Table Of Content(continued from front fl ap)
THERE’S A H $60.00 USA/$72.00 CAN
e
“NEW NORMAL”
When the facts are all out, Bernie Madoff n
A Case Study Approach
probably did not get up one morning and n
IN BUSINESS ETHICS A Case Study Approach
say, “I think I will reconstruct the original
BUSINESS
Ponzi scheme and defraud investors.” For the BUSINESS
vast majority of companies ruined by ethics Despite all the words and regulations aimed at building ethical and responsible
scandals, there was something small that organizations, observed misbehavior has increased—think of the Siemens scandal ETHICS
eventually snowballed into an out-of-control and Bernie Madoff. Business Ethics: A Case Study Approach confronts the brutal
situation. Business Ethics: A Case Study fact about business ethics as it exists today—it’s not working. B
ETHICS I
Approach is, now more than ever, essential
U
reading for senior leaders of organizations, This stirring casebook powerfully draws a direct line between ethics and business n the seven years since Enron exploded, it
performance—that is, the sounder your company’s ethical foundation, the
trustees, managing partners, government S seems little has changed. The fi nancial crisis,
stronger it will perform in brand recognition, sales, customer satisfaction and
offi cials, and anyone tasked with a duty— the seemingly intractable problems facing
loyalty, employee productivity, and even in reduced regulatory burdens. I
fi duciary or otherwise—to prevent that Detroit, and the bribery scandal that resulted
N
“something small” from happening in the in an $800 million fi ne for Siemens, to name
So, how can you develop leadership that sets the right
fi rst place. E a few have altered the business landscape
tone at the top? for the foreseeable future. Ethics seems to
S
be discussed frequently when people talk
STEPHEN K. HENN is President of SmartPros
S about these matters. So, have we learned our
Legal & Ethics, Ltd. He is an experienced Author and ethics professional Stephen Henn answers that question with candidly
consultant, executive, and attorney with insightful case studies that look at every angle of ethical lapses, including: lesson? If the past few years are any guide,
E the answer is “no.”
over fi fteen years as a pioneer and leader
• A CFO’s Dilemma
in legal and ethics training for lawyers • The Duke University Lacrosse Scandal T Linking theory to practice, Business Ethics:
and executives. He has been an instructor
• Arthur Andersen H A Case Study Approach—written by ethics
for several live and Web-based legal and
• The Stanford Prison Experiment professional Stephen Henn—provides de-
ethics programs. Prior to SmartPros Legal • The Smithsonian Institution I tailed case studies showing how organizations
& Ethics, Henn was president and CEO of • Firestone/Ford Tire Recalls C
built on strong ethical foundations outperform
Cognistar Interactive Corporation, a leader • Jordan’s Furniture
S those where ethics is not a principal business
in Web-based continuing legal education and • Whirlpool and Leadership Development
driver. Revealing the relationship between
executive ethics and compliance training. • Ponzi Schemes
behavior in the workplace and the conditions
• And many more A A
that foster it, this timely book:
p
C
Examining the old mind-sets and dogmas on business ethics and holding them p a • Discusses the key elements involved in
r
up to the light of day, Business Ethics: A Case Study Approach reveals how the o s ethical and unethical behavior
e
a
ethical health of your organization will forecast whether or not it outperforms c S • Looks at the role of trust in an organization
the competition. This is your twenty-fi rst-century rule book for understanding h
t and its internal and external dealings
u
the “new normal” in business ethics.
d • Examines the psychology behind individual
y
decision-making
• Explores the role that group behavior plays
in affecting individual decision-making
• Reveals how to strengthen an individual’s
Stephen K. Henn affi nity for your organization
(continued on back fl ap)
E1FFIRS 03/26/2009 9:8:3 Page2
E1FFIRS 03/26/2009 9:8:2 Page1
Business
Ethics
E1FFIRS 03/26/2009 9:8:3 Page2
E1FFIRS 03/26/2009 9:8:3 Page3
Business
Ethics
A Case Study
Approach
Stephen K. Henn
John Wiley & Sons, Inc.
E1FFIRS 03/26/2009 9:8:3 Page4
Copyright#2009byStephenK.Henn.Allrightsreserved.
PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey.
PublishedsimultaneouslyinCanada.
Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinany
formorbyanymeans,electronic,mechanical,photocopying,recording,scanning,orotherwise,
exceptaspermittedunderSection107or108ofthe1976UnitedStatesCopyrightAct,without
eitherthepriorwrittenpermissionofthePublisher,orauthorizationthroughpaymentofthe
appropriateper-copyfeetotheCopyrightClearanceCenter,Inc.,222RosewoodDrive,
Danvers,MA01923,978-750-8400,fax978-646-8600,oronthewebatwww.copyright.com.
RequeststothePublisherforpermissionshouldbeaddressedtothePermissionsDepartment,
JohnWiley&Sons,Inc.,111RiverStreet,Hoboken,NJ07030,201-748-6011,fax201-748-
6008,oronlineathttp://www.wiley.com/go/permissions.
LimitofLiability/DisclaimerofWarranty:Whilethepublisherandauthorhaveusedtheirbest
effortsinpreparingthisbook,theymakenorepresentationsorwarrantieswithrespecttothe
accuracyorcompletenessofthecontentsofthisbookandspecificallydisclaimanyimplied
warrantiesofmerchantabilityorfitnessforaparticularpurpose.Nowarrantymaybecreatedor
extendedbysalesrepresentativesorwrittensalesmaterials.Theadviceandstrategiescontained
hereinmaynotbesuitableforyoursituation.Youshouldconsultwithaprofessionalwhere
appropriate.Neitherthepublishernorauthorshallbeliableforanylossofprofitoranyother
commercialdamages,includingbutnotlimitedtospecial,incidental,consequential,orother
damages.
Forgeneralinformationonourotherproductsandservices,ortechnicalsupport,pleasecontact
ourCustomerCareDepartmentwithintheUnitedStatesat800-762-2974,outsidetheUnited
Statesat317-572-3993orfax317-572-4002.
Wileyalsopublishesitsbooksinavarietyofelectronicformats.Somecontentthatappearsin
printmaynotbeavailableinelectronicbooks.
FormoreinformationaboutWileyproducts,visitourWebsiteathttp://www.wiley.com.
LibraryofCongressCataloging-in-PublicationData:
Henn,StephenK.,1963-
Businessethics:acasestudyapproach/StephenK.Henn.
p.cm.
Includesbibliographicalreferencesandindex.
ISBN978-0-470-45067-3(cloth)
1. Businessethics–Casestudies. I. Title.
HF5387.H46452009
1740.4—dc22
2009005649
PrintedintheUnitedStatesofAmerica.
10 9 8 7 6 5 4 3 2 1
E1FTOC 03/26/2009 16:6:31 Page5
&
Contents
Preface ix
Acknowledgments xv
CHAPTER 1 Introduction 1
Themes 1
Case Study:A CFO’s Dilemma 3
CHAPTER 2 Why Are Ethics Critical? 9
What Is the Objective? 9
TheResearch 10
Stakeholder Approach 14
AllAnimals Are Equal, but... 16
ATwo-Way Street 18
Uncle Sam 19
Toward aWorkableModel 19
CHAPTER 3 Why ‘‘Business’’ Ethics IsNot Just about
Corporations 23
Case Study:The Duke University Lacrosse Scandal 24
20/20 Hindsight 29
TheBurden ofExpectations 31
Case Study:The United Way 32
ABroad Impact 35
CHAPTER 4 AHistorical Review 39
TheAncient World 40
Greek Citizens’Code 43
Military Codes 44
Cardinal Virtues andVices 46
Business Ethics inTimesPast 47
v
E1FTOC 03/26/2009 16:6:31 Page6
vi contents
Timbuktu 48
Case Study: Saint ThomasAquinas 49
Case Study: ArthurAndersen 50
The Nature ofMan 51
CHAPTER 5 Why Do People BehaveBadly? 57
Moral Development 57
FraudTriangle 58
Propensity 60
Hierarchy of Needs 63
Case Study: Walt Pavlo 64
There but for the Graceof God 67
BrokenWindows 69
Rending Moral Fabric 70
CHAPTER 6 WorkEnvironment and Group Dynamics 73
Social Animals 73
RelativeEthics 75
Social Control Theory 77
Case Study: TheStanford Prison Experiment 78
Elements ofSocialBonding 80
Case Study: TheMilgram Experiment 83
Power, Authority,andProximity 85
PositivePeer Pressure 86
CHAPTER 7 Leadership 89
Toneat the Top 89
Authenticity 91
Case Study: Va´clavHavel 93
Outside Perspectives 97
Case Study: TheSmithsonian Institution 97
LeadershipBonding 101
CHAPTER 8 The CommonElement—Trust 105
Prisoners’ Dilemma 105
Trust 107
The Cost ofTrust 108
Case Study: TheTylenol Poisonings 110
A Well ofGoodwill 114
Case Study: Firestone–Ford TireRecalls 116
Two Approaches 118
E1FTOC 03/26/2009 16:6:31 Page7
contents vii
CHAPTER 9 Building anArmy ofDavids 123
HerdingCats 123
1Samuel 17 124
Breakingthe Chains 125
Basic Principles 126
Evangelize 128
Case Study:Jordan’sFurniture 130
Back to Maslow 132
Moral Hazard 134
Causes and Culture 136
CHAPTER10 The PositivePower of Peer Pressure 139
TheGentleman atDinner 139
Belief 141
IFly SWA 142
Attachment 144
Commitment 145
Involvement 147
In the Trenches 148
Why Are We Doing This? 149
TheWhole Picture 150
CHAPTER11 Howto DevelopLeadership 153
Fore! 153
Case Study:Whirlpool and Leadership
Development 155
Investinginthe Future 159
Emerging Leaders 161
ABias 163
CHAPTER12 The Logic ofWilliam ofOckham 165
Law ofParsimony 165
Is Itthe Meansor the Ends? 166
TheWhole View 167
AllOrganizations Are Businesses 168
Case Study:University versus Nation 169
Allabout Me 173
Case Study:Charles Ponzi andHis Scheme 174
Enjoyingthe Kool-Aid 177
CEO and Trust 179
Feeding the Wolf 181
Index 183
E1FTOC 03/26/2009 16:6:31 Page8
