1. Business & Marketing Essentials
Business Ethics

2. Today’s Vocabulary
Values - form the basis of ethics, a set of moral principles that govern decisions and actions.
Universal values - are values shared by all cultures throughout history.
Business ethics – are moral principals applied to business issues and actions.
Universal values -> All cultures tend to value friendship, success, and helping others. They all nurture the young and care for the old or sick.

3. Ethics Imagine that you are working in a department store.
A co-worker puts an idea into the suggestion box, but signs it “anonymous.”
Your boss thinks it was you and compliments you on your excellent idea.
Would it be ethical to accept the credit?
Would it be smart? Why, or why not?
It would not be ethical because you would be taking credit for someone else’s contribution; it’s a form of stealing. It would also be unwise to take credit because you are likely to be caught when the boss implements the idea or thanks you publicly for it.

4. Ethics
You are meeting with your teacher after class for some special help.
The teacher is called out of the room to take a phone call.
While he’s gone you notice that next week’s exam is in plain view on his desk.
Would it be ethical to read it? Why, or why not?

5. Ethics You take a telephone message for a friend.
The message is about a terrific job opening that requires immediate action.
You could easily pocket the message and try to get the job yourself.
Would that be ethical? Why, or why not?

6. Ethics How do we know whether or not something is ethical?
What does “ethical” mean?
Acceptable answers: 1) Rules of right and wrong behavior; 2) Codes of conduct, like the Ten Commandments; 3) Good and bad actions; 4) Being a good person; what good people do; and 5) Being moral in a business situation.

7. Itinerary
For the next few days you will be watch a video series on the subject of business ethics called “Not For Sale.”
There are ten episodes that takes place in a department store named Krieger.
Today we will cover the first two episodes.

8. Assessment
Please pay close attention to the different characters in today’s videos.
You will be asked to write a minimum of three paragraphs for a daily grade.
Your paragraphs must be created using Microsoft Word.
A grading rubric will be distributed to you before you leave class.
Your paragraphs are due by the end of class tomorrow.

9. Episode 1

10. Episode 1 Discussion
Ms. Pruitt said, “Most business situations require simple moral choices…but once in a while the right decision will not be so obvious.”
What did she mean by that? Is there a difference between simple morality and business ethics?
The difference between them is knowledge or experience. Some actions everyone knows not to do. But there are certain business situations and decisions which are complex and difficult. They require experience in the particular business and knowledge of its standards and practices. That is why Ms. Pruitt recommends that in these situations employees talk to a supervisor to find out the right thing to do.

11. Episode 1 Discussion
John Kraft said to Lydia “if there’s a problem You don’t talk to anyone else, you don’t call that help line, you leave it here. You join my team, we play by my rules.”
What did he mean?
Is this right? Why did he tell her that?
He is indicating to that he will be upset if she suspects something is wrong and reports it to anyone other than himself. Since use of the Help Line is clearly company policy, his failure to respect the rules laid down by his superiors is unethical. Further, it makes on wonder what he might not want reported.

12. Episode 1 Discussion
After Collins accidentally broke the calculator, he decided to report his mistake rather than cover it up.
What do you think of his decision?
Collins is being morally honest in trying to fulfill his obligation as an employee by reporting breakage. His action is an example of why his honesty is the best policy. He did the right thing, and now his supervisor knows he can be trusted.

13. Episode 1 Discussion
Ellen offended a customer by suggesting that she needed a larger dress size.
Was that unethical?
What should she have done differently?
Ellen was trying to be helpful and look after the customer’s best interests, which is her job. Ellen’s action was misguided because it hurt the customer’s feelings and made her less likely to shop at Kreiger’s. But it was not unethical. Ellen should, however, have found a more diplomatic way to put it. Obviously, the effect was exactly opposite of what she intended.

14. Episode 1 Discussion
At the orientation meeting Ms. Pruitt said “Our ethics are not for sale.”
What does that mean?
Business is about making money. Ms. Pruitt means:
Krieger’s management will not engage in wrongful conduct in order to make more money; and,
Krieger’s employees ought not to accept money from outsiders for doing something wrong.

15. Episode 1 Discussion
When Lydia met her new boss, John Kraft, he commented on her good looks and suggested that she has a lot of boyfriends.
Was this appropriate?
Unethical?
Why do you think he did it?
What do you think of the way she handled it?
What would you have done if you were Lydia?
Lydia’s attractiveness has nothing to do with her job. Mr. Kraft, as her supervisor, has authority and power over her, and so his remarks are intrusive and inappropriate. However, people in the workplace often pay each other small compliments. Therefore, Mr. Kraft’s behavior is just on the borderline of being unethical. As to why he said such things, one senses that Mr. Kraft may have wanted to see how she reacted so that he could know whether to begin a more personal relationship with her. Lydia’s dismissive reaction was exactly right for the situation. She sent him a message that she was not interested in talking about her personal life.

16. Episode 1 Discussion
At the orientation meeting, Max said “We at Krieger’s believe that if you treat people fairly, they will be fair with you.”
Do you think he’s right about that? (Why, or why not?)

17. Ethics
You are the lunchtime host at a popular restaurant. The waiting list is 30 minutes long. A customer offers you $20 to seat his party next.
Would it be ethical to accept the offer? (Why, or why not).
No. You personally would profit but the restaurant would lose customers who were angry at the way they were treated. And it’s not fair to those who got there first.

18. Ethics
When you accept a job, what does the employer owe you, and what do you the employer?
Employer obligations to you:
Appropriate compensation
Safe working conditions
Fair treatment, respect, and courtesy
If possible, the opportunity for career advancement
The employee owes the employer:
An honest day’s work
Compliance with safety and other work rules
If desired, ideas on how to improve the quality of products and services

19. Ethics What are the obligations of a salesperson to a customer?
A salesperson should do more that stand by the cash register and ring up the items. He or she should:
Offer to help customers
Answer customers’ questions and
Assist customers in determining whether an item in the store’s merchandise fits their needs.
The better he or she fulfills these professional obligations, the more likely customers are to buy. That’s how stores stay in business, by selling things to people, and how workers stay employed.

20. Episode 2

21. Episode 2 Discussion
Collins exploded at a customer he felt was being racist.
Do you agree with the way Collins handled it?
How should Collins have handled it?
If we don’t confront racists, make them “pay a price” for there prejudice, then aren’t we failing to eliminate racism?
Wouldn’t the store be well rid of racist customers?
Wasn’t Lee at fault for making Collins handle it by himself?
Racism is wrong and Collins’ reaction might have been justified in a different situation. But Collins is on the job at Krieger’s and not on his own time. Therefore he has obligations to his employer which transcend his desire to vent his own understandable indignation.
From the store’s point of view, Collins’ behavior is wrong because:
He disobeyed his supervisor and did not “keep cool.”
The immediate customer’s business is lost.
More important, customers who overheard Collins’ sarcastic outburst may think poorly of Krieger’s for insulting its customers.
Collins physically and verbally bullied the customer in anger which could have provoked a lawsuit.
__________________________________________________________________________________________________
If Collins encounters the racist away from the store, as a fellow student at school for instance, many people (not all) would argue that he would be justified in subjecting the bearer of prejudice to his barrage of withering sarcasm. (Other victims of prejudice may argue that to respond to it with aggressive ridicule simply creates further ill-will, lowers the speaker to the level of his or her tormentor, and accomplishes nothing beyond emotional release. Therefore they would recommend that Collins maintain a calm dignity in the face of such prejudice, whatever the setting.) But the key point here is that as a student dealing with another student, Collins speaks for himself, while as a sales clerk at Krieger’s, he speaks for Krieger’s.
Had Pruitt been aware earlier of what was happening, she might well have told the customer that Krieger’s was not interested in his business. But Pruitt as the President of the store has the authority to make that decision. Individual sales personnel do not have such authority and must follow the general rule to treat every customer with respect. If he had treated the customer diplomatically, Collins might have raised the issue with management at a later time.
Retail stores train employees for anticipated responsibilities but they cannot predict and prepare for every customer situation. Some knowledge comes only form experience on the job. Lee judged Collins would better learn how to manage the situation by doing it himself rather that by Lee taking it over. But given Collins’ newness and emotional involvement, this turned out to be a mistake.

22. Episode 2 Discussion
Collins’ supervisor, Paul Lee, declined a salesman’s offer of a free lunch at an expensive restaurant.
Why?
What do you think of his decision?
Lee explains that he knows the salesman is trying to influence him to buy from him. Lee rightly does not want even to appear to be susceptible to this indirect bribery. Many stores have specific policies on what they will allow their employees to accept from suppliers in terms of gifts and entertainment for just the reasons Lee states.

23. Episode 2 Discussion
Lydia’s supervisor, John Kraft, accepted a gift of a weekend hunting trip from a supplier with whom he agreed to place an order in return.
Is that ethical? (Why, or why not?)
John Kraft’s obligation, as an employee of Krieger’s, is to do what’s best for the store. More specifically, as Director of Purchasing, his job is to select the best combination of quality, price, and service. The offer of a free hunting trip has the potential to compromise the objectivity of his judgment because only Kraft benefits. In addition, acceptance of the offer harms the store in at least two ways:
The supplier will add the cost of the trip to the price it charges Krieger’s for the merchandise, and Krieger’s will have to pass the cost on to its customers, raising its prices and putting it at a competitive disadvantage to other stores.
Krieger’s will pay more for the supplier’s items that it would were the store to purchase from others. The only reason the store will be paying more is because Kraft has a personal incentive to do so. Krieger’s must pay the higher price for Kraft to get his hunting trip.

24. Episode 2 Discussion
Collins was talking on the phone while a customer was waiting.
What’s wrong with that?
Would it have been wrong if there had been no customers waiting?
Would it be wrong if he had nothing else to do?
Having a long personal telephone conversation on the company phone is a breach of Collins’ obligation to his employer. When you take a job, you agree to devote your working hours to promoting your employer’s best interest, in return for which the employer pays you wages or a salary. Collins’ long personal phone call to pursue his own profit used time and attention he owed to the employer, whether or not customers were present and waiting for his service.
Seldom is their “nothing to do” in business. If Collins thinks he has free time he should ask his supervisor what to do. If the supervisor says he has no work for him at that time, then he may ask it it’s all right form him to make a brief personal phone call.

25. Homework Assignment
Write a minimum of three paragraphs about one of the characters in the “Not For Sale” video. Discuss the ethical situation the character found themselves in and how they dealt with that situation. Discuss how you would have handled the situation differently or why you feel the character handled the situation correctly. This will count as a daily grade.
Your paragraphs should be well organized. Make sure you cover the topic thoroughly. Pay close attention to your spelling and grammar.

26. Things to Remember
Values - form the basis of ethics, a set of moral principles that govern decisions and actions.
Universal values - are values shared by all cultures throughout history.
Business ethics – are moral principals applied to business issues and actions.
Please make sure you have an assignment sheet and grading rubric before you leave. Remember that your assignment is due by end of class tomorrow.

27. Ethics: Not for Sale
Daily grade assignment for tomorrow - Choose a rule from any code of behavior – school or employee handbook, traffic regulations, etc. – to write a one page essay. Argue in favor of having such a rule and defend it against possible objections. The essay should meet standards given by your English teacher.

28. Episode 3 – before viewing
What does “conflict of interest” mean? Give an example.
*Pay attention to the arguments people which people use to justify their behavior.*

29. Episode 3 “If you scratch my back, I’ll scratch yours!”
“Be careful who your friends are!”
“Everybody does it!”

30. Episode 3 – after viewing
When Lydia finds out her boss is paying $300 for $50 worth of shopping bags, he says, “It is standard practice to maintain good relationships even if it costs a little extra money.” What does he mean? Why is he doing it?
What do you think of the rationalization that “Everybody does it?”

31. Episode 3 – after viewing
When might it be ok to “pay a little extra”?
What are some of the ways Liz and Sara try to pressure Ellen into letting them shoplift?
What’s wrong with what they do or say?
How do Liz and Sara rationalize shoplifting Krieger’s?
Do high prices = customers being ripped off?
Will the store miss it?
Liz and Sara are Ellen’s friends, while Krieger’s is just a summer job. Why should she side with Krieger’s and not her friends?

32. Episode 4 – before viewing
If you owned your own business and the profit or loss was your money, who would you prefer working for you – John Kraft or Max Krieger?
Which of them is better for customer goodwill? Store profits? Employee morale? Teamwork?

33. Episode 4 What is the problem with being ignorant or apathetic?
Whose problem is it?
How can either/both of these conditions prevent success in your chosen field?

34. Episode 4 – after viewing
How many things can you name that Roy has done wrong since his first day?
How does Roy deal with his dissatisfaction with his job? Is that appropriate?
When Max reprimands Roy for talking on the phone instead of helping his co-workers, Roy replies, “Who cares what they think?” What is wrong with that attitude?

35. Episode 4 – after viewing
Was it ok for Roy to stop to visit his father while he was making a delivery? Why or why not? Why was Max angry with Roy?
Does the scene between Roy and his father show that Roy’s “bad attitude” isn’t really his fault? Is it fair to hold him responsible for his actions?
When Roy returned to the warehouse with alcohol on his breath, shouldn’t Max have fired him? How do you feel about how Max handled Roy? Should he be more lenient or more strict?

36. Daily grade for tomorrow…
Choose a rule from any code of behavior – school or employee handbook, traffic regulations, etc. – to write a one page essay. Explain the rule, whether you agree with the rule or not, argue in favor of having such a rule and defend it against possible objections.

37. Episode 5 – before viewing
These are actual cases heard by the Equal Employment Opportunity Commission (EEOC). You decide which cases were ruled as sexual harassment.
Case 1: You are a female shipyard welder. There are pinups of nude women posted at your worksite which you don’t like. Your employer refuses to remove them.
Ruling: Yes, b/c such photos create a hostile work environment.

38. Episode 5 – before viewing
Case 2: You are the female manager of a mall store carrying clothing for young women. All of your sales personnel are young females. The owner, a male, requires you and the staff to dress in swimsuits and a beach outfit for a promotion. When you refuse, claiming that men in the mall would gawk and whistle, you are fired. Is the store owner guilty of sexual harassment?
Ruling: No, b/c the purpose was promotional and the clothing was revealing but not sexual in nature. The men did not make vulgar or explicitly sexual remarks, therefore no hostile environment was created.

39. Episode 5 - before viewing
Case 3: You are a male employee with a female supervisor. She asks you to have sex with her and you refuse. Shortly thereafter, you are demoted.
Ruling: Yes, the demotion was clearly a punishment for refusal to have sex with the supervisor

40. Episode 5 – before viewing
Case 4: You are a female secretary. Your supervisor asks you, at work, to have dinner then go to a hotel. He also brags of how good he is. You are deeply offended!
Ruling: No. Though offensive and distasteful, his behavior does not constitute sexual harassment b/c he never suggested refusal would affect your job, nor does he punish you for refusing. Also, this was an isolated incident, therefore not creating a hostile work environment. His conduct was deemed as inappropriate and unprofessional and his supervisors would reprimand him.

41. FACTS ABOUT SEXUAL HARASSMENT from www.eeoc.gov
It is a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964.
DEFINITION: Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitutes sexual harassment when submission to or rejection of this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance or creates an intimidating, hostile or offensive work environment.
Sexual harassment can occur in a variety of circumstances, including but not limited to the following:
The victim as well as the harasser may be a woman or a man. The victim does not have to be of the opposite sex.
The harasser can be the victim's supervisor, an agent of the employer, a supervisor in another area, a co-worker, or a non-employee.
The victim does not have to be the person harassed but could be anyone affected by the offensive conduct.
Unlawful sexual harassment may occur without economic injury to or dismissal of the victim.
The harasser's conduct must be unwelcome.

42. What to do… It is helpful for the victim to directly inform the harasser that the conduct is unwelcome and must stop. The victim should use any employer complaint mechanism or grievance system available.
When investigating allegations of sexual harassment, EEOC looks at the whole record: the circumstances, such as the nature of the sexual advances, and the context in which the alleged incidents occurred. A determination on the allegations is made from the facts on a case-by-case basis.
Prevention is the best tool to eliminate sexual harassment in the workplace. Employers are encouraged to take steps necessary to prevent sexual harassment from occurring. They should clearly communicate to employees that sexual harassment will not be tolerated. They can do so by establishing an effective complaint or grievance process and taking immediate and appropriate action when an employee complains.

43. Episode 5 Is it Sexual Harassment? What should Lydia do?
What are the risks
if she reports it?
Do you think Lydia was inviting Mr. Kraft’s behavior
in the way she acted or dressed?

44. Episode 6 – before viewing
You are the President of a company…
Should you use inferior materials (lower cost and lower quality) to make your product so that you can make higher profits?
Your manufacturing facility is being modernized and within 6 weeks you will have to lay off 50 employees. How much notice will you give them?
The school district has asked that you send some of your engineers to tutor students in math and science a few hours per week. Should you do it?

45. Episode 6 What does it mean to be socially responsible?
What are ways you can be socially responsible to…
Your employees?
Your customers?
Your community?

47. Assignment: Choose 1of the following Due Tuesday, November 30
Create a PowerPoint presentation (or poster) explaining the corporate social responsibility efforts of a company. You MUST use the company’s website as your main source. or
Create a PowerPoint presentation (or poster) about the unethical conduct of a CEO. Explain what he/she did, consequences of their actions, who was affected (self, employees, customers, investors, etc…)
Examples: Bernie Ebbers/Worldcom, Martha Stewart/ImClone, Ken Lay/Enron, Jeffrey Skilling/Enron

48. Episode 7-10 - before viewing
Facts:
More than $13 billion worth of goods are stolen from retailers each year. That's more than $35 million per day.
1 in every 11 people in the US shoplift
Shoplifting affects more than the offender. It overburdens the police and the courts, adds to a store's security expenses, costs consumers more for goods, costs communities lost dollars in sales taxes and hurts children and families.
Approximately 25 percent of shoplifters are kids, 75 percent are adults (men and women). 55 percent of adult shoplifters say they started shoplifting in their teens.
Shoplifting is often not a premeditated crime. 73 percent of adult and 72 percent of juvenile shoplifters don't plan to steal in advance.
89 percent of kids say they know other kids who shoplift. 66 percent say they hang out with those kids.

49. Shoplifters say they are caught an average of only once in every 48 times they steal. They are turned over to the police 50 percent of the time.
Approximately 3 percent of shoplifters are "professionals" who steal solely for resale or profit as a business. These include drug addicts who steal to feed their habit, hardened professionals who steal as a life-style and international shoplifting gangs who steal for profit as a business. "Professional" shoplifters are responsible for 10 percent of the total dollar losses.
The vast majority of shoplifters are "non-professionals" who steal, not out of criminal intent, financial need or greed but as a response to social and personal pressures in their life. The excitement generated from "getting away with it" produces a chemical reaction resulting in what shoplifters describe as an incredible "rush" or "high" feeling. Many shoplifters will tell you that this high is their "true reward," rather than the merchandise itself.
Drug addicts, who have become addicted to shoplifting, describe shoplifting as equally addicting as drugs.
Information and statistics provided by the National Association for Shoplifting Prevention (NASP), a non-profit organization;

50. Ethics: Not for Sale Review
Theme 1 – THEFT
Specify the various types of theft seen in the series. What were the motivations for the various kinds? Were those involved acting in their own best interest? If not, why did they do it?
Shoplifting, internal theft (embezzlement), kickbacks, stealing time
Theme 2 – SEXUAL HARASSMENT
Would Mr. Kraft be found guilty of sexual harassment by the EEOC based on their definition? Explain your reasoning.

51. Theme 3 – PERSONAL RESPONSIBILITY