HONEST WORK. A Business Ethics Reader. Joanne B. Ciulla. University of
Richmond. Clancy Martin. University of Missouri, Kansas City. Robert C. Solomon
.
HONEST
WORK
A Business Ethics Reader
Joanne B. Ciulla University of Richmond
Clancy Martin University of Missouri, Kansas City
Robert C. Solomon University of Texas at Austin
New York Oxford OXFORD UNIVERSITY PRESS 2007
CONTENTS
PREFACE
xvii
INTRODUCTION 1
XX
*
W H Y W E WORK: THE MEANING OF WORK
Introduction
1
1
Box: "WORTHY WORK"
4
Joanne B. Ciulla I "From Curse to Calling: A Short History of the Meaning of Work" 5 Box: "THE NOONDAY DEMON"
7
Michelle Quinn I "Hopping On and Off Career Track"
10
CASES Case 1.1: Sloan Wilson, "The Job Interview" 12 Case 1.2: Nick Denton, "Less Heat, More Light" 15 2
PROMISES AND BETRAYALS ON THE JOB: ETHICS IN THE WORKPLACE
Introduction 17 Norman E. Bowie I "Respecting the Humanity in a Person" Arlie Hochshild I "Exploring the Managed Heart" 22 Box: "ROBERT C. SOLOMON, THE PASSIONS"
19
23
Box: "JOHN STUART MILL ON THE GREATEST GOOD AND EXPEDIENCY"
Anita M. Superson I "The Employer-Employee Relationship and the Right to Know" 26 John Orlando I "The Ethics of Corporate Downsizing" 30 Box: ROSABETH Moss KANTER, "ETHICAL MANAGEMENT OF UNCERTAIN EMPLOYMENT"
34
Annette Friskopp and Sharon Silverstein I "Anti-Gay Jokes" Box: "MORE MEN ARE SAYING 'STOP' "
39
17
37
24
CONTENTS CASES
Case 2.1: John R. Boatright, "A 'State of the Art' Termination" 41 Case 2.2: William H. Shaw and Vincent Barry, "AIDS in the Workplace" 42 Case 2.3: Kurt Eichenwald, "Racial Discrimination at Texaco" 43 Case 2.4: Joanne B. Ciulla, "The Energetic Boss" 46 Case 2.5: Joanne B. Ciulla, "Does Home Life Matter at Work?" 46 Case 2.6: "Discrimination at Wal-Mart: Unequal Wages and Opportunities" 47 Box: "SEXUAL HARASSMENT GUIDELINES"
51
Case 2.7: Joanne B. Ciulla, "Prejudice or Preference?" 52 Case 2.8: Joanne B. Ciulla, "Attraction or Business As Usual?" 52 Case 2.9: Joanne B. Ciulla, "Innocent and Dangerous" 53 " T H E CHECK IS IN THE M A I L " : HONESTY AND T R U S T IN BUSINESS
Introduction
55
55
Box: "ARISTOTLE, KANT, AND MILL ON HONESTY"
58
Albert Z. Carr I "Is Business Bluffing Ethical?" 59 Timothy B. Blodgett I "Replies to Carr" 64 Box: "NIETZSCHE ON HONESTY"
65
Norman E. Bowie I "Does It Pay to Bluff in Business?" 67 Robert C. Solomon I "Is It Ever Right to Lie?" 69 Sissela Bok I "Defining Secrecy—Some Crucial Distinctions" 72 Richard T. De George I "Secrecy and Disclosure" 76 Sue De Wine I "Giving Feedback: The Consultant's Craft" 77 Evan M. Dudick I "Do Management Gurus Lie?" 82 The Economist I "Self-Deception" 84 Paul Ekman and Mark G. Frank I "Lies That Fail" 85 Box: "TRANSPARENCY INTERNATIONAL—USA PROGRAM"
88
Robert C. Solomon and Fernando Flores I "Building Trust" 91 CASES Case 3.1: Robert C. Solomon, "Flying or Lying in Business Class" 95 Case 3.2: Robert C. Solomon, "Willful Ignorance? Or Deception?" 95 Case 3.3: Clancy Martin, "Blindsided by Bankruptcy" 96 Case 3.4: William H. Shaw and Vincent Barry, "Testing for Honesty" 97 Case 3.5: Margaret P. Battin and Gordon B. Mower, "The Columbia Shuttle Disaster: Should We Have Told the Astronauts the Truth?" 100 T H E GOOD LIFE
103
Introduction 103 Robert C. Solomon I "Strategic Planning—For the Good Life"
106
CONTENTS
ix
Aristotle I "On the Good Life"
108
Box: "ADAM SMITH ON CAPITALISM"
111
Epicurus I "On Pleasure" 112 Andrew Carnegie I "Wealth" 114 Solomon Schimmel I "Greed" 118 Box: "LABOR DAY, 2004"
119
Joanne B. Ciulla I "Leisure and Consumption"
120
Box: BERTRAND RUSSELL, "IN PRAISE OF IDLENESS"
121
LynneMcFall I "Integrity" 125 Cheshire Calhoun I "Standing for Something" 128 Joe Dominguez and Vicki Robin I "Your Money or Your Life" Bertrand Russell I "Impersonal Interests" 134 * Robert C. Solomon I "Why Ethics?"
131
136
CASES Case 4.1: James Fenimore Cooper I "The Opportunist" 138 Case 4.2: Bowen H. McCoy I "The Parable of the Sadhu" 139 Box: "THE HAPPINESS Box"
141
Case 4.3: Arthur Miller I "A Life Badly Lived" 142 Case 4.4: Ruth Capriles I "Rags to Riches to Rags" 143 5
MONEY, HOW W E G E T IT, AND W H E R E IT GOES: ACCOUNTING, AND INVESTMENT ETHICS
Introduction
FINANCE,
148
148
Box: "ACCOUNTING AND MERGERS"
149
Richard T. De George I "Ethical Issues for Accountants" Box: "Six PRINCIPLES OF ETHICAL ACCOUNTING"
151
152
Carol J. Loomis I "Lies, Damned Lies, and Managed Earnings" Box: "LEARNING TO CHEAT?"
154
155
Box: PRICE WATERHOUSECOOPERS, "ETHICAL DECISION MAKING"
158
Ed Cohen I "Arthur Andersen Refugees Reflect on What Went Wrong" Box: SHERRON WATKINS, "BEFORE THE WHISTLE BLEW . . . "
162
162
Robert E. Frederick and W. Michael Hoffman I "The Individual Investor in Securities Markets: An Ethical Analysis" 164 Box: "DIRE CONSEQUENCES . . . "
166
John R. Boatright I "Finance Ethics" Box: "THE WAKE-UP CALL"
172
169
CONTENTS
Jennifer Moore I "What Is Really Unethical About Insider Trading?" 176 Box: ROEL C. CAMPOS, "ETHICS MATTER"
181
Frank Partnoy I "F.I.A.S.C.O." 184 Box: "ARISTOTLE ON MONEY"
186
CASES
Case 5.1: The Democratic Policy Committee, "A Modern History of 'Creative' Accounting" 188 Case 5.2: Lisa H. Newton and David P. Schmidt, "Merger Mania" Case 5.3: Ron Duska, "Annuities to Seniors" 192 Case 5.4: John R. Boatright, "An Auditor's Dilemma" 193 Case 5.5: David Lawrence and Tom L. Beauchamp, "Enron and Employee Investment Risk" 194 6
W H O GETS W H A T AND W H Y ? FAIRNESS AND JUSTICE
Introduction
190
196
196
Box: "PLATO AND ARISTOTLE ON JUSTICE"
Plato I "RingofGyges"
197
199
Box: "WOULD YOU RATHER EARN MORE, OR JUST MORE THAN THE OTHER FELLOW?" 200
Adam Smith I "On Human Exchange and Human Differences" 201 Latin Trade I "A Latin Viewpoint: The Bentonville Menace" 204 Joanne B. Ciulla I "Exploitation of Need" 205 Box: "MARX ON ALIENATED LABOR"
206
John Rawls I "Justice as Fairness" 208 Peter Singer I "Rich and Poor" 210 Irving Kristol I "A Capitalist Conception of Justice" 213 Box: "EXECUTIVE COMPENSATION"
217
Friedrich von Hayek I "Justice Ruins the Market" 219 Eduard Garcia I "The Winner-Take-All Game" 221 Gerald W. McEntee I "Comparable Worth: A Matter of Simple Justice" 224 CASES Case 6.1: Naomi Klein, "Revolution Without Ideology" 227 Case 6.2: Jim Hightower, "Going Down the Road" 228 Case 6.3: Joanne B. Ciulla, "The Problem with Dudley Less" 230 Case 6.4: Joanne B. Ciulla, "Overworked and Ready to Blow" 231 Case 6.5: Rogene A. Buchholz, "Poverty Area Plants" 232 Case 6.6: William H. Shaw and Vincent Barry, "Poverty in America" 232 Case 6.7: William H. Shaw and Vincent Barry, "Burger Beefs" 234 Case 6.8: Sasha Lyutse, "Nike's Suppliers in Vietnam" 237
CONTENTS 7
Is " T H E S O C I A L R E S P O N S I B I L I T Y O F B U S I N E S S . . . T O I N C R E A S E I T S P R O F I T S " ? SOCIAL RESPONSIBILITY AND STAKEHOLDER T H E O R Y
Introduction
239
239
Milton Friedman I "The Social Responsibility of Business Is to Increase Its Profits" 241 Christopher D. Stone I "Why Shouldn't Corporations Be Socially Responsible?" 246 Peter A. French I "Corporate Moral Agency"
250
R. Edward Freeman I "A Stakeholder Theory of the Modern Corporation" Kenneth J. Arrow I "Social Responsibility and Economic Efficiency"
261
J. Maurice Clark I "The Changing Basis of Economic Responsibility"
265
CASES
255
«
Case 7.1: Ana G. Johnson and William F. Whyte, "Mondragon Cooperatives" Case 7.2: Rogene A. Buchholz, "Social Audit" 270 Case 7.3: Kelly McDougall, Tom L. Beauchamp, and John Cuddihy, "The NYSEG Corporate Responsibility Case" 271 Case 7.4: Thomas I. White, "Beech-Nut's Imitation Apple Juice" 273 Case 7.5: Thomas I. White, "Sentencing a Corporation to Prison" 274 8
W H E N INNOVATION BYTES BACK: E T H I C S AND TECHNOLOGY
Introduction
269
276
276
Box: "LOCKE ON PROPERTY"
277
Deborah C. Johnson I "Intellectual Property Rights and Computer Software"
279
Box: RICHARD DE GEORGE, "SEVEN THESES FOR BUSINESS ETHICS AND THE INFORMATION AGE"
283
Box: "FOUCAULT AND THE PANOPTICON"
285
Elizabeth A. Buchanan I "Information Ethics in a Worldwide Context" Deborah C. Johnson "Hacker Ethics"
287
291
Box: C. KLUCKHORN, "INTERNET CULTURE?"
Bill Joy I "Why The Future Doesn't Need Us"
292
296
Theodore Roszak I "In Defense of the Naked Mind"
300
CASES Case 8.1: Joel Rudinow and Anthony Graybosch, "Digital Divide" 308 Case 8.2: Joel Rudinow and Anthony Graybosch, "Hacking into the Space Program" 308 Case 8.3: Joel Rudinow and Anthony Graybosch, "The I Love You Virus" Case 8.4: Richard A. Spinello, "Privacy Pressures: The Use of Web Bugs at HomeConnection" 309
309
xii 9
CONTENTS T H E A R T OF SEDUCTION: T H E E T H I C S OF ADVERTISING, MARKETING, AND SALES
Introduction 311 John Kenneth Galbraith I "The Dependence Effect"
311
313
Box: "PLATO ON THE DANGER OF BELIEVING BAD ARGUMENTS"
315
Friedrich von Hayek I "The Non Sequitur of the'Dependence Effect'" 318 Robert L. Arrington I "Advertising and Behavior Control" 321 Alan Goldman I "The Justification of Advertising in a Market Economy" 326 Leslie Savan I "The Bribed Soul" 331 Box: "CONSPICUOUS CONSUMPTION"
333
Thomas L. Carson I "The Ethics of Sales" 336 Box: "ASK M E NO QUESTIONS . . . "
340
CASES
Case 9.1: Manuel G. Velasquez, "Toy Wars" 343 Case 9.2: Rogene A. Buchholz, "Advertising at Better Foods" 347 Case 9.3: Joseph R. DesJardins and John J. McCall, "Advertising's Image of Women" 348 Case 9.4: William H. Shaw and Vincent Barry, "Hucksters in the Classroom" 349 Case 9.5: Tom L. Beauchamp and Norman E. Bowie, "Marketing Malt Liquor" 351 10
THINGS FALL A P A R T : P R O D U C T LIABILITY AND CONSUMERS
353
Introduction 353 Peter Huber I "Liability" 356 John Nesmith I "Calculating Risks: It's Easier Said Than Done" 361 Box: "WHAT'S RISKY? CHANCES OF DEATH?"
362
Stanley J. Modic I "How We Got into This Mess" 363 George G. Brenkert I "Strict Products Liability and Compensatory Justice" 367 Henry Fairlie I "Fear of Living" 374 Warren E. Burger I "Too Many Lawyers, Too Many Suits" 378 MarkDowie I "Pinto Madness" 381 Patricia Werhane I "The Pinto Case and the Rashamon Effect" 384 CASES Case 10.1: William H. Shaw and Vincent Barry, "The Skateboard Scare" 388 Case 10.2: William H. Shaw and Vincent Barry, "Aspartame: Miracle Sweetener or Dangerous Substance?" 389 Case 10.3: Joseph R. DesJardins and John J. McCall, "Children and Reasonably Safe Products" 391 Case 10.4: William H. Shaw and Vincent Barry, "Living and Dying with Asbestos" 392 Case 10.5: Kenneth B. Moll and Associates, "Merck and Vioxx" 394
CONTENTS 11
"You
x
KNOW H O W TO WHISTLE, DON'T YOU?" WHISTLE-BLOWING,
COMPANY LOYALTY, AND EMPLOYEE RESPONSIBILITY
396
Introduction 396 Box: "MARTIN LUTHER KING ON SILENCE"
397
Sissela Bok I "Whistleblowing and Professional Responsibility" 398 Box: "RALPH NADER ON WHISTLE-BLOWING"
400
Michael Davis I "Some Paradoxes of Whistleblowing" 403 Ronald Duska I "Whistleblowing and Employee Loyalty" 408 Box: JOSEPH PULITZER, "SECRECY AND DISCLOSURE"
410
Box: JIM YARDLEY, "THE UPSIDE OF WHISTLE-BLOWING"
412
David E. Soles I "Four Concepts of Loyalty" 414 Box: "BLIND TO EARNED LOYALTY"
417
t
George D. Randels I "Loyalty, Corporations, and Community" 421 CASES Case 11.1: Sherron Watkins, "The One Successful Business Model" 426 Case 11.2: Pat L. Burr, "Would You Blow the Whistle on Yourself?" 428 Case 11.3: William H. Shaw and Vincent Barry, "Changing Jobs and Changing Loyalties" 429 Case 11.4: David Margasak, "The Greenhouse Effect: Putting the Heat on Halliburton" 430 Case 11.5: Joseph R. DesJardins and John J. McCall, "Whistleblowing at the Phone Company" 431 12
T H I N K LOCAL, A C T GLOBAL: INTERNATIONAL BUSINESS
433
Introduction 433 Benjamin Barber I "Jihad vs. Me World" 436 Box: "ISAIAH BERLIN"
438
Thomas L. Friedman I "The Lexus and the Olive Tree" 440 MaryMidgley I "Trying Out One's New Sword" 443 Dalai Lama I "The Ethic of Compassion" 447 Thomas Donaldson I "Values in Tension: Ethics Away from Home" 449 Box: "WHAT D O THESE VALUES HAVE IN COMMON?"
452
The Economist I "Doing Business in Dangerous Places" 456 United Nations Universal Declaration of Human Rights 458 CASES Case 12.1: Joanne B. Ciulla, "The Oil Rig" 462 Case 12.2: Karen Marquis and Joanne B. Ciulla, "Diller's Dilemma: Street Children and Substance Abuse" 463
xiv
CONTENTS
Case 12.3: Thomas Dunfee and Diana Robertson, "Foreign Assignment" 465 Case 12.4: Karen Marquis and Joanne B. Ciulla, "The Quandry at PureDrug" 467 Case 12.5: Karen Marquis, "The Conflict at Lomatex Chemical" 468 Case 12.6: Kelly MacDougall and Tom L. Beauchamp, "Consulting for Jones and Jones Pharmaceutical" 469 13
W O R K I N G W I T H M O T H E R NATURE: ENVIRONMENTAL E T H I C S AND BUSINESS ECOLOGY
Introduction
472
472
Box: NATIVE AMERICAN PROVERB
473
Mark Sagoff I "At the Shrine of Our Lady Fatima or Why Political Questions Are Not All Economic" 474 Box: NATIONAL ENVIRONMENTAL EDUCATION AND TRAINING FOUNDATION, "NINTH ANNUAL NATIONAL REPORT ON ENVIRONMENTAL ATTITUDES, KNOWLEDGE, AND BEHAVIORS" 475 Box: CHIEF JOSEPH OF THE NEZ PERCE, "WHY HE AND THE EARTH ARE OF ONE MIND" 478
William F. Baxter I "People or Penguins" 481 Box: MILTON FRIEDMAN, "POLLUTION"
483
Norman E. Bowie I "Morality, Money, and Motor Cars" 485 Box: "VINE DELORIA ON LAND AS A COMMODITY" Box: " W H O OWNS THE EARTH?"
486
489
Peter Singer I "The Place of Nonhumans in Environmental Issues" 491 Box: LUTHER STANDING BEAR, "THE TAME LAND"
494
JonEntine I "Rain-Forest Chic" 497 CASES Case 13.1: Thomas I. White, "The Ethics of Dolphin-Human Interaction" 503 Case 13.2: William H. Shaw and Vincent Barry, "Made in the U.S.A.—and Dumped" 504 Case 13.3: William H. Shaw and Vincent Barry,- "The Fordasaurus" 507 Case 13.4: Denis G. Arnold, "Texaco in the Ecuadorean Amazon" 508 14
T H E G I F T THAT KEEPS ON ASKING: RECIPROCITY AND CONFLICTS OF INTEREST
Introduction 511 Adam Bellow I "Nepotism in American Business" 514 John T. Noonan, Jr. I "A Quick Look at the History of Bribes" 517 Box: "HAVAMAL"
519
Mark Pastin and Michael Hooker I "Ethics and the Foreign Corrupt Practices Act" 521
511
CONTENTS
xi CASES
Case 14.1: Barry Meier, "Family Values at Adelphia" 525 Case 14.2: Karen Marquis and Joanne B. Ciulla, "The Moza Island Project" 527 Case 14.3: Motorola University, "Personal Luxury or Family Loyalty?" 529 15
W H E N THE BUCK STOPS H E R E : LEADERSHIP
531
Introduction 531 Joanne B. Ciulla I "What Is Good Leadership?" 533 Niccolo Machiavelli I "Is It Better to Be Loved Than Feared?" 538 Box: "LAO TZU O AND TAO-TE-CHING"
540
Dean C. Ludwig and Clinton O. Longnecker I "The Bathsheba Syndrome: The Ethical Failure of Successful Leaders" 541 Box: "PLATO ON WHY ETHICAL PEOPLE DON'T WANT"TO BE LEADERS"
545
Norman E. Bowie I "A Kantian Theory of Leadership" 547 James MacGregor Burns I "What Is Transforming Leadership?" 551 Robert Greenleaf I "Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness" 554 CASES Case 15.1: George Orwell, "Shooting an Elephant" 556 Case 15.2: Abraham Zeleznick, "General Patton and the Sicilian Slapping Incident" 560 Case 15.3: Alejo Jose G. Sison, "Neutralizing 'Neutron Jack' " 563 Case 15.4: Thomas Teal, "Aaron Feuerstein: Not a Fool, Not a Saint" 569 Case 15.5: Joanne B. Ciulla, "Merck and Roy Vagelos: The Values of Leaders" 572 Case 15.6: Kirk O. Hanson, "Jack Stack" 574 16
W H O ' S M I N D I N G THE STORE? T H E E T H I C S OF CORPORATE GOVERNANCE
581
Introduction 581 Ralph Nader, Mark Green, and Joel Seligman I "Who Rules the Corporation?" 583 Irving S. Shapiro I "Power and Accountability: The Changing Role of the Corporate Board of Directors" 589 Box: IMMANUEL KANT, "ADVICE TO CORPORATE DIRECTORS"
591
Henry Mintzberg I "Who Should Control the Corporation?" 595 Box: "CORPORATE-GOVERNANCE REFORM"
599
John J. McCall I "Employee Voice in Corporate Governance: A Defense of Strong Participation Rights" 606 Box: "DOES GOVERNANCE NEED GOVERNMENT?"
609
Box: WARREN BUFFETT, "ADVICE TO OUTSIDE AUDITORS"
612
CONTENTS
CASES Case 16.1: Michael Lewis, "Selling Your Sole at Birkenstock" 613 Case 16.2: Dennis Moberg and Edward Romar, "The Good Old Boys at WorldCom" 615 Case 16.3: Sasha Lyutse, "CEO Compensation at Qwest" 620 17
Is EVERYTHING FOR SALE? T H E FUTURE OF THE FREE MARKET
622
Introduction 622 Aristotle I "Two Kinds of Commerce" 624 Adam Smith I "The Benefits of Capitalism" 626 Patricia Werhane I "Adam Smith's Relevance to Contemporary Economic Theory" 629 Karl Marx I "Commodity Fetishism" 632
