Chapter 1 :

Vocabulary:
Blanchard and Peale
Is it legal? Is it balanced? How does it make me feel?
Categorical Imperative (Kant)
One ought only to act such that the principle of one's act could become a universal law
of human action in a world in which one would hope to live
Contractarians and Justice
Putting ethical standards in place by a social contract; using rational thinking people
develop a set of rules for everyone.
Divine Command Theory
Ethical standards are based upon religious beliefs.
Ethical Egosim
We all act in our own self-interest and limit our judgments to our own conduct, not the
conduct of others.
Ethics
The unwritten rules we have developed for our interaction with each other.
Front Page of the Newspaper Test
"Contemplating any business act, an employee should ask himself whether he would be
willing to see it immediately described by an informed and critical reporter on the front
page of his local paper, there to be read by his spouse, children, and friends."
Laura Nash
(1) Have you defined the problem accurately? (2) How would you define the problem if
you stood on the other side of the fence? (3) How did this occur in the first place? (4) To
whom and what do you give your loyalties as a person and as a member of the
corporation? (5) What is your intention in making this decision? (6) How does this
intention compare with the likely results? (7) Whom could your decision or action injure?
(8) Can you engage the affected parties in a discussion of the problem before you make
your decision? (9) Are you confident that your position will be as valid over a long period
of time as it seems now? (10) Could you disclose without qualm your decision or action
to your boss, your CEO, the board of directors, your family, or society as a whole? (11)
What is the symbolic potential of your action if understood? If misunderstood? (12)
Under what conditions would you allow exceptions to your stand?
Categories of ethical dilemmas
a. Taking things that don't belong to you.
b. Saying things you know are not true.
c. Giving or allowing false impressions.
d. Buying influence or engaging in conflicts of interest.
e. Hiding or divulging information.
f. Taking unfair advantage.
g. Committing acts of personal decadence.
h. Perpetrating interpersonal abuse.
i. Permitting organizational abuse.
j. Violating rules.
k. Condoning unethical conduct.
l. Balancing ethical dilemmas.
Methods avoid facing ethical dilemmas
Re-labeling (copyright infringement vs. peer-to-peer file sharing) and rationalizing.
Moral Relativists
Time-and-place ethics; making ethical choices based on the circumstances.
primum non nocere
"Above all do no harm."
Rights Theory
Everyone has a set of rights and it is the role of government to enforce those rights.
Steps to Follow for Analyzing an Ethical Dilemma
1. Make sure you have a grasp of all of the facts available.
2. List any information you would like to have but don't and what assumptions you would
have to make, if any, in resolving the dilemma.
3. Take each person involved in the dilemma and list the concerns they face or might
have.
4. Develop a list of resolutions for the problem.
5. Evaluate the resolutions for costs, legalities, and impact.
6. Make a recommendation on the actions that should be taken.
Utilitarian Theory
Greatest good for the greatest number of people.
Virtue Ethicists (Plato and Aristotle)
Develop virtues and determine conduct by those virtues.

Outline
1. Explain what ethics is.
Give a definition here: Ethics consists of the unwritten rules we have developed
for our interaction with each other.

2. List and briefly describe the schools of ethical thought

a. Divine Command Theory: ethical standards are based upon religious beliefs.
b.Ethical Egosim Theory: We all act in our own self-interest and limit our
judgments to our own conduct, not the conduct of others.
c.Utilitarian Theory: “Greatest happiness principle,” or doing the most good for
the most people.
d. Categorical Imperative and Immanuel Kant: One ought only to act such that
the principle of one’s act could become a universal law of human action in a
world in which one would hope to live.
e. Contractarians and Justice: Putting ethical standards in place by a social
contract. Rational thinking people develop a set of rules for everyone.
f. Rights Theory: Everyone has a set of rights and it is the role of government to
enforce those rights.
g. Moral Relativists: Time-and-place ethics. Making ethical choices based on
the circumstances.
h. Plato and Aristotle: Develop virtues and determine conduct by those virtues.

3. List the categories of ethical dilemmas

a. Taking things that don’t belong to you
b. Saying things you know are not true.
c. Giving or allowing false impressions
d. Buying influence or engaging in conflicts of interest
e. Hiding or divulging information
f. Taking unfair advantage g. Committing acts of personal decadence
h. Perpetrating interpersonal abuse
i. Permitting organizational abuse
j. Violating rules
k. Condoning unethical conduct
l. Balancing ethical dilemmas

4. Give the ways we avoid facing ethical dilemmas

a. Give examples of different labels. Copyright infringement vs. peer-to-peer file
sharing Smoothing earnings vs. cooking the books Lying vs. earnings
management
b. List the rationalizations (1) Everybody else does it (2) If we don’t do it,
someone else will (3) That’s the way it has always been done (4) We’ll wait until
the lawyers tell us it’s wrong (5) It doesn’t really hurt anyone (6) The system is
unfair (7) I was just following orders

5. Give a descriptions of the simple tests that can be used to resolve

ethical dilemmas
a. Peter Drucker: primum non nocere; above all do no harm
b. Laura Nash (1) Have you defined the problem accurately? (2) How would you
define the problem if you stood on the other side of the fence? (3) How did this
occur in the first place? (4) To whom and what do you give your loyalties as a
person and as a member of the corporation? (5) What is your intention in making
this decision? (6) How does this intention compare with the likely results? (7)
Whom could your decision or action injure? (8) Can you engage the affected
parties in a discussion of the problem before you make your decision? (9) Are
you confident that your position will be as valid over a long period of time as it
seems now? (10) Could you disclose without qualm your decision or action to
your boss, your CEO, the board of directors, your family, or society as a whole?
(11) What is the symbolic potential of your action if understood? If
misunderstood? (12) Under what conditions would you allow exceptions to your
stand?
c. Blanchard and Peale (1) Is it legal? (2) Is it balanced? (3) How does it make
me feel?
d. Warren Buffett “Contemplating any business act, an employee should ask
himself whether he would be willing to see it immediately described by an
informed and critical reporter on the front page of his local paper, there to be
read by his spouse, children, and friends. At Salomon we simply want no part of
any activities that pass legal tests but that we, as citizens, would find offensive.”
e. Wall Street Journal (1) Am I in compliance with the law? (2) What
contribution does this choice of action make to the company, the shareholders,
the community, and others? (3) What are the short- and long-term consequences
of this decision? f. Categorical Imperative (Kant) “Do unto others are you would
have them do unto you.

LIST THE SIX STEPS YOU SHOULD FOLLOW FOR ANALYZING AN

ETHICAL DILEMMA
1. Make sure you have a grasp of all of the facts available.
 2. List any information you would like to have but don’t and what assumptions
you would have to make, if any, in resolving the dilemma.
. Take each person involved in the dilemma and list the concerns they face or
might have.
4. Develop a list of resolutions for the problem.
5. Evaluate the resolutions for costs, legalities, and impact.
6. Make a recommendation on the actions that should be taken.

Chapter 3 :
Vocabulary:
Censorship
According to the American Civil Liberties Union (ACLU), it is the “Suppression of words,
images, or ideas that are "offensive,"
Enlightened Self-interest School of Social Responsibility
Advises managers to be responsible to shareholders by being responsive to the larger
society.
Inherence School of Social Responsibility
Advises managers to serve shareholders and to act only with shareholders’ interests in
mind.
Invisible Hand School of Social Responsibility
Role of business is to serve larger society and it does so best when serving
shareholders only.
Social Responsibility School of Social Responsibility
Role of business is to serve larger society, so it should serve the needs of the larger
society.
Morals clause
Part of a contract for actors, athletes and others that prohibits private conduct that
would subject that person to public ridicule.
Shareholders
Owners of shares of stock in a corporation.
Stakeholders
Groups of people who are impacted by a company’s business decisions including
customers, suppliers and the government.
Steroids
Prescription medication often used illegally to increase the performance of competitive
athletes.
“Toes to the Line” philosophy
Doing no more than what is required under the law while violating the spirit (or intent) of
the law.

Outline:
List the two questions companies are faced with on social responsibility issues:
1. Whose interests should a corporation serve?
2. To whom should a corporation be responsive in order to best serve that interest?
List the four views on social responsibility and business.
1. Inherence
2. Enlightened self-interest
3. Invisible hand
4. Social responsibility
Chapter 4:
Vocabulary:

Alternative Dispute Resolution (ADR)

Means other than litigation used to resolve disputes and claims; includes arbitration,
mediation, and negotiated settlements.
Answer
Pleading filed by the defendant containing the defendant's version of the basis of the
suit.
Binding Arbitration
Arbitration from which there is no judicial appeal.
Burden of Proof
The responsibility of the party for providing the facts needed to recover in a lawsuit.
Class action suits
Civil suits by a group of plaintiffs with the same claims.
Complaint
Pleading that outlines the plaintiff's allegations against the defendant and the remedies
sought.
Counterclaim
Pleading in a lawsuit in which the defendant makes allegations against the plaintiff in
response to the plaintiff's complaint.
Default
Judgment entered when the defendant fails to file an answer or other responsive
pleading in a lawsuit.
Depositions
Form of discovery in which witnesses or parties can be questioned under oath in
recorded testimony outside the courtroom.
Derivative suit
Lawsuit brought on behalf of another through the other's rights; for example, a
shareholder suing to enforce a corporation's rights.
Discovery
Pretrial process to gather evidence for a case.
Equitable remedy
A remedy other than money damages, such as specific performance, injunction, and so
on.
Injunctions
Equitable remedy in which the courts order or stop a particular activity.
International Chamber of Commerce (ICC)
Voluntary body with uniform rules on commerce and contracts.
Interrogatories
Method of discovery in which parties send written questions to each other, with
responses that are given under oath.
Legal remedy
In common law, a legal remedy consisted of money damages only.
Mediation
ADR mechanism in which a third party helps the parties come to an agreement that
settles a dispute.
Minitrial
ADR method in which the officers of two firms in a dispute listen to the key evidence in a
case to see if a settlement can be determined.
Motion
A party's request to the court for action.
Peremptory Challenge
Right to strike jurors with or without cause (usually limited in number).
Pleadings
The complaint, answer, and counterclaim filed in a lawsuit.
Prima Facie Case
A case establishing all the necessary elements; without rebuttal evidence from the
defendant, entitles the plaintiff to a verdict.
Process servers
Individuals licensed by a state to deliver summonses and subpoenas to individuals.
Rent-A-Judge
ADR method in which the parties hire a former judge and a private hearing room and
the judge determine liability.
Request for Admissions
Discovery tool in which one side asks the other to admit certain facts in a case.
Request for Production
Discovery tool in which one side asks the other side to produce documents relevant to
the case.
Specific performance
Equitable remedy in which party asks for performance of the contract as damages.
Statute of limitations
Statute controlling the time periods in which suits must be brought by plaintiffs.
Summary Jury Trial
An ADR method in which the parties present a summary of their evidence to a private
jury and then agree to abide by their decision or settle, depending on what the jury
concludes.
Summons
Court order issued to the defendant in a lawsuit that explains the requirement of filing an
answer or other response and the time period in which it must be done.
Verdict
The outcome or decision in a trial.
Work product
An attorney's thoughts, research, and strategy in a case; nondiscoverable.
Outline :

I. Types of Alternative Dispute Resolution

A. Arbitration - Oldest Form of ADR

1. Parties submit grievances and evidence to a third-party expert in an

informal setting

2. American Arbitration Association provides many arbitrators

3. Binding arbitration − can’t get court to reverse it

4. Advantages

a. Less formality

b. Moves faster than a trial

c. Handled privately

d. Expert handles the cases

5. Disadvantages

a. Arbitrator may not have legal training and may not

understand the significance of legal points

b. Rules of evidence don't apply

6. Federal Arbitration Act

 a. Passed to curb judicial declarations of arbitration clauses
invalid

b. Designed to encourage arbitration except when it is

specifically prohibited

7. Process

a. Parties agree to submit to arbitration

i. may be part of their contract

ii. can agree after the fact

b. American Arbitration Association (AAA) can handle the

proceedings for a fee

c. Demand for arbitration is filed

d. Arbitrator is selected

i. proposed list sent to parties

ii. they can object within time limits

e. Hearing preparation - parties gather evidence

f. Case is presented in hearing

g. Arbitrator has thirty days from close of hearing to make a

decision

h. Award is made

B. Mediation

1. Parties use a go-between to negotiate and communicate

2. Used in international transactions

3. Mediator can offer suggestions for resolution

4. Not binding

C. Medarb
 1. Arbitrator tries mediation first

2. If no success, goes to arbitration

D. Minitrial

1. Small-scale trial where parties present case to a judge with

experience in the field or to a neutral advisor

2. Advisor or judge makes decision

3. Can motivate parties to resolve differences even if the results are

not binding

E. Rent-a-Judge

1. Trial held in commercial as opposed to a public court

2. Pay fees for courtroom and judge

3. Example: “The People's Court” TV show; Judge Judy

F. Summary Jury Trials

1. Summary presentation of case to judge and jury

2. Gives parties an idea about jury's perceptions

3. Used after discovery is complete

G. Early Neutral Evaluation

1. Consultant or volunteer gives parties an assessment of the position

2. Generally used prior to discovery

3. Saves expenses if parties settle following the evaluation

H. Peer Review

1. Employment dispute method

2. Company-chosen, employee-chosen and neutral members review

employer's actions

3. High success rate

 I. Impact of ADR

1. Some states have mandatory ADR for cases below a certain dollar
amount ($25,000 - $50,000)

2. Increasing because of its cost savings

II. Complaint—plaintiff’s statement of a case
III. Summons—document to serve defendant with lawsuit
IV. Answers—defendant’s response to complaint
V. Statute of limitations—time limit for filing suit
VI. Discovery—advance disclosure of evidence in case
VII. Production—obtain and produce document
VIII. Deposition—questioning of witnesses under oath
IX. Interrogatories—information questions to other party
X. Admissions—acknowledgment of facts in a case
XI. Trial—court proceeding for hearing evidence
XII. Voir dire—jury selection method to screen for bias
XIII. Opening statements—frame by parties’ lawyers of the case
XIV. Plaintiff’s case—facts for proving complaint presented
XV. Defendant’s case—defenses to allegations presented
XVI. Evidence—testimony and documents presented in the case; no
hearsay