Experiential Exercise: 3

Know the difference

Most entrepreneurial actions are ethical and legal. Sometimes, however, they are unethical and/or
illegal. The four categories of ethical/legal actions and a list of examples of each category (a through h)
follow. Match them up by placing the number of the category next to appropriate examples from the list
(the two are given for each category).

1. Ethical and Legal.

2. Unethical and Legal.
3. Ethical and illegal.
4. Unethical and illegal.

a) ___________ Giving a gift of $50,000 to a foreign minister to secure a business contract with his
country ( a customary practices in his country) and then writing off the gift as a tax-deductible
item.
b) __________ knowing that 1 percent of all tires have production defects but shipping them
anyway and giving mileage allowances to anyone whose tries wear out prematurely.
c) __________ manufacturing a new fuel additive that will increase gas mileage by 10 percent.
d) __________ offering a member of the city council $100,000 to vote to give the entrepreneur the
local cable television franchise.
e) _________ publishing a newspaper story that wrongly implies but does not openly state that the
governor (a political opponent of the newspaper) is deliberately withholding state funds for
education in the newspaper’s effort to win nomination support for its candidate from the state
teachers union.
f) ________ obtaining inside information from another brokerage that results in the entrepreneur
netting more than $2 million.
g) _________ producing a vaccine, already approved by the Food and Drug Administration that will
retard the growth of bone cancer.
h) ________ producing and selling a drug that will reduces heart attacks but failing to complete all
of the paperwork that must be filed with the government prior to selling the product.