Bethel University Consumer Financial Protection Bureau Discussion Each response should be researched using the course materials and/or outside sources, inc

Bethel University Consumer Financial Protection Bureau Discussion Each response should be researched using the course materials and/or outside sources, including in-text citations and references following APA formatting. 2 citations with 1200 word minimum count.

1.

Read the Sing & Dance scenario on pp. 59-61, trying to see the situation from Jackie’s perspective. Answer the following:

1) Which of the ethical issues and dilemmas described in Chapter Three are evident in this scenario?
2) Is Jackie the victim of illegal sexual harassment or gender discrimination? Explain.
3) What should Jackie do? What professional and private outcomes will result from that choice?

2.

Google

Read the Chapter Three debate issue on page 85. Clearly state whether

1) Google’s storage of user data is appropriate and does not violate users’ privacy, or
2) Google’s storage of user data is inappropriate and violates users’ privacy.

Explain your answer.

3.

The Consumer Financial Protection Bureau (CFPB)

Read the Chapter Four debate issue on page 111. Clearly state whether

1) The CFPB’s benefits to consumers outweigh the burden on financial institutions, or
2) The CFPB’s burden on financial institutions outweigh the benefits to consumers.

Explain your answer.

4.

Dodd-Frank Wall Street Reform (Dodd-Frank)

Dodd-Frank has been in the news since it was passed in 2010, with some arguing that it imposes too great a burden on financial institutions, and others arguing that it does not go far enough to prevent the “too big to fail” scenario that we saw in the recent financial crisis.
Research the current state of the law and answer the following:

1) What is the current state of executive orders and/or legislation regarding Dodd-Frank? What changes to the original bill have been made or are in the legislative pipeline?
2) Does Dodd-Frank currently strike the right balance? If so, explain. If not, describe the changes that should be made to the law. CHAPTER 3
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© Sissy Borbely, Shutterstock
EMERGING BUSINESS2 ETHICS ISSUES
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
CHAPTER OBJECTIVES
CHAPTER OUTLINE
t To define ethical issues in the context of
Recognizing an Ethical Issue
organizational ethics
Honesty
Fairness
t To examine ethical issues as they relate to
C
L
t To delineate misuse of company resources,E
abusive and intimidating behavior, lying,
M
conflicts of interest, bribery, corporate
E
intelligence, discrimination, sexual
harassment, environmental issues, fraud, N
insider trading, intellectual property rights,
T
and privacy as business ethics issues
t To examine the challenge of determining ,
the basic values of honesty, fairness, and
integrity
an ethical issue in business
M
A
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T
H
E
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2
1
AN ETHICAL DILEMMA*
9
As Jackie sat waiting to talk to the president of
Sing & Dance Records (SDR), she started to wonder
1
whether the meeting would destroy her musical
T
career before it even got started. Because she was an
up-and-coming star recently hired by SDR and didn’t
S
know the unwritten rules of the company, the chainof-command philosophy, and the employees and
studio musicians around her very well, the wait was
making her more and more uneasy. Given how well
things had started, it was painful for her to recall the
circumstances that had led her to this place.
Integrity
Ethical Issues and Dilemmas in Business
Misuse of Company Resources
Abusive or Intimidating Behavior
Lying
Conflicts of Interest
Bribery
Corporate Intelligence
Discrimination
Sexual Harassment
Environmental Issues
Fraud
Consumer Fraud
Financial Misconduct
Insider Trading
Intellectual Property Rights
Privacy Issues
The Challenge of Determining an Ethical Issue
in Business
Jackie had been lured to SDR after winning third
place in a national talent competition. Considering
how long some performers wait to land at a major
record label, if they ever do so at all, she had
attracted SDR’s attention remarkably quickly. Jackie
had a sultry voice and she wrote her own music.
Music industry insiders expected big things from
her soon. The opportunity at SDR seemed like a
dream come true. The possibility of a lucrative
recording contract, the chance to be close to her
old neighborhood, and a romantic encounter with
Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
60
Part 2: Ethical Issues and the Institutionalization of Business Ethics
Curtis (her future manager at SDR) made it nearly
impossible for Jackie to say no.
In the beginning, Curtis had been very
charming. He convinced Jackie to work with SDR
by telling her about the label’s industry connections,
the bands it represented, and the resources it
employed to boost its performers. Curtis had helped
her find a nice house, had assisted with her move,
and eventually had become more than her manager.
As the months slipped by their relationship became
close to the point where they began to discuss living
together. Then Jackie started hearing rumors about
Curtis and Leslie.
Leslie, who had come to SDR six months
before Jackie, worked in the record label’s legal
department, and in a just a few months, she had
become head of that department amidst rumors
that Curtis had helped her get the promotion
because of their personal relationship. The rumors
became so intense that Jackie confronted Curtis and
discovered that the stories were true. Devastated,
Jackie ended her relationship with Curtis in a heated
confrontation, but the professional aspect of their
relationship proved more difficult to untangle.
Because of Curtis’s contacts in the music
industry and at SDR, Jackie couldn’t afford to
drop him as her manager. Days passed with little
contact between the two of them, and then one
afternoon Curtis stopped by the recording studio.
He apologized for his behavior, and Jackie accepted
his apology. But when he visited the next day, he
began to make sexual advances toward Jackie. She
made a joke of it to defuse the situation, but several
days later he repeated the same behavior and made
several suggestive remarks to her just out of earshot
of her band members.
Jackie’s face turned red as she said, “Curtis,
you pig, you’ve crossed the line. Do that again, and
I’ll report you to Legal!”
A few more weeks went by, and then Jackie
got a phone call in the studio from Curtis in which
he made even more sexually suggestive comments.
Every few days, he would stop by or call and remind
her of some private experience they had had
together. He would taunt her, saying, “Jackie, you
know you want it.”
Eventually, Jackie went to SDR’s legal
department to complain formally about Curtis, his
sexual advances, and the hostile environment that
he had created. The person she met with at Legal
was Leslie.
After Jackie had described the situation in
detail, she said, “Leslie, I need you to help me.
I can’t lay the vocal tracks down for my album
because what he’s doing shakes me up so much.
He’s undermining my position with my fellow
musicians, he’s not sharing my album with the label
C
executives,
and at the same time he’s telling me that
I could change all of that if I wanted to!”
L
Leslie responded, “Jackie, I’ve heard what
E said, but I have had people come to me with
you’ve
some
M very disturbing reports about you, too. For
example, you and Curtis were supposedly sleeping
E and he is your manager. If that was the
together,
case,
N you should have reported it immediately, but
you didn’t. You have no tangible evidence except
forTyour word. Even if I believed you, the allegations
that
, you had been sexually active with Curtis
could be construed as making all of what you’ve
said mutual or consensual. If that was the case, I
would
M have to discipline you because of this label’s
superior–employee ethics code, and a letter would
A
go into your permanent file that could ruin your
T of working at another major record label
chances
for years to come. From my perspective, we can call
T
this an informal and confidential meeting that is not
to H
be repeated, or you can continue this formally
and
Etake your chances. It’s your call, Jackie, but you
should know that I am disinclined to support your
W
accusations.”
In shock, Jackie mumbled a thank-you to
Leslie and left her office. The next day Curtis
2 by, smiled, and said, “Your album’s status
stopped
review
1 is next week, and it doesn’t look good. I’ve
told you before that it’s all about who you know in
the9music industry, and I have friends at all the
majors.”
1
T Jackie said, “Curtis, why are you doing this to
me? I’m not in love with you anymore. We have no
future
S together. Doesn’t that tell you something?”
Curtis smiled and said, “It tells me that you’re
not interested in a permanent relationship, which
is good, because neither am I. And you know that
if you want your album to be pitched to the radio
stations, or if you want to headline your own tour
someday, it all starts with me.”
Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
61
Chapter 3: Emerging Business Ethics Issues
So now here Jackie was, waiting to meet with
the president of the record label. As she got up from
her chair, she weighed her alternatives and what had
led her here. She knew that each record label had its
own individual code of ethics, but she hadn’t known
the reality of the code at SDR until it was too late.
QUESTIONS | EXERCISES
1. Keeping in mind the facts and timeline of this
C
situation, discuss Jackie’s situation in terms of its
legal and ethical issues.
2. Discuss Jackie’s alternatives and the possible
professional and private outcomes of her
situation.
3. Is Curtis in violation of sexual harassment
and/or sexual discrimination laws in the United
States?
4. Certainly Curtis has damaged Jackie’s
performance level; however, has he also created
a legally hostile work environment?
*This case is strictly hypothetical; any resemblance to real persons,
companies, or situations is coincidental.
L
E
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takeholders’ ethical concerns determine whether specific business actions and
E In the case of the government, comdecisions are perceived as ethical or unethical.
munity, and society, what was merely an ethical
N issue can soon become a legal debate
and eventually law. Most ethical conflicts in which there are perceived dangers turn into
T issues when they exert pressure on
litigation. Additionally, stakeholders often raise ethical
businesses to make decisions that serve their particular
agendas, as when corporate share,
S
holders demand that managers make decisions that boost short-term earnings, thus maintaining or increasing the value of the stock they own in that firm. For example, some U.K.
M
stakeholders believe that Kraft Foods acted irresponsibly
when it purchased confectioner
Cadbury PLC. Before purchasing Cadbury, Kraft told the Summerdale community that
A
the company would not cut the plant’s 400 jobs. The company repeated the pledge on the
day it bought Cadbury. The following week, KraftTannounced it would close the plant. The
community charged Kraft with reneging on its promises
and blatantly telling falsehoods to
T
mollify the community’s fears.1
H recognize that a particular issue or
People make ethical decisions only after they
situation has an ethical component; therefore, a E
first step toward understanding business
ethics is to develop ethical issue awareness. Ethical issues typically arise because of conW and values, the values and culture
flicts among individuals’ personal moral philosophies
of the organizations in which they work, and the values of the society in which they live.
The business environment presents many potential ethical conflicts. A company’s efforts to
2 its employees’ attempts to fulfill their
achieve its organizational objectives may clash with
own personal goals. Similarly, consumers’ need 1
for safe and quality products may inhibit
a manufacturer’s ability to earn adequate profits. The desire of an oil company like BP or
9
Chevron to create a profitable and dependable supply of oil and gas may conflict with the
needs of many stakeholders. The fact that BP repeatedly
placed profits over the safety of
1
employees and the environment culminated in the 2010 Deepwater Horizon explosion,
T
which released 206.2 million gallons of oil into the Gulf of Mexico.2 Chevron continues to
S
fight an order to pay $8.6 billion to clean up oil pollution
in the Ecuadorian rainforest after
local residents won a lawsuit against the company.3
In this chapter, we consider some of the ethical issues that are emerging in business
today, including how these issues arise from the demands of specific stakeholder groups. In
the first half of the chapter, we explain certain universal ethical concepts that pervade business ethics, such as honesty, fairness, and integrity. The second half of the chapter explores
a number of emerging ethical issues, including misuse of company resources, abusive and
Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
62
Part 2: Ethical Issues and the Institutionalization of Business Ethics
intimidating behavior, lying, conflicts of interest, bribery, corporate intelligence, discrimination, sexual harassment, environmental issues, fraud, financial misconduct, insider trading, intellectual property rights, and privacy. We also examine the challenge of determining
an ethical issue in business. Because of the global financial meltdown, there are certain
practices and products that have or will become issues and will either be defined as illegal
or unethical in the coming years. It is important that you understand that what was once
a legal activity can become an ethical issue, resulting in well-known practices becoming
illegal.
C
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RECOGNIZING AN
ETHICAL ISSUE
E
Although we have described a number ofM
relationships and situations that may generate
ethical issues, in practice it can be difficult to recognize specific ethical issues. Failure to
acknowledge such obscured ethical issuesEis a great danger in any organization, particularly if business is treated as a game in which
N ordinary rules of fairness do not apply. Sometimes people who take this view are willing to do things that are not only unethical but also
illegal so that they can maximize their ownTpositions or boost the profits of their organizations. Those involved in the marketplace have
, an additional set of values related to profit,
increased revenue, earnings per share, sales, return on assets, and/or return on investment
that they must address. All or part of these objectives come into play within business and
impact what people choose to do and howM
they justify their actions. In one’s home life, one
does not have the profit motive with which to contend. To be clear, businesspeople do not
A
have a unique set of values from others; rather, the values they have are weighted differT of the additional responsibilities associated
ently when doing business activities because
with the marketplace.
T
Business decisions, like personal decisions, involve an unsettled situation or diH an ethical issue does not mean the behavior
lemma. Just because an activity is considered
is necessarily unethical. An ethical issue E
is simply a situation, a problem, or even an opportunity that requires thought, discussion, or investigation before a decision can be made.
W new ethical issues are emerging all the time.
And because the business world is dynamic,
Table 3.1 defines specific ethical issues identified by employees in the National Business
Ethics Survey (NBES). Abusive behavior and lying to employees are personal in nature,
2 by individuals in the belief that they are furbut these activities are sometimes committed
thering organizational goals. Falsifying time
1 or expenses, safety violations, and abuse of
company resources are issues that directly relate to the firm’s agenda. Table 3.1 compares
9specific types of misconduct over the past two
the percentage of employees who observed
National Business Ethics Surveys.
1
Employees could engage in more than one form of misconduct; therefore, each type
T
of misconduct represents the percentage of employees who witnessed that particular act.
S of ethical issues that exist in organizations, it
Although Table 3.1 documents many types
is impossible to list every conceivable ethical issue. Any type of manipulation or deceit,
or even just the absence of transparency in decision making, can create harm to others.
For example, collusion is a secret agreement between two or more parties for a fraudulent,
illegal, or deceitful purpose. “Deceitful purpose” is the relevant phrase in regard to business ethics, as it suggests trickery, misrepresentation, or a strategy designed to lead others
to believe something less than the whole truth.
Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
63
Chapter 3: Emerging Business Ethics Issues
TABLE 3.1 Specific Types of Observed Misconduct
Behavior
2009 (%)
2007 (%)
Company resource abuse
23
n/a
Abusive behavior
22
21
Lying to employees
19
20
E-mail or Internet abuse
18
18
Conflicts of interest
16
C
14L
12E
11M
11E
10N
10T
10,
22
Discrimination
Lying to outside stakeholder
Employee benefit violations
Health or safety violations
Employee privacy breach
Improper hiring practices
Falsifying time or expenses
12
14
n/a
15
n/a
10
n/a
Source: From 2009 National Business Ethics Survey: An Inside View of Private Sector Ethics, Copyright © 2009, Ethics Resource Center (ERC). Used with
permission of the ERC, 2345 Crystal DR. Ste 201, Arlington, VA 22202, www.ethics.org.
M
Honesty
A
Honesty refers to truthfulness or trustworthiness. T
To be honest is to tell the truth to the best
of your knowledge without hiding anything. Confucius defined several levels of honesty.
T
The shallowest is called Li, which relates to the superficial
desires of a person. A key aspect
of Li is a striving to convey feelings that outwardly
H are or appear to be honest, but that are
ultimately driven by self-interest. The second level is Yi, or righteousness, where a person
E
does what is right based on reciprocity. The deepest level of honesty is called Ren, and it is
Wothers. The Confucian version of Kant’s
based on an understanding of and empathy toward
Golden Rule is to treat your inferiors as you would want your superiors to treat you. As a
result, virtues such as familial honor and reputation for honesty become paramount.
2
Issues related to honesty also arise because business
is sometimes regarded as a game
governed by its own rules rather than those of society
as
a whole. Author Eric Beversluis
1
suggests that honesty is a problem because people often reason along these lines:
1.
2.
3.
4.
9
Business relationships are a subset of human relationships that are governed by their
1 competition, profit maximization, and
own rules, which, in a market society, involve
personal advancement within the organization.
T
Business can therefore be considered a game people play, comparable in certain
S
respects to competitive sports such as basketball or boxing.
Ordinary rules and morality do not hold in games like basketball or boxing. (What if a
basketball player did unto others as he would have them do unto him? What if a boxer
decided it was wrong to try to injure another person?)
Logically, then, if business is a game like basketball or boxing, ordinary ethical rules
do not apply.4
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent righ…
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