David Haslett
24 Kent Way, Rm. 205
Office: 831-0609

Home: 366-8579

FAX: 831-6321

Syllabus: BUAD 840 (Fall, 2002)

Social, Ethical, Legal, and Political Environment of the Firm

GENERAL INFORMATION

Your required work will consist of the following: (1) weekly reading assignments; (2) bi-weekly papers; (3) participation in class discussion; and (4) two tests. A term paper is optional.

The textbook is Moral Issues in Business, 8th ed, by William Shaw & Vincent Barry. The weekly reading assignments are not particularly long, and it is therefore expected that, every week, each item assigned will be read by everyone. Class discussion will presuppose that this been done. All the readings are about controversial topics, and some may defend positions that are not justified; so be sure to read very critically.

So as to maximize your chances of getting the final grade that you want, there are two different final-grade tracks you may take for this course, as explained below.

I. First Final-Grade Track

A. Forty percent of your course grade will be based upon the number of bi-weekly papers you turn in on time, and on the extent to which you participate in class discussion and debate.

1. Bi-Weekly Papers

Because skills in presenting a clear, well defended written argument in support of a position are important in business, this course places importance upon developing these skills through bi-weekly papers.

The most important thing to remember in writing your bi-weekly papers is what these papers are not to include: under no circumstances are these papers to include a mere summary of the reading material assigned. The papers are meant to provide you with an opportunity to state your own conclusions about the controversial topics upon which you are to write, and to set

out—clearly and concisely—the reasons for your conclusions. One or two handwritten pages, or one double-spaced, typed page, will be a sufficient length for any of these papers, although you may write more if you wish. But remember: in these papers I am not interested in your summarizing other people’s views. I am interested in your defending what, at the moment, are your own views.

All bi-weekly papers are due in my mailbox by 12:00 a.m. on the day of class, so that I can read them before class meets. They can be faxed to me at 831-6321.

2. Participation in Class Discussion

Because verbal skills in presenting and defending controversial positions are important in business also, this class places importance upon developing these skills through active participation in class discussion. Participation consists of the following:

a. Answering questions about, commenting on, or disagreeing with, the readings that were assigned.

b. Asking questions about, or disagreeing with, positions I defend in class. Since some of the controversial ethical positions I defend in class may not be justified, I especially encourage the expression of any disagreements with these positions. The more opposing viewpoints we have expressed in class, the more interesting class discussion will be, and the more we are all likely to learn.

c. Reading and defending your bi-weekly paper in class (as some of you will, at times, be asked to do).

B. Sixty percent of your grade will, if you choose the first track, be based upon how you do on two short-answer tests. Each test counts thirty percent. The date of each test is found in the “Assignments” section of this syllabus Important Reminder: the material that you will be tested on will include both material from the readings and positions that I defend in class that go beyond the readings.

II. Second Final-Grade Track

A. Forty percent of your grade will be based upon bi-weekly papers and class participation--the same as with the first track.

B. Ten percent of your grade will be based upon the two tests mentioned above, each test counting 5 percent. Those in each track must take both tests. The only difference is that with the first track, they count a total of sixty percent of your grade, while, with the second track, they count a total of only ten percent of your grade.

C. Fifty percent of your grade will be based upon a term paper. You choose the second track simply by placing a term paper in my mail box at the philosophy department (24 Kent Way), or by faxing it in, on, or prior to, the due date set out below. If you do not hand in a term paper by this due date, it will be assumed that you have chosen to be graded according to the first track. Notice that this term paper is not extra credit. If, by handing in the term paper by the due date, you choose the second track, this simply reduces the percent of your grade that the tests count from sixty percent to ten percent, with the term paper then making up the remaining fifty percent. So if you do not do well on the term paper, you may get a lower grade than you would have gotten had you chosen the first track. But if you do well on the term paper, then, of course, you may get a higher grade than you would have gotten had you chosen the first track.

The term paper is to be written on any topic, of either theory or practice, from among those we have discussed in class, or on any other controversial matter of business ethics. Again, I am not interested in mere summaries of other people's views, but I want you to present and defend your own views. Your own views may consist of one of the following:

a. Your critical evaluation of other people's views.

b. Your own position on any controversial topic, of either theory or practice, along with clear and concise arguments in support of your position.

c. Some combination of (a) and (b) above.

You will be graded not on what your views are, but on how clearly you present your views and how skillfully you defend them. Any length, starting from five double-spaced, typed pages, is acceptable. Remember: I am looking for quality of argumentation, not quantity.

Hints for Writing Good Term Papers.

1. Do not, so to speak, choose "wife beating" as your topic. In other words, choose a topic that is controversial enough for there to be a number of interesting arguments on both sides.

2. Present not just the arguments for your position, but also the main ones against it along with your responses.

3. If you choose a topic already discussed in class, do not ignore the points made in class, but do not limit yourself to just these points either; that is, break new ground with arguments that go beyond class discussion.

Style Guide for Term Papers

1. Double space

2. Leave wide margins--at least 1 inch on top, bottom and both sides. This is so I have room to write comments.

3. Number all pages, except the title page

6. Adhere to some standard method for citations and references, such as the "author-date" system (in which the author, year of publication, and relevant page numbers are enclosed in parentheses immediately after the sentence in the text to which the citation refers, and complete bibliographic information for the citation is given in the "References" at the end of the paper).

ASSIGNMENTS

Note: Our discussion of most topics below will carry over somewhat into the following week.

September 9: Introduction

September 16: The Nature of Morality

Readings: 1. "The Nature of Morality," by Shaw & Barry, pp. 2-29

2. "The Place of Nonhumans in Environmental Issues," by Peter Singer, pp. 575-79

3. "Rich and Poor," by Peter Singer, pp. 129-35

Paper Topics (choose either one of the following two):

a. What, if any, is the difference between humans and animals that justifies our giving human interests greater consideration than animal interests?

b. To what extent, if at all, are we morally obligated to aid the starving?

September 23: Theories of Ethics

Readings: 1. Case 1.1, Made in the U.S.A—dumped in Brazil, Africa, Iraq . . . , pp.27-9

2. "Normative Theories of Ethics," by Shaw & Barry, pp. 54-79

Paper Topic: Defend whichever theory of normative ethics set out in the readings that you find most convincing, or sketch a theory of your own.

September 30: Justice and Economic Distribution

Readings: 1. Case 3.2, Poverty in America, pp. 125-7

2. "The Libertarian Approach" (Nozick), pp. 108-14

3. “Justice and Economic Distribution, pp. 100-05

4. "Is Inheritance Justified?" by D. W. Haslett, pp. 136-43

Paper Topics (either one of the following two):

a. Critically evaluate Robert Nozick’s libertarian theory of justice, described in the book on pp. 108-14.

b. Critically evaluate the position set out in “Is Inheritance Justified?”

October 7: Corporate Responsibility

Readings: 1. "Corporations," by Shaw & Barry, pp. 196-218.

2. "Ethical Issues in Plant Relocation," by John P. Kavanagh, pp. 241-46

3. Case 5.3, Selling Infant Formula Abroad, pp. 224-27

Paper Topic: A corporation can be a "good citizen" in many ways, such as, for example, by donating land for public parks, contributing funds to educational institutions, providing paid maternity leaves, and going out of its way to establish costly training programs so as to provide jobs for disadvantaged people who otherwise might not find work. Everyone, of course, agrees that a corporation should be a “good citizen” to the extent that doing so is likely to be profitable. Should, however, a corporation be a "good citizen" even in cases where, according to the best estimates, doing so is not likely, through good will or in any other way, to be profitable in the short run, long run, or at any other time, but, on the contrary, is likely to decrease profits somewhat?

October 14: Product Safety

Readings: 1. "Consumers," by Shaw & Barry, pp. 482-91 only

2. Case 2.2, The Ford Pinto, pp. 83-6

Paper Topic: Smoking is responsible for 16 percent of all deaths in the U.S. each year (p. 482, Shaw & Barry), and cigarettes kill one third of those who smoke them (USA TODAY, 1997). Are cigarette companies, in manufacturing, advertising and selling, cigarettes acting immorally? If so, why?; if not, why not?

October 21: The Environment

Readings: 1. "The Environment," by Shaw & Barry, pp. 543-62

2. Case11.4, The Fordasaurus, p. 569

Paper Topic: Assume that XYZ corporation is emitting a pollutant into the air that, by itself, does absolutely no harm to anyone, but, together with all the other corporations emitting the same pollutant, will cause a certain number of deaths from lung cancer. The government is unwilling to pass any regulations prohibiting this sort of pollution, even though urged by XYZ to do so. If XYZ were to stop polluting, it would be in no danger of going out of business, but its profits would decrease substantially (and could not, even in the “long run,” be recovered through good public relations or any other way!), none of the other corporations would follow its lead, and thus just as many people would end up dying. Does XYZ nevertheless have a moral obligation to (unilaterally) stop polluting?

FIRST TEST WILL BE GIVEN TOWARD END OF CLASS

October28: Preferential Treatment, and Sexual Harassment

Readings: 1 "Job Discrimination," by Shaw & Barry, pp.429-47

2. "Homosexuality, Prejudice, and Discrimination,” by Richard D. Mohr, pp. 471-78

Paper Topic: Affirmative action in the form of “preferential treatment” is defined as giving qualified members of extensively discriminated-against groups--in particular, women, blacks, and Hispanics--priority for positions over even better qualified white males. Present as strong a case as you can either for or against preferential treatment.

November 4: Job Discrimination

Readings 1. The Workplace (1): Basic Issues,” by Shaw & Barry, pp. 260-73 (up to “Wages” only)

2, Case 7.5, The Mommy Track, pp. 337-8

3. Case 6.2, Aids in the Workplace, p. 284-85

4. Case 4.1, The Downsizing of America, pp. 165-6

Paper Topic: Assume that Felice N. Schwartz is correct in saying that "the cost of employing [married, fertile] women in management is greater than the cost of employing men" (for the reasons specified in Case 7.5). Assume also no legal considerations. In promotion and hiring decisions, is it therefore morally permissible for an employer to take into account that one of two otherwise equally qualified candidates for a management position is a married, fertile women, and thus give the position to the man instead? By “equally qualified” what is meant is that, considering all things (aside only from the difference in cost referred to above), even considering the advantages woman are sometimes said to have over men in the workplace such a better interpersonal skills, the two are, overall, still equally qualified.

November 11: Employee Rights

Readings: 1. “The Workplace (2): Today’s challenges” by Shaw & Barry, pp. 308-28

2. Case 7.4, Protecting the Unborn at Work, pp. 334-36

3. "Drug Testing in Employment," by Joseph DesJardins and Ronald Duska, pp. 341-46

4. Case 6.5, Old Smoke, p. 289

5. Case 7.1, Unprofessional Conduct, pp. 329-30

Paper Topics: (either one of the following two)

a. Exposure to the lead particles referred to in Case 7.4 does no harm to a woman herself, but permanently damages her reproductive system so that if, at any time in the future, she has a child, it will likely be born with brain damage. Since this damage cannot, in any way, be avoided, Johnson Controls had a policy that excluded women from any jobs that exposed them to these particles, unless they could prove that they could not become pregnant. The Supreme Court overruled this policy on the grounds that it discriminated against women, since the evidence indicated that these particles can damage the male reproductive system as well. Assume, however, that these particles cannot damage the male reproductive system and that, furthermore, Johnson Controls can, effectively, avoid any legal liability in this matter. On the basis of these assumptions, argue for either one of the following three propositions: (1) the policy of excluding women from these jobs is morally wrong (although Johnson Controls must, of course warn them of any danger); (2) the policy of excluding women from these jobs is morally permissible, but not obligatory; (3) the policy is morally obligatory.

b Argue either for or against drug testing in the workplace

November 18: Employee Obligations

Readings: 1. Moral Choices Facing Employees." by Shaw & Barry, pp. 363-70 and 375-

81 only.

2 “What Is Really Unethical About Insider Trading” by Jennifer Moore, pp. 401-408

Paper Topic: Among S & P 500 companies since 1980, the average CEO’s total compensation of has, according to the latest figures, jumped from 42 times that of the ordinary production worker to 500 times (Source: CNBC). Most of this jump in CEO compensation comes from cashing in on stock options. Seventy five percent of all stock options outstanding as of 2000 were issued by CEOs to themselves and the four other top executives of the company— with approval from boards of directors which, typically, are beholden to, and under the influence of, the top executives. (Source: National Center for employee Ownership, Merrill Lynch, as reported in Time, July 29, 2002.) For example, Gary Winnick, CEO of bankrupt Global Crossing, has, since 1997, cashed in more than $700,000,000 in stock options that he issued to himself (Time. July 29, 2002). With very few exceptions, stock options are not counted as an expense on company reports to stockholders. If all S & P 500 companies did count stock options as an expense, their reported earnings, on average, would have dropped 20 percent in 2001.(Sources: USA TODAY research, Standard & Poor’s, Bear Stearns, company reports) In light of these figures along with recent corporation scandals, which many believe to have been motivated primarily by the desire of top executives to cash in on stock options, consider the following four proposals, listed in order of diminishing severity. (1) Make it illegal for top executives (ones on the insider information loop) of publicly-traded corporations (ones listed on stock exchanges) to own stock in their company while still employed by it. (2) Make stock options illegal. (3) Do not make stock options illegal, but require that they be counted as an expense. (4) Adopt none of the above proposals, thereby leaving stock option practice virtually unchanged. (Spurred on by intense lobbying from top executives, (4) is the alternative adopted by President Bush and Congress.) Argue for either one of the above four alternatives or some alternative of your own, briefly explaining why you do not favor the other alternatives.

November 25: Sales and Advertising

Readings: 1. "Consumers," by Shaw & Barry, pp 497-507 only

2. Case 10.5, Closing the Deal, pp. 517-18

Paper Topics: (Either one of the following two)

a. Take, for example, the case of a car dealer who receives a shipment of used cars of various ages that were submerged in a flood (although they seem to run OK), which he is selling at a discount. Or take the case of the real estate agent who is showing a couple a house in which the previous owner, during an argument, was murdered by his wife. Or take, finally, the case of the couple who, as the agent knows, really want a home in Oaktree Manor, but, since currently no homes are for sale in Oaktree Manor, they are willing to settle instead for a home that the agent is listing in Mapletree Manor. The agent also knows that, within a month, a home in Oaktree Manor just like the couple wants will be for sale by the owners (i.e., no agents will be involved) Must the car dealer, on this own initiative, reveal to customers that the discounted cars were submerged in a flood, must the first real estate agent, on her own initiative, reveal that the murder occurred, and must second real estate, on her own initiative, agent reveal that a house in Oaktree Manor will be on the market within a month? In general, what information, if any, are parties to a potential sale morally obligated to reveal about what is being sold?

b. Is the "closing technique" described in Case 10.5 morally permissible?

December 2: Doing Business in Foreign Countries

Readings: 1. “Moral Choices Facing Employees, “ by Shaw & Barry, pp. 370-75 only

2. “Foreign Corrupt Practices: How to Deal with Foreign Forms of Bribery,”

by Jeff Fadiman, pp. 409-19

3. “Wages,” by Shaw & Barry, pp. 273-73 only

4. Case 8.3, The Housing Allowance, pp. 388-9

Paper Topics: (either one of the following two)

a. Assume that, in foreign countries in which monetary bribes are common, and expected, American companies will in fact lose significant business unless they also offer monetary bribes. Given this assumption, is the Foreign Corrupt Practices Act (described on pp. 371-73) a good law?

b. Say that BJ Textiles, a large, rich American corporation with huge profits, establishes a factory in Destitutia, a small, very poor, South American country. BJ hires a number of Destitutians, who range in age from ten to seventy, to work in this factory, ten hours a day, for a mere 25 cents an hour. Assume that 25 cents/hour, although market wages in Destitutia, is below subsistence level even for them. Assume furthermore that BJ’s employment practices in Destitutia violate no laws. Is BJ acting unethically? If so, why; if not why not?

SECOND TEST WILL BE GIVEN TOWARD END OF CLASS

December 9: Pricing Strategy, Exploitation, and the Nature of Capitalism

Readings: 1. “Other Areas of Business Responsibility,” by Shaw & Barry, pp. 491-97

only

2. “The Nature of Capitalism” by Shaw & Barry, pp. 146--64

No Paper Topic

Monday, December 16 (5 p.m.): TERM PAPERS DUE (for those choosing the Second Final-

Grade Track) Papers may be faxed, or put in my mailbox.