Business Ethics: Concepts & Cases: Chapter 8 Outline
The Individual in the Organization

Introduction

• Three Cases: Two unhappy campers & one happy one
• Assembly Line worker: unhappy camper
• the labor: boring, tedious, stupefyingly repetitive, fractionated nature of his task
• loss of dignity and disempowerment: has to ask to go to the bathroom
• lack of status: at the bottom of the corporate pyramid
• lack of hope for advancement: "When a man becomes a foreman, he has to forget about even being human as far as feelings are concerned."
• Plant Manager: happy camper
• conducts unscheduled tours & inspections of the plant
• tries to keep in touch with the workforce: "always stopping to talk to foremen or even hourly fellas"
• delegates assignments to supervisors & foremen: "Did you call maintenance?"
• shoots trouble: "Call me on this", "Can you help me on that?"
• meets with the operating committee to plan operations
• Conglomerate Ex-President: unhappy camper
• job insecurity
• pressures of office politics: caught in a squeeze
• "men working for you" who are "shooting for your job"
• "the guy your working for" who's afraid you are out to "shove him out of his job"
• job pressures: one major slip-up & you're history: plus it's on your permanent record
• life-style pressures off the job: fit into the mold: always be on guard
• you've got to be careful when you go to corporate parties: e.g., don't drink too much
• even your wife & children have to behave properly
• be careful who your friends are: "when I was president of this big corporation . . . [the] corporation specified who you could socialize with, and on what level."
• Internal Organizational Problems
• workers
• negatives: alienation, feelings of oppression
• positives: camaraderie with fellow workers (you're not competitors)
• middle management
• estrangement
• loss of camaraderie: you're no longer one of the guys you may have more in common with than you have in common with the "suits" above you.
• not really one of the bigwigs
• yet your job is to impose their directives
• even against the perceived interests of the workers below you
• issues of authority: burdens of responsibility & potential for abuse
• upper management
• estrangement: the higher you get in the pecking order the more intense the pecking
• issues of authority: burdens of responsibility & potential for abuse
• Preview: Three Models of the Organization
• The traditional "rational structure" model
• duties of the employee to the firm
• duties of the firm to the employees
• Political Structure Model
• employee rights
• organizational politics
• The Caring Organization

8.1 The Rational Organization

• Velasquez's Take: Defines the Organization as
• a structure of formal relationships
• explicitly defined
• openly employed
• to achieve some technical or economic goal
• E. H. Schein
• a rational coordination of the efforts of  a number of people
• through division of labor and function
• and a hierarchy of authority and responsibility
• for the achievement of some common explicit purpose or goal
• Organizational Chart: describes the core features of the organization
• representing the formal hierarchy of authority within the organization
• who is responsible for what
• and to whom are they accountable
• typically an organizational chart is pyramidal
• "higher ups" have authority over "underlings"
• pyramid is wide at the bottom narrow at the top: few "chiefs" & many "indians"
• three levels
• operating layer: employees who directly produce the goods and services that constitute the essential outputs or products of the organization:
• the line-workers such as the spot-welder (in the example).
• and their immediate supervisors: the line foremen (in the example)
• middle management
• direct the operating layers below them
• directed in turn by "higher ups"
• top management
• Vice Presidents
• Chief Executive Officer
• Directors
• how such organizations work (supposedly)
• general policy decisions get formulated at the top: the goals of the firm: "build a better widget"
• these decisions get passed down & "amplified" through the hierarchy as commands
• to the research dept.: test new materials & widget designs
• to marketing: survey customers widget preferences
• further decisions get passed down to the operating layers
• purchase 100 lbs of molybdenum, and 200 board feet of mahogany
• Contractual Basis of Organization
• Authority of higher ups and responsibilities of underlings based on contractual agreement between employees and the organization.
• employees freely & knowingly agree
• to accept the organization's formal authority
• and to undertake to pursue the organizations goals
• the organization agrees, in exchange, to give the employee
• payment: an agreed upon wage
• working conditions that enable the employee to perform the assigned tasks
• Moral force of this employment contract: each party takes on a duty to keep their promises
• employee has a duty obey the orders of superiors
• employer has a duty to
• pay the employees the wages agreed on
• supply them with working conditions that enable them to carry out the tasks assigned them
• Buttressing utilitarian consideration: organization is essential to efficiency & productivity of any enterprise
• all members of the firm pursuing the corporate goal
• following the same plan
• Focus on two reciprocal sets of obligations
• Employees
• to obey organizational superiors
• to pursue the organization's goals
• not to pursue conflicting goals
• Employers
• to provide employees with a fair wage
• and fair working conditions

8.2 The Employee's Obligations to the Firm

• Main Duty: to work towards the goal of the firm
• obedience to superiors
• avoidance of activities which might be harmful to these goals, e.g.,
• "white collar crime" = illegal pursuit of activities harmful to these goals
• mismanagement of funds
• malingering, absenteeism, etc.
• Law of Agency: "agents" = employees; "principals" = employers
• "an agent is subject of a duty to his principal to act solely for the benefit of the principal in all matters connected with his agency"
• and not for the benefit of "persons whose interests conflict with those of the principal in matters in which the agent is employed" (353)
• Preview: Several ways in which an employee may fail to work towards the goal of the firm
• By acting on conflicting interests
• Theft
• Abuse of privileges of one's position: e.g., insider trading

Conflicts of Interest

• Definition: A conflict of interest exists when an employee or officer in in company is engaged, for the company in carrying out a task in which the employee has a private interest
• possibly contrary to the interests of the company
• substantial enough that it reasonably might affect the employee's judgment
• Examples
• Financial: a corporate officer involved in deciding on bids from subcontractors when he or she holds stock in one of the bidding companies
• Non financial: a personnel officer involved in hiring decisions involving close relatives
• Actual vs. Potential Conflicts of Interest
• Actual: an employee actually discharges his or her duties in a way that is prejudicial to the firm out of self interest.
• Example: as a personnel officer I hire my incompetent brother over other more competent candidates because I want to help out my brother
• Immorality of actual conflicts of interest
• employment involves accepting an implied contract to endeavor to advance the goals of the firm in performance of your duties
• in trying to advance your own interests to the detriment of the firm you're violating the implied contract.
• Merely Potential: an employee is has motives that might tempt him or her to act in ways prejudicial to the firm out of self interest, but doesn't
• Example: as a personnel officer I hire my wonderfully qualified brother (who I want to help out) over other less competent candidates
• Morality depends on how likely they are to become actual conflicts
• preceding example: should I recuse myself?
• How close am I to my brother?
• How fair-minded am I: would I have hired my brother if he hadn't been the best qualified?
• yes?: then it was only by luck (no better qualified applicants) that I didn't transgress
• no: then I was less culpable in not recusing myself
• corporate policies meant to address uncertainties in this area
• limits on interests (e.g., stock) employees are allowed to hold in supplier firms
• prohibiting specified relations between employees and competitor and supplier firms
• full financial disclosure requirements for key officers
• Commercial Bribes and Extortion
• commercial bribe: a consideration given or offered to an employee by a person outside the firm with the understanding that when the employee transacts business with the giver or their firm the employee will deal favorably with them
• example: a supplier who offers a purchasing agent a "kick back" for placing orders with them rather than competitors
• extortion: when the employee demands a consideration from an agent outside the firm as a condition for dealing favorably with them
• example: purchasing agent who demands a "kick back" from suppliers as a condition for placing orders with them rather than competitors
• Gifts
• Commercial gifts: considerations given or offered to an employee by a person outside the firm with no understanding that the employee will deal favorably with them.
• Moral issue: the fine line (sometimes) between a gift and a bribe
• commercial gifts often given in hope of favorable treatment
• even some expectation by the giver of favorable  in their dealings with the recipient
• Factors to be considered when evaluating the morality of accepting a gift (suggested by Vincent Barry)
1. The value of the gift: is it substantial enough to influence one's decisions? (bad)
2. The purpose of the gift: was it intended as a kind of quasi-bribe? (bad)
3. The circumstances of the gift
• was it openly given? (good)
• was it given on some reasonable pretext: e.g., to celebrate some special event like X-mas? (good)
4. The position of the recipient: was the recipient in a position to advance the interests of the giver in the giver's dealings with the recipient's firm? (bad).
5. Accepted business practice in this area: Is it accepted practice? (good)
6. Company policy regarding the acceptance of such gifts: Policies against it? (bad).
7. Relevant laws: Is the gift forbidden by law? (bad)

Employee Theft

• Employer contracts to supply the employee only with the means to do the job and wages & benefits explicitly agreed to
• Appropriation of other assets of the employer is theft: taking property from its rightful owner without their consent.
• petty theft: small tools, office supplies, etc.
• at the managerial level
• petty: manipulation or padding of expense accounts
• "white collar crime"
• embezzlement & forgery
• fraud in the handling of trusts and receiverships
• Common theft in business settings is uncontroversially immoral
• Computer Theft
• Unauthorized examination, use or copying of computer information or programs constitutes theft
• information & programs are intangible property of the company
• taken without their consent notwithstanding
• the intangibility of the property
• the fact that the "taking" didn't deprive them of what they possessed: if I make a copy MS-Excel off my office computer to install on my home computer it's still there on the office computer.
• Discussion: What is property?
• Characterization: a bundle of rights that attach to some identifiable asset
• to exclusive use
• to decide whether and how others may use it
• to sell trade or give it away
• to modify or change it.
• within limits imposed by rights of others: e.g., I don't have the right to remove my car's catalytic converter & operate it in that condition
• claim: unauthorized employee appropriation of computer data and programs usurps these rights
• Trade Secrets
• aka "proprietary information": example the formula for Coca Cola nature
• definition: nonpublic information that
1. concerns a company's operations which, if it were to be known by competitors, would materially affect the companies ability to compete against these competitors: e.g., information concerning
• activities & plans
• policies, records, & technologies
2. is owned by the company because it was either
• developed by the company for its private use
• or purchased by the company for its private use
3. that the company clearly indicates that it does not want others, outside the company, to have
• by security measures
• explicit directives & contractual agreements
• limitation: skills acquired by working for a company do not count as trade secrets
• skills aren't information: considered parts of the employee's person not property of the employer
• controversial point: where does skill leave off and information begins
• Example: I'm a research scientist working for Biotech Inc. who gets a better offer Genetic Engineering Ltd
• Discussion: how do you draw the line between
• what I know about Biotech's lab procedures
• my ability to perform those procedures
• attempted corporate safeguards:
• employee contract provisions:
• agreement not to work for competitors for some fixed period after leaving the company
• courts have generally rejected such provisions
• pay offs: continued remuneration or retirement benefits offered to departing employees on the condition that they continue not to reveal proprietary information they have.

Insider Trading

• Insider trading: buying or selling stock in a corporation on the basis of "inside" information about the company
• Inside information: confidential or "proprietary" information about a company
• information not available to the general public outside the company
• which would have a material or significant impact on the price of the company's stock
• Example: CEO of Boeing Aircraft, has advance knowledge of impending award of a large government contract to Boeing
• anticipates rise in value of Boeing stock as a result
• uses advance knowledge to buy Boeing before the price rises
• or tells his brother-in-law to buy & his brother-in-law buys Boeing
• Dubious Morality
• illegal: a crime for which not a few bankers, stockbrokers, and managers have been prosecuted
• unethical, it's claimed, because the inside trader in effect "steals" proprietary information to gain an unjust advantage over others without this information
• famously tempting: the very nature of investment is such that success depends on informational advantage
• Defenses of Insider Trading
• modulates stock prices:
• market works most efficiently when corporate share prices truly reflect the assets & prospects of the corporation
• insider trading sends "signals" to others about discrepancies in share prices
• insiders buying signals the stock is underpriced
• insiders selling signals the stock is overpriced
• harms no one because inside traders trade at current market values
• those who buy shares from insider aren't harmed
• will, no doubt regret it after the value goes down (as the insider knew it would)
• but they would have bought at the stock at the same price from someone else, anyhow
• those who sell to an insider aren't harmed
• will, no doubt, regret it after the value goes up (as the insider knew it would)
• but they would have sold the stock at the same (market) price to someone else, anyhow.
• it's not true that the inside trader's advantage is unfair
• nature of the stock market that some have more and better information than others
• because they are (or can afford to hire) expert stock analysts
• because they're well connected
• inside information is just one (among many other) ways of being informationally advantaged
• there is nothing unethical or unfair about having an informational advantage
• Indictments of Insider Trading
• The information the trader uses does not belong to him or her but is, essentially stolen: it's not just one way, among others, of obtaining an informational advantage: the other ways don't involve theft
• Not true that insider trading is beneficial to the market and harms no one
• reduces size of the market
• those lacking inside information perceive the game as rigged against them, so they leave or don't enter the market
• decreases market efficiency: fewer traders cause, among other things
• decline in liquidity of stocks
• increase in the variability of stock prices
• increased concentration of risks
• increases the costs of buying and selling stocks
• on the NYSE stocks are bought through intermediaries called specialists who
• buy stocks from those who want to sell
• hold stocks for those who want to buy them later
• holding stocks bought from insiders is risky
•  insiders must think they'll go down
• so specialists have to raise the fees they charge in order to cover these losses
• Illegality: fairly settled except for the exact scope of what constitutes "inside information"
• SEC has prosecuted many cases: according to these court decisions in these cases "insider trading" is held to consist in
• trading a security while in possession of
• nonpublic information that can have a material effect on the price of the security
• and that was acquired, or known to have been acquired, in violation of an individual's duty to keep this information confidential
• notable point: second parties can be guilty of insider trading
• even if they themselves didn't wrongfully acquire the information
• if they were in possession of information they knew to be wrongfully acquired by someone else

8.3 The Firm's Duties to the Employee

• The basic moral obligation the employer owes to the employee on the "rational structure" view are
1. to provide them with the compensation they have freely and knowingly agreed to receive in exchange for their services
2. to provide them with working conditions they have freely and knowingly agreed to accept
• Main issues relate to the question of how free and knowing the worker's consent.
  • the fairness of the wage
• the fairness of the working conditions

Wages

• Dilemma: What's a fair wage?
• employees want higher wages
• employers want to minimize production costs (including labor)
• for competition's sake
• and profit's sake
• A complicated question: the fairness of wages depends on several factors
• public supports available to workers, e.g. social security, Medicare, unemployment compensation, public education, welfare
• the freedom of labor markets (effects how freely the parties contract)
• other things: worker contribution, worker needs, competitive position of the firm
• Factors to be taken into account in determining wages and salaries
1. going rate in the industry and the area:
• labor markets provide rough indicators of what's fair if we assume competitive markets are just
• going rate a function of supply & demand
• if the supply of workers is low and demand for their work is high employers bid wages up
• if the supply of workers is high and demand for their services is low workers wages down
2. the firm's capabilities
• the higher the firm's profits the more generously it can afford to pay its workers
• it's exploitative when a highly profitable firm takes advantage of cheap labor in a closed market
3. the nature of the job: higher compensation warranted for jobs involving
• greater health risks or heavier physical or emotional burdens
• less security job security
• more required training and experience or greater required effort
4. minimum wage laws set a floor beneath which wages are both unlawful and unfair
5. relation to other salaries: workers doing roughly similar work should receive similar salaries within the organization
6. the fairness of the wage negotiations: relates how freely and knowingly did parties enter the contract? 
   • absent deceit: e.g., management "cooks the books" to hide profits
   • absent coercion: e.g., International Brotherhood of Godfathers makes management's negotiator "an offer he can't refuse"

Working Conditions: Health and Safety

• Facts and Figures
• Workplace Injuries
• 4,700,000 workplace injuries and 5,000 fatal on-the-job accidents/yr
• 10% of the workforce suffers an job related injury or illness each year
• resulting in loss of over 31 million work-days annually
• additionally there are "delayed occupational diseases" caused by factors in the workplace (e.g., chemical exposure) but only developing after the worker has left the workplace.
• Costs of worked-related deaths & injuries in 2002
  • $40 billion of direct costs (medical costs and payments to workers)
  • $240 billion of indirect costs (lost productivity, overtime, etc.)
• Workplace Hazards: a lot of workplaces are hazardous to your health
• very serious hazards include
• exposure to toxic chemicals, pathogens, carcinogens:
• radiation
• less serious (but more common) hazards include
• even moderately high levels of noise cause hearing loss over time
• repetitive stress injuries, carpal tunnel syndrome, etc.
• OSHA (the Occupational Safety and Health Administration) created by act of congress in 1970
• Aim: "to assure as far as possible for every working man and woman in the nation safe and healthful working conditions."
• Criticisms of OSHA: inadequate number of field inspectors (800) & inefficient regulation
• Good results according to one poll
• 36% of firms surveyed had implemented safety programs as a result of OSHA
• 72% said OSHA had influenced their safety efforts
• Trends in on the job deaths & disabling injuries 1970-2001
  • deaths: trended downward from 18 per 100,000 to 4 per 100,000
  • disabling injuries: totals rose from 2.2 million to 3.9 million
• Some unavoidably risky occupation
• examples: race-car driver; deep-sea diver; bridge construction worker
• not objectionable so long as they are
1. fairly compensated for assuming the risks
2. freely and knowingly accept the risks in exchange for the compensation
• Problematic Cases:
• workers might incur risks unknowingly in accepting the work
• because they lack the time and expertise to fully research & understand the hazards of a job they accept
• because the risks are unknown: e.g., asbestos mining, painting watch dials with radium paint
• workers accept known risks out of desperation due to uncompetitive labor markets, e.g., coal miners in Appalachia
• where no other well-paid positions are available
• who lack of mobility to relocate to where less risky work is available or lack of information on available alternatives
• Employer Guidelines
• general: insure that the worker is not being unfairly manipulated into accepting risks without
• full knowledge
• full consent
• due compensation
• specific guidelines
1. offer wages that reflect the risk-premium prevalent in other similar but competitive labor markets
• e.g., coal mine owner might compare risk-premiums paid asbestos removal workers
2. provide workers with suitable health insurance programs to protect against unknown hazards
3. research the health hazards that accompany each job and make all such information readily available to workers.
• "sweatshops" and "outsourcing"
  • sweatshops: workplaces featuring poor working conditions and low wages: prevalent in developing nations where health and safety laws are lacking or ill enforced
  • outsourcing:
    • the export of labor to low-wage unsafe-workplace countries
    • usually the work is contracted out: somebody else owns the factory and employs the workers that make Nike shoes (e.g.)
  • A U.S. company is responsible for working conditions in foreign factories it hires to make its products if
    • the company can and should do something to change working conditions at the factory
    • knows about these working conditions
• workplace violence
  • 1 million workers nonfatally assaulted & 600-700 killed in their workplace annually
  • 7% of all occupational deaths are homicides, making homicide the 3rd leading cause of occupational death
    • 70% of workplace homicides occur during robberies of taxicabs, convenience stores, etc.
    • 13% due to angry co-workers
    • 7% due to customers
    • 10% due to assorted others: spouses, acquaintances, relatives, etc.
  • Employers have an obligation to take steps to reduce risks from workplace violence as with other risks

Working Conditions: Job Satisfaction

• The Rational Structure of the Organization
• an ordering towards some economic or technical goal
• as represented by the organizational chart
• vertical dimension: authority relations:
• horizontal dimension: division of labor
• since specialization is often most efficient, organizations tend to incorporate highly specialized tasks
• vertical specialization: restriction of the range of control and decision making over the activity the job involves
• horizontal specialization: restricting the range of tasks & increasing the repetition
• Onerousness of job specialization
• As noted by Adam Smith: job specialization negatively impacts mind and body
• "The man whose whole life is spent performing a few simple operations has no occasion to exert his understanding" and "generally becomes as stupid and ignorant as it is possible for a human creature to become."
• "It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigor and perseverance, in any other employment than that to which he has been bred."
• Kornhauser's findings on auto workers
• 40% of auto workers suffered some sort of mental health problem
• only 18% could be considered to have good mental health
• Sanislav Kasl: factors related to both low job satisfaction and poor mental health
1. lack of control over work
2. inability to use skills and abilities
3. highly fractionated, repetitive tasks involving few diverse operations
4. no participation in decision making
• only 24% of blue collar workers say they'd choose the same sort of work if they could start over
• Problem of compensating those who do boring, tedious, and stupifyingly repetitive work for the psychological injuries it does
• the most specialized work is the most unskilled: the fewer & more repetitive the tasks: the less skill and training required
• unskilled labor (since anyone can do it} commands the lowest level of compensation
• unskilled workers often have no real freedom of choice: they must accept fractionated work or not work at all
• Three determinants of job satisfaction (Hackman, Oldham, Jansen, and Purdy)
• Experienced meaningfulness: workers perceive their work to be meaningful according to some system of values they accept.
• Experienced responsibility: workers believe they are accountable for the outcomes their efforts.
• Knowledge of Results: workers can regularly determine whether the outcomes of their work are satisfactory.
• One proposed remedy: work teams
• giving workers greater involvement in and control over a variety of work tasks has been shown to increase productivity
• vertical deepening: allowing more employee control over tasks, e. g., giving worker teams responsibility for scheduling their own work assignments, breaks, & inspection procedures
• horizontal enlargement: e.g., replacing single workers performing single repetitive tasks with small teams who are jointly responsible for (a certain number of) complete assemblies

8.4 The Political Organization

• The rational model is views the corporation in the abstract: a kind of idealized organization
• an organization
• hierarchy: lines of command
• role assignments: division of labor
• for some economic or technical purpose
• Real corporations and workplaces are far from this ideal
• more like Dilbert's workplace
• behaviors and situations that don't seem to fit within the orderly pattern of the rational model
• personal intrigues & personality clashes
• arbitrary treatment by superiors
• Dilbert's pointy haired boss
• Catbert evil director of Human Relations
• scrambles for career advancement.
• interdepartmental battles for company resources.
• Political Model of the Organization: focuses on real (not just official) relations of authority
• contrast with rational structure model
• dynamic vs. static: power is constantly shifting
• through power struggles & authority clashes
• unlike the static formal authority relations portrayed by the organizational chart
• does not assume all organizational behavior is rationally ordered toward a given economic goal
• alternative characterization of political model
• elements
• a system of competing power coalitions and
• formal and informal lines of influence and communication that radiate from these coalitions.
• characterization of the organization in these terms
• individuals seen as grouping together to form coalitions
• coalitions viewed as competing with each other for resources
• the direction or "goal" of the organization is established by the historically most powerful or dominant coalition
• goals are not dictated by "rightful" authority
• but negotiated among more or less powerful coalitions
• fundamental organization reality is power
• not formal authority or contractual relations
• power: the ability of the individual or group
• to modify the behavior of others desired ways (to take)
• without having to modify their own in undesired ways (without giving).
• Discussion
• formal authority, of course, is a major source of real power: the boss's say so is backed by sanctions
• the foreman can make you hold it . . . or else
• the plant manager can make the foreman make you do it . . . or else
• informal sources of power & information "may travel completely outside (even contrary to) formal lines of authority and communication."
• issues connected with acquisition of informal power are not issues of contractual obligation
• Principal moral issue: "What, are the moral limits to the exercise of power within an organization?"
• Employee rights: What are the moral  limits on the power superiors acquire & exercise over subordinates?
• Office politics: What moral limits are there on the power employees acquire and exercise over each other?

8.5 Employee Rights

• Similarity of Corporate Management to Government: Corporations are little Fiefdoms
• Defining features of government or political authority
1. centralized body of decision-making officials
2. who have the power and recognized authority to enforce their decisions on subordinates
3. making decisions that determine the public distribution of social resources
• of benefits: rewards
• of burdens: tasks
4. having a monopoly on such power.
• All these feature also seem characteristic of corporate management: within the organization
1. top level management: a centralized body of decision-making officials
2. has the power and recognized authority to make business decisions subordinates must obey or else
3. decisions determining distribution of
• status, power, perks, position, and pay
• and assigned tasks and responsibilities
4. and they're the only one's in the organization that have these powers
• Thesis: there are moral limits to the power that corporate managers may exercise over subordinates analogous to recognized limits on governmental authority.
• Civil rights of citizens: to speak and assemble freely; to keep and bear arms; privacy rights; etc.
• parallel moral rights of employees: privacy rights, free speech rights, etc.
• Disanalogies & Objections
• Different bases of the two kinds of authority
• Political authority (in theory) based on the consent of the governed: a social contract
• civil rights come from limited nature of citizens' consent
• civil rights are, in effect, negotiated limitations on the citizen consent
• Corporate authority based on ownership of the business
• owners have right to impose whatever conditions they choose on employees
• since in accepting employment employees freely and knowingly contracted to accept owners' authority
• Unions limit the power of corporate management: there is no similar countervailing power to authority of government.
• Greater voluntariness of employment
• very hard to change citizenship
• "love it or leave it" they say: but leaving is generally not that viable an option
• so citizens need civil rights for protection against abuses of political authority
• much easier to change employers, so there's no comparable need for employee rights
• Replies to the Objections
• The distributed nature of corporate ownership nowadays undercuts the prerogatives of ownership
• ownership commonly dispersed nowadays among many stockholders
• managers do not simply function as the owners agents as the idealized picture painted by the rational structure view suggests
• so appeal to property rights is no longer sufficient to warrant absolute managerial authority
• not all workers are unionized: and if managers had their way a lot fewer would be
• changing jobs is sometimes nearly as hard and traumatic as changing countries: many people switch countries to keep their jobs!
• Question: what specific rights are employees owed

Right to Privacy

• Right to privacy, broadly speaking, is the right to be left alone.
• Narrowed sense for this discussion:
• the right not to have others pry into your private life
• the right to determine the type and extent of disclosure of information about yourself.
• Practices, policies, and technologies threatening employee privacy
• corporations legally entitled to monitor employee
• computer use, including e-correspondence
• telephone conversations
• polygraph testing: not admissible in courts of law but
• can be legally used in some circumstances -- e.g., internal investigations of employee theft -- in most industries
• in "exempt industries" can be used more widely: e.g., as part of preemployment interviewing
• computerized databanks enable companies to obtain personal information about employees, even, supposedly "confidential information"
• medical records
• credit histories
• criminal and arrest records
• genetic testing: vast intrusive potential: e.g., could be used for screening prospective employees for genetic predispositions which might add to company health insurance costs
• urine tests allow companies to screen employees for alcohol use, drug use, & tobacco use at home.
• written tests, psychological inventories, and "honesty" tests pry into · personal characteristics and tendencies,  that employees might rather keep private, e.g., "level of honesty," sexual orientation.
• Two types of privacy:
• psychological: right to keep your thoughts to yourself
• hopes & fears
• religious beliefs, political persuasions, etc.
• Physical: right not to be physically surveiled
• partly for the sake of psychological privacy: since our deeds (even our tics) can reveal our thoughts
• partly valued for its own sake: intrusions on physical privacy may be objectionable in themselves
• e.g., use of hidden cameras & microphones in the bathroom to protect against employee theft or malingering
• Moral Importance of Privacy
• protective functions
• inhibits others from obtaining information about us that could be used to harm us
• e.g., to blackmail us, to expose us to shame or ridicule, etc.
• inhibits others from interfering in our plans & pursuits
• because they're opposed to them or offended by them
• to "back-stab" us in competition for promotions, from sheer cussedness, or whatever
• protects loved ones from being confronted with things they might not want to know
• protects us from self incrimination & involuntarily harming our own reputations
• enabling functions
• enables formation of personal relations of friendship, love, and trust: intimacy involves self revelation
• it presupposes individuals have private lives to share
• information about us that is not for everyone & activities not for public exhibition
• necessary to the formation & maintenance of certain professional relations
• e.g., doctor-patient & attorney-client
• enables individuals to separate their professional & private personal lives
• gives individuals control over their own self presentation or image
• Like all rights privacy rights need to be balanced against other rights and needs
• employers' needs to know the qualifications and work-experience of prospective hires
• employers' rights to protect themselves against employee theft, fraud, etc.
• Three elements should be considered in considering collecting of information that threatens an employee's privacy:
1. relevance of the information
2. consent of the employee
3. method by which the information is obtained
• Relevance: the employer should limit the inquiry to what's material to the issue at hand
• inquiry into matters unconnected with job performance is wrongful invasion of privacy
• if potentially damaging information unconnected with job performance is discovered
• it should be destroyed, not kept
• and certainly not revealed or "leaked"
• in general lower-level employees warrant less scrutiny -- are entitled to a greater zone of privacy
• due to the irrelevancy to their job performance {by and large) of factors like
• marital problems, political affiliations, emotional characteristics
• the higher up in the managerial hierarchy you go, the cloudier the issues of relevance become
• top managers are called on to represent their companies to others
• personal characteristics -- like the above -- are potentially relevant to their performance of this representative function: personal problems might be seriously bad for business
• VPs drinking problem
• membership in a disreputable association (the Michigan Militia)
• Consent: employees must be given the opportunity to consent to or refuse investigation
• consent often regarded as a condition of taking the job on the grounds that one is otherwise free to refuse the job
• surveillance: employees should be informed of surveillance measures in effect
• Method:
• ordinary & reasonable, e.g., normal supervisory oversight
• extraordinary & unreasonable:
• hidden microphones & cameras, wiretaps, use of spies
• personality tests, polygraphs
• extraordinary circumstances: extraordinary measures may be reasonable & acceptable if
1. the firm has a problem that seems to be solvable by no other means
2. the problem is serious & the firm has good reason to think the extraordinary means will solve it
3. the use of the extraordinary means is not prolonged beyond the time needed to solve the problem (apprehension of the culprits, or whatever) or beyond the time it becomes clear that the problem won't be solved by these means
4. all immaterial information must be disregarded and destroyed
5. failure rates of extraordinary devices (e.g., drug tests & polygraphs) are taken into account: "information" derived from fallible sources should be verified by means not subject to the same failure rates
   • e.g., more expensive drug tests
   • independent investigation of discrepancies "revealed" by lie-detector tests

Freedom of Conscience

• Employees may discover, in the course of doing their job, that a corporation is doing something wrong or injurious to society
• commonly insiders are the first to become aware of matters of potential moral concern, e.g.,
  • defective products
  • polluting practices
  • unsafe working conditions
  • illegal activities
• Employee options
• bring the matter to the attention of superiors who
• may want to know & do something about it
• but also might not
• other options are legally limited: if the employee goes public with the information this is just cause for termination
  • under law such disclosure considered a breech of the employee's duties of loyalty and confidentiality to the firm
  • in extreme cases employers may put the matter on the employees record & attempt to see to it that the employee is black-balled throughout the industry
• Complaint: this situation in in violation of individuals right of conscience:
• a right individuals have to adhere to their religious and moral convictions
• hence not to be forced to cooperate in activities they believe to be wrong

Whistleblowing

• An attempt by a member or former member of an organization to disclose wrongdoing in or by the organization.
• Internal vs. external
• internal: disclosure to superiors
• external: disclosure to outsiders, e.g., legal or regulative authorities, or the press
• High personal costs of {external?) whistleblowing: studies show
• 100% who worked for private businesses were fired
• many reported subsequent difficulty finding work
• many symptoms of anxiety, stress, and other life setbacks reported
• Argument against external whistleblowing
• employee has a contractual obligation to be loyal to their employers and keep inside information confidential
• external whistleblowing is a violation of that obligation
• so, external whistleblowing is always wrong
• Reply contractual obligations aren't unqualified:
• contracts that require parties to do something illegal or immoral are void.
• so, external whistleblowing is morally permissible or even obligatory under certain circumstances
• if necessary to prevent a wrong one has a moral right to prevent, it's permissible
• if necessary to prevent a wrong one has the moral duty to prevent, it's obligatory, especially if
• it's specifically your duty because it falls within the sphere of your professional responsibilities
• it's reasonably certain that if you don't do anything, no else one will
• the wrong-doing or harm that will be prevented is very substantial.
• if necessary to bring about a good that one has a moral right or a moral duty to bring about
• permissible if one has the moral right
• obligatory if one has the moral duty, especially if
• it's specifically your duty because it falls within the sphere of your professional responsibilities
• it's reasonably certain that if you don't do anything, no else one will
• the good that will be brought about is very substantial.
• provisions limiting the moral right (and sometimes duty) to blow the whistle externally
• there is clear, substantiated, and reasonably comprehensive evidence of harmful activity or wrongdoing on the part of the firm
• reasonable attempts to stop the harm or wrong through internal whistleblowing have failed
• it is reasonably certain that the external whistleblowing will stop the harm or right the wrong
• the wrong or harm that the whistleblowing prevents is greater than the harm that the whistleblowing will cause to other parties, e. g., stockholders, superiors, and fellow employees.
• Justified occurrences of external whistleblowing can be seen as indications of failures of an organizations internal communication systems.
• a symptom of structural problems that prevented the employee from redressing the situation through internal channels.
• companies should have clear policies or procedures to enable employees to voice their moral concerns outside the standard chain of command
  • the problem might originate with or otherwise concern your immediate superiors so that complaining to them (up the chain of command) may be pointless or even counterproductive
• going over one's immediate supervisors head is generally resented by supervisors & may lead to reprisals against the employee
• the absence of internal whistleblowing policies and procedures often leaves employees with no way of taking there concerns to anyone in the organization who is willing and able to do something: making their only live options
• quitting
• external whistleblowing
• Some companies provide channels and procedures to facilitate internal whistleblowing, e.g.,
• by establishing a company "ethics hotline" (say an 800 number)
• by having a company "ethics officer"
• to whom employees can report their concerns while remaining anonymous if they choose
• giving authority of the ethics officer
• to fully investigate allegations
• reports the results to higher management including, if necessary, the board of directors
• subject supervisors who retaliate against (suspected) whistleblowers to discipline

The Right to Participate and Participatory Management

• Workplace Democracy
• Features of Democracies
  • majority rule: decisions that effect the group are made by a majority of its members
  • freedom of discussion: decisions are made after full free and open discussion
• Features for the most part lacking in business organizations: little fiefdoms (not democracies):
  • one person (or small group) rule
• not by consent of the governed by right of ownership or appointment by ownership
• Proposals for democratization of the work place a "moral imperative": 3 levels of participation
1. worker right of consultation on decisions directly affecting them
• merely consultative function
• encourages employee input in the form of criticism & suggestions
• implies right of employees to access to information relating to such decisions
2. granting workers decision making power in decisions directly affecting them, e.g.,
• working hours & breaks
• organization of tasks and assignments
3. allowing workers to participate in major policy decisions
1. through consultation
2. decision-making
• Controversy:
• Organizational democracy unpopular with management . . . especially in U. S.
• Managers cite lack of employee enthusiasm & interest
• Ideological appeal to the difference between governmental and business authority
• government authority is legitimized by consent of the governed & so should be democratic
• management authority is legitimized by right of ownership & so may be authoritarian
• Counter concern: business organizations are now playing a greater and greater role in our lives
• which means, if our workplaces are undemocratic
• democratic values, practices, and attitudes will become more and more peripheral to the actual conduct of our lives and the decisions that affect them.
• Participatory Leadership Management Style
• Management dictates more benevolently and consultatively: similar to approach 1
• Various analyses (Rensis Likert): 4 management styles or "systems"
1. exploitative authoritative
2. benevolent authoritative
3. consultative
4. participative
• Evidence for claims that more participative management styles improve productivity in organizations that use them is inconclusive.

The Right to Due Process versus Employment at Will

•  Employment at will principle
• unless employees are protected by explicit agreement (as with a union contract)
• employers "may dismiss their employees at will . . . without being thereby guilty of legal wrong" whether
• "for good cause , for no cause, or even for causes morally wrong." (461 )
• Theoretical Justification: prerogatives of property ownership
• as owner of the business the employer the right to decide who will work for the business
• as nonowners employees have no right to decide how the business will be run and whom it employs
• Objections to "employment-at-will" principle
1. based on a false assumption:
• that employees "freely" accept employment and are "free" to find employment elsewhere
• falsity of it: workers bear heavy costs of job search and going unpaid while doing so
2. considerations of reciprocity support worker rights to fair treatment
• workers generally make a conscientious effort to contribute to the firm with the implicit understanding that the firm will deal fairly and conscientiously with them in return
• workers therefore have a quasi-contractual right to fair treatment based on this implicit agreement.
3. workers have a right to be treated with respect as free persons: to nonarbitrary treatment, and not to be harmed unfairly
• Waxing recognition of employee rights to "due process"
• due process guarantees employees rights not to be treated arbitrarily, capriciously, or maliciously, in business decisions affecting them
• particularly important area of application: grievance procedures
• due process requires explicitly defined policies for handling employee grievances
• Trotta & Gudenberg's five elements of an effective grievance procedure
1. three to five steps of appeal (depending on organization size)
2. a written account of the grievance when it goes past the first level
3. alternate routes of appeal so the employee can bypass their immediate superiors if necessary
4. a time limit at each step of the appeal to assure employee that their grievance will be dealt with in a reasonable amount of time
5. permission for employee to be accompanied by coworkers (1-2) at each interview or hearing
• helps overcome fear of reprisal
• assures employees that the procedures are being followed and honored

Employee Rights and Plant Closings

• Plant closings due to any number of factors are not always avoidable in a market economy
• competition from other firms
• with newer or better equipment: Japanese steel mills
• cheaper labor: U. S. Steelworker $23/hr. vs. Latin American Steelworker $2/hr
• product and plant obsolescence
• competition from more productive plants within the same firm
• due to newer or better equipment
• cheaper labor: exportation of jobs
• Employees can be seriously negatively impacted
• Ethical Concerns
• Rights: workers rights to be treated only as they freely & knowingly consent to be treated
• implies right to information about impending shutdowns that will affect them
• legally recognized in other countries which require extended advance notification, including Great Britain, Germany, Sweden
• Utility: harm should be borne by the party who will suffer least
• the corporation or corporate owner usually has greater resources than the individual workers
• the corporation should bear many of the costs of plant closure, e.g., worker transfer & worker retraining
• Justice
• workers and communities have made substantial contributions to the business
• should be assured that companies will not abandon them by unfairly terminating
• worker pension plans, health plans, & retirement plans
• corporate contributions to the local community
• Ethical recommendations (of William Diehl)
1. advance notice: at least 12-18 months
2. severance pay: l wk/yr of service
3. health benefits extended at least 1 yr. beyond employee's date of dismissal
4. early retirement: with full benefits for workers within 3 yrs. of their normal retirement with years of service with benefits computed as if they had worked up to that date
5. transfer opportunities at no loss of pay with company payment of moving expenses
6. job retraining: company sponsored training & counseling
7. employee purchase opportunity: the workers and community should be offered the chance to purchase the plant and operate it under an employee stock ownership plan (ESOP) . . . if viable
8. phasing out local taxes over a five year period

Unions and the Right to Organize

• Derivation of the right to organize: what gives us the right?
• general right to freely associate implies a right to freely associate with fellow workers to pursue common interests
• right to be treated as free and equal person implies a right to countervailing organization
• "what force on earth is weaker than the feeble strength of one, but the union makes us strong"
• workers need this organization to countervail the corporate might of management
• Right to strike:
• right of each worker to quit his/her job at will implies the right of all strike
• so long as it violates no prior agreements: e.g., nonstrike clauses previously agreed to
• and so long as does not violate the rights of others: e.g., citizens whose rights to protection & security might be violated as in strikes by firefighters & other public workers.
• Recent History of Union Decline
• 1947: 35% of the workforce unionized
• early 1990s: down to 16%
• 2004: 14%
• Causes of Decline
• increases in percent of workforce comprised of white collar & female workers
• at one time 75% of all unionization votes passed: used to be
• presently 55% of all unionization votes fail
• decline in public confidence in unions
• management opposition
• legal tactics include aggressive propagandizing against unionization & lobbying for laws impeding unions
• use of illegal tactics widespread
• illegal interference with would-be organizers' rights
• reprisals against employee-organizers for attempting to exercise their right to organize
• Consequences of this decline
• increasing dependence on legislative means to protect the rights of workers: workers are increasingly dependent on governmental regulation for protections previously afforded under union contracts.
• increasing appeals to the legislatures and courts
• to secure legal remedies against abuses of managerial power
• that the countervailing powers of unions used to provide in a more flexible & negotiable way

8.6 Organizational Politics

• formal power relations based on contracted relations described by the organizational chart
  • relations of authority, deference, and responsibility
  • that are sanctioned and overt
    • essential features: inscribed in contracts and job descriptions that define employee duties to the firm & recognized by law
    • additional features: openly employed by superiors & generally acknowledged & accepted by subordinates
• informal power relations
  • lack the essential features by definition: "power tactics" are defined as the use of not-formally-sanctioned tactics to advance your aims within an organization
  • may also not lack the additional features
    • may be covertly employed & not necessarily by superiors
    • may not be generally acknowledged or even known about

Political Tactics in Organizations

• Power tactics: use of not-formally-recognized tactics to advance one's aims within an organization
• one's aims needn't be opposed to the aims of the organization: coalescence tends to be brought about by
• employees seeing that their own careers and success depends on success of the firm
• bonds generated by employment -- especially over the long haul
• loyalty to the firm
• friendship with others in the firm
• can be legitimate disagreements between employees about what's best for the firm
• conflicts of interest: sometimes selfishly motivated, sometimes not
• Perils of power tactics: wherever power is used informally & even covertly there's increased potential for abuse
• by definition power exercised by power tactics is informal
• and the exercise frequently is covert: power tactics often the result of power struggles between individuals or factions with competing interests or agendas.
• Catalogue of tactics
1. blaming or attacking others
2. controlling information: gossip a special case of this
3. developing a base of support for one's ideas
4. image building
5. ingratiation (kissing up)
6. association with the influential (schmoozing)
7. forming power coalitions and alliances: "you scratch my back I'll scratch yours"
8. creating obligations: "you owe me"
• Attempt to boil several of these tactics down to two kinds
• getting control over scarce resources desired by others
• establishing favorable relations

The Ethics of Political Tactics

• Utility: Do the tactics promote the general welfare?
• general welfare
• of society is served by efficiently functioning organizations
• of organizations is impaired by employee pursuit of individual or group aims in conflict with the best interests of the firm: factionalism
• immoral use of political tactics
• almost surely wrong when used deliberately for ends you know to be contrary to the best interests of the firm
• example: trying to undermine a rival group's research project to preserve your own research prerogatives by making deliberately unhelpful input & recommendations.
• Rights: Are political means consistent with moral rights?
• Deceptive & manipulative tactics are generally morally wrong
• Because they violate individual rights to be have things done to and through them only with their knowledge & their consent
• Justice Issues: Are the results of the use of the political consequences equitable?
• Political tactics are generally morally wrong when used to bring about unfair distribution
• of benefits like advancement & burdens like blame (for a failed project, say)
• unjust because not based on relevant considerations
• irrelevant considerations: e.g., who you know & what favors you can call in
• relevant considerations: what you know, have done & can do
• The Impact on Caring
• Political tactics are morally suspect when they undermine worker bonds of friendship, respect, cooperation, & care
• gossip, backbiting, backstabbing, etc. do not a caring organization make

8.7 The Caring Organization

• Contrast: "rational structure" and "political" takes on the organization
• "rational structure" approach emphasized formal relations of authority: command
• political model emphasized real power relations: conflict
• formal
• informal
• "caring organization" approach emphasizes non-power relations: cooperation
• friendship, respect, care
• Organizations have a heart
• as well as a head as the rational structure model emphasizes
• as well as an overabundance of testosterone as the political model emphasizes
• Descriptive thrust: to leave this out would be to miss an important part of the picture.
• Normative thrust: organizations should have more of a heart
• should rely more on cooperation & sharing
• less on compulsion & competition
• Potential Competitive Benefits for Organizations
• increased productivity due to reduced friction
• recruitment advantages: due to desirability of working conditions
• better customer relations: customer loyalty, repeat business, word-of-mouth recommendations

Cases for Discussion

ABC News CD-ROM: The Gap's Labor Problems

• Gap, Inc. sells casual apparel
  • also owns Old Navy & Banana Republic
  • 2003 total sales: $15.85 billion
  • 2003 profits: $1.03 billion
  • in over 4000 stores
• Almost all Gap merchandise is made by foreign companies under contract.
• Gaps code of ethics for these suppliers as updated in 1993
  • no discrimination
  • no use of forced or prison labor
  • no use of children under the age of 14
  • provide a safe working environment
  • pay the local industry standard or legal minimum wage: whichever is greater
  • meet all local environmental regulations
  • no threats or penalties against workers who try to organize unions
  • obey all local laws
• History of troubles
  • at the Taiwanese owned Mandarin International plant in El Salvador
    • workers paid 12 cents for assembling a turtleneck that retailed for $20 in the U.S.
    • workers' pay averaged 56 cents per hour
    • harassing workers for trying to organize
    • hiring 15 years to work full time (though E.S. law sets limits of 18 years of age for full time work)
    • failing to pay overtime (though E.S. law states that overtime rates must be paid for work over 44 hrs. per week
  • National Labor Committee (NLC) and other human rights organizations agitation & initiatives
    • NLC was concerned with working conditions of foreign garment workers because U.S. garment workers have to compete with them
    • started a campaign highlighting the plight of foreign garment workers
    • generated enormous negative publicity for Gap detailing various violations
      • young female workers being forced to undergo pregnancy tests
      • workers being forced to work overtime without pay
      • workers not being denied access to bathrooms
      • use of child labor: 13 year old girls working 13 hour shifts
      • harassment of workers trying to organize
    • NLC summation: Gap clothing workers everywhere were poorly paid and not unionized
    • Gap eventually acceded to NLC demands that it hire an independent third-party to monitor working conditions at Mandarin International plants
  • The Saipan Suit against Gap and 17 other retailers
    • brought by NGOs & and the AFL-CIO Union of Needletrades Industrial and Textile employers on behalf of 50,000 garment workers in foreign-owned Saipan factories
    • Saipan itself is a located in the Commonwealth of the Northern Mariana Islands (CNMI)
      • most U.S. labor laws -- e.g., those governing overtime pay and worker health and safety -- apply
      • however CNMI was exempted from federal minimum wage laws & immigration restrictions
      • Saipan's garment factories are all foreign owned: mainly by Asian companies
      • Saipan's garment workers are 91% foreign -- mostly Asian women recruited outside CNMI
    • The suits accusations
      • workers were hired under false pretenses and bound to exploitative agreements
        • ads promised "well-paying jobs in the U.S.A.
        • had to pay recruitment fees of $5000 to be deducted from their paychecks
        • had to agree not to marry, not to participate in political or religious activities, not to marry, not to ask for salary increases, not to unionize, not to seek other employment
      • forced to live in "company towns" -- veritable shantytowns
        • overpriced at $200/month
        • with overcrowded and unsanitary conditions
      • forced unpaid overtime
      • widespread violations of U.S. health and safety laws
      • deceptive advertising of the clothes as "Made in the USA" which implied to consumers that the garments were made in compliance with U.S. labor laws and guidelines when
        • 80% of consumers polled say they would pay extra for clothes made in the USA
        • 78% say they would avoid shopping in stores whose clothes they knew to be made with sweatshop labor
    • Gap's response
      • added labor code previsions
        • safe and healthy working and living conditions for foreign workers are to be maintained
        • foreign workers must be allowed to seek other employment & to return home at will
      • all future contracts with Saipan factories to
      • require safe healthy working conditions
      • uphold workers' rights to marry and engage in political, religious, & union activities
      • prohibit of recruitment fees
  • Other abuses elsewhere continued to surface
    • in Lesotho South Africa: forced overtime, below subsistence wages, harassment of union organizers
    • in Indonesia: harassment of workers for trying to organize
    • in Cambodia: harassment including violence against union organizers
• Gap commissions a public report to provide full details of all the problems the company faced, the companies attempts to deal with the plight or garment workers, and detailed data on conditions in all factories supplying Gap
  • admitted "few factories, if any, are in full compliance [with the Gap labor code] all of the time"
  • noted that 25-50 percent of its Central American suppliers had been cited for paying below-minimum wages
  • noted that 25-50 percent of its sub-Saharan African and Indian factories had workweeks longer than 60 hours
  • made this troubling admission" "that [union rights] abuses are difficult to discover and prove and even harder to resolve ... violations of our code's freedom of association requirement are rarely as straightforward as other issues, such as health and safety problems"
• Charles Kernaghan of the NLC's reservations: "In economies that are paying poverty wages, when people have no rights and no power, what you end up monitoring are well-run prisons.  Sure, factories will be cleaned up.  They'll have bathrooms where the water runs.  But when it comes to wages, to having a democratic voice on the shop floor, monitoring and codes of conduct are a dead end."

Questions for Discussion

1. In your view, should Gap have given in to the union's 1995 demand that it should hire a third-party independent group to monitor the Mandarin plants instead of relying on its own inspectors and the word of factory owners?  Should Gap have done anything more?  Explain.
2. Is a company like Gap morally responsible for the way its suppliers treat their workers?  Why or why not?
3. Should companies like Gap attempt to get their suppliers to pay more than the local industry standard when it is insufficient to live on?  Should they pay wages in the Third World that are equivalent to U.S. wages?  Should they provide the same levels of medical benefits that are provided in the United States?  The same levels of workplace safety?
4. In your view, is Gap's use of the labels "Made in the USA" or "Made in Northern Mariana Islands (USA)" deceptive?  Explain.
5. In your view, and in the light of the fact that Gap's own monitors had not reported the sweatshop conditions and unpaid overtime in its Saipan factories that these were in compliance with all applicable worker health and safety laws, was it right for Gap to settle the lawsuit?  Should Gap have settled the lawsuit?  Explain.
6. In light of the long history of labor problems that Gap has had to contend with, what recommendation or recommendations would you make to Paul Pressler concerning what the company should now do to deal with these and future problems?  Explain how your recommendations will effectively solve these problems for Gap.
7. In your judgment, how effective would you expect the release of the company's Social Responsibility Report 2004 to be?  From an ethical point of view, in in light of the company's responsibilities to its various stakeholders, should the report have been released?
8. From an ethical point of view, assess Kernaghan's ending statement concerning the issue of unions.  Should Gap require unions?
9. What other issues do you believe this case raises or what else to you think it shows?

Who Should Pay?

1. In your judgment, and from an ethical point of view, should Turner Construction and/or B&C Steel pay for all or part of the $2,428,000 (if part, indicate which part)?  Explain your view.
2. In your judgment, and from an ethical point of view, should Elliot be held wholly or partially responsible for his injuries and left to shoulder all or part of the $2,428,000 cost of his injuries (if part, indicate which part)?  Explain.
3. In your judgment, is the Colorado worker's compensation law to which Turner Construction appealed fair?  Explain your view.
4. What other issues do you believe this case raises or what else to you think it shows?