MGMT 320 Final Exam

Two models for Ethics Enforcement

Compliance-based programs seek to avoid legal sanctions through detection and punishment. You live with these programs every day: (These programs try to find misconduct and punish it, it's different than integrity based programs which are more ethics driven) "integrity-based" program combines a concern for the law with an emphasis on personal integrity, ethics driven, combine teaching people about doing the right thing for the right reasons. (Businesses won't be 100% one and 100% the other)

Disclosure/Transparency Rule Model

Ethical tool to use: Suppose you are contemplating if this or that is the right thing to do. Disclosure Rule asks you to think if decision and facts behind your decision were on front cover of the NY Times, would you do it? Would I cheat? You wouldn't do it. If comfortable with decision then yes! Ex: Insys making payments to doctors to participate in speaker programs. Gov. knew that speaker fees are problematic bc your company would want something in return (kinda bribery) Program since 2012, when pharma companies are paying doctors, the doctors & pharma companies have to report it, can go to a website and see database (example of disclosure rule); docs have to think twice bc the public will see it

Student Expert: The Fiduciary Rule (and other standards) in finance

Finance Ethics--> conflict of interest, kickbacks example Investment experts who follow the fiduciary standard are required to put their clients' interests ahead of their own. The suitability standard just have to make sure their recommendations are suitable, given the client's age, goals, resources and other factors. But what if you had 3 options that were all suitable for the client but one of them would give you a giant commission can't give them that option bc it's not in the client's best interest. Retirement accounts people getting advice Who is against: suitability (much lower standard)/fiduciary (much higher) standard: investment manager who could've made more money

U.S official policy for decades has been free-trade through Free Trade Agreements

Ideally, these agreements make it easier and cheaper for US businesses to export goods and services - by lowering or abandoning tariffs or quotas - and provides similar benefits to the counterparty, exporting their goods to the US.

Biotechnology 7th phase

MEDICINE Covid MNRA vaccine is science

Section 230 of the Communications Decency Act (CAN YELP BE SUED?)

NO! Section 230 of the Communications Decency Act shields internet companies from being sued based on what 3rd parties post on their sites.

7 Broad Phases of Technology, but focus only on the last 2

Semantic / metadata Biotechnology

EPA's power is LIMITED

Supreme Court ruling, hard for EPA to regulate things, can only regulate & make a big rule if Congress approves EPA to do so; our congress is so divided between dems and republicans so it's very problematic that they would come to a decision to make a big rule or not

Threats To The Ecosystem

THE ANTHROPOCENE PERIOD -(PERIOD WHERE HUMANS HAVE THE ABILITY TO ALTER NATURE IN VERY SIGNIFICANT WAYS) (STORY ABOUT TOD'S NEPHEW FROM PERU FROM LAST WEEK, HOW THEY USED LARGE STONES & NEDED TO GET THEM ACROSS THE RIVER TO BUILD MACHU PITCHU, INCA PEOPLE CHANGED THE COURSE OF THE RIVER BY BENDING THE LAWS OF THE NATURE TO GET THINGS DONE)

Tragedy of the Commons

The failure to appreciate this sustainability. (when we use the resources faster than we can replenish, ex: few salmon comes up the stream extinctions bc overfishing) Paradox: if all individuals attempt to maximize their own private advantage in the short term - at the expense of other people around the world, or at the expense of future generations-- the commons will be destroyed, and all users, present and future, will lose

Sustainable Development

The need for balance between economic progress and environmental protection. Sustainability is about fairness in 2 ways: 1. the current benefits (and costs) from the use of natural resources should be fairly distributed across various countries. Are we fair to other countries? 2. the current benefits (and costs) from the use of natural resources, should be fairly distributed across generations (in other words, the present generation should not gain at the expense of future generations) Are we fair for the future? Sustainability Tomorrow: my generation needs to do things to protect your generation. Greta Thunberg, a generational activist (which is distinct from being a geographic activist) on the issue of climate change, speaking for youth

Two distinct theories about how "businesses" should approach ethics

Theory of amorality & The Theory of Moral Unity

Relationship between climate change and inflation

There is a significant link bc it's a supply & demand curve; if it gets too hot to grow things the supply and demand will raise prices, lots of oysters and clams died in Pacific Northwest bc of the heat dome, the supply went down and the demand stayed the same so inflation is neatly tied to climate change

BRIAN JORGENSON, guy convicted of insider trading at Microsoft

To combat this: The MBA Oath, First Promise book: I will manage my enterprise with loyalty and care, and will not advance my personal interests at the expense of my enterprise or soc (they realized the corrosive impact of self-interest that overwhelms other ethical considerations)

Student Experts (Winners and Losers of Climate Change) We've all heard of "climate change," but who are "climate refugees?" And what are "climate reparations?"Provide at least two examples. What do they want? You may use the following links as a starting point.

"climate refugees"... means any group of people that's forced from their homes due to gradual or sudden climate change; countries that have a lot of emissions & climate refugees, EX: where lots of climate refugees are ought to occur in the future and what causes people to relocate some of the biggest changes: in Bangladesh, about half population lives only 5 meters above the sea level, it's predicted that they will lose about 17% of their land and it will lead to 20 million of climate refugees. In 2022 Nigeria forced a lot of people to leave bc of floods; 2 main reasons: natural disasters hurricanes happening more frequently and another is economic struggle: farming is becoming harder countries like Somalia and Ethiopia they don't export as much they produce internally/trouble growing, rising sea level too much or too little level causes flood & people leave or too little water level, people can't grow vegetation which causes them to leave) (climate refugees are an important problem) For people concerned about undocumented people entering the United States (which is certainly a problem), consider how much worse this may be in the future as a direct result of climate change. There is a direct link. If it's a binary choice, people will choose to flee their uninhabitable homelands, rather than die in there. (People who are climate refugees don't really have much choice, they have binary choice either stay where they at and perish or move; there is going to be a lot of people moving from one country to another bc they will die if they won't)

WHY SHOULD BUSINESSES ACT ETHICALLY?

(1) To enhance performance - there is a positive link to being perceived as an ethical company (recall "reputation" & returns) poor reputation will drive people away poor ethics have negative consequences, financial costs of reputational damage that exceeds fines EX: VW - total costs exceeded 35 billion; company also is no longer on the list of most admired companies. &EY ethics exam cheat (2) To comply with legal requirements. if you comply with sentencing guidelines you pay less in terms of fines kind of like an insurance policy against a dishonest employee (3) To prevent or minimize harm (4) meet demands of stakeholders, stakeholders will only want to do business with counter parties that are ethical (5) To promote personal morality-Ethical companies align with individuals who act ethically where there is a symbiotic relationship where everything will be better as a result of that (6) How do you value "trust" within a relationship?-The absence of trust and what you have to do to make up for that absence of trust is a lot easier to measure (Think about the costs if you don't trust your counterparty, do you have to go count every single widget that you are supposed to receive from them If you don't trust them your expenses will go much higher Can't be measured until the breach of trust, and now we have to do all these types of things Business is much easier if you trust your counter party, if you don' trust them your expenses will rise) Ronald Reagan's foreign policy mantra, when dealing with adversaries, was: "Trust but verify." (the verify part doesn't make sense bc it's costly)

Tom Freidman of the New York Times wrote two books about globalization

(For Workers, "The World is Flat"NPR -new info technology has leveled the playing field, global economy becomes personal as you realize the customer rep answers from India, Australian doc looks at your x-ray; globalization shrink the world from large to medium, driven by Spain uncovering Americas, early 1800-2000's shrunk from medium to size small companies globalizing for markets & labor, now shrinks from size small to size tiny, now it's build around individuals & small groups globalizing, now about every individuals from all colors of the rainbow & background so now the world becomes flat. Alki & Infasys leading outsourcing companies in India; country is flat - the convergence of tech & companies around 2000 has enabled global web enabled platform that allows collaborations * share of knowledge despite time, distance, or language barriers) Commerce 1.0 (The Nation State engaged in trade: Think England. Commerce 2.0 (The rise of the corporation.). Commerce 3.0 (Communications empowers the individual)

US Government Regulation of non-commercial speech, online and traditional Why is it so difficult for the US government to tell Facebook or Instagram "Do not post, or allow your users to post, X, Y and Z?"

(Part of U.S Constitution & Laws limit the gov from telling people don't say that particular thing) The First Amendment (Government has to worry about Twitter & FB don't bc they can make their own rules) CONGRESS (All levels of government) SHALL MAKE NO LAW respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. "Is the government regulating the speech BECAUSE of its CONTENT?" Content-based regulation is hardly ever allowed for government because it's viewpoint discrimination. takeaway: it's really difficult for any level of gov. To say stop doing this or posting this bc of the view; hard for gov. To tell Facebook don't allow this specific speech; if it's not allowed off line then it's not allowed online. Viewpoint discrimination is unconstitutional. Ex: Crazy preacher in Florida, got online & burned hundreds of Qurans as a protest of 9/11 attack, nothing that the gov. could do to stop. couldn't stop him from burning it in his yard & couldn't stop him from streaming it online.

The reasons for ethical problems

1. Competitive Pressure- if you're in the industry where you have to compete & people are winning you may engage in unethical behavior to stay in business. Ex: American companies doing subcontracting around the world bc you don't have as much control of what's happening somewhere else. 2. Conflict of Interest (biggest driver)- if you have obligation to one entity but you also think you can enrich yourself by doing something. (you have desires to not only benefit your boss but also do things at an expense of your boss) Ex: a friend comes to buy a shirt & you tell him don't buy it, it will be on sale next week so conflict of interest, you take money out of your employer's bank account to benefit your friend (conflict of interest) Ex: working at restaurant, telling the customer to order the most expensive item so you can make more tips, or tell them to buy expiring fish bc boss will give you bonus if you push it & sell it. You don't give the right info to the customer. (conflict of interest) Ex: car dealership, you haven't gone to the bank & finance guy says no worries, the finance guy incentivized by cash bonus to give you the largest interest rate, they have 0 ethical obligation to give you a good deal. (conflict of interest) Corrections Corporation of America: makes private jails for overflow prisoners. If Tod persecutes people it's unethical for him to buy stock in corrections corporation of America bc he will be incentivized to put more people in jail to earn a higher return (conflict of interest) 3. Cross cultural contradictions- businesses unaware of cultural norms in other countries. During the 1994 World Cup, bottles of Heineken beer displayed the flags of all the participants in soccer's biggest tournament, including Saudi Arabia. The Quran forbids the use of alcohol, so Muslims registered complaints. 5. Rationalization- your first impression will be different than the later impression. If you have enough time you might rationalize to yourself that engaging in misconduct is okay. Ex: if I cheat in class w/out curve it won't hurt anyone & I can succeed, the ends justify the means; in this case people only looking at ends, Machiavelli point was to maintain power in class sometimes you had to do things that might not be the nest thing. What if you need $250k for heart transplant what about justifying doing $750 criminal damage to 6 cars? Bc if you're in jail your health costs will be covered. Walter White Breaking Bad had cancer, school teacher broke, the ends to provide for family, justify the means to make bunch of money

Negatives: FROM THE PERSPECTIVE OF THE HOST COUNTRY (OFTEN LESS DEVELOPED)

1. Destruction of the local environment. This is key, because most countries, especially those in the third world, do not have EPA-like laws on the books that protect our environment. For multinationals, it's almost always cheaper to do things where there are fewer regulations. 2. Political Interference. There is also a widespread belief, particularly in developing countries, that MNCs affect local politics (elections). Foreign governments complain that MNC's put pressure on the legal/political system to create laws that favor MNCs (but isn't this a "choice"? A country can either take the development, along with the new laws, or keep their existing laws and money will flow elsewhere.) 3. Exploiting weak local regulations protecting indigenous workers. (Building in Bangladesh, garment building collapsed; Deadly Cost of Fashion making clothes for 1st world countries; Rana Plaza Building)

Positives: FROM THE PERSPECTIVE OF THE HOST COUNTRY (OFTEN LESS DEVELOPED)

1. Employment 2. Retain a fair share of profits made by MNCs in the host country. 3. Train and educate the local workforce. (Also happens domestically to train skilled vocation to be a plumber/electricians Boeing Highschool) 4. Retain control over the economy 5. Protect the natural environment (Pro & Con) 6. Maintain social and political stability. (If people are employed there are less likely to rebel against the government)

5 Steps are required to resolve ethical problems (The UW Test). Analysis:

1. Identify the important facts and ethical issue, e.g, "What is going on here?" 2. Who are the key stakeholders and how will they be affected? How do things subjectively appear from their perspectives? (how will this look from this stakeholder's perspective, look at it from multiple different perspectives) 3. What are the utilitarian trade-offs among the affected parties, e.g. Who are the winners and losers? 4. Articulate how different moral principles apply, and recognize how various justice/fairness models might yield different results.(different models will lead to different outcomes, the choice of the model might dictate your answer at the end) 5. Recognizes and articulates personal biases that can influence your evaluation (conflicts of interest) (important to recognize your bias and how it will shape your solution)

Application of Utilitarianism

1. Knowing who will be affected 2. As assessment of the positive/negative impact on these people, by cost-benefit analysis 3. A choice to pursue the greatest good, for the greatest number. (hard to get it right)

Why Ethical Problems Occur in Business

1. Personal Gain and Selfish Interest (giant driver, putting your interest above everyone else's even though they owe a legal/ethical obligation to them) WIFM (Burlakoff trying to figure out what is it the doctors want for themselves became very problematic-Insys) Greed compromises our ethics.

The Three Sector World

1. State Actors - which would be governments representing defined, recognized countries (Russian government, Chinese government) 2. Private Sector Actors - which would be businesses. 3. Civil Society - Not the government, and not private businesses, but entities like social organizations that are neither the government, nor pro-making enterprises. Charities, educational institutions, non-profits. Of the various types of civil society organization, Non-Governmental Agencies have become more important, as they focus on environmental and social issues, and try to put pressure on governments and private businesses to do better (can be environmentalists, public service organization, non-governmental agencies that have a mission to do something, not trying to run a government or business; Non Governmental Organization, NGO)

Why sustainability practices are important to have

1. They often help improve the bottom line (Revenues (obvious) = Making more $; can charge higher prices for organic foods, Tesla-product innovation sustainability drives your revenues, net plus. Can increase market share & attract more people; lower costs- save money on insurance costs, decrease energy, water waste-asset efficiency) 2. They are viewed as the moral thing to do. (right thing to do to preserve your Supply Chain; reliability (shorter supply chains are more efficient, and usually less risky; if you have to get things from all over the world there are risks of bottlenecks, if we can get product from places closer to us there is less risk). 3. Without them, the planet - and businesses -- may be irreparably harmed. Intangibles: Can attract/retent more talent Avoid iron law of responsibility, less likely to be a target of government regulations First Mover Advantage Customer Loyalty

Big Picture Ethical Models:

1. duty-based (deontological)- rule based model, you wake up and follow the the preexistent rules to determine what's ethical. The end doesn't matter, are you following the rules that's what matters. Ex: Ten Commandments (rules in religion) or "The Golden Rule" Strengths: strong foundation to guide people. Weaknesses: difficult to consistently apply those rules. 2. "result-oriented" (consequentialist)- results matter, you pay attention to the results, is the end result fair/appropriate, doesn't care about preexistent rules, just looks at the end result to see if the conduct is ethical or not. Ex: Utilitarianism (cost-benefit) analysis for consequentialist reasoning. John Stuart Mill + Jeremy Bentham gives a rise to CBA. How you assess good is very subjective. Problematic Area: what price would you put on American human life? Would you place a different valyue on the life of a non-US citizen living here or abroad? Boeing didn't pay as much money to 737 Max crash victims as much as it would've if it had happened in U.S. Trolley way: if you were duty-based you would be consistent, you would pull the lever in the 1st scenario, 2nd scenario & 3rd. If you were consequentialist even though the numbers don't change, the more personal it becomes the harder it is for you to hold onto to consequantilist/utilitarian

Why Tariffs is Used?

1. protect local industries and jobs from less costly foreign competition;- protect local industries and jobs from less costly foreign competition; 2. to punish foreign producers where local government assist manufacturers in producing products below the price of production (sometimes referred to as an anti-dumping tariff) Ex: (anti-dumping measure, imagine we operating in another country & it wants some gov. Industrial policy, we really want to develop this sector if economy, the gov. And the company (business sector) get together & the gov. Helps the industry to sell that product below the cost of producing it, in the long run it's not a winning strategy but if gov. comes along and helps that will get attention of others around the world as they get mad that they can't compete with a country that's dumping below the cost of production like that) 3. to address indirect government support of local businesses through tax policy (consider Boeing, and Washington State). This is known as a "countervailing tariff"- tariffs imposed on other things Ex:(becomes evident that the local business gets support of the gov. Example Boeing used to play hard ball with legislators, we will go to South Carolina & make our planes there, WA state politicians said omg we can lose 50,000-60,000 of good paying jobs, WA state legislators & government voted & gave Boeing tax breaks on the Boeing land to keep them in WA; but what's Airbus (Boeing competitor) would now say seeing this? They would want local city to do the same for them or else they would want a removal of WA tax break they can go to WTO and complain about unfair tax break to Boeing as Boeing can now produce planes for cheaper; if Airbus convinced EU, they could put tariffs on Microsoft, lumber, apples which is a countervailing tariff; not necessarily the plane but tariff something that is domestically produced in WA state) Protecting local industries and jobs is the easiest way to understand tariffs, since local politicians want to protect their constituents' jobs, by making foreign goods more expensive - this is what protectionism is all about. Countervailing tariffs are more problematic, because they attempt to get at more indirect ways that local governments try to help their local businesses.

(1) the major types of political and (2) economic systems in which companies operate. How the world is divided along political & economic lines

2016 / The Economist: (Democracy (Tod's definition)-political organization where every individuals has an opportunity to meaningfully opportunity to contribute to the leaders of the country; can meaningfully participate & choose your leaders & run for office, the moment you get out of the penitentiary you can vote but in some countries you can't) Bluer = More Democracy Yellow = Medium Democracy Red = Little Democracy What economic system are you operating in? Is it a free enterprise or repressed where the government has a thumb on the scale where they gov. can nationalize your business if they're unhappy with you or you're doing too great?- that presents a risk doing business abroad

Smoking Utilitarian Czech Case

Both Business AND government use "utilitarianism" when it comes to making decisions. And both have been forced to recognize the inherent shortcomings associated with using this model. We made it difficult for people to smoke. Let's suppose cigarette manufacturer was trying to stop the government from putting new regulations that minimized smoking, so they need to make a utilitarian argument that smoking made sense even to consideration to health risks & it's a good thing, if only considered the financial cost. If more people smoke the predicted consequence is that smoking people have a shorter lifespan & die early so the government saves money by not having to pay for old & sick people because they die young so we shouldn't put regulations in place . (argument from utilitarian perspective) The consultants Phillip Morris figured out how much money the government would save if people died early, wouldn't have to put people in retirement homes, also positive external effects like saving on housing, pensions. It was a huge public relations nightmare, Morris had to apologize for making this argument to the government. Utilitarianism is outcome determinative, the flaw of it is that it doesn't take into account lots of things that are hard to put a price on like liberty & freedom. Utilitarianism can justify violating basic human rights. Ex: after pearl harbor West Coast of U.S. WWII, utilitarians decide better not to run the risk to have any Japanese-Americans who aren't loyal to US so to protect we will take away their liberty & put them in detention camps. so that's utilitarianism run amok, it overcame individual rights. It's very hard to do CBA (have to assess the positive & negative impacts of all those people because you need to know who is going to be affected, hard to know the consequences ahead of time, business people have to look at different stakeholders with competing interests. Ex: If we wanted to bring the # of car fatalities down to 1% what could we do with utilitarianism? We can move the speed limit to 1 mph or have the cars with front built catchers to scoop up people & move them to the side if it ran into them. The problem is the economy would go to haul because we wouldn't be able to get produce from Eastern WA as cars would be too slow It's hard to choose to pursue the greatest good for the greatest number of people.

The Conventionist Ethic

Business is a game, where special, lower ethics are permissible. Consider the teenager doing jello shots... (you said you didn't drink alcohol ...bc you ate it...you played games...conventionist ethics would say this is perfectly fine, lower level of ethics is perfectly fine to go with that answer. Stupid dad bc he hasn't asked the right question if he is not going to ask the right question I'm ok answering the wrong question) Phone call with insurance companies (games being played)- Insys Like the teenager, if businesses follow the conventionist ethic, they are free to act in their best interest, even in morally questionable ways, provided they do not violate the law. The story of Backpage.com (pimps buy ads on backpage to advertise prostitutes, underage) Based on and relied & abused on 230 decency act, had an opportunity to make a lot of $$ . Tech giants come in support to amend section 230 to end sex trafficking They were finally put out of business because section 230 dawned on lawmakers was being abused, the congress would never make a law to let that type of business to thrive Trump and Congress pass reforms on section 230 that takes these type of businesses out of this umbrella protection. Usually gov. would step in & say we will have to regulate it so it doesn't happen again.

Who pays when quotas are imposed?

Consumers. Ex: Japanese cars imported less supply bc of quota

Regulatory Options For Managing Environmental Risks

Control: Command & Control (you have to do it this way, very inflexible, costly), Flexible Enforcement (we don't care how you get there, just get to the end product, get your pollution down to a specific level), Market Incentive ( carrots & sticks; carrot bottle buy back rule, we will give you 10 cents back- incentive); cap & trade (you as a company can only do so much polluting, if you do more there will be costs, never really worked in the U.S. bc critics think it's a tax, Biden instead gave carrots like tax credit for electric cars as an incentive) Freedom: Required Disclosure (gov. requires to disclose corporations how many chemicals they're emitting into the atmosphere or land, or water, way of shaming people, similar to docs & pharma having to disclose payments from pharma ), Voluntary Compliance (doesn't work well, hard for corporations to act in public interest)

5 examples showing some breaks/impeded on globalization

Covid (supply chains)- Covid revealed brittle supply chains, nations self-interest will trump for the sanity of contracts. (masks we weren't in a position where we could produce N95 masks, we don't produce them we get them from other places we have lots of contracts, we had a contract with countries but the countries said the contract be damned bc we have covid here too we need the masks; covid revealed national self-interest trumps other things & brittle supply chains; can I really trust my partners to meet my need in emergency or do I need to rely on myself and produce them myself; we realized we should be able to produce things on our own) (the risk with ship building; sometimes you have to make decisions we don't want to be in position where we forgot how to build ships when we need to build them that's why we have some regulations to build ships domestically too) Ukraine (supply chains), plus the sanction's fallout.- (the first time was Balkan wars this is the second time major war; significant impact on globalization, what do we do NYT since we can't do business with Russia at significant financial loss, a lot of companies were burnt in a huge way bc of sanctions that followed, the companies that left are very reluctant to go sometimes back to Russia sometime soon, Germany's dependence on Russia's oil and Belarus (significant break in globalization/ trade) Trump's Trade Wars Political polarity and the rise of "friend-sourcing"- (friend-sourcing is a play on the term outsourcing, outsourcing doesn't capture what companies are thinking about right now; friend-sourcing implies there is a giant benefit to choose a trading partner who is your friend, your friend will be more likely to honor your trust bond established, or unlikely have a coup or gov overthrow, less trade with so many other counter parties and more trade with fewer counter parties; prioritize friends for outsourcing) Climate Change - (disrupting supplies, as well as supply chains + the cost of moving goods. (on good side: sea lanes of north plane are now opened, ships can get over faster & more efficiently but only bc the world is melting, disrupts supply chain; can affect the cost of moving goods, if you're Starbucks you want to be worried about climate change will your farmers be able to get coffee beans grown on time & get products on time to you)

THE ROLE OF CULTURE

Culture = ("how we do things around here"). Whether it is the culture of a country, a business, or a community of people, culture plays a significant role in whether people act ethically/morally Do you not park in the handicapped bc you're worried about a ticket or the ethics of doing the wight thing? (Takeaway: The regulations matter to some of us, it's not the ethics it's the regulations sometimes ) NY City, UN diplomats parking tickets Corruption is partly cultural "it's the way we do things around here" - if you come from country accepting corruption you're a more likely to ignore the rules regarding parking, diplomats have a manner reminiscent of officials in home country Takeaway: We find that this measure is strongly correlated with existing measures of home country corruption. Wall Street High earners witnessed wrong doing felt like professionals must engage in unethical activity to succeed The danger: the first group is seeing crossing the line & the second group sees it & thinks they have to do it too to keep up. positive feedback loop: we take our cues from other people nearby (Insys you are a new sales rep Mia Guzman takes cues from her supervisor Alec Burlakoff) Ex: cheating in Tod's class, why he lies to undergrads in law? To protect the 97% that don't cheat his goal is to drive down the # of cheating to leverage conformity & fairness. If he tells the truth that more people cheat then you will feel like you need to do cheat. Ex: VW emission cheating, Chairman of VW said "the cheating took place in a climate of lax ethical standards." "There was a tolerance for breaking the rules," software engineers willing to write the code to turn off emissions at certain times, mechanic engineers & corporate people signing off on it Wells Fargo: created system told salespeople to open more accounts, wall street found out the stock went up, people on the top making $$

Student Experts: "Extended product/producer responsibility" laws.

EPR Extended producer responsibility laws are part of environmental protection strategy to minimize the environmental impact of products, flips responsibility back on producers & shifting responsibility from taxpayers & consumers. There are regulations in electronic equipment, pharmaceuticals and pesticides. What types of industries are being asked to do more? -Ex: WA state, drug take back laws, e-cycle program TVs, electronics so it doesn't end up in waterways poisoning fish/people. Also bigger push banning straws & single plastics use & do biodegradable materials to keep things out of environment, container takeback return bottles for money In future: these laws might go more into effect

Root Analysis

Ethics tool when a business has an ethics problem (or any problem), it employs "root cause analysis" (asks you reiterative questions: why, you really want to figure out what is really causing this issue bc if you don't know you can't really solve it) 5 Whys- to get to the core of the problem until you're able to make some decisions Why do we have that problem? NFL 10 years ago super lucrative, 1st problem football players had early dementia, doctors discovered CTE and brain concussions that there is a higher rat to get CTE & fall into dementia, NFL didn't want to hear about it bc they were worried about undermining the game, 2nd problem: Aaron Hernandez on Patriots star player, arrested charged with murder & arrested, life in prison, 2014 NFL understand CTE problem, 2016 NFL admits there is something happening, employee players dying we have to do something, Parents talking to their young boys saying no you're not playing football Now NFL is scared that the future employees don't want to play football, Aaron commits suicide, autopsy severe brain damage, NFL got some work to do, need to go through root cause analysis. 1. Why are our players dying of CTE A: Because they getting concussions 2. Why are they getting so many concussions? A: They hit each other too hard, in the head, repeatably 3. Why are they hitting each other so hard? A: On certain plays, it's the nature of the game 4. Which plays are the most dangerous? A: The kickoff. Kickoff returns account for 23.4 percent of concussions during games despite representing only 5.8 percent of overall plays (kickoff event both sides are running the opposite ways to each other very fast) 5. Why? A: Teams runs full speed at each other What did NFL do: instead of having the kicker kick the ball from 20 yard line to now kicking from 30 yard line so there is less likely kickoff

EXAMPLES OF SELF-REGULATION NOT WORKING

Ex: During Covid, for instance, lies spread online, about the efficacy and safety of the vaccines, likely contributed to many deaths A wide variety of groups sponsored ads, and created Facebook pages. Some of these ads directly supported the candidates Hilary or Trump. (traditional ads from UW communities) Pro Police Anti-Police Ex: Heart of Texas to get a protest going against Clinton (created by Russian intelligence gov. services that bought ads for pro Trump & pro Clinton to destabilize the democracy, FB weren't able to self-regulate) Ex: Trump in 2016 says he would only lose if Clinton cheated. The Christian Times is an on-line "newspaper". purchased by Cameron Harris (similar to Burlakoff, designed fraudulent scheme, so proud), 2016 they publish "Tens of thousands of fraudulent Clinton votes found in Ohio warehouse" - was quickly picked up, retweeted, Trump already set the ground work that he would only lose bc of Clinton's cheating. The entire story was a lie & there was no ability to self-regulate, this story did a lot of damage

Student EXPERT SOCIAL INFLUENCES AND THE FTC

Ex: The Kardashians fighting morning sickness. Social Media Influencer, people that post on social media and they turned that into a business. They get paid for saying that they use things or do things or endorse things so that people follow them & do the same. If I am a fan of Kim Kardashian and follow her, Kim Kardashian is supposed to very clearly disclose that whatever she is advertising is indeed and that she has a material connection to the company she is advertising for so she doesn't get in trouble with the FTC. So that you as a consumer she is not giving me a tip, but she is actually paid by the company & that I am not just buying this product bc I love her, so potential conflict of interest. The Rules by FTC that Kim Kardashian has to follow: It also applies to other types of ads & social media ads. Interesting that you have to disclose any material connection, it doesn't have to be paid for, can be a prize for employment, if somebody else or charity gets money you have to disclose; can be a free product or experience, or discount in return for talking about their product even if they don't explicitly say you have to talk about X. Who got in trouble for violating these influencer disclosure rules: Companies working with influencers like Teeny - supplement & skincare and tea brand they didn't let their influencers know that they need to disclose that they have material information. Influencers using mascara but actually applied false eye lashes. Kylie Jener was called out for advertising fit tea, she also advertised crypto currency asset & didn't disclose that she was paid for it, had to pay $1.26 fine can't promote for 3 years crypto.

Student Expert: Heart Problems/Heart Surgeons

Ex: conflict of interest Least expensive: take a pill Mid-level: take out build up angioplasty. Most expensive: do a bypass surgery & open you up. Group of Doctors only did pills or mid-level angioplasty surgery. Didn't want to refer people to other specialists to do bypass so others earn more $$ so they did angioplasty 3 times the rate, way off the chart to make more money; qui tam report & had to pay $4 mil to U.S. (more medical misconduct-conflict of interest; some people probably got the angioplasty without needing it) Conflict of Interest in financial sector, consultants more lucrative than accountants, auditors don't want to upset their client & lose their business

Moral Intensity Analysis

Organizations & government can use this to help prioritize and categorize ethical issues 1. The Magnitude of Consequences (more or less people affected) 2. Proximity (earthquake in Turkey, far from Seattle so less of an issue) 3. Social Consensus (ex: if a large majority agree it's wrong) 4. Probability that an action will lead to a result. (if you give $1 to a charity that's not much) 5. Immediacy (is it happening now, climate change)

Threats To The Environment

POPULATION EXPLOSION- In November 2022 the world's population passed 8 billion. In November 2022 the world's population passed 8 billion (Japan, China). In developing countries population growth is high, with significant implications for the environment. Poor people create different type of damaging pollution, although rich people contribute too. Rich Americans use (and waste) a lot of energy relative to other people (Europeans seldom use clothes' dryers, for instance). (Europeans don't use clothes drying, rich Americans have clothes dryers that use a lot of energy; poorer countries may use less energy in ways that are more detrimental to the environment; Ex: South Africa: people would burn trees and coal to heat up food that's more detrimental than rich people using a microwave to heat up food) While poorer people often use less resources, they may use them in ways that are more damaging. Coal fires, for instance.

Guyana

Poor country that suffered at hands of climate changes, but it just discovered oil, they have a choice to develop oil and get the money but if you do it you will make the climate change worse, but if you do it & get the money you can get infrastructure to deal with it. It's a dilemma for them.

Why do people engage in White Collar Crime?

Rationalization** (distance, unknowable victims, time) The criminal (inside trader) is removed in terms of distance from victim, not face-to-face with a victim, so it's much easier for you to do it. You don't realize the consequences of the inside trading on the victim for some time not like a robbery.

Ethical challenges raised by the increased presence of tech

Regulating online content. Who decides what I am seeing online and who decides what it is that can be posted online? Governments or private companies or combination of both set the rule for what is allowed on privately owned websites? Governments are trying to figure out, there are no clear answers. If internet company operates in some other part of the world we have to be mindful of that country's laws. With tech companies you have to not worry about the law of the home country but also the law of the host country (the one you're operating in). In U.S. there is minimal government regulation, gov. usually needs a warrant, in U.S. it's the private businesses Google & FB that set their own rules via terms & conditions & they can do whatever they want to. In Europe, there are a lot of government regulations to protect individuals over the internet, big regulation called GDPR, been around for 6 years, private companies are obligated to follow the government regulations. Rest of the world, lots of government regulations designed not to protect individuals but to censor content & protect the interest of the ruling parties/government, big tech companies can't write their own rules. Only quarter of the population is really free online (Canada/US/Western Europe), there is a higher percentage of people that are not free (China, Russia). Key Findings: Internet freedom declined, 2/3 of internet users live in countries where criticism of the government, military, or ruling family** are subject to censorship (criminal offense to criticize the king of Thailand) Ex: Russia closed its cyber-borders when it invaded Ukraine. China does not allow Facebook, or the New York Times, or virtually any online criticism of the ruling Communist Party This type of government censorship is illegal in the U.S.. (American companies like Google, FB face extra regulations because there are significant differences in national customs, norms and rules relating to the internet, they need to be mindful operating in other countries. In Germany Google had to pay large fines, GDPR rules, the right to be forgotten, can ask to delete, designed to protect individual rights

The Internet

Semantic / metadata Internet 6th Phase As of June, 2021 - 59% of world's population. Ex: Facebook= 3B users, 1/3 of world population, Facebook seems free but actually not they monetize your information. An average user would want more than $1000 to deactivate their account for one year. Tech is not always sequential. Ex: South Africa. (South Africa very segregated; Soweto; everybody had a cell phone which wasn't unusual, but there is an absence of telephone pole in Soweto; when asked people they said the townships never had telephone poles bc they never had phones but they leaped over to telephones, they went from nothing to cell phones; didn't have the money for telephone poles to be wired into the house; poor South Africa benefited through cell phones but not traditional phones, Example of Tech Not Being Sequential, leap over

Compensatory Sub-Category Justice Model

Sort of rule driven, predetermined rules, not look at end result if it's fair or not depends upon what type of compensation we're thinking about giving people. Ex: Comparative Negligence: Tort law, car accident someone rear-ends you using tort you will sue them to compensate with money for the damages they've done. I left bar a little drunk, didn't see where the crosswalk and the other guy swerving & their collision & I am hurt bad. So in WA you go to jury to sue them. The guy says but you crossed where you shouldn't have, so jury will decide what percentage at fault I am & the guy driving the car. Tod you're 25% & car you're 75%, can't do get rich quick scheme. Someone comes & grabs me from the ground to pull me out of the road & injures my spine & I am paralyzed. Let's say jury says Tod is not liable, so driver get 99% and good Samaritan gets 1%. The rule: as long as I am 99% innocent the damages will be paid by rich Samaritan, the driver is broke. Ex: Contract breach, the breaching party, you put non-breaching party in the same position if they had fulfilled the law Ex: affirmative action in college admission (have to outlaw discrimination upon race) & Title VII, gov said we had long history of discriminating in college admissions/employment, we need to compensate damages to people who have been historically discriminated against, a plus factor can be given to get into college, 50 years later is there still wrong that needs to be compensated? What about innocent bystanders? There is someone who would be disfavored bc of affirmative action

Federal laws relating to the environment

The Modern Era late 1960's not many laws, 1970 EPA established-Nixon signed. Dems & Republicans got together we have to do something. EPA has authority to make federal rules regarding to air, water, land protection. The have to balance economic & environmental interest with CBA- Risk Assessment to evaluate stuff thrown into atmosphere & regulate. 1. Hazard Assessment -(establishes a link between a substance, such as a chemical, and human disease. Is there a link between the stuff thrown in the atmosphere & human disease; have to prove) 2. A dose-response assessment -(How toxic the chemical is, super toxic or not) 3. Exposure assessment- (how much of that chemical have to be absorbed by humans to have a toxic level, bad consequences;) Ex of Risk Assessment: Gas Hose plastic safety valve around your car so you don't inhale fumes in the atmosphere; EPA required gas stations to do it. 1. Hazard Assessment- There is a link between the toxic fumes and human disease 2. Exposure assessment- qualitative, how bad it is 3. Exposure Assessment- how much you have to absorb in your lungs As a result government/ EPA could push these rules

U.S. government REGULATION OF CONTENT (OFF-LINE, AND ON-LINE)

Why is the U.S. government doing too little or too much to regulate what happens online? U.S Government has to use the same set of rules when looking at online content as they would use when assessing the offline content. Ex: (If U.S gov not happy with you saying things on red square there are limited things it can do to stop you; the same rules would apply for online, gov. Has minimal ability to say stop saying what you're saying) The U.S does censor things rarely, some examples of their censorship: 1. "True threats" - (You will get prosecuted if you make a threat you shouting that on red square same way they'll prosecute you if you make true threats online) 2. Civil lawsuits relating "Libel and Slander" - (If you say untrue things on the square you will get prosecuted and same set of rules will apply in person and online) 3. "Obscene" Materials...- (If you have obscene images that you distribute on the square you will get prosecuted and same set of rules will apply in person and online) 4. FALSE ADVERTISING- (Rules relating to these types of conduct apply both on and off-line, regulates false and deceptive advertising in tv, radio and print ads online & offline) 5. Commercial Speech- (US government is active in regulating commercial advertising that has the potential to deceive consumers). (If you lie and say in a magazine your product can cure COVID in 1 day that would be something U.S gov can come after bc it's false advertising)

Protecting Real Reviews.

YELP REVIEWS & NON-DISPARAGEMENT CLAUSES (Yelp can take and monetize your review so that when you make a decision where to go you have some guidance) Yelp's business model is based upon selling ads, or products - but its attraction is that you visit the site to read people's reviews about hotels, restaurants, and things to see. You rely upon those reviews to make decisions about where to spend your money. But anonymous reviews could lead to competitors trying to take down your firm, by posting fake reviews saying your business is awful. Ex: suppose you open a restaurant & your competitors aren't happy with you, the competitors could go online & post anonymous bad reviews on Yelp to drive down your stars & anyone looking for a restaurant can see it, what company can do is to stop people from posting reviews completely & it's called non-disparagement

Distributive Justice Sub-Category Model

a form of consequentialism because the results matter; it focuses on the end result, and whether it is "fair". But defining what is fair is subjective (normative everyone is entitled to their opinion, we won't agree with each other; can cause discomfort). Analysis Ex: 2 years ago there weren't enough COVID vaccines so states had to rank and prioritize who will get COVID vaccine 1st, 2nd, and 3rd that's distributive justice; Different states had different answers. People most at risk should get it, Tod's nephew's theory we should give vaccine to who is most likely will not follow the rules and spread COVID easily. Another Analysis: Who should bear the costs of health care relating to people who get COVID? Non-vaxxed getting COVID costs a million in medical expenses that taxpayers & vaxxed have to pay. The vaxxed with COVID cost. So the public thinks should I really as a taxpayer cover their medical costs when they were engaging in much more risky behavior? Ex Analysis: I am TodCo & I give everyone insurance and one group doesn't get vaccines and others do, now health insurance costs skyrocket & I have to raise everyone's premiums; is it fair or not? Ex: Treating people with equality may not in some people's views be equitable (fair). You don't want to treat people differently or everyone the same. Baseball field with boxes and a big fence Ex: does it make sense to divide estates equally when one child has a disability & the other is multimillionaire. (makes sense in equality but not equity) State Level examples: WA state, the poorest American pays 10% of their income in state & federal taxes and top 1% pay average 5.4%. (Poorer people are spending a lot more than rich) Regressive tax hits different income people differently, sales tax are very regressive bc we don't have income tax in WA (regardless if you're rich or poor you're going to consume so much toothpaste) (poor person will spend more on toothpaste than rich). From a fairness perspective, inequitable tax system in WA isn't good. Ex: When go to Walmart or McDonald's, distributive justice going on you buy something inexpensive thinking you got a deal, you're participating in distributive justice bc item is cheap bc Walmart pays low wages to employees so the employees are eligible for federal welfare benefits, your tax dollars are covering the flaw. (52% of Walmart workers on public programs vs. all workers 25%)

Rights Model

emphasizes individuals' rights to life, safety, free speech, freedom, property, and due process (to be treated fairly, by the government, which is closely related to the justice models, below). (rights are different than Utilitarianism) Rights (provided by Constitution or statute, local laws) cannot be selectively applied; they must be applied without regard to race, gender, etc Anything that interferes with these rights is unethical. (rights are often made into laws) Rights Analysis: Ex: The ADA, where businesses are required to make reasonable accommodations for disabled workers. What if the rights clash? we have not fully answered the question about whether the Right of a small merchant, who may NOT want to sell a wedding cake to a same sex couple (because it violates the merchant's religious views) is MORE important than the rights of the same sex couple not to be discriminated against. The state law says if you operate a business you have to offer services to everybody, can't discriminate, we have merchants saying I have Constitutional right to exercise religion, you caan't undermine it. The Supreme court has to figure it out...

LAW OF COMPARATIVE ADVANTAGE

idea that countries should produce what they produce most efficiently, relative to other things they might produce. In a free trade system, goods and services will be produced most efficiently if they are produced where the prices of materials and labor are the lowest.

Ethical relativism

the idea that there are no fixed, static ethical rules, but that ethics rules depend upon the time, place and circumstances. (there is going to be a legitimate, different ways of looking at ethical situations depending on where you lived in the world, the culture in which you've grown up in the world) Ex: How different countries responded to Covid, U.S prioritized individualism where rights of individuals, cultural priority, in other parts of the world individualism is less important than the collective good, Melbourne everyone was on board on shutting everything down, cultural difference will also drive ethics might adopt the mantra -- "When in Rome do as the Romans". (-there will be different ways of looking at ethical situations depending where you lived in the world & the culture you grew up; in recognition that different places do things differently, it's a product of their culture and histories, its not like this place is right and this place is wrong ) If a company with supply chains overseas decides to simply do what is legally and ethically allowed there, the consequences in the home country may be significant. (might cause problems at home) if follow blindly example: Pakistan Boy stitching Nike soccer balls, child labor, U.S reaction really mattered, you better understand the risks

STUDENT EXPERT Flip-side: Greenwashing (compare to Whitewashing)

whitewashing- you pretend you're better than you are; greenwashing- when companies use marketing terms to make them look more sustainable than they actually are, a lot of terms aren't regulated by any organization so words like natural/sustainable or natural images like leaves to make it look like they are more sustainable/green have no backing to them (flat out hiding the truth); when VW messed with numbers to make it seem like they get higher mileage to make it look like they were sustainable car to choose, but actually just hiding the truth, so more severe form of greenwashing) earlier the businesses could do whatever but then the SEC the gov. taken steps to attach clear meaning to have names rules to provide more transparency to the investors; when funds are getting invested in & they tell that they only invest in green companies, the SEC comes & says you better be able to prove to the SEC that the things in your hedge fund do what they claim to be doing)

John Rawls, philosopher

worked to figure out why was it so hard for people to think critically about the rules? "Veil of Ignorance" and Distributive Justice Model (normative)- The only way we can figure what is the right thing to do is to play a mind game, step back & not look at things from perspective of our upbringing, we will divorce it. If we knew nothing about where we would end up in what sort of society would we enter? Veil of Ignorance forces observers to accept the country they would want to be born into, we know the sort of society we want to live in. If you were given $100 million what would you put in Haiti in terms of society? (how do you look at the world from your position in the world; if you're an inherited rich person you will look at the world through that set of life experiences and if you're poor vice versa; that upbringings will color how you see solutions when you decide what's the ethical thing to do, hard to separate your experiences)

CHALLENGES TO MNCS (Multinational Corporations)

#1: LACK OF PREDICTABILITY. (unpredictable things can affect businesses, make things expensive; when foreign gov. change the rules in the middle of the game) Ex: Brexit, UK voted to leave EU, it affected a lot of businesses that were in heart of London & part of EU, 10,000 banking jobs have to leave, that's very expensive #2. Lack of an independent judiciary able to make decisions, and then have their decisions enforced. (Ex: Consider basic contract law they lay a lot of predictability to relationships with counterparties, if you have a problem & contract breach you know judiciary system is independent of the political organs & they won't be told by politicians what to do but if you go to judge in Russia, the judge is beholden by the political interest & that's a problem bc businesses want independent judiciaries. #3. CORRUPTION- pay people under the table. bribery is a form of corruption; Small bribes to government officials may be acceptable, but American corporations are forbidden. Foreign Corrupt Practices Act. (bribery is a particular form of corruption usually has to do with gov. Officials, Mia Guzman said to us what's wrong to spending money to wine & dine your counter party get them tickets to a game, it's not corruption, it's just wine & dine at that point but if you're paying money to them that's corruption; bribery in U.S is very rare) Ex: The cost of doing business in India/Peru: Telephone & Internet service but to get those things done it's required a bribe, $200 dollars gov. Official slips it in his brief case. Gunghim had to bribe 10-15 people & pay every person, bribes made it more expensive to start a business, principles changed just get your things done, it's a debate if bribes are good or bad for economy, if you can pay a bribe it might make things in the economy move a lot smoother #4 The host country's laws may make operating there problematic. In Europe there is a GDPR law they have to do something to protect individual privacy, makes operating in those country difficult #5 BUSINESS CAPITAL DIVERTED FROM THE BUSINESS. -Countries may have high tax rate -A poorly trained workforce -Inadequate infrastructure (transportation, etc, Walmart had to pull out of India) #6 The environment (more than just "quality of life" - life itself) (Ex: late august in Seattle smoke season, forest fires) #7 Technology Transfers Student Expert -is a practice in which a domestic government forces foreign businesses to share their tech in exchange for market access, quid pro quo access to the market will only be granted if you enter into a partnership with a local business to share this information directly with the government. Downside if you share info: your business will be cannibalized by someone else who now has the access to technology you spent a lot of money developing

Life Cycle Analysis

(a tool that businesses have to consider; businesses take a step back and they assess every single component about distribution, and recycling of the widget from when the widget is made to when it's disposed; what can we do through the process to make things more sustainable) (need to look at a long process from the moment the widget is made to its disposal what can we do during the process to make things more sustainable) Who should be responsible for the disposal of products? Consumer? Government? Producer? Ans: Producer

Why Free Trade?"

(COMPARATIVE ADVANTAGE, makes sense that the company can produce what it can the most efficiently compared to the costs of producing it in other countries; Florida shouldn't be producing xmas trees and WA shouldn't produce palm trees, different climates will present different opportunities in different places)

Daniel Kahneman, Noble Prize winner in economics

(gave 6 questions to hundreds and thousands of normal people in society and businessman) Takeaways from pre-class quiz: There is a giant disconnect from what you think about it and what the general public thinks about it. The danger of this disconnect is the better we educate you the further you will be removed from the people who are buying. There are a lot more of them than of you) They can scream to legislators; you can't forget before you started the business school you were on the other side you were a consumer, there was some self selectivity...if you lose sight that general public looks at issues differently from you that's a big problem!

Virtue Ethics

Are aspirational, rules that you try to live by, reflect personal values that guide us, for businesses it pulls us away from considering profits and losses. Honesty/Truthfulness Generosity/Charity Justice Prudence Courage- (Insys Mia Guzman, whistleblowers have to stand up, ability to stand up for what you know is right) Trust (John Courson appealing to homeowners- honoring one's word)

Tools to assess how population growth affects the environment

CARRYING CAPACITY- (Earth has resources that are generally fixed, x and x is the carrying capacity, you want to use less sources than the Earth has to offer) Technology can also affect it, on the margins, for the good. Question: How has the internet saved fuel? (During Covid we were driving less and using the internet more) Ecological footprint- the biologically productive area needed to provide for everything people use. At a global scale, footprint assessments show how big humanity's demand is compared to what planet Earth can renew. (How many resources you and someone else use to subsist) Highest footprints in developed countries, U.S, Australia, Western Europe RAPID INDUSTRIALIZATION - (people moving out of farms into cities, lots of consequences occur Ex: The Cuyahoga River. (Dumps of waste on the Cuyahoga River until it caught fire, young activist Americans got fired up, it took rivers to catch on fire to get nations to say stop we should stop throwing waste into rivers)- Environmental Protection Agency established

Ford Pinto Utilitarian Case

Car designed in early 1970's, there is an oil shock price, gasoline is like $8 per gallon, no American car makers making small economy cars, have to import them from Japan bc at Japan was building gas friendly cars, bunch of Japan cars get brought to US & American manufacturers are struggling, Ford's CEO says we have to build a car that weighs less than 2,000 lbs and can compete with Japanese cars and we need to do it fast within 2 years. They did cost-effective engineering put gas tank on top of axle but in rear end collisions it could rupture gas tank & if ignited it would cause a big explosion & people would burn to death. Multiple cases happen in different states and they settle them quietly so they're aware of how many accidents will happen based on the # of cars sold. Ford accountant did some math and figured out if they fix & recall all the cars it would cost them $137 million but if they do nothing it would only be $59 million to pay/settle cases for injuries/deaths. How are you going to explain that you just spent $87 million difference that you didn't need to (Remember reputation has a price, it takes 20 years to build it). Decision: Ford didn't recall the cars, let them burn, we will pay the money. Once jury found out that Ford did CBA & didn't recall the cars they slammed them with $100 million judgment to change the dynamics of the case. Ford didn't account for its reputation & what public will think

Common environmental issues shared by all nations and businesses

DECLINE OF BIODIVERSITY IS A SEVERE PROBLEM THREATS TO MARINE ECOSYSTEM-Coral Reefs - bleaching / dying (Australia / UW) (lots of threats to the marine system, corals lose their vibrant colors) Climate Change- COP21 CO2 emissions (which significantly contribute to climate change) Ex: In 2021 Seattle experienced an unprecedented heat wave, which had consequences. 21 People died as result of the 2021 heat wave. Rich countries (the US, Canada, Japan, Western Europe) account for only 12% of the world's population, but have contributed 50 percent of CO2. U.S responsible for 34% of historical CO2 emissions. China & others for 14%. Per person U.S is the 2nd, China now produces more. The Progress on Climate Change isn't enough. 1.5

Strategic Default

During Financial crisis essentially defaulting on your mortgage, the value of the homes go down the whole, so instead of putting money ; buy a house for $100,000 and you take a loan for $400,000 but now my house doesn't worth $500,000, it's worth $150,000 so instead of paying my debt, I walk away, I made a contractual promise with a bank to pay $400,000 back, but now I break the promise even though I could pay. Consequantialist would look at it your house isn't worth as much now you will walk away, neighbors houses will plummet Duty-based would say I made a promise, I can't walk away John Courson is appealing to virtue ethics that only non-virtuous people are gong to default on their mortgage, he is also employing duty-based, you made the promise you have to pay, Courson is a hypocrite, didn't follow these models himself

How Companies Approach place relative importance on things:

Egoism (self-centered) = =Company interest= Economic efficiency. Benevolence (concern for others) = Team interest Social Responsibility Principle (Integrity approach) = Rules and Procedures Laws and Codes

TERMS AND CONDITIONS

Facebook & Twitter sets the rules of terms & conditions; it's a type of contract, the gov. Will respect these contract law, what happens if FB doesn't own up and stand by it's own rules of their term & conditions? The gov. FTC will get involved & call FB for not treating you fairly and doesn't abide by its terms & condition. Ex: FB got fined $5 billion by the gov. bc it didn't honor their promise of it's terms & conditions that they wouldn't sell user's info but they did so the gov. stepped in THIS IS NOT GOV. REGULATION, IT'S GOV. FINING FB FOR NOT ADHERING TO THE TERMS & CONDITIONS IT AGREED TO WITH ITS USERS

Upper Branch Mine

From Textbook: Blankenship guy running the Massey Energy coal mine focusing on bottom line, wants to get as much coal out as possible, he ignores safety precautions and spends less money on safety. From Blankenship perspective, moral intensity analysis he is far away from the coal, do I pay attention to the regulations or push running coal? Moral Intensity Analysis Applied: Proximity is important to him, he is far away and Immediacy it's not happening now caused him not to pay attention. And he was blinded by the profits. He actually went to prison as a result of a disaster, 29 killed

NON-DISPARAGEMENT CLAUSE

If you were an employee at TodCo & had problems with management so we want you to leave, we give you good severance package but as you leave TodCo you need to sign a non-disparagement clause to agree you will never say anything bad about your experience at TodCo. It's lawful supported by traditional contract. If you went to restaurant & they asked you to sign the non-disparagement clause is it legal? The gov had to step in & make some regulations. Ex: Xmas shopping , buying chachkies (desk toys) gifts never arrived; they posted a review and forgot about it, 4 years later, it emailed you have to take it down or pay a fine bc you violated the non-disparagement clause. They said no, then they were charged on their credit card bc the company passed them onto collections; it never hurts to read the fine print) Federal Law now protects this: Consumer Fairness Law Consumers have a new law to help protect their right to complain about a company in an online review — but advocates say it's wise to still stay away from hateful words. The new protection is provided in the Consumer Review Fairness Act. The law prohibits non-disparagement, or "gag" clauses, in contracts with consumers.; but REMEMBER!! YOU CAN STILL BE SUED FOR LIBEL IF YOU POST SOMETHING FALSE

Immanuel Kant: Categorical Imperative Model

It combines duty-based rules (Golden Rule) with a bit of consequentialism. If you're faced with ethical issue & you thinking which direction do I go duty-based or consequntialist, it's k to go in either direction as long as you're also ok with everybody else doing the same thing later & if you're ok making your action a universal law, if I do A or B I'm ok with the results that follow from everybody else doing A or B Mortgage Banker Association: Depending on what you decide break promise you need to be ok with everyone breaking that promise or do something consequentialist, make sure you're comfortable with everybody else doing the same thing you're doing. He would probably say it's not the best idea to walk away from your mortgage Jello Shots: Kant would say don't consciously mislead your dad, you know the intent of his question

KPMG

Need to embrace sustainability to have competitive advantage among competitors. Sustainability can be "driven" by virtually all stakeholders, including consumers, the government, suppliers, and the business itself.

SELF REGULATION SUCCESSFUL

Non-consensual porn (some success). (Companies done an ok jobs to work with organizations to take things down; this occurs when couple in consensual relationships take photos for themselves & then they break up and one of them goes and posts those photos so companies are helpful at taking it down) Fake Users. Addiction Treatment Ads (Google takes down bcthere is a lot of shady practices out there with untrue and not backed up info) Payday Lending / May 2016 (Google takes down payday) (Google takes down locksmith ads bc they were scams) Ex of self-regulation initially didn't work & then worked: Trip Advisor: Brilliant business - like Yelp, it obtains free content (from you and me) then profits from it. Does not need to pay authors. We want to visit the site because we expect unbiased reviews (though we know that some people can game the system with fake "poor" reviews, and fake "good" reviews. (you for free post an add on trip advisor about your trip, TripAdvisor sells ads to hotels & restaurants to ad their stuff) (Mexico victim of sexual assault, assaulted by the employee of the all-inclusive resort, TripAdvior took down the review bc the resort is a client of TripAdvisor who buys the ads, so TripAdvisor wasn't interested in accuracy and transparency of the reviews they cared about the profits gained from the ads that Resort pays for; TripAdvisor later apologized and promised regardless if people are paying about reviews or not that you will see alerts; so TripAdvisor changed their policies ) Ex: Alec Jones thrown off FB

Environmental Sustainability Successes

OZONE DEPLETION- Limiting CFCs -- a success story. (ban refrigerants, ban sprays) / ozone. Ban LEADED GASOLINE- (lead is very dangerous if taken by human consumption it can make cognitive development more difficult; it used to be used for combustion engines to run more smoothly, and cars had to be re-engineered, 1995 banned in the U.S.) Sydney Opera House- (went to city council to ban straws businesses; so ozone, ban lead gasoline, and straws are initiatives when we have a will, there is some hope & progress that can be made)

Understanding stages of moral reasoning (people go from different stages of development). The Kohlberg's 6 stages development psychology

Pre-Convention: 1. To avoid punishment. (don't want to get spanked) Pre-Convention: 2. To satisfy self-centered needs and elicit a positive external response. Convention: 3. To conform to the group interest to please others in the group. (when you're 13 years old, junior high, you are motivated to conform to your group of peers to please that group, you don't want to alienate your peers, conformity motivates you) Convention: 4. To accept legal restrictions as being in the best interest of society. (high school and college even if you take jello shots and party with a party you won't drive drunk home bc driving drunk can hurt you and other people) Post-Convention: 5. To accept legal restrictions balanced with individual rights as being in the best interests of society and the individual. (During covid you're completely healthy student, you have no at risk adults in your life, this kid that will continue wearing a face mask not worried about themselves worried about getting strangers sick) Post-Convention: 6. To find satisfaction in being ethical and moral for personal reasons. (finding self-satisfaction) You want to be in 4,5,6!!

STUDENT EXPERTS SUNDAY RILEY- FAKE Reviews a giant problem

Review numbers matter, and they provide plenty of incentive to cheat as an increase of just one star in a rating on Amazon correlates with a 26 percent increase in sales. Sunday Riley is skincare/beauty company they sell it through their website and through sephora.com What did they do that got attention of fed. Gov? Leaked email from Sunday Riley where they told their employees to post fake reviews on Sephora; very specific instructions, specific products to write reviews for and to create an account so it looks legit. They violated section 5a of FTC Act they seek to get unfair competition, What happened? There were no fines, they just agreed to abide by the laws; some FTC wanted to do more or less to Sunday Riley, made consumers not confident about reviews anymore) (Riley made their employees download VPN to get around Sephora taking down their posts; there is should've been more punishment, this was just a beginning)

Two Tools that the government can impose on the trade

Tariffs- -is a duty, or tax, levied on goods when they arrive in a country that did not produce the good -at the point that the good is imported, the tariff kicks in & the person importing pays a tax on that item which increases the cost of that item when it's sold. SO who pays the tariff? -Consumers DO Ex: Trump lied said China pays. Quotas: limit the amount or number of specific products that a country will allow to be imported (from foreign countries) each year Ex:The US, for example, has limited (by quotas) the textiles (fabrics) that may be imported. (If not, cheaper textiles from 3rd world counties would overwhelm us, ending all local production.) Note that the US has, in the past, worked out deals with foreign countries to "voluntarily" impose their own quotas (think supply & demand, if there is a tariff on supply & demand is the same then the price on supply goes up bc limited supply) Ex: price of gas goes up & American consumers want to buy fuel efficient cars & you can only buy Japanese ones, prior to 1980 U.S was producing a lot of cars then production falls bc consumers don't want gas guzzlers, so government imposes quota to the # of cars imported to U.S so price of cars went up by $2600. Quotas raise the price of the cars bc limited supply

Technology displaced the knowledge

Taxi drivers, black cab who had to take a barrier to entry test knowledge exam to learn all the streets replaced in 2012 by general people/Uber drivers who just needed to punch some info and take a small test & use google maps; businesses & knowledge technology is replacing; technology is so powerful that's why Uber could exist

THE FOREIGN CORRUPT PRACTICES ACT

The FCPA prohibits: (1) US business and their agents (2) from bribing (3) foreign officials (4) to influence an official act (5) to gain or retain business. Ex: Boeing can take you out for dinner & agree to put your child through college & it's not a bribe, won't violate the FCPA. FCPA kicks in when the bribe is directed to gov. official who has to control some domain. Ex: Walmart got in trouble with a violation from FCPA, built a Walmart next to ruins, Walmart officials bribed zoning officials so they allowed to build a Walmart store, it's hard to figure out if the foreign company you're dealing with is private or government owned

Tensions of Free Trade

Will produce winners & losers (suppose you want to buy a new suitcase, you find a good deal/less expensive that's imported & you buy it. U.S suitcase makers can lose their jobs, U.S suitcase sales go down bc too expensive for consumers, you guys charge too much, we don't need your suitcases; the benefits of free trade are spread out it's mile wide but inch thick in terms of how they're spread, the benefits you get are so minimal that you don't care enough to go write a letter to the congressmen saying thank you for $25 cheaper on my exported suitcases, but the U.S employers that just lost jobs will be very vocal and upset that they want tariffs and quotas to be done something; employees would want protectionist trade policy, but the consumers who got $24 cheaper suitcases don't feel the pain so they don't care much; the benefits of free trade are spread out) There is no question that "free trade", as a public policy, wins if you apply a "utilitarian" analysis (e.g., on a macro level, it makes sense)

Ethics

a conception of right and wrong conduct

Globalization

a process in which international trade and financial flows integrate the world economy, leading to the spread of technology, culture and politics. (exchange of cultures & goods between people, technology sped up the process of globalization) Globalization is not new; it's been occurring for centuries - it has simply been happening faster in recent decades - but (significantly) has slowed in the past 3 years.

The Theory of Moral Unity

businesses should be judged by the same moral/ethical considerations that apply throughout society. (fuse your own everyday ordinary ethics with your business ethics, just have 1 good ethical way of approaching things in your life and business) (this is where you want to be)

Procedural Justice Sub-Categories Model

duty-based; it's not really concerned about the end result. If we follow the pre-existing rules and procedures, which are agreed to ahead of time, then the result is just, we cannot make an error. (not flexible, can lose the bigger picture if only look at the procedure) Analysis Ex: Someone convicted 25 years ago after jury trial & they went through appeals & their conviction was affirmed. Then you read that DNA has proven that the person didn't do the crime, we got this brand new science tech that we didn't have, the advocate of procedural justice would say with the information they had at the time it seems justified, we followed the right procedures, he was properly convicted, and now we have newly discovered evidence we will fix it. (not very nice to someone who just lost 25 years of life)

Laws

formal, written rules or codes

Ethical principles

guides to moral behavior, which come from multiple sources

Risk Management

is not concerned with "hard science", but is based upon law, economics, politics and ethics. CBA how many people would be hurt & how much money we could save if we have a rule. Ex: lights wasteful so we will move to LED lights although costly rn, will be cost-efficient over the future. People complaining that they shouldn't be forced to buy lights but gov. said no you have to

Justice (Fairness) Model

it can be broken down to 3 different types of "Justice" 1. Procedural Justice (as long as we follow preexistent rules we cannot make an error) 2. Distributive Justice (normative your view might be different than my view, form of consequentialist? Normative as well who should bare the cost of ) 3. Compensatory Justice

Ethical Tone

often set by management - ethical management is more likely to lead to employees acting ethically. Ex: Uber's unwritten corporate culture was: Don't ask permission; ask forgiveness. Uber doesn't follow the same rules as taxi cabs but once we break a rule then ask for forgiveness (ex: it can say no to driving a person) Ex: FB move fast & break things

Climate Reparations

rich countries potentially owe money to the poor countries as damages to the countries who haven't contributed to the climate change as much. Bangladesh would fit in here, it can't come up with money to deal with these damages. Poor countries think they got short end of the stick & they deserve money from rich countries.

Tech (platforms) change the way organizations operate

tech helps business run smoothly; outsourcing can be good & bad, it can be cheaper to outsource online, ex: Task Rabbit, can go to intermediary that will find a worker that you need Downside of technology: Disney bringing people from other parts of the world and Disney employees were getting replaced as people fly back and do jobs from other countries. Jobs in the future can be exported around the world.

Business ethics

the application of general ethical ideas to business behavior - it is the application of existing rules to specific settings. focuses on what constitutes right and wrong behavior in the business world.

Theory of amorality

the belief that business should be conducted without reference to the full range or ethical standards, restraints and ideals in society. (Wrong way, in a business it's ok to play by a lower ethical standard than you do in your personal lives) It's ok to play the game to win and capture financial rewards as much as you can) Leads to The Conventionist Ethic Business is a game, where special, lower ethics are permissible. Consider the teenager doing jello shots...

Triple-bottom-Line

the idea that firms should include non-financial measures alongside financial measures of success. 3P's: People, Planet, Profit (businesses can assess what they're doing)

Brandon Richter, eWaste in China

the person who engaged in this conduct, was convicted of the crime of fraud. He lied to people about their computers and tvs being responsibly recycled, when he knew that was not true. (He wasn't ethical about his recycling, he was sending it to China, Richter got in trouble for lie to the local communities about ethically recycling; he wasn't in trouble bc of a law of improperly recycled goods, he got in trouble bc he lied about ethical recycling) This is a problem of NOT having rules that protect the environment. If he told the truth about sending stuff to China, he wouldn't had been charged with crime/fraud bc there is no U.S law that says you can't export those ewaste