Business Law Today Study Set 1

Business

Quiz 7 :

Ethics and Business Decision Making

Quiz 7 :

Ethics and Business Decision Making

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Ethical Conduct. Richard Fraser was an "exclusive career insurance agent" under a contract with Nationwide Mutual Insurance Co. Fraser leased computer hardware and software from Nationwide for his business. During a dispute between Nationwide and the Nationwide Insurance Independent Contractors Association, an organization representing Fraser and other exclusive career agents, Fraser prepared a letter to Nationwide's competitors asking whether they were interested in acquiring the represented agents' policyholders. Nationwide obtained a copy of the letter and searched its electronic Me server for e-mail indicating that the letter had been sent. It found a stored e-mail that Fraser had sent to a co-worker indicating that the letter had been sent to at least one competitor. The e-mail was retrieved from the co-worker's file of already received and discarded messages stored on the server. When Nationwide canceled its contract with Fraser, he filed a suit in a federal district court against the firm, alleging, among other things, violations of various federal laws that prohibit the interception of electronic communications during transmission. In whose favor should the court rule, and why? Did Nationwide act ethically in retrieving the e-mail? Explain. [Fraser v. Nationwide Mutual Insurance Co., 352 F.3d. 107 (3d Cir. 2004)]
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The federal laws related to this issue protect only those electronic communications which are made in the course of transmission and therefore the court should grant summary judgment in the favour of company N. In this case, the e-mail was already sent and was stored in the computers of company N.
Retrieval of messages or e-mails after they have been transmitted is not covered by the federal laws in this case. These laws only provide protection for those messages which are in transmission stage. Since company N retrieved Mr F's mails after post transmission therefore it is not prohibited under Federal laws.
Company N is ethically incorrect in retrieving Mr F's mail from the file server because it would be considered as an invasion of Mr F's privacy which is similar to searching someone else's garbage. It could also be considered as violation of duty towards the employees even though Mr F was working as an independent contractor.

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How did the dissent interpret the issue before the Court? What were the reasons for this interpretation?
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Dissent interpreted that company M paid royalties only under protest and due to the compulsion of injunction decree. The dissent claimed that if company M had not done so and defied it then it would have had to face the risk of actual as well as treble damages in the infringement suit.
The court stated that in this case, the requirement of a controversy or case are met if the payment of claim is asked as of right and payment is made, but the coercive or involuntary nature of exaction preserves the right of recovering the sum paid or to challenge the claim's legality.
Court further stated that Article III does not require the petitioner to terminate its license agreement for seeking a declaratory judgment that the underlying patent is not valid or not infringed.

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ETHICS. Suppose that either or both of the parties in this case had asserted their respective positions only to increase their profits. Would this have been unethical? Explain.
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Even if both the companies assert their positions only for profit then still it could be considered ethical if it results in greatest happiness for the greatest number of peoples i.e. the employees, shareholders and customers, under the Utilitarian ethical theory. This theory states any course of action which can maximise happiness and reduce suffering for the greatest number of peoples can be deemed as ethical.
In this case if both the companies are seeking profit for benefitting their customers, shareholders and employees then their actions would not be considered as unethical. However if both these companies just want to maximize their wealth and market position while ignoring the benefits of all others then their actions would be deemed as unethical.

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What is ethics? What is business ethics? Why is business ethics important?
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How can business leaders encourage their companies to act ethically?
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What type of ethical issues might arise in the context of international business transaction?
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CompTac, Inc, which is headquartered in San Francisco, California, is one of the leading software manufacturers in the United States. The company invests millions of dollars in researching and developing new software applications and computer games that are sold worldwide. It also has a large service department and has taken great pains to offer its customers excellent support services. One of CompTac's employees in its accounting division, Alan Green, has a gambling problem. To repay a gambling debt of $10,000, Green decides to "borrow" some money from CompTac to cover the debt Using his "hacking" skills and his knowledge of CompTac account numbers, Green electronically transfers CompTac funds into his personal checking account. A week later, he is luckier at gambling and uses the same electronic procedures to transfer funds from his personal checking account to the relevant CompTac account. Has Green committed any crimes? If so, what are they?
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CompTac, Inc, which is headquartered in San Francisco, California, is one of the leading software manufacturers in the United States. The company invests millions of dollars in researching and developing new software applications and computer games that are sold worldwide. It also has a large service department and has taken great pains to offer its customers excellent support services. Roban Electronics, a software manufacturer and one of CompTac's major competitors, has been trying to convince one of CompTac's key employees, Jim Baxter, to come to work for Roban. Roban knows that Baxter has a written employment contract with CompTac, which Baxter would breach if he left CompTac before the contract expired. Baxter goes to work for Roban, and the departure of its key employee causes CompTac to suffer substantial losses due to delays in completing new software. Can CompTac sue Roban to recoup some of these losses? If so, on what ground?
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CompTac, Inc, which is headquartered in San Francisco, California, is one of the leading software manufacturers in the United States. The company invests millions of dollars in researching and developing new software applications and computer games that are sold worldwide. It also has a large service department and has taken great pains to offer its customers excellent support services. CompTac routinely purchases some of the materials necessary to produce its computer games from a New York firm, Electrotex, Inc. A dispute arises between the two firms, and CompTac wants to sue Electrotex for breach of contract. Can CompTac bring the suit in a California state court? Can CompTac bring the suit in a federal court? Explain.
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Hypothetical Question with Sample Answer. If a firm engages in "ethical" behavior solely for the purpose of gaining profits from the goodwill it generates, the "ethical" behavior is essentially a means toward a self-sewing end (profits and the accumulation of wealth). In this situation, is the firm acting unethically in any way? Should motive or conduct carry greater weight on the ethical scales in this situation?
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What are corporate compliance programs?
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Business Ethics. Some business ethicists maintain that whereas personal ethics has to do with right or wrong behavior, business ethics is concerned with appropriate behavior. In other words, ethical behavior in business has less to do with moral principles than with what society deems to be appropriate behavior in the business context. Do you agree with this distinction? Do personal and business ethics ever overlap? Should personal ethics play any role in business ethical decision making?
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Ethical Decision Making. Shokun Steel Co. owns many steel plants. One of its plants is much older than the others. Equipment at that plant is outdated and inefficient, and the costs of production at that plant are now twice as high as at any of Shokun's other plants. The company cannot raise the price of steel because of competition, both domestic and international. The plant employs more than a thousand workers and is located in Twin Firs, Pennsylvania, which has a population of about 45,000. Shokun is contemplating whether to close the plant. What factors should the firm con-sider in making its decision? Will the firm violate any ethical duties if it closes the plant? Analyze these questions from the two basic perspectives on ethical reasoning discussed in this chapter.
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CompTac, Inc, which is headquartered in San Francisco, California, is one of the leading software manufacturers in the United States. The company invests millions of dollars in researching and developing new software applications and computer games that are sold worldwide. It also has a large service department and has taken great pains to offer its customers excellent support services. A customer at one of CompTac's retail stores stumbles over a crate in the parking lot and breaks her leg. The crate had just moments before fallen off a CompTac truck that was delivering goods from a CompTac warehouse to the store. The customer sues CompTac, alleging negligence. Will she succeed in her suit? Why or why not?
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ECONOMIC DIMENSIONS. This ease resolved what seems to be a technical question in a dispute between a pharmaceutical maker and a biotechnology firm. What is the practical importance of the ruling?
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CompTac, Inc, which is headquartered in San Francisco, California, is one of the leading software manufacturers in the United States. The company invests millions of dollars in researching and developing new software applications and computer games that are sold worldwide. It also has a large service department and has taken great pains to offer its customers excellent support services. One of CompTac's best-selling products is a computer game that includes some extremely violent actions. Groups of parents, educators, and consumer activists have bombarded CompTac with letters and e-mail messages calling on the company to stop selling the product. CompTac executives are concerned about the public outcry, but at the same time they realize that the game is CompTac's major source of prof-its. If it ceased marketing the game, the company could go bankrupt. If you were a CompTac decision maker, what would your decision be in this situation? How would you justify your decision from an ethical perspective?
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What was the majority's decision on the principal question before the Court in this case? What were the reasons for this decision?
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How do duty-based ethical standards differ from outcome-based ethical standards? 5 What types of ethical issues might arise in the context of international business transactions?
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The following multiple-choice question is representative of the types of questions available in one of the four sections of ThomsonNOW for Business Law Today. ThomsonNOW also provides feedback for each response option, whether correct or incorrect, and refers to the location within the chapter where the correct answer can be found. The primary focus of utilitarian ethics is the
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Ethics and Business Decision Making Isabel Arnett is the chief executive officer (CEO) of Tamik, Inc., a pharmaceutical company that manufactures a vaccine called Kafluk, which supposedly provides some defense against bird flu. The company began marketing Kafluk throughout Asia. After numerous media reports that bird flu may soon become a worldwide epidemic, the demand for Kafluk increased, sales soared, and Tamik earned record profits. Tamik's CEO, Arnett, then began receiving disturbing reports from Southeast Asia that in some patients, Kafluk had caused psychiatric disturbances, including severe hallucinations, and heart and lung problems. Arnett was informed that six children in Japan had committed suicide by jumping out of windows after receiving the vaccine. To cover up the story and prevent negative publicity, Amett instructed Tamik's partners in Asia to offer cash to the Japanese families whose children had died in exchange for their silence. Arnett also refused to authorize additional research within the company to study the potential side effects of Kafluk. Using the information presented in the chapter, answer the following questions. 1. In this scenario, it is not clear that the other corporate officers and Tamik's board of directors were aware of the actions of its CEO, Amett. Flow might an integrated corporate governance system ensure that all parties were informed of Arnett's conduct? 2. Would a person who adheres to the principle of rights consider it ethical for Arnett not to disclose potential safety concerns and to refuse to perform additional research on Kafluk? Why or why not? 3. If, during this same period, Kafluk prevented one thousand Asian people who were exposed to bird flu from dying, would Arnett's conduct in this situation be ethical under a utilitarian model of ethics? Why or why not? 4. Did Tamik or Arnett violate the Foreign Corrupt Practices Act in this scenario? Why or why not?
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