Some Questions of Business Ethics

2 Pages Posted: 21 Oct 2008

See all articles by R. Edward Freeman

R. Edward Freeman

University of Virginia - Darden School of Business

Abstract

This is a series of vignettes, or briefly sketched problem situations, which arise in a variety of business settings. They raise important ethical questions--which range from lying and deception, cooperation with evil, and abuse of company benefits--from the point of view of the central character in the case.

Excerpt

UVA–E–0077

SOME QUESTIONS OF BUSINESS ETHICS

As a company president, what would you do in the following scenarios?

1. You are competing with several foreign firms for the sale (to an absolute monarch of a Middle Eastern country) of military aircraft. The U.S. Defense and State departments have informally let you know they are strongly in favor of the sale and hope you will receive the contract. The ruler, long friendly to the United States, also says he likes your product and company. He suggests you use a firm in which he has full confidence as your local agent (paying only normal commissions). You have heard rumors that his family has an interest in the firm but no formal ownership records are available.

2. You quote a price of $ 1.6 million to a foreign government as your standard price (including commissions) for a package of airport navigational equipment. Your bid is accepted with the stipulation that you bill them $ 1.9 million and deposit the $ 300,000 “additional sales commission” to the U.S. account of a commercial agent in the United States who will “help with the paperwork.”

3. The manager of an important foreign plant just called asking you for permission to retain a local law firm for $ 10,000. This is an action that requires corporate approval. The manager's reason for bypassing the approval is that customs officials are holding up a vital piece of machinery because it arrived in two crates rather than one crate as specified in the (otherwise correct) documents. The customs inspector suggested it would go much faster if his cousin (a local lawyer experienced in such matters) was retained, rather than return the crates for repackaging or start the customs approval process over again.

. . .

Keywords: ethical issues

Suggested Citation

Freeman, R. Edward, Some Questions of Business Ethics. Darden Case No. UVA-E-0077, Available at SSRN: https://ssrn.com/abstract=908130 or http://dx.doi.org/10.2139/ssrn.908130

R. Edward Freeman (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
804-924-0935 (Phone)
804-924-6378 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/freeman.htm

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