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Ethics in Business Management

Google's founders, Larry Page and Sergey Brin, have never approached business in the traditional way, and their approach to corporate philanthropy is no excep-tion. They have put together a for- profit philanthropy ( Google. org) and given it a mandate to tackle poverty, disease, and global warming. As a for- profit entity, it will be responsible for paying taxes if any of its ven-tures shows a profit, and Google will have to pay taxes on any corporate earnings used to finance its work. The organization began operations with seed money of about $ 1 billion. Dr. Larry Brilliant, executive director of Google. org, compares its for- profit status to the keys on a keyboard, " Google. org can play the entire keyboard. It can start companies, build industries, pay consultants, lobby, give money to individuals and make a profit." Because Google. org is for- profit, its funds are available to Goo-gle whenever it would want to pull them back. Some skeptics object to this, noting that Google's directors or shareholders might want to take back funds in the event of an economic downturn. They may also resent paying taxes on expenditures intended to accomplish charitable purposes. Google. org announced that it intends to spend its money over the next 20 years. According to Dr. Brilliant, " Poor people can't wait. Dying people can't wait for some 20- year plan. It's not what we're doing here." Google moved quickly and, within a short time, compiled a list of over 1,000 ideas, which they winnowed down to five ideas in three areas— climate change, economic development, and building an early warning system for pandemics and natural disasters.

Read the Case above Address the following questions:
- Assess Google's decision to be a for-profit entity. Do you agree with that decision?
- How would your opinion change if you were a shareholder?
- How do the projects selected by Google relate to the company's bottom line? Why or why not does it matter to you? Explain.

Discussion Questions:
1. Outline the essential steps involved in developing a community action program.
2. Explain the pros and cons of community involvement and corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give.
3. Differentiate among community partnerships, strategic philanthropy, cause- related marketing, and cause branding. Provide an example of each.
4. Identify and discuss briefly what you think are the major trade- offs that firms face as they think about offshore outsourcing, offshoring, or plant closings. When substantial layoffs are involved, what are firms' responsibilities to their employees and their communities?
5. In your opinion, why does a business have a responsibility to employees and community stakeholders in a business- closing decision? Enumerate what you think are the major reasons.

1. Rank the various changes that are occurring in the workplace in terms of their importance to the growth of the employee rights movement. Briefly explain your ranking.
2. Explain the employment- at- will doctrine, and describe how it is being eroded. Do you think its existence is leading to a healthy or an unhealthy employment environment in the United States? Justify your reasoning.
3. In your own words, explain the right to due process. What are some of the major ways management is attempting to ensure due process in the workplace?
4. If you could choose only one, which form of alternative dispute resolution would be your choice as the most effective approach to employee due process? Explain.
5. How do you feel about whistle- blowing now that you have read about it? Are you now more sympathetic or less sympathetic to whistle-blowers? Explain.
6. What is your assessment of the value of the False Claims Act? What is your assessment of the value of the whistle- blower protections under the Sarbanes- Oxley Act?

Part 2:
Place yourself in the role of a personnel director for a bank. It is company policy that neither personnel files nor copies of files are to leave the personnel office. The director of accounting and computer services is due to give his employees their yearly employee evaluations and has sent a memo to your secretary requesting cop-ies of his employees' evaluations from the previous year. Your secretary shows you the memo. You are upset that the director would send such a memo to your secretary, because he should be aware of the pol-icy concerning employee files. So you decide to call the director and tell him that he is welcome to read the evaluations of his employees from the previous year in the personnel office. He tells you that he does not have the time to come to personnel and read the files and that he will speak to the president of the bank about this issue. The working relationship between you and the director has been addressed by the president before, and she has told the two of you that you need to be able to work out problems such as this between yourselves. The dilemma is whether you should go against company policy in an effort to avoid another lecture from the president, and let the director take the copies of the evaluations to his office, or adhere to the bank's policy on protection of employee privacy.

Read the Case above respond to the following questions:
•What are the main ethical dilemmas in this situation?
•How would you respond to the director's threat to step over you to the president?
•What would you do in this situation?
•If you had to come up with a definition of privacy in the workplace, what would it be?

Discussion Questions:
1. In your own words, describe what privacy means and what privacy protection companies should give employees.
2. Enumerate the strengths and weaknesses of the polygraph as a management tool for decision making. What polygraph uses are legitimate? What uses of the polygraph are illegitimate?
3. What are the two major arguments for and against integrity ( honesty) testing by employers? Under what circumstances could management most legitimately argue that integrity testing is necessary?
4. How has technology affected workplace privacy? What are the implications for the social contract between firms and their employees?
5. How has the World Trade Center tragedy affected workplace privacy? What are the long-term implications of that?
6. Which two of the four guidelines on the issue of privacy presented in this chapter do you think are the most important? Why?
7. Identify the privacy, health, and due- process ramifications of violence in the workplace.

1. List the major federal discrimination laws and indicate what they prohibit. Which agency is primarily responsible for enforcing these laws?
2. Give two different definitions of discrimination, and provide an example of each.
3. What effect do you think the Americans with Disabilities Act ( ADA) is having on businesses? Explain.
4. Explain the dilemma of affirmative action versus reverse discrimination. Do you think the Supreme Court is headed in the right direction for handling this issue? Explain.
5. Should preferential treatment be used in university admissions? Explain your answer.

Solution Preview

Step 1
Google's decision to be a for-profit entity is a positive decision. I agree with the decision. A not for profit entity has several restrictions. The IRS places several restrictions on a not for profit entity. A nonprofit cannot contribute for political campaigns, can only engage in limited lobbying activities, and cannot distribute profits to its members/officers/directors. The restrictions also include the nonprofits cannot make substantial profits from unrelated activities and if they do make profits they must pay taxes on it.

If I were a shareholder then I would resent on two points. First the money paid by Google can be pulled back if the performance of the company weakens. Second, Google has to pay tax on money paid for charity. These are not substantial objections. Google wants to pay taxes so that it can support innovative and aggressive charitable activities and it may draw back money when it wants to support its operations. Both these activities are acceptable. Even as a shareholder I will support Google's strategy.

The projects selected by Google relate to its bottom line. If there is climate change, there will be global economic adversity and the Google's profits will be affected. If there is economic development, more countries will use the services provided by Google and the profits of Google will increase. Building early warning system for pandemics and natural disasters will ensure that harmful effects of this disaster have minimum impact on people this will ensure that the market and profits of Google are not adversely affected.

Step 2
1. Steps involved in developing a community action plat are to first obtain commitment to preparedness and objectives. The second step is to conduct a vulnerability assessment. It means obtaining information about the needs of sections of community. The next step is to develop a response plan. The steps Google must take before and after an emergency. Next, the company must implement the action plan. For implementation, training has to be provided, equipment and materials have to be acquired, volunteers and employees have to be monitored, and regular drills have to be carried out. Finally, systems have to be put in place that will prevent the problem in future. For example, if there is a problem of education in an area, if the company sets up a school the problem may be avoided in future.

2. The pros of community involvement is that community needs are known, understood, and addressed. The cons of community involvement are that community politics interferes in the program, creates obstacles in implementation, and detracts from company philanthropy policy. Pros of corporate philosophy are that the company policy is implemented. The cons are that the real issues of the community may not be addressed. Corporate history began in 1903 when Henry Ford founded the Edison Institute. In 1877 Graham Bell founder of AT&T in 1877 began teaching the hearing impaired. Finally, JPMorgan founder of JPMorgan &Co donated most of his collection of art and books to the Metropolitan Museum in 1895. Companies give because they feel that they have a responsibility to the society and they give to those that they feel are disadvantaged.
3. Strategic philanthropy means corporate giving and philanthropic endeavors that fit with firm's mission, goals, or objectives. Community partnerships means the companies form a partnership with local community. For example, companies partner with a local sports club to encourage sport. Cause related marketing is the direct link of a business's product or service to a specified charity. For example, ...

Solution Summary

This solution explains ethical business practices. The sources used are also included in the solution.