Rutgers, the State University of New Jersey s2

RUTGERS, THE STATE UNIVERSITY OF NEW JERSEY

ETHICS IN BUSINESS (22:373:619:60) Spring 2003, New Brunswick, Wednesday 6:00-9:00 PM

Professor D. E. Warren International Business/Business Environment Newark Office: 329 Management Education Center NB Office: 217-G Janice Levin Building Email: [email protected] Newark voice: (973) 353-5734

COURSE OVERVIEW The course provides a multidisciplinary, interactive study of business ethics and social responsibility in business organizations. This course raises awareness of difficult ethical conflicts and dilemmas in business and explores the application of multiple frameworks and decision- making tools. Disciplinary perspectives include professional and applied ethics, law, management, and international business. At the end of the course, students should possess a richer understanding of their own position on issues regarding ethical dilemmas in business and a broader sense of the available approaches to resolving such problems.

COURSE MATERIALS

Readings and assignments will be provided in class or: Posted to the RBS blackboard website, www.fom.rutgers.edu. Your username and password is your first initial, last initial and the last four digits of your social security number (e.g., Frank Edwards 432-71-8329 would be fe8329) Purchased on www.Study.Net. You will need to create a username and password the first time you visit the site. The course is listed as: Rutgers University – Ethics in Business. You pay for the semester readings online with a credit card and then download the readings as you need them. For an extra fee, you may request a bound copy of the readings and they will be sent to your home. The readings for this course will be available for purchase in early January.

GRADING Your final grade will reflect your ability to acknowledge the complexity of ethical dilemmas, synthesize relevant information and draw informed conclusions. Your performance in this class will depend upon your critical reasoning skills, not your beliefs or values. I expect you to be able to support your arguments through logical reasoning, empirical data, or an integration of both. The breakdown of grades is as follows:

30% PARTICIPATION Participation is expected and required in this class. Good participation involves good listening but listening alone does not contribute to your participation grade. Participation involves intelligently contributing to the class discussions by speaking

1 about the assigned readings. If you do not speak all semester, you will receive a “0” for participation. Missing class will negatively affect your participation grade.

35% STAKEHOLDER PROJECT ( Midterm Project ) The stakeholder project will involve an application of the Stakeholder Approach to an actual corporation. For this project, you need to identify 3 stakeholders related to a specific corporation, each from a different stakeholder group (e.g., an employee, a stockholder and a customer). You will develop questions to ask the stakeholders about their interests and concerns associated with the corporation. You will compare and integrate the interviewees’ answers and then analyze their responses.

CHOOSING A CORPORATION. You may use your present employer if you are employed by a corporation. The size or prestige of the corporation does not matter for this project. If you need help finding a corporation to study, please email me.

CHOOSING STAKEHOLDERS. You may interview individuals from any of the following stakeholder groups: employees, stockholders, customers, suppliers, community members where the company operates, environmental groups associated with the company’s operation, or regulators associated with the company’s industry. If you would like to interview a stakeholder from a group not listed above, please ask me first. Make sure the stakeholders do not overlap (e.g., interviewee should not be an owner of stock and an employee). If you have difficulty finding interviewees that only fall into one category, then opt for interviewees who have the least amount of association with the other categories.

Hand in a list of interviewees with tentative interview dates and a draft of interview questions by the third week of the semester. You should create approximately 10 questions per interviewee. This will not be graded, but if you do not hand in the list of interviewees and interview questions, 5 points will be deducted from your project grade.

GRADING. This project will be judged on how well you capture the differences and similarities in the views of the various stakeholders and the way in which you integrate the various views. You will be rewarded based upon the thoughtfulness and rigor of your analysis. You may interview more than 3 individuals but it is not clear that doing so will improve your paper because it is your analysis that will be judged. At the end of the paper, you should make a recommendation to the corporation on how it should address your stakeholders’ interests. The paper should be between 8 and 10 pages of text, double-spaced, in 12-point font. The interview questions and stakeholder responses should be stapled to the back. You must follow Rutgers academic guidelines for citing other authors.

You will give a short presentation of your findings. A third of your project grade will depend upon this presentation.

35% SOCIAL REPORTING PROJECT ( Final Project)

The purpose of this project is to investigate the content of corporate social reporting. You will obtain social audits or reports for a major corporation and analyze the content.

2 Choosing a company. A list of companies will be presented in class. You do not have to choose a company from my list. If you choose a company that is not on my list, please let me the name of the corporation you will be using.

Social Reporting. Because social reports are unregulated, you may find they differ greatly in their names and contents. For instance, they may be referred to as a report on “the environment, health & safety,” “sustainability,” or “social responsibility.” Some firms include charitable giving and outreach in these reports and some do not. Please refer to the reading, “The Social Audit, Risk, and Environmental Protection,” for guidance on what social reports may or may not include.

Analyses As the class progresses, you will develop skills that will facilitate your analysis. You may use different approaches to analyzing the reports but the final report needs to address the following areas: I. Provide a summary of the content of the report(s) II. Do the firm’s espoused values (values statement, code of ethics, etc) match the social report? III. What was is missing from the report(s)? a. Given the company’s espoused values? b. Given society’s expectations? (as a member of society, you can use your own expectations as a proxy for society) IV. Would this report influence your investment in this company? V. If you were hired as a social reporting consultant for this firm, what recommendations would you make?

Grading. Your grade will be based upon the thoughtfulness and rigor of your analysis and how well you address the five components listed above. The paper should be between 8 and 10 pages of text, double-spaced, in 12-point font. The paper is due on the final day of the class. A third of your grade will depend upon a 5 minute, informal presentation on the last day of class.

CLASS PROCEDURES If you need to contact me outside of class, please send an email to [email protected]. This is the best way to reach me. The blackboard website will be used to distribute course-related information. Each student is responsible for checking blackboard (www.fom.rutgers.edu) regularly for notices regarding class cancellations, articles to be read before class, and other course-related materials and announcements. The subject matter in this class may be controversial and cause much debate. This is how we learn about the various sides to issues. If I debate with you in class, do not assume that I disagree with you. I will often play devil’s advocate in order to advance the discussion and increase your understanding and awareness of different perspectives. Your comments in class need to reflect respect for the differences within the academic community. There shall be no comments that are considered offensive to one's race, ethnicity, gender, religion or sexual preference.

3 Plagiarism will not be tolerated. Academic dishonesty will be reported to the university and is subject to disciplinary action. University policies on academic integrity are strictly followed in this class.

CLASS MEETINGS AND ASSIGNMENTS

Week 1 Introduction to Ethics in Business

Readings: 1. Friedman, M. 1996. The Social Responsibility of Business is to Increase its Profits. In Donadlson & Werhane (eds) Ethical Issues in Business: A Philosophical Approach. Prentice Hall, pp. 222-227. [in class] 2. Stone, C. 1975. What Exactly are the “Antis” Against? In Where the Law Ends: The Social Control of Corporate Behavior, pp. 74-79. [in class] 3. Stone, C. 1975. Why the Market Can’t Do it. In Where the Law Ends: The Social Control of Corporate Behavior, pp. 88-92. [in class]

Week 2 Theoretical Foundations & Concepts

Readings: 1. The Normative Foundations of Business [www.Study.net] 2. Kohlberg’s six levels of moral cognitive development [in class]

Study Questions: 1. What are the similarities and differences between the traditional approaches? 2. Can you arrive at the same conclusions after applying different theories to a problem? Why or why not? 3. Which theories apply to Friedman’s argument? Stone’s argument?

Week 3

DUE: List of Stakeholder Interviewees and Questions

Readings: 1. Sears Auto Center (HBS case 9-394-009) [www.Study.net] 2. Carter Racing [in class]

Study Questions: 1. How seriously should Brennan take the allegations against Sears? 2. Which of the alleged practices, if any, do you find problematic? Why? 3. What are the origins of Sears’s problem? Who is responsible? 4. How well has Sears handled the matter to date? 5. What should Brennan do now?

4 Week 4

Readings: 1. Conflict on a Trading Floor (HBS case 9-394-060) [www.Study.net] 2. Salomon and the Treasury Securities Auction (HBS case 9-385-001) [www.Study.net]

Trading Floor - Study Questions: 1. What’s your appraisal of Linda’s conduct? 2. How do you determine the fair price for a product? 3. What do you consider “misleading” in negotiations?

Salomon - Study Questions: 1. As Meriwether, what would be your principal concerns in June 1991? 2. What are the origins of Meriwether’s problem? 3. What options should Meriwether consider? What course of action would you advise him to take?

Week 5

Readings: 1. Braniff International: The Ethics of Bankruptcy (HBS case 9-385-001) [www.Study.net] 2. Enron, Andersen and Worldcom readings [blackboard]

Study Questions: 1. How do our standards and expectations for a corporation change when it declares bankruptcy? 2. What does the bankrupt corporation owe shareholders? employees? customers? suppliers? 3. What is the proper role of an auditor during a bankruptcy?

Week 6

Readings: 1. AES Honeycomb (HBS case 9-395-132) [www.Study.net]

Study Questions: 1. Why is Sant feeling pressure in the summer of 1992? As Sant, what would be your concerns? 2. What are the origins of Sant’s problems? What’s your diagnosis of the Cedar Bay and Shady Point episodes? 3. What changes, if any, would you advise Sant to endorse? Be sure to consider whether Sant should: a. Reorganize the company b. Hire the recommended staff specialists

5 c. Revamp and strengthen internal controls d. Drop the emphasis on values

Week 7

DUE: MIDTERM PROJECTS and OVERVIEW PRESENTATION

Week 8

Readings: 1. Becton Dickinson: Ethics and Business Practices (HBS case 9-399-055, 9-300-073, 9-399-045) [www.Study.net] 2. Managing for Organizational Integrity (HBR article 94207) [www.Study.net]

Becton Dickinson – Study Questions: 1. How does BD’s approach differ from your employer’s approach? 2. Is there anything you would add or change in BD’s survey?

Week 9

Readings: 1. This Case Sucks: Beavis, Butt-head and TV Content (HBS case 9-395-053) [www.Study.net] 2. Exporting American Culture (HBS case 9-396-055) [www.Study.net]

Study Questions: 1. Do you find television programs such as Beavis & Butt-head problematic? Why? 2. Are you in favor of monitoring or regulating television content? Film content? Internet content?

Week 10

Readings: 1. A Brush with AIDS (HBS case 9-394-058) [www.Study.net] 2. Managing Product Safety: The Ford Pinto (HBS case 9-383-129) [www.Study.net]

Study Questions: 1. What is at stake for the product manager in this case? 2. What are the product manager’s options? 3. Which would you choose if you were in this situation?

6 Week 11

Readings: 1. Levi Strauss & Co.: Global Sourcing (HBS case A: 9-395-127) [www.Study.net] 2. UN Declaration of Human Rights [course pack] 3. Values in Tension: Ethics Away from Home (HBR article 96502) [www.Study.net]

Study Questions: 1. How attractive is China as a business opportunity? As a member of the China Policy Group what would you recommend regarding continued sourcing and possible direct investment in manufacturing or marketing ventures in China? 2. If you recommend continued involvement in China, would you attach any special requirements such as adherence to the guidelines in the proposed code-of-conduct bill? 3. What is your assessment of Levi’s global sourcing guidelines? Would you have voted for the guidelines as written? 4. How vulnerable is Levi’s to the charge of moral imperialism?

Week 12

Readings: 1. Merck & Co., Inc.: Addressing Third-World Needs (A) & (B) (HBS case 9-991-021) www.Study.net

Study Questions: 1. What course of action should Merck take regarding the development of a drug for River Blindness? 2. Indicate how the actions and policies you recommend for Merck are consistent with your own notion of corporate and managerial responsibility. 3. Can your recommendation for Merck in this case be generalized to future Merck decisions? To other companies in other industries?

Week 13

DUE: FINAL PROJECTS - OVERVIEW PRESENTATION

Readings: 1. Schlosser, Eric. 2001. Fast Food Nation: The Dark Side of the All American Meal. HarperCollins Publishers, Inc., pp. 225-252.

Study Questions: 1. Is the fast food industry responsible for changing the eating habits of people in other countries? 2. How does the position of the fast food industry towards globalization compare to that of the pharmaceutical industry?