FEEDBACK TUTORIAL LETTER

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1 FEEDBACK TUTORIAL LETTER 2 nd SEMESTER 2017 ASSIGNMENT 2 BUSINESS ETHICS BBE612S 1

2 SECOND SEMESTER 2017 BUSINESS ETHICS (BBE612S) FEEDBACK TUTORIAL LETTER ASSIGNMENT 2 MARKS: 40 Section A Question 1 (10) Answer the questions in this section by writing the correct letter (answer) in your answer book. 1.1 Kate, the owner of a small telecommunications firm gives gifts of share in her company to telephone company managers who purchase her equipment. Kate is giving in to the ethical temptation of a. bribes b. misuse of corporate resources c. sexual harassment d. treating people unfairly 1.2 Whistle-blowing is ethical under all of the following conditions, except: a. when the motivation is financial gain b. when the employee identifies a serious threat of harm c. when the company will cause serious and considerable harm to the public d. when the employee immediate supervisor does not act, and the internal procedures and chain of command have been exhausted 1.3 Which of the following theory assumes that the manufacturer can discover the entire risk associated with using a product before it is actually used? a. The contractual theory b. The liability theory c. The due care theory d. The social cost theory 1.4 Fish Monga is chain of food stores whose major product is fish. Fish Monga would sell a franchise license to a person only if the person also agreed to purchase a certain number of cookers, fryers, and other supplies. This is an example of: a. Manipulation of supply b. Retail price maintenance agreement c. Exclusive dealing arrangement d. Tying arrangement 1.5 Which statement does not reflect the idea of ethical relativism? a. All opinions are equal; no one can say what is ethically right or wrong. b. One's culture, society, or personal feelings are the only criteria for deciding what is ethically right or wrong. c. None of the above d. All of the above 2

3 1.6 The public view that advocates breaking large firms up in smaller firms as well as regulating them is called a. The Chicago view b. The do-nothing view c. The anti-trust view d. The regulation view 1.7 What statement suggests that the Johnson and Johnson Tylenol advertisement stating that last year hospitals dispensed twice as much their competitors was suspiciously deceptive? a. It was a simple statement of a valid claim about the product. b. It was an effort to call attention to the practice selling the drug to hospitals at a deep discount. c. Johnson and Johnson wanted consumers to think that the medical profession and hospitals believed it was the most effective acetaminophen treatment on the market. d. Johnson and Johnson wanted to show its commitment to lowering medical costs to consumers. 1.8 A whistle blower is an employee who a. Exposes organizational wrongdoing. b. Complains a lot to company management. c. Engages in unethical behavior. d. Referees disputes with other employees. 1.9 Sometimes risk is unavoidable as long as: a. Employees are coerced b. Employees are fully compensated for assuming them and they do so freely and knowingly c. No one else has the expertise to do the work d. All of the above 1.10 When is one obligated to compensate an injured party? a. Negligent action b. Fair distribution of burdens and benefits c. Discrimination d. Justice and rights Section B Question John is a business manager with an employment contract. The contract requires him to work solely for the employer and use his talents to attract new clients to the business. John begins attracting more clients than he believe the employer can reasonably handle, and he decided to divert that excess business elsewhere to his employer s competition and receiving the commission from these competitors. a) Explain the employee s moral obligation to the employer (1) You were to explain that the employer s obligation is to work towards the goals of the firm and to avoid any activities that might harm those goals. b) As a competent business ethics student. How will you advise John to deal with this dilemma? (8) Your explanation was supposed to center on how John can avoid conflict of interest. In addition your advice to John should disclose the idea to his employer, as this will lead to a breach of contractual and ethical duties. 3

4 c) Name and explain the dilemma John as an employer finds himself in. Motivate your answer. (2) Most of you correctly mention conflict of interest and gave an explanation on what conflict of interest is. 2.2 You're the boss in a predominantly male environment. The presence of a new female employee, Maria stirs up conflict because your company has not had a chance to conduct sensitivity training. Some of your male employees make inappropriate touches and sexual comments that makes Maria feels uncomfortable. She complains to you; in response, you sanction those responsible for the conduct. a) What form of discrimination is Maria subjected to? (1) Most of you mention sexual harassment and you were awarded a mark for it, but the correct form of discrimination is isolated intentional discrimination from this case study. b) Who is responsible for the job discrimination Maria is subjected to? (4) You were to explain that the person responsible for job discrimination is the employer and give reasons why the employer is responsible for example that the employer is to give training to the male employees on how to treat a female employee, etc. c) You also wonder if it would be wise to move Maria to another position where she would be less likely to draw attention. Explain the disadvantage of that thought. (2) Your explanation was to state that treating Maria differently based on her gender or in response to a harassment complaint may be considered discriminatory and unethical conduct. d) Name two ethical principles that are against discrimination. (2) Utilitarian Rights Justice any 2 Section C Question 3 Kuga fires being investigated - Ford 4

5 by Chamwe Kaira FORD Motor Company of Southern Africa said yesterday that both Ford SA and Novel Ford were contacting customers regarding engine fires in the 1.6 litre Kuga models. We are currently investigating reports of engine fires in Kugas equipped with the 1.6-litre EcoBoost engine in South Africa/Namibia. While our investigations into the incidents are not complete at this time, we have found that the fires may be a result of engine overheating, the company said. Our decisions are driven by the data available, and when the data indicates action is needed, we move quickly on behalf of our customers. To help reduce the risk of engine overheating, just prior to the holiday period, Ford advised affected customers to contact their Ford dealers to request a further check of maintenance items, especially to check the coolant system's condition and integrity. Our initial contact with affected customers was through , SMS and a social media campaign, and we are rapidly following up with letters to each customer, the company said. The company said dealer checks were free of charge, and would take approximately one hour to complete. There were about litre Kugas built between December 15, 2012, and October 20, 2014, identified for check-up. Kugas with 1.5-litre and 2.0-litre engines were not affected by this dealer maintenance check, but Ford said customers of all Ford vehicles should follow the regular maintenance checks. We also have agreed with the SA National Consumer Commission that we will report back to them voluntarily by the end of February, and we will keep you updated on any developments. South Africa's The Times newspaper reported this month that owners of Kugas feared that they would not 5

6 be able to resell their cars. ENCA of South Africa also reported that since December 2015, at least 43 Kugas, which were manufactured between 2013 and 2014, had caught fire in South Africa. Source: Which one of the three theories of consumer protection does the case study above violates? Motivate your answer. (10) Marks were allocated when you have said due care theory and then have given reasons. You were to explain that the due care theory is the manufacturer s responsibility to exercise due care in the following areas: Design Production Information 3.2 According to the theory identify above is it possible for consumers to be 100% protected from product injuries. (6) Your discussion was supposed to center around the following: The basic problem with the due care theory is that there is no way to determine when one has exercised enough due care. Every product involves some small risk: if all risks were eliminated, few, if any, products would be affordable. The theory assumes that the manufacturer can indeed discover all risks attendant upon using a product before it is actually used, and this may not be possible. The due care view appears to some to be paternalistic, assuming that the manufacturer alone should make the important decisions about the levels of risk the consumer should bear. 3.3 It is reported that engine fires in Kugas equipped with the 1.6-litre EcoBoost might be a result of engine overheating. This could probably result in loss of human live and damage to property. Which ethical principle could be violated in this case? (4) All principles are violated and you were to mention all four principles: Utilitarian Rights Justice Ethics of care 6