Business Ethics: Ethical Decision Making and Cases, Thirteenth Edition
By O.C. Ferrell, John Fraedrich and Linda Ferrell
Contents:
Part 1: An Overview of Business Ethics 1
Chapter 1: The Importance of Business Ethics 1
Chapter Objectives, 1 | Chapter Outline, 1
An Ethical Dilemma 2
Business Ethics Defined 4
Why Study Business Ethics? 5
A Crisis in Business Ethics, 5 • Specific Issues, 6 •
The Reasons for Studying Business Ethics, 7
The Development of Business Ethics 8
Before 1960: Ethics in Business, 8 • The 1960s: The
Rise of Social Issues in Business, 9 • The 1970s:
Business Ethics as an Emerging Field, 10 • The 1980s:
Business Ethics Reaches Maturity, 10 • The 1990s:
Institutionalization of Business Ethics, 11 • The 2000s:
Twenty-First Century Business Ethics, 11 • The 2010s:
New Challenges in Business Ethics, 12 • The 2020s and Beyond, 15
Developing Organizational and Global Ethical Cultures 16
The Benefits of Business Ethics 16
Ethics Contributes to Employee Commitment, 17 •
Ethics Contributes to Investor Loyalty, 18 • Ethics
Contributes to Customer Satisfaction, 18 • Ethics Contributes to Profits, 19
Our Framework For Studying Business Ethics 20
Summary 22
Important Terms for Review, 23 | Resolving Ethical
Business Challenges, 24 | Check Your EQ, 25
Chapter 2: Stakeholder Relationships, Social Responsibility, and Corporate Governance 26
Chapter Objectives, 26 | Chapter Outline, 26
An Ethical Dilemma 27
Stakeholders Define Ethical Issues in Business 28
Identifying Stakeholders, 30 • A Stakeholder Orientation, 31
Social Responsibility and Business Ethics 33
Issues in Social Responsibility 35
Social Responsibility and the Importance of a Stakeholder Orientation 37
Corporate Governance Provides Formalized Responsibility to Stakeholders 38
Views of Corporate Governance, 41 • The Role
of Boards of Directors, 42 • Greater Demands for
Accountability and Transparency, 43 • Executive Compensation, 43
Implementing a Stakeholder Perspective 45
Step 1: Assessing the Corporate Culture, 46 •
Step 2: Identifying Stakeholder Groups, 46 •
Step 3: Identifying Stakeholder Issues, 46 •
Step 4: Assessing Organizational Commitment to Stakeholders and Social Responsibility, 47
Step 5: Identifying Resources
and Determining Urgency, 47
Step 6: Gaining Stakeholder Feedback, 47
Contributions of a Stakeholder Perspective 48
Summary 48
Important Terms for Review, 50 | Resolving Ethical
Business Challenges, 51 | Check Your EQ, 52
Chapter 3: Sustainability: Social and Ethical Dimensions 53
Chapter Objectives, 53 | Chapter Outline, 53
An Ethical Dilemma 54
Defining Sustainability 55
How Sustainability Relates to Ethical Decision Making and
Social Responsibility 56
Global Environmental Issues 58
Atmospherics, 58 • Water, 61 • Land, 62
Environmental Legislation 66
Environmental Protection Agency (EPA), 67 •
Environmental Regulations, 67
Alternative Energy Sources 71
Wind Power, 71 • Geothermal Power, 71 • Solar Power,
72 • Nuclear Power, 72 • Biofuels, 72 • Hydropower, 73
Business Response to Sustainability Issues 73
Green Marketing, 74 • Greenwashing, 75
Strategic Implementation of Environmental Responsibility 76
Recycling Initiatives, 77 • Stakeholder Assessment, 77 •
Risk Analysis, 77 • The Strategic Environmental Audit, 78
Summary 79
Important Terms for Review, 81 | Resolving Ethical
Business Challenges, 82 | Check Your EQ, 83
Part 2: Ethical Issues and the Institutionalization of Business Ethics 84
Chapter 4: The Institutionalization of Business Ethics 84
Chapter Objectives, 84 | Chapter Outline, 84
An Ethical Dilemma 85
Managing Ethical Risk Through Mandated, Core, and Voluntary Practices 86
Mandated Requirements for Legal Compliance 88
Laws Regulating Competition, 90 • Laws Protecting
Consumers, 92 • Laws Promoting Equity and Safety, 94
The Sarbanes–Oxley (SOX) Act 95
Public Company Accounting Oversight Board, 96 •
Auditor and Analyst Independence, 97 • Whistle-Blower
Protection, 98 • Cost of Compliance, 98
Dodd–Frank Wall Street Reform and Consumer Protection Act 98
Financial Agencies Created by the
Dodd–Frank Act, 99 • Consumer Financial Protection
Bureau, 99 • Whistle-Blower Bounty Program, 99
Laws that Encourage Ethical Conduct 100
Federal Sentencing Guidelines for Organizations 101
Core or Best Practices 103
Voluntary Responsibilities, 103 • Cause-Related
Marketing, 104 • Strategic Philanthropy, 104 • Social
Entrepreneurship, 105
The Importance of Institutionalization in Business Ethics 105
Summary 106
Important Terms for Review, 107 | Resolving Ethical
Business Challenges, 108 | Check Your EQ, 109
Chapter 5: Emerging Business Ethics Issues 110
Chapter Objectives, 110 | Chapter Outline, 110
An Ethical Dilemma 111
Recognizing an Ethical Issue (Ethical Awareness) 112
Foundational Values for Identifying Ethical Issues 113
Integrity, 113 • Honesty, 114 • Fairness, 114
Emerging Ethical Issues and Dilemmas in Business 115
Misuse of Company Time and Resources, 115 • Abusive
or Intimidating Behavior, 116 • Lying, 118 • Conflicts of
Interest, 119 • Bribery, 119 • Corporate Intelligence, 120
Discrimination, 122 • Sexual Harassment, 123 • Fraud,
124 • Consumer Fraud, 126 • Financial Misconduct, 128 Insider Trading, 129
The Challenge of Determining an Ethical Issue in Business 130
Summary 131
Important Terms for Review, 132 | Resolving Ethical
Business Challenges, 133 | Check Your EQ, 134
Part 3: The Decision- Making Process 135
Chapter 6: Ethical Decision Making 135
Chapter Objectives, 135 | Chapter Outline, 135
An Ethical Dilemma 136
A Framework for Ethical Decision Making in Business 137
Ethical Issue Intensity, 137 • Individual Factors, 139 •
Organizational Factors, 141 • Opportunity, 144 • Business
Ethics Intentions, Behavior, and Evaluations, 146
Using the Ethical Decision-Making Model to Improve
Ethical Decisions 147
Normative Considerations in Ethical Decision Making 148
Institutions as the Foundation for Normative Values, 148
Implementing Principles and Core Values in Ethical
Business Decision Making, 151
Understanding Ethical Decision Making 153
Summary 154
Important Terms for Review, 155 | Resolving Ethical
Business Challenges, 156 | Check Your EQ, 157
Chapter 7: Individual Factors: Moral
Philosophies and Values 158
Chapter Objectives, 158 | Chapter Outline, 158
An Ethical Dilemma 159
Moral Philosophy Defined 160
Moral Philosophies 162
Instrumental and Intrinsic Goodness, 163 • Teleology, 164
Deontology, 166 • Relativist Perspective, 167 • Virtue
Ethics, 169 • Justice, 170
Applying Moral Philosophy to Ethical Decision Making 173
Cognitive Moral Development and Limitations 174
White-Collar Crime 176
Individual Factors in Business Ethics 179
Summary 180
Important Terms for Review, 181 |
Resolving Ethical Business Challenges, 182 |
Check Your EQ, 183
Chapter 8: Organizational Factors: The Role
of Ethical Culture and Relationships 184
Chapter Objectives, 184 | Chapter Outline, 184
An Ethical Dilemma 185
Defining Corporate Culture 186
The Role of Corporate Culture in Ethical Decision Making 188
Ethical Frameworks and Evaluations of Corporate
Culture, 188 • Ethics as a Component of Corporate
Culture, 190 • Compliance Versus Values-Based Ethical
Cultures, 192 • Differential Association, 193 • Whistle-Blowing, 193
Organizational Structure 197
Group Dimensions of Corporate Structure and Culture 199
Types of Groups, 200 • Group Norms, 201
Variation in Employee Conduct 202
Can People Control Their Actions Within a Corporate Culture? 203
Summary 204
Important Terms for Review, 205 |
Resolving Ethical Business Challenges, 206 |
Check Your EQ, 207
Part 4: Implementing Business Ethics in a Global Economy 208
Chapter 9: Developing and Implementing an Effective Ethics Program 208
Chapter Objectives, 208 | Chapter Outline, 208
An Ethical Dilemma 209
The Responsibility of the Corporation to Stakeholders 210
The Need For Organizational Ethics Programs 211
An Effective Ethics Program 213
An Ethics Program Can Help Avoid
Legal Problems, 213 • Values versus Compliance Programs, 215
Codes of Conduct 215
Ethics Officers 217
Ethics Training and Communication 218
Systems to Monitor and Enforce Ethical Standards 220
Continuous Improvement of an Ethics Program, 222 •
Common Mistakes in Designing and Implementing an Ethics Program, 222
The Ethics Audit 223
The Auditing Process, 224 • Informal Ethics Audits, 225 •
Integrity Measurement Frameworks, 227 • Implementing
Programs, Audits, and Measurements to Sustain an Ethical Culture, 230
Summary 230
Important Terms for Review, 232 | Resolving Ethical
Business Challenges, 233 | Check Your EQ, 234
Chapter 10: Global Business Ethics Issues 235
Chapter Objectives, 235 | Chapter Outline, 235
An Ethical Dilemma 236
Global Culture, Values, and Practices 237
Economic Foundations of Business Ethics 240
Economic Systems, 242
Multinational Corporations 245
Global Organizations to Support Responsible Business 247
United Nations Global Compact, 247 • Global Business
Organizations that Affect Ethical Behavior, 248
Global Ethics Issues 250
Bribery, 250 • Antitrust Activity, 254 • Internet
Security and Privacy, 255 • Human Rights, 257
Healthcare, 258 • Supply Chain, 259 • Labor
and Right to Work, 259 • Compensation, 260 • Consumerism, 261
The Importance of Ethical Decision Making in Global Business 262
Summary 264
Important Terms for Review, 265 |
Resolving Ethical Business Challenges, 266 |
Check Your EQ, 268
Chapter 11: Ethical Leadership 269
Chapter Objectives, 269 | Chapter Outline, 269
An Ethical Dilemma 270
Defining Ethical Leadership 271
Requirements for Ethical Leadership 273
Benefits of Ethical Leadership 276
Ethical Leadership and Organizational Culture 277
Power, 279 • Motivating Ethical Behavior, 282
Managing Ethical Business Conflicts 283
Conflict Management Styles, 283
Ethical Crisis Management and Recovery 286
Ethical Leaders Empower Employees 288
Ethical Leadership Communication 289
Ethical Leadership Communication Skills, 290
Leader–Follower Relationships 293
Ethics Programs and Communication, 293 • Power
Differences and Workplace Politics, 294 • Feedback, 295
Leadership Styles and Ethical Decisions 296
The RADAR Model 298
Summary 300
Important Terms for Review, 302 |
Resolving Ethical Business Challenges, 303 |
Check Your EQ, 304
Chapter 12: Technology: Ethics and
Social Responsibility Issues 305
Chapter Objectives, 305 | Chapter Outline, 305
An Ethical Dilemma 306
Defining Technology 307
Technology Ethics, 308 • Technologies to Watch, 309
Ethics Issues in Technology 314
Privacy, 315 • Intellectual Property, 317 •
Cybercrime, 318 • The Digital Divide, 320 •
Biotechnology, 320
Managing Ethics Issues in Technology 322
The Future of Technology Ethics 324
Summary 326
Important Terms for Review, 327 |
Resolving Ethical Business Challenges, 328 |
Check Your EQ, 329
Part 5: Cases 330
Case 1: From the Outside In: Corporate Social Responsibility at Patagonia 332
Case 2: Tesla Accelerates the Transition to Sustainable Energy 338
Case 3: An Apple a Day: Ethics at Apple Inc. 349
Case 4: TOMS Reinvents the One for One Movement 364
Case 5: CVS Smokes the Competition in Corporate Social Responsibility 374
Case 6: Bayer Rounds Up Monsanto 387
Case 7: Uber Collides with Controversy 398
Case 8: Herbalife Nutrition Achieves Success by Managing Risks 407
Case 9: Home Depot Works on Stakeholder Relationships 421
Case 10: Brewed to Perfection: New Belgium Brewing 431
Case 11: Google’s Search for Solutions to Privacy Issues 441
Case 12: Big-Box Retailer Walmart Makes Big Moves in Social Responsibility 457
Case 13: Volkswagen Cleans Up Reputation After Emissions Scandal 468
Case 14: Zappos Finds the Perfect Fit 475
Case 15: Starbucks Serves Up Its Social Responsibility Blend 484
Case 16: The Hershey Company’s Bittersweet Success 496
Case 17: Wells Fargo Banks on Recovery 508
Case 18: Whole Foods Market Refreshes Its Commitment to Stakeholders 516
Case 19: The NCAA Enforces Penalties in College Athletics 526
Case 20: Enron: Not Accounting for the Future 535
Endnotes 546
Glossary 576
Index 583