and other investment vehicles. One of the most popular products Infidelity offers is the annuity. Annuities in this context means a loan to Infidelity, which is paid back over the lender's lifetime in scheduled payments. For example, a customer could deposit $50,000 in an annuity account with Infidelity. Over the remaining years of the customer's life, Infidelity would pay back a fixed amount - say, $5000, each year.
Over time, the customer would earn back his investment, and then some. But the payments stop whenever the customer dies. Which brings us to our problem. Infidelity has a customer named Agatha Gristy, and boy, is she a pill! Agatha is 92 years old. Last year, she purchased a $100,000 annuity,
repayable in $5000 increments. This means Agatha is guaranteed an "income for life," as the advertisements say.
As long as she stays alive, Agatha gets a yearly check for $5000. What's wrong with that? Well, Agatha has gone and complained to the Attorney
General's office. She says we've "done her dirty," and she wants her money back. The Attorney General's office called me, and the man says that we might not be lawfully obligated to refund her money but it would be the "right thing to do." What the heck does that even mean? Why would anyone think that Infidelity should repay Agatha a dime? The AG made noises about some "ethics" and "morality" claptrap. Does this ring a bell with you?
Check pages 31 and 32 of your textbook, and see what you
can find.
pictures are attached as photo
ETHICS AND GOVERNMENT These changes in society have been accompanied by changes in the role of government. When business fails to make ethical decisions, when it fails to live up to seciety's expectations for ethical behavior, government may step in. As noted in a prior section, and detailed throughout the chapters of this book, government regulates business when there are ethical failures such as those that preceded the Sarbanes-Oxiey Act of 2002 when business scandals dominated headlines. Business leaders have incentive to promote corporate integrity, and thereby to limit further governmental regulation. They recognize that by encourag- ing ethical conduct and self-regulation within business organizations, they will prevent outside standards from being imposed on them through public law. As a consequence, both business and industry have, in recent decades, developed codes of ethics. Such efforts by professions and businesses to set standards of behavior are evidence of the increasing tendency toward self- regulation. Self-regulation can mean more than helping a business stay out of trouble. Companies that are perceived as ethical and acting in a responsible manner can attract loyal customers, employees, and investors. Federal law also encourages self-regulation. Federal sentencing guidelines reduce criminal fines for legal violations in companies that have taken spe- cific steps to self-police ethical/legal conduct. See Chapter 13. In an increas- ingly international business environment, it is worth noting that outside the United States, governments value compliance programs. For example, in Italy, businesses may defend against charges of corrupt practices with evidence of a compliance program. See Chapter 12. The Nature of Ethics In 1759 Adam Smith wrote, \"However selfish man believes himself to be, there is no doubt that there are some elements in his nature which lead him to concern himself about the fortune of others, in such a way that their happiness A study conducted by establishing an "ethics index" of companies with high rankings in corporate citizenship. governance. social responsibility. and sustainability practices showed an average five-year investment return of 102% com- pared to 26% for the S&P500. Source: Corp-din 32 PART 1 Introduction: Legal Foundations for Business is necessary for him, although he obtains nothing from it except the pleasure of seeing it." With this statement the author of The Wealth of Nations, per- haps the most famous book on economic theory ever written, recognized a moral element in human nature that goes beyond self-interest. What is it that makes us care about the fortunes of others? The next sec- tions examine the nature of ethics. What is morality? What are ethics? How are morality and ethics similar? How do ethics relate to law? What are the major ethical systems? How do these systems apply to business decision mak- ing? When you have finished reading these sections, come back to these ques- tions and see if you can answer them. ETHICS AND MORALITY Morality is the In 2011, Gil Meche, a 32-year-old right-handed pitcher for the Kansas City collection of values that Royals, had a baseball contract that called for a $12 million salary. The previ- guides our behavior. ous season he had hurt his arm, but under the terms of his contract, all he had to do was show up for spring training to earn his salary, even if he could not pitch well or needed surgery. Instead of collecting his $12 million salary as he was legally entitled to do, he retired, which meant that he would not be paid at all. Gil said, "Honestly, I didn't feel like I deserved the salary. Retiring is the right thing to do." This statement shows the pitcher's morality, which is the collection of values that guides human behavior. In society at large, the sharing of moral values promotes social coopera- tion and is a significant means of social control. Shared moral values lead us to accept and trust others. Shared values allow us to recognize when there is proper behavior in others and where limits to behavior rightfully belong. Shared moral values create social harmony. The sharing of values in business life is as important as it is in other "If we are to go for- aspects of our lives. Today many businesses try to foster shared moral val- ward, we must go back ues in employees. It is right to strive for quality in products and service. It is and rediscover those precious values-that wrong to discriminate against or harass a person because of race, gender, or all reality hinges on religion. One of the successes of many Japanese companies has been to instill moral foundations. . . ." shared moral values in their employees. -Martin Luther King Jr. Internationally, businesses often face problems when they do business with nations with different moral values. What is wrong in the United States may be right somewhere else and vice versa. Is it right to bribe customs offi- cials so that your company's goods can enter a country? Is it wrong for a woman to appear in public without her face covered? Is it right to eat meat and consume alcohol? Is it wrong to talk business on Sunday? On Saturday? On Friday evening? To succeed in international operations, businesses must "If you don't have integ- be sensitive to differences in moral values. rity, you have nothing You can't buy it. You If morals involve what is right and wrong, ethics is a systematic statement can have all the money of right and wrong together with a philosophical system that both justifies in the world, but if you and necessitates rules of conduct. In the Judeo-Christian tradition, for exam- are not a moral and ple, private ownership of land and goods is highly valued. It is wrong to take ethical person, you something that does not belong to you-hence the rule "Thou shalt not steal." really have nothing." Ethics involves a rational method for examining our moral lives, not only -Henry Kravis, for recognizing what is right and wrong but also for understanding why we co-founder KKR think something is right or wrong. "The unexamined life is not worth living," equity firm said the Greek philosopher Socrates. In other words, ethical self-examination is necessary for a meaningful human life. Copyrighted m
