Faculty
Professor Richard S. Shreve
Objectives
This mini-course will involve students in an exploration of the ethical challenges and opportunities in the business world today. Integrity is the foundation of any successful business, and how that notion is fostered and cultivated will be highlighted throughout the course. Faculty members from diverse disciplines will lead discussions of ethical issues in cases involving their particular areas of expertise.
Ethics does not provide black and white answers to the complex issues of the business world. Rather, it provides a framework for decision-making that will guide business leaders in their professional roles. The questions we will address are controversial. Often, thoughtful people of good will can have strongly held opposing views on the issues. We will have the opportunity to review the positions of representative advocates of one side or the other, but, ultimately, you are expected to engage the issue and form your own opinions. The learning in this course will come from your willingness to internalize the issues and from the effort you put into formulating your own views so that you can express them clearly and convincingly in class discussion.
*The participation of our faculty is generously supported by the Albert G. Milbank Memorial Endowment in Ethics
Requirements
Tuck Honor Code and Attendance Policies
While the opinions you form should be backed by your own personal convictions, you are encouraged to discuss freely any of the materials contained in this course with your classmates, your friends, your spouse, or anyone else whose views you respect. Ethical dilemmas are seldom solved on a mountaintop. Most of us find it helpful to discuss hard decisions with people who know us well enough to recognize when we are rationalizing.
You are required to prepare for and attend each class. Consistent with Tuck attendance policy, absences may be excused for personal illness or family emergencies. A request for an excused absence for placement activities is unlikely to be favorably received. Since grades are heavily dependent on class participation, unexcused absences will adversely affect your grade.
Materials
Readings for each class are contained in the course packet.
There is no book for this course.
Grading
Participation
Grading in a course such as this is necessarily subjective. Your grade will be determined principally by an assessment of your success in engaging the subject matter and by your participation in class discussion and written responses to discussion questions. Participation that is limited to riding the coattails of other students’ comments will be viewed as less valuable than fresh insights and thoughtful arguments that influence the direction of the discussion.
Grading will not be done on a curve or in accordance with fixed quotas. However, unless there are compelling reasons to depart from customary practice, grades are likely to fall within the Tuck grade distribution guidelines.
Schedule
Sept 14
Introducing the Course: Objectives, Goals and Principles of Moral Leadership in Business
Sept 15
Governance and Ethical Leadership
Aine Donovan, "Managing By Deception: Leaks and Lies at Hewlett Packard"
Hand in: Please prepare a one-page response to the following question: If you had been asked to counsel Patricia Dunn when she first took office, what would you have advised her about the board leaks? Why? How?
Sept 21
Ethical Issues in a Changing Environment: Responding to the NGO Attack
Paul A. Argenti, "Collaborating with Activists: How Starbucks Works with NGOs", California Management Review, Fall 2004.
PETA's "Kentucky Fried Cruelty, Inc." Campaign
Prepare the following questions:
What is the problem?
How would you respond, if at all?
Sept 22
Other People's Problems? A Case of Harassment
Lonestar
Note on the Law of Sexual Harassment
Robert K. Robinson, Neal P. Mero, Dave L. Nichols, "More than Just Semantics: Court Rulings Clarify Effective Anti-Harassment Policies", Human Resource Planning 24, 4, 2001.
Talbot, Margaret, "Men Behaving Badly,", New York Times Magazine; October 13, 2002; New York Times; pg. 52.
Suppose you discover by accident that someone you work with may be bending or breaking the rules? Lonestar asks that question about a pervasive but potentially sensitive topic: sexual harassment. In addition to the case, please read the background material in the Note on Sexual Harassment and More Than Semantics. You are welcome to access any other relevant material.
Come to class prepared to discuss these questions:
How would you evaluate Jack DeCoste's options at this point? What, if any, additional information would you need to reach a decision if you were in his shoes? How would you get it?
From your reading of the note on sexual harassment law, do you think DeCoste got accurate advice when he called the counsel's office? Why might a lawyer representing the company insist on instituting a formal investigatory process?
In the end, what would you recommend Jack DeCoste do?
Please hand in your answer to question 1.
Sept 28
Real Estate and Ethics
Lakeside
The Broker’s Dilemma
Preparation: Please read the two short cases and prepare the following study questions:
Study questions for Lakeside:br
What would you do in this situation?
Why?
Study questions for The Broker’s Dilemma:
What should Michael Heller do?
Which of the ethical frameworks (Consequences, Duty, Values, Caring) was most helpful to you in deciding what he should do?
Hand in: When (if ever) does a business person have an obligation to provide information to a client that could alter projected profits? Why? How do you justify your position?
Sept 29
Copyright Infringement and Secondary Liability for Infringement
Lavoie, “Jury awards $675K in Boston music downloading case,” boston.com Aug 1, 2009, http://proquest.umi.com/pqdweb?did=1811854021&sid=3&Fmt=3&clientId=4347&RQT=309&VName=PQD
Lessig, “In Defense of Piracy,” WSJ Oct. 11, 2008, http://online.wsj.com/article/SB122367645363324303.html
Napster case:
http://www.law.cornell.edu/copyright/cases/239_F3d_1004.htm
Viacom v.YouTube: http://news.findlaw.com/cnn/docs/google/viacomyoutube31307cmp.html
Reading the four items above in the order they are presented is probably a good start. If you want to, you can find a lot more on all this stuff by searching the web. Some other cases that are fascinating are the US Supreme Court decisionin the Sony video recorder case(http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=464&invol=417) and the more recent decision in the Grokster case (http://www.law.cornell.edu/supct/pdf/04-480P.ZO).
Questions to think about:
I really want to get to the question of whether users of YouTube and YouTube (aka Google) itself is or was doing anything wrong, and therefore whether they should be doing something to fix their error.
Start with Mr. Tenenbaum, the grad student in Boston who was found guilty of violating copyright law. Was he doing anything wrong? Are you willing to defend his behavior?
And what about the case at the beginning of the Lessig piece, involving Stephanie Lenz. Did she do anything wrong? What about Google/YouTube – do they have some guilt in this? Or was Universal Music Group the culprit here?
The Viacom vs. YouTube case lays out the case against YouTube. What do you think?
The Napster case was a big case that brought many of these issues to the forefront – although it did not settle them entirely. I like to ask people what they think about Napster’s business model. Was it ethical? Would you feel all right working for a company like Napster?
It is also useful to think of the economics of copyrighted works. Why does it make sense to give copyright in the first place? In what sense are pirates actually promoting economic efficiency?
You should also think that the “secondary liability” issues here go well beyond copyright. The law in fact holds many parties responsible for others’ actions. Some of the other cases you will consider in this course will be ones that involve secondary liability (for suppliers’ and employers’ actions). How far are you willing to go in saying that we have responsibility (legal and/or ethical) for others’ behavior? Should banks be liable for companies they lend to (if the funded project ends up afoul of the law or ethics)? How about consultants – should they be responsible for what their clients do?
Hand-in: Is YouTube behaving unethically in its business model and in its response to copyright owners’ concerns about its site? Yes or no, and briefly (one page) explain.
Oct 5
Are bankers
"Subprime Meltdown: American Housing and Global Financial Turmoil", Harvard Business School, #9-708-042, Rev. May 6, 2008.
"The Financial Crisis of 2008," Harvard Business School, #9-709-036, December 16, 2008.
Nocera, Joe, " 'Nice' Wasn't Part of the Deal," New York Times, August 1, 2009, page B1 (continued).
"The Essence of Professionalism: Managing Conflict of Interest", Harvard Business School, #9-903-120, Rev. December 29, 2003.
Khurana, Rahesh and Nohria, Nitin, "It's Time to Make Management a True Profession," Harvard Business Review, October 2008.
As the title of this session implies, the intent is to consider whether bankers ---commercial and investment bankers, specifically, and financial service industry executives, more generally --- are, or should be considered, "professionals," and the implications of such a perspective or, even, designation.
The first two articles, above, are intended to provide background leading up to the financial crisis of the past several years. The first is a chronology of events; the second provides different analyses of the causes and possible responses. Obviously, "bankers" were right in the midst of the crisis.
Joe Nocera's New York Times article gets at the heart of the issue of today's session. What responsibility do bankers have to act in the best interests of their customers/clients vis-à-vis maximizing shareholder value and their own income?
The last two articles deal with the concept of a professional. The first is relatively definitional; the second raises the broader question of whether "management," generally, should be considered a profession.
Study Questions:
In what ways did "bankers" contribute to the extreme financial crisis of the past several years? Cite as many examples as possible.
What responsibilities do bankers have to act in the best interests of their customers/clients vis-à-vis maximizing shareholder value and personal income?
Are bankers, or should they be, considered professionals? What are the implications?
Hand in: Please write a one-page response to the following question. Is management, generally, a profession? Should MBA's commit to a "code of ethics"?
Oct 6
“Fiscal Policy and Distributive Justice:
Who Should Pay What Taxes and For What Purposes?”
For the United States and many other countries, the current and longer-term fiscal outlook is sobering. Very large deficits are currently being run—and are forecast to be continued for many years, if not decades, into the future. Recently the administration of President Obama announced that the U.S. federal deficit in the current fiscal year of 2009 will be about $1.6 trillion, or about 11.5% of GDP. Except for periods during the two World Wars, as a share of GDP this deficit will be the largest the United States has ever run in its history. The fiscal situation in many other countries is even more dire.
Many analysts—citizens, business leaders, elected and appointed government officials—say that these large fiscal deficits are not sustainable. Such arguments raise the important distributive-justice question of who should pay what taxes for what purposes? Today’s class discussion will be devoted to trying to answer this question, with a focus on the country in which most of you will live and work in the coming years—the United States
"Deficit Projected To Swell Beyond Earlier Estimates," Washington Post, 3/21/09. This short article describes the most-recent best-guess projections of the non-partisan Congressional Budget Office for the U.S. fiscal deficits 2009-2019.
Chapter 1 of A Preliminary Analysis of the President’s Budget and an Update of CBO’s Budget and Economic Outlook. Congressional Budget Office, March 2009. Chapter 1 of this report summarizes the CBO’s best-guess for the ten-year U.S. budget outlook.
Historical Effective Federal Tax Rates. Congressional Budget Office, April 2009. This short document—especially Table 1—gives an overview of who pays what in taxes.
Senate Testimony by Federal Reserve Chairman Ben S. Bernanke, "Long Term Fiscal Challenges Facing the United States, 1/18/07." In this testimony, Chairman Bernanke discusses the building fiscal pressures that face the United States because of entitlement programs and why today “seems likely to be the calm before the storm.”
Optional: In addition, I have included four short optional readings: four op-ed essays of recent days, all of which discuss the current fiscal problems facing the United States. The four authors—and their overall home papers—tend to come from different points of the political spectrum.
Optional: "Fiscal Suicide Ahead," David Brooks, The New York Times, 5/15/09
"America Requires a Dose of Health Care Reality," Clive Crook, The Financial Times, 5/17/09
"Obama’s Risky Debt," Robert Samuelson, The Washington Post, 5/18/09
"Soak the Rich, Lose the Rich," Arthur Laffer and Stephen Moore, The Wall Street Journal, 5/18/09
Prepare the following:
The massive current U.S. fiscal deficits as analyzed by CBO are being caused by what combination of forces: the state of the economy, tax policies, and spending policies? How about the massive future U.S. fiscal deficits discussed by Ben Bernanke?
Who currently pays how much in taxes in the United States today? Companies? Workers? Consumers? Note that this is a positive, empirical question: the two CBO readings, in particular, can help answer this question.
Hand in: Please write a one-page response to the following question. Who should pay how much in taxes in the United States—both today and in the future? Companies? Workers? Consumers? Note that this is a normative question: what notion(s) of distributive justice inform your answer to this question? For example, think about John Rawls and his notions of "the veil of ignorance" and "the original position."
TUESDAY, Oct 13
Wrap-up and Conclusion
