MGT 200 midterm
What is business ethics?
""The principles, norms, and standards of conduct governing an individual or organization." An unethical act violates these principles. We have developed these principles together as a society over time. These principles are often represented in U.S. law and organizational codes of conduct. Not only do they need to exist, they need to be enforced. Principles governing organizations"
8 steps of ethical choice
"1. Gather the facts 2. Define the ethical issues 3. Identify the affected parties 4. Identify the consequences 5. Identify the obligations 6. Consider your character and integrity 7. Think creatively about potential actions 8. Check your gut"
Ethics in an online world
"A vast array of data and information is stored online via computers, networking, hardware, and software. It has revolutionized the job landscape"
Ethics in an online world
"A vast array of data and information is stored online via computers, networking, hardware, and software. It has revolutionized the job landscape"
Influence of Opoid Crisis
"According to the 2016 National Survey on Drug Use and Health, there were 11.8 million past year opioid misusers aged 12 or older in the United States, the vast majority of whom misused prescription pain relievers. Specifically, 11.5 million people aged 12 or older in 2016 misused prescription pain relievers in the past year compared with 948,000 people who used heroin. The majority of prescription pain reliever misusers had misused only prescription pain relievers in the past year but had not used heroin (10.9 million). Approximately 641,000 people had misused prescription pain relievers and also used heroin in the past year."
plagarism
"Act of stealing someone's ideas or words and passing them off as one's own"
Trap 1- Obiedence to Authority
"After WW2, Stanley Milgrim (Shocks) 65% of people who participated shocked the highest level ('severe shock')—when they thought the man in the other room was unconscious. One person refused to shock (holocaust survivor)"
Trap 17- Personality: Machiavellianism
"Based on The Prince- every behavior should be directed towards your own self benefit- including behavior that is deceitful, cunning, manipulative, low empathy. Do whatever it takes to succeed. High priority to power money and fame. "" "Never tell anyone the real reason you did something unless it is useful to do so "honesty is not the best policy"""
Trap 17- Personality: Machiavellian ism
"Based on The Prince- every behavior should be directed towards your own self benefit- including behavior that is decietful, cunning, manipulative, low empathy. Do whatever it takes to succeed. High prioirty to power money and fame. "" "Never tell anyone the real reason you did something unless it is useful to do so" ""honesty is not the best policy"""
Consumer profiling
"Companies openly collect personal information about users when they register at websites, complete surveys, or sign up for social media. • Many companies use tracking software (e.g., cookies) to allow their websites to analyze browsing habits. • Cookies are text files that can be downloaded to the hard drives of users who visit a website so that the website is able to identify visitors on subsequent visits. • This allows them to tailor the ads and promotions presented to you. This data can be sold to third parties even without consumers' providing explicit consent. • Ideally, advertisers can use this information to attract customers and make their shopping experience effective and efficient. • Many companies now ask users whether they can obtain personal information using cookies."
Industrial Spies
"Competitive intelligence: Legally obtained data gathered using sources available to the public ◦ Industrial espionage: Using illegal means to obtain information not available to the public"
Malicious Insiders
"Employees, consultants, or contractors from within the company ◦ Usually have some form of collusion ◦ Collusion: Secret or illegal cooperation between an employee and an outsider ◦ Negligent insiders: Poorly trained and inadequately managed employees who cause damage accidently"
Resistant to Change
"Even when employees are shown data that suggest they need to change (e.g., failing an FDA inspection), they latch onto whatever data they can find that suggests they are okay and don't need to change (e.g., it's ok; we're a research lab, not a health clinic!) ◦ Change threatens the status quo, making it an inherently political activity. ◦ Politics suggests the impetus for change is more likely to come from: ◦ Outside change agents (stockholders, the government, regulators, the media) ◦ Employees new to the organization who have less invested in the status quo. ◦ Managers slightly removed from the main power structure."
Why isnt it obvious what is ethical and what is unethical
"Everyone has different values, perspectives, backgrounds, opinions, goals, beliefs, and ethics"
Exploit
"Exploit: Attack on an information system that takes advantage of a particular system vulnerability Often due to poor system design."
Modern Ethics
"Focus on Integrity of moral actor rather than act . Considers character, motivations, intentions ◦Character defined by one's community- ex police force"
business Applications
"For example, you can say to yourself "I am going to do something unethical for more money." Will it really make me happy? For example, you can say to yourself "I am going to behave unethically because there is too much time pressure - I need to ask my supervisor for more time to complete this task""
Cybercriminals
"Hack into computers to steal and engage in computer fraud ◦ Data breach: Unintended release of sensitive data or the access of sensitive data by unauthorized individuals"
Trojan Horse
"Harmful program in which malicious code is hidden inside a seemingly harmless program • Logic bomb: Executes when triggered by a specific event (ex: keystroke)"
Trojan Horse
"Harmful program in which malicious code is hidden inside a seemingly harmless program • Logic bomb: Executes when triggered by a specific event (ex: keystroke)"
Cyberterrorist
"Launch computer-based attacks to intimidate or coerce an organization in order to advance certain political or social objectives ◦ Use techniques that destroy or disrupt services ◦ Cyberattacks on Estonia in 2007; shut down banking, phone networks, internet, government services ◦ Consider themselves to be at war ◦ Have a very high acceptance of risk ◦ Seek maximum impact"
Forms of Expression
"Limiting access to certain Web sites ◦Allowing access to only some content or modified content at certain Web sites ◦Rejecting the use of certain keywords in search engine searches ◦Tracking the Internet activities of individuals ◦Jailing individuals for certain Internet use"
Educating Employees
"Motivate employees to understand and follow the security policies by communicating some of the potential negative consequences. Users must help protect an organization's information systems and data by: ◦ Guarding their passwords, Prohibiting others from using their passwords, Applying strict access controls, Reporting all unusual activity to the organization's IT security group, Ensuring that portable computing and data storage devices are protected, Encryption, Scrambling messages or data such that only authorized parties can read it, Allows orgs to share sensitive sales data and personal employee information Be careful about 'Bring your own device (BYOD)': A business policy that permits employees to use their own mobile devices to access company computing resources and applications. ◦Raises potential security issues as it is highly likely that such devices are also used for non-work activities that exposes them to malware that can be spread throughout the company."
Equifax Data Breach
"Not just for-profit company breaches; also political breaches. • One of the most serious leaks of sensitive information in U.S. history occurred in late 2010, when hundreds of thousands of leaked State Department documents were posted on the WikiLeaks' website (e.g., U.S. tactics in Afghanistan). • The source of the leaks was a low-level IT user with access to confidential documents."
Inept Sinner Hypothesis
"People readily use information about another's morality when judging his/her competence (despite holding folk intuitions that these domains are independent). • In six studies, one research paper found that people judge targets who commit ethical transgressions as less intelligent than others who do not behave unethically. • The reason is that people who commit unethical behavior are seen as less socially intelligent (includes skills such as empathy, impression management, and adherence to established social norms), which is perceived as part of one's overall intelligence. • However, there are contingencies (e.g., when the unethical behavior is "not rocket science" or if the person is otherwise viewed as highly socially intelligence (e.g., Bill Clinton & Monica Lewinsky scandal)."
The Importance of Awareness
"People simply do not know that they are exhibiting these biases. ◦ They can distort our perception of what is right and wrong. ◦ Once you are aware of the bias and its effects on behavior, it is nearly impossible not to see it in everyday life. ◦ Once we see them, they lose much of their power to deceive us. ◦ Objectify what is happening to us; create distance between person and situation. ◦ "Voyagers who know the location of quicksand navigate around it.""
Virus
"Piece of programming code, disguised as something else, that causes a computer to behave in an unexpected and undesirable manner (e.g., delete documents, reformat hard drive, keystroke tracking)"
Virus
"Piece of programming code, disguised as something else, that causes a computer to behave in an unexpected and undesirable manner (e.g., delete documents, reformat hard drive, keystroke tracking)"
Changing to an Ethical Culture
"Planned Change ◦Change involves making something different. ◦When change is an intentional, goal oriented activity, it is planned change. ◦Change agents are those responsible for managing change activities. Ex: New CEO"
Changing to an Ethical Culture
"Planned Change ◦Change involves making something different. ◦When change is an intentional, goal oriented activity, it is planned change. ◦Change agents are those responsible for managing change activities. Ex: New CEO"
Privacy v freedom of expression
"Privacy is the right to be left alone. • Although a number of independent laws and acts have been implemented over time (e.g., U.S.A. Patriot Act of 2001), there is no single, overarching national data privacy policy in the U.S., nor is there an established advisory agency that recommends acceptable privacy practices to businesses. • As a result, existing legislation is sometimes inconsistent or even conflicting Variety of different laws and acts that address user privacy: Fair Credit Reporting Act (1970), Right to Financial Privacy Act (1978), Health Insurance Portability and Accountability Act (1996) • The vast majority of existing laws address invasion of privacy bythe government. • Almost no legislation protects people from data privacy abuses by corporations. • Many people object to the data collection policies of governments and businesses on the grounds that they strip individuals of the power to control their own personal information. The existing hodgepodge of privacy laws fails to provide adequate protection. ◦ Rather it causes confusion that promotes distrust and skepticism Overlapping CIA, FBI, NSA, DEA"
Ransomeware
"Ransomware is malware that stops you from using your computer or accessing your data until you meet certain demands, such as paying a ransom or sending photos to the attacker. • In early February 2016, Hollywood Presbyterian Medical Center was forced to shut down its computer network after hackers encrypted some of its data and demanded a ransom be paid before the data would be unlocked. • Initially, the hospital refused to pay the ransom, and hospital employees were forced to resort to paper, pencil, phones, and fax machines to carry out many of their tasks, including accessing patient data. • The hospital sought help from the FBI, the Los Angeles Police Department, and cybersecurity consultants, but it was unable to access the data. After a week, the hospital paid the ransom of $12,000. • By February 15, access to the data was fully restored, and according to a hospital spokesperson, there was no evidence that any patient or employee data had been accessed."
Cybersquatters
"Register domain names for famous trademarks or company names to which they have no connection ◦Hope that the trademark's owner will eventually buy the domain name for a large sum of money Typosquatting (e.g., "amazon.com")"
Time 7- Time Pressure
"Researchers told seminary students that they were conducting a study on religious education and were requesting students to give an impromptu lecture on the Good Samaritan in a class. No hurry situaiton- 63% offered to help, hurry situation- 10% helped"
Trap 9- Role Assignment
"Role perception- ones perception of how to act in a given situation. Role expectation- how others believe you should act in a situation. Role conflict- situation which an individual faces divergent role expectations. Ex: Dr. Phillips in Stamford- had average students as guard or prisoner. guards quickly came to see the prisoners as a negative out group and treated them very poorly. Prisnors acted inferior People develop stereotyped notions of different roles (e.g., prisoner and guard) from the media and education and family, and we are able to rapidly assume these roles and behave in a way consistent with what the roles prescribe. the power of the situation and authority. made students hit another student based on role."
Drug Testing:Controlled Substances Act of 1970
"Schedule 1 Examples- Marijuana (THC), Heroin, LSD Schedule 2 Examples- Cocaine and Amphetamines Schedule 5 Example- Cough syrup w/codeine 2016, Governor Andrew Cuomo legalized medical marijuana"
Modern Research: Role of Emotions-
"Suffering- Not everyone who has committed unethical behavior and wants to warn others against committing it will feel entitled to do so. When advisors had suffered (vs. not suffered) for their misdeeds, observers thought advisors had more of a right to advise and perceived them as less hypocritical and self-righteous.Advisees responded with less anger and derogation. Advisors themselves felt more comfortableoffering strong advice. Advisors also strategically highlighted how they had suffered for their wrongdoing when they were motivated to establish their right to offer advice. Additional results illustrated concerns about the legitimacy of advice-giving. The findings shed light on what prevents good advice from being disseminated, and how to help people learn from others' mistakes."
Hackers
"Test the limitations of information systems out of intellectual curiosity ◦ Lamers or script kiddies: Terms used to refer to technically inept hackers"
Intellectual Property example
"The infamous Apple Inc. v. Samsung Electronics Co. (2011) lawsuit Although these lawsuits involve Apple and Samsung, the larger battle actually pits Apple against Google, which developed the Android operating system, which runs on many of Samsung's smartphones. Apple alleges Android is illegally based on its iOS operating platform. • In 2010, Steve Jobs told his biographer: "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I'm going to destroy Android because it is a stolen product.""
Virtue Ethics
"The proposed Hippocratic Oath ◦ Managers as agents of society - serve public interest, enhance long-term value for society ◦ Enterprise well-being over self-interest ◦ Obedience to letter/spirit of law and other contracts ◦ Behavior of honesty - self and others ◦ Accuracy and transparency in reporting outcomes & processes ◦ Treat others with respect/fairness re: others, the powerless ◦ Knowledge/fact-based decision making ◦ Accept responsibility as a professional manager"
moral dilemma
"Trolley Problem- Up close and personal scenarios trigger parts of the brain associated with emotion (the drowning child, pushing the fat man) and we tend to make more deontological choices in these situations. ◦Moral judgments at a distance (pulling a switch, mailing money to a child in a different country) trigger areas of the brain associated with cognition and calculation which lead us to more utilitarian choices. fMRI brain scans of people making moral choices"
Software privacy
"Unauthorized copying or distribution of copyrighted software. ◦ Illegal torrenting. and In organizations it is often traceable to IT professionals. ◦ They may allow it to happen or actively engage in it. ◦ The software piracy rates in Albania, Kazakhstan, Libya, Panama, and Zimbabwe exceed 70%. ◦ A common violation occurs when employees copy software from their work computers for use at home. If no one has paid for an additional license to use on a home computer, it is still considered piracy.The increasing popularity of the Android smartphone operating system has created a serious software piracy problem. ◦ Some IT users have figured out how to download applications from the Google Play store without paying for them, and then use the software or sell it to others online. ◦ The rate of software piracy for apps from Google's Play store is very high (>90%) for popular games (e.g., Monument Valley). ◦ Piracy rates from the Apple App store are closer to 60%. ◦ Piracy can sometimes discourage future app development"
Software privacy
"Unauthorized copying or distribution of copyrighted software. ◦ Illegal torrenting. and In organizations it is often traceable to IT professionals. ◦ They may allow it to happen or actively engage in it. ◦ The software piracy rates in Albania, Kazakhstan, Libya, Panama, and Zimbabwe exceed 70%. ◦ A common violation occurs when employees copy software from their work computers for use at home. If no one has paid for an additional license to use on a home computer, it is still considered piracy.The increasing popularity of the Android smartphone operating system has created a serious software piracy problem. ◦ Some IT users have figured out how to download applications from the Google Play store without paying for them, and then use the software or sell it to others online. ◦ The rate of software piracy for apps from Google's Play store is very high (>90%) for popular games (e.g., Monument Valley). ◦ Piracy rates from the Apple App store are closer to 60%. ◦ Piracy can sometimes discourage future app development"
Trap 3- Small Steps
"Unethical behavior that happens little by little- Enron's board of directors in 2002 described its "slow journey into accounting hell" Becomes very dangerous when combined with the obedience to authority trap • It seems less innocuous if we obey an order from our boss to do something slightly unethical; if our boss increases, little by little, the magnitude of the transgressions we can become desensitized to our own unethical behavior"
Data Breaches
"Unintended release of sensitive data. • The cost to an organization that suffers a data breach can be quite high - nearly $200 for each record lost. ◦ Nearly half the cost is typically a result of lost business opportunities associated with the customers whose patronage has been lost due to the incident. ◦ Other costs include public relations-related costs to manage the firm's reputation, and increased customer-support costs for hotlines and credit monitoring for the victims. "
cognitive errors
"We fail to act because we see the situation only in cognitive terms and it does not push our emotional buttons ◦ 22,000 children dying every day vs. the girl who fell down a well in Texas and was sent thousands of dollars ◦ "One death is a tragedy, a million deaths is a statistic" -Joseph Stalin"
cognitive errors
"We fail to act because we see the situation only in cognitive terms and it does not push our emotional buttons ◦ 22,000 children dying every day vs. the girl who fell down a well in Texas and was sent thousands of dollars ◦ "One death is a tragedy, a million deaths is a statistic" -Joseph Stalin"
business analysis
"Would a white collar criminal (perhaps a greedy CEO) feel ok about mugging an old lady? Probably not ok, but this same individual might be willing to steal thousands of dollars from stockholders. • Would an accountant be willing to shoplift at the supermarket? Probably not, but this same individual might not feel as bad about fudging the numbers to hide a major corporate fraud. • Ethical behavior depends on the context. The same person who favors one outcome in one situation can completely reverse their decision in a different situation even when the technical costs and benefits are identical. • Evidence from brain scans show different areas of activation based on the different ethical scenarios, associated with either deontological choices or utilitarian choices."
Cyberattacks
"are offensive attempts by individual hackers, nations, or groups to invade, damage, destroy, or manipulate a computer network or system."
Types of cyber attacks
"exploIt, zero day attack, virus, worm, torjan horse- Melissa virus (1999, New Jersey), spam, phishing "
Cyberloafing
"is defined as using the Internet for purposes unrelated to work such as sending personal emails or shopping online. ◦ Can cost organizations up to $85 billion each year. ◦ Almost 80% of major companies choose to record and review employee communications and activities on the job, including phone calls, text messages, and browser history. ◦ The Fourth Amendment to the Constitution protects citizens from unreasonable government searches, and is often invoked to protect the privacy of government employees. ◦ However, the Fourth Amendment cannot be used to limit how a private employer treats its employees. ◦ Courts typically side with the employers."
Cybersecurity
"is the protection of a computer network or system using various shields such as firewalls and encryption mechanisms. • Given the amount of confidential data stored on the web, the worldwide financial services industry spent $27.4 billion on IT security and fraud prevention in 2015. • 58% of global companies have an overall security strategy • 54% have a chief information security office (CISO) in charge of cybersecurity"
Modern Research: Broken windows Theory
"• A theory known as the 'broken windows theory' suggests that signs of disorderly and petty criminal behavior trigger more disorderly and petty criminal behavior, thus causing the behavior to spread. • This may cause neighborhoods to decay and the quality of life of its inhabitants to deteriorate. • For a city government, this may be a vital policy issue and trigger a new way of policing. 33% to 69%- new potential policing policy. fixing little things will send a signal to the community that this is a place that adheres to positive social norms and standards of cleanliness. Will prevent the big things. Crime went 60% in NYC- stop and frisk (stop even the petty crime before taking shape; stop anyone who looked 'threatening'...)"
Modern Research: Broken windows Theory
"• A theory known as the 'broken windows theory' suggests that signs of disorderly and petty criminal behavior trigger more disorderly and petty criminal behavior, thus causing the behavior to spread. • This may cause neighborhoods to decay and the quality of life of its inhabitants to deteriorate. • For a city government, this may be a vital policy issue and trigger a new way of policing. 33% to 69%- new potential policing policy. fixing little things will send a signal to the community that this is a place that adheres to positive social norms and standards of cleanliness. Will prevent the big things. Crime went 60% in NYC- stop and frisk (stop even the petty crime before taking shape; stop anyone who looked 'threatening'...)"
Spam
"• Abuse of email systems to send unsolicited email to large numbers of people • CAPTCHA (Completely Automated Public Turing Test to Tell Computers and Humans Apart) • Generates and grades tests that humans can pass but computer programs cannot"
Moral Mind
"•"Good people do bad things" •Even if we have good ethical values, every one of us could do bad things."
Concerns for ethical use of online information:
"◦E-mail and Internet access monitoring at work ◦Software piracy ◦Downloading in violation of copyright laws ◦Unsolicited e-mail ◦Identify theft by hackers ◦Plagiarism by students ◦Cookies and spyware to track a site's visitors' hard drives"
"Ultimately people make ethical or unethical decisions."
"◦Psychological perspective ◦Unconscious biases ◦Personalities ◦Human processes ◦Physiological processes"
Kotter's 8 steps for implementing change
1.establish sense of urgency 2. Form coalition 3. create a new vision 4. communicate vision 5. empower others to act on vision 6. Plan, reward and create short term "wins" for change 7. consolidate improvements, re asses change 8. reinforce changes by demonstrating relationship between new behaviors and organizational
Trap 5- Money
100% convinced money makes us more satisifed and goal is to become richer so we will become unethical. there is a "satiation point", after which more money does not necessarily lead to more happiness. $105,000 is the point studies show
Modern Research: Perceptions of Unethical Behavior and Intelligence
2011- congressman anthony weiner resigned in house of rep after photos leaked of him texting women. 73% felt actions were unethical but not illegal- 11% thought illegal. 39% questioned judgement and 43 % said he can carry out duties as a congressman.
Trap 20- Personality: Moral Character
3 parts- Moral Attentiveness ( extent to which one consistently perceives and considers morality and moral elements in their experiences), Moral Identity( part of mones core self cocnerpt organized around moral traits like compassion) and Moral Purpose ( capacity to generate responsibility to take moral action with adversity.)
"Help individuals understand what constitutes plagiarism and why they need to cite sources ◦ Show individuals how to document Web pages ◦ Incorporate detection software and services"
Actions for plagarism
Trap 6- Conformity
Asch- 75% conformed to the incorrect answer at least once. If there was even one dissenter - one person who went against the group - thenparticipants only conformed 9% of the time. Had to determine which line is equal to a different line in length. 6 people- 5 are confederates- 1 is subject. 37% went along w group- they must be right. Also- Jessica Alba's The Honest Company claimed that all its products wereorganic and natural- not the case.
Exploit
Attack on an information system that takes advantage of a particular system vulnerability Often due to poor system design.
Trap 4- Impossible goals
Become blinded by our goals to succeed, to climb the ladder, and achieve status. Ex; wells fargo. Also tend to believe that achieving goals will make us happy. Also Amazon- little time 9 seconds to grab item to process for packing.
Internet Censorship
Control of the publishing or accessing of information on the Internet 17% mostly restricted, 33% somewhat restricted and 47% heavily
To The extreme: The Ford Pinto
Cost to society of dying in a Pinto (in 1971 dollars) equals $200,725. The societal cost of an $11 safety improvement would have been: cost to society for fixing = $137 million cost to society for not fixing = $50 million
With the creation of new jobs, new ways to store and transmit data, and new enterprises, a new branch of ethics arose, simultaneously known as
Cyber ethics Computer ethics Information ethics Technology ethics Online ethics
"Privacy & Freedom of Expression: Current Issues"
Data breaches, consumer profiling, workplace monitor, stalking apps
Workplace monitoring
Developing policies on the use of IT in the workplace in order toprotect against worker de-productivity, exposure to damaging software, or increased legal liabilities.
CaNexus example
EVE Plagarism Detection
Common Theme
Empathy- understand and share feelings of others
Deontology
Ethical behavior = following the rules. ◦ Should not run a stop sign even if no one is around and it benefits you and hurts no one else. ◦ "The Golden Rule" ◦ A moral person should act ethically regardless of the consequences. Ethicality is based on rules and duties. Immanuel Kant
traditional views
Ethical dillemma- follow steps-- rational choice. These are restricted in time and our psychology gets in the way
Trap 15- Dehumanizing
Framing the Victims of ones action as undeserving of basic human consideration. Lose empathy towards them, see them as objects, harm them without guilt. Ex: Liars Poker- Michael Lewis. referring to customers as "victims", "fools", "stupid", or "ducks...that were trained to fly repeatedly over the same field of hunters until shot dead"
Billy McFarland
Fyre Media Charged with fraud; incarcerated in NY 6 years in prison (2018)
Gloablization
Greater globalization has created a much more complex work environment that spans diverse cultures and societies, making it more difficult to apply principles and codes of ethics consistently. • Numerous U.S. companies have moved operations to developing countries, where employees or contractors work in conditions that would not be acceptable in the most developed parts of the world
Hacktivist
Hack to achieve a political or social goal
Mapp v. Ohio (1961)
How does this contrast act utilitarianism vs. rule utilitarianism? ◦ In one act, it might be 'useful', but it will harm people in the long run ◦ Create a law that ultimately has the most benefit
Utilitarianism
I regard utility as the ultimate appeal on all ethical questions; but it must be utility in the largest sense, grounded on the permanent interests of man as a progressive being."- John Stuart Mill Largest picture of good. "Utility in the largest sense". Think in terms of calculation, probabilities, and outcomes- greatest good for greatest number Actions are ethical if they benefit the majority.
Fruit of the Poisonous Tree
If the source (the "tree") of the evidence or evidence itself is tainted, then anything gained (the "fruit") from it is tainted as well.
United States v. New York Central & Hudson River Railroad Co.)
In a 1909 ruling , the U.S. Supreme Court established that an employer can in certain cases be held responsible for the acts of its employees even if the employees act in a manner contrary to corporate policy and their employer's directions. • The principle it established is called respondeat superior, or "let the master answer" • Even if your employees behave unethically, you could be responsible.
Profit Loss: Settlements- Volkswagen
In mid-September 2015, the EPA issued a notice of violation to Volkswagen for failure to comply with Clean Air Act regulations. • Volkswagen admitted that 11 million of its vehicles were equipped with software that was used to cheat on emissions tests. • This has resulted in a $14.7 billion settlement to compensate car owners and address environmental harm.
Morals-
Individual beliefs of what is wrong and what is right
Order of beliefs
Interior- core personal beliefs- moral beliefs and group code of ethics
Warren Buffet Quote
It takes 20 years to build a reputation and 5 minutes to lose it
Trap 12- Minimizing
Makes unethical transgression seem smaller, Martha Stewart in 2002- sold her holdings in ImClone stock right before the stock plummeted after allegedly receiving incriminating information about the company from her assistant. She said it was a small personal matter. Ex: at most, sort of, only a little, I might have
Trap 16- Personality: Psychopathy
Martin Skreli- Turing pharmaceutricals in 2015. raised price of Daraprim from $13.50 to $750. jail for 15 years. Raised prices 5000%. Helps treat taxoplasmosic. Also Nitrofurantion- helped treat bladder infections. "I think it is a moral requirement to make money when youcan . . . to sell the product for the highest price." convicted on two counts of securities fraud and one count of conspiring to commit securities fraud. In 2018, Shkreli was sentenced to seven years in federal prison and up to $7.4 million in fine
Robinhood
Part of utilitarianism- Steal from the rich and give to the poor
Trap 8- Confirmation Bias
People search for informationthat confirms their existing beliefs or preferred answer. People can find information that supports their unethicaldecisions
Chanign to Ethical
Planned Change ◦Change involves making something different. ◦When change is an intentional, goaloriented activity, it is planned change. ◦Change agents are those responsible for managing change activities. Ex: New CEO
Trap 19- Personality- Social Dominance
Preference for inequality among social groups- your groups dominate others- to get ahead in life you need to step on other groups- poor empathy, low altruism
Dark Triad
Psychopathy, machiavellianism, and narcissism
Blackboard ex:
Safeassign
"Cellphone spy software can be loaded onto someone's cellphone or smartphone called a stalking app that can track the whereabouts of someone else at all times (and location, phone calls, every text message), without ever having to follow the person. • Could include built-in microphones that record sound even if the phone is off. • Mobile Spy, ePhoneTracker, FlexiSPY, and Mobile Nanny. There is no law that prohibits a business from making an app whose primary purpose is to help one person track another, and anyone can purchase this type of software over the Internet. • However, it is illegal to install the software on a phone without the permission of the phone owner. • It is also illegal to listen to someone's phone calls without the permission of the phone owner. • Though none of this will deter the determined stalker."
Stalking Apps
""Obedience is an impulse overriding training in ethics, sympathy, and moral conduct.""
Stanley Milgrim
.com, .edu, .gov
Tactics to circumvent cybersquatting - Register all possible domain names
"• The 2013 data breach at Target affected 40 million debit and credit card accounts and the personal information of up to 70 million customers. • Target reported that it incurred more than $248 million in costs. • Sales fell in the fourth quarter of the company's fiscal year 2013 by $800 million."
Target Breach Data
Trap 13- Minimizing
The use of benign or benevolent words to replace words that have negative connotations. It can camouflage unethical transgressions. Ex: Collateral damage- death/injury/bankruptcy, units- people, team players- people who collude, enhanced interrogation- torture, cheater v. cheating
Elizabeth Holmes
Theranos- Charged with fraud; case is proceeding in San Jose, CA (2018)
Collateral Damage
Unintended physical or psychological damage to any non-involved person(s), property, or environment(s) caused by a particular event or person. •Often used in military terminology (e.g., harming civilians). • In the world of business ethics this would be defined as innocent employees being harmed by the unethical behavior of another employee. • Bernie Madoff's family • Layoffs at Enron, Fannie Mae, Freddie Mac, Lehman Brothers • Theranos studies with terminal cancer patients
Two broad theories:
Utilitarianism and Deontology
Why do we have business ethics?
We have ethics because otherwise we would probably all descend into chaos We have ethics because otherwise we would probably all descend into chaos. EX SEC and FDA- Tacobell
Psychological Stress- wells fargo
Wells Fargo Scandal from 2016-2018 Employees were illegally opening 7-8 savings and checking accounts on behalf of Wells Fargo clients without their consent or knowledge. Clients received unanticipated fees and credit reports. After the scandal was published worldwide, CEO John Stumpf resigned. 185 Million in fines
Trap 2- Sidestepping responsibility
When our sense of responsibility is weakened, we are more likely to behave unethically: Indirect responsibility ( only doing paperwork), faceless victims( easier to behave unethically when don't see who it affects- milgrim-in same room as victims only 40% high shock) and lost in group. ex Diffusion of responsibility: The murder of Kitty Genovese adn Jim Sullivan, attorney representing the Catholic Church
Profit Loss: Recalls- Fen Phen and SuperHerbs
When the weight-loss drug Fen-Phen was recalled, it cost its maker in Wyeth-Ayerst Laboratories almost $14 billion in awards to victims, many of whom developed serious health problems as a result of taking the drug
Largest Data Breach
Yahoo (2013/2014)- 1 billion and 500 thousnad, friend finder 2016 412 mill- linkedin 2012 165 million and target 2013 110 million
Trap 11- Advantageous Comparisons
`Emphasize the contrast between one behavior and an even more reprehensible behavior to make the former seem innocuous. Ex: misrepresentation lies on expense reports can be viewed as more acceptable when compared with larger violations.
Dr. Death
christopher duntsch- Former neurosurgeon who was sentenced to life in prison in February 2017 for gross medical malpractice in Dallas, TX. X ray tech was told by him when she said cage is in wrogn spot that hes the boss etc.
In map v ohio- Prohibits the courts from admitting or considering evidence that was taken in violation of the constitutional rights of the accused ◦ "The criminal goes free, if he must, but it is the law that sets him free."
exclusionary rule
Stewart Parnell
former CEO of Peanut Corporation of America, was sentenced to 28 years in prison for knowingly shipping contaminated food products, resulting in a salmonella outbreak that killed nine people and sickened more than 700
U.S. Bureau of Labor Statistics expects tech jobs
grow by 32.5%. Compliance officer jobs are expected to grow by 26%. 366,000 worked in these jobs and average salay $139,220
iParadigms
iThenticate, Turnitin
Patent
is a grant of a property right to an inventor. It allows its owner to exclude the public from making, using, or selling a protected invention.
intellectual property
is a term used to describe works of the mind (e.g., art, books, films, formulas, inventions, and music) that are distinct and owned or created by a single person or group. It is protected through copyrights and patents.
Copywright/patent infringement
is a violation of the rights secured by the owner
copywright
is the exclusive right to distribute, display, perform, or reproduce an original work in copies such as books, music, software, and films
Trap 10- Justifications
re framing unethical act as being in the service of greater good. Driven by desire to be rational and consistent- try to convince yourself that what you are doing is okay- cognitive dissonance.
Trap 14- Attribution of Blame
responsibility is assigned to victims themselves, deserve whatever they get. Bring it on themselves.
Takata Corporation
was a Japanese automotive parts company. • In 2013, several fatalities occurred as a result of defective airbags. • Mark Lillie, a former Takata Corporation engineer, warned the company of the potential deadly consequences of using the propellant ammonium nitrate to inflate its airbags. • The use of ammonium nitrate enabled Takata to earn a greater profit than other designs. However, it also resulted in devices that could deploy with too much force, causing them to rupture and shoot metal fragments at motorists. • Lillie was unable to convince management at Takata to choose an alternative design. • Several deaths and injuries have been attributed to the flawed devices and over 100 million cars with Takata airbags have been recalled worldwide (the largest recall in U.S. auto history). • In January 2017 the U.S. charged three Takata executives and imposed a $1 billion fine. • Takata Corporation filed for bankruptcy in June 2017.
Bernie Maddoff
was sentenced to 150 years in prison after stealing $65 billion from his clients. He is required to pay back a fine of $17 billion.
Facebook reputation
• In 2016, many prominent ad buyers and marketers cut ties with Facebook after finding out that the world's largest online social network service greatly exaggerated the average viewing time of video ads on its platform. • Viewing time is the key metric used by advertisers in deciding how much to spend on ads through Facebook (as opposed to YouTube, Twitter, Snapchat). • It turns out that Facebook was not including views of three seconds or less in calculating its average viewing time, resulting in overestimating viewing time by about 60% to 80%.
damaged reputation
• Negative information is sticky. • Once we hear something bad about an individual employee or a company (negative publicity) it is difficult for us to forget that information, regardless of how hard the company tries to redeem itself. • The public reputation of a company strongly influences the value of its stock, the degree of oversight it receives from the government, and the amount of support and cooperation from its business partners. • Cynicism towards banking industry.
Act Utalitarianism
◦ Decisions are made on a case-by-case basis ◦ Determine whether the act benefits more people than it harms
Deontology Science of Duty
◦ Do not lie Do not cheat Do not steal Acted out of duty
Rule Utilitarianism
◦ Once a rule is optimized to maximize utility and is put in place, it must be followed even in specific instances where it produces bad outcomes ◦ How the government or organizations should act overall ◦ Mandatory retirement? Must retire at 70? What about great employees?