Business Ethics
(in traditional Chinese)

Note from the Editor

This casebook explores a series of business ethics dilemmas. Although the issues are set in a Western context, the lessons are universal. Indeed, valuable learning can be gained by considering the extent to which a particular analytical perspective is (and more importantly, should be) driven by a particular national culture or set of shared values.

At the centre of many business ethics dilemmas is the tradeoff between profitability - the rights of shareholders to a fair return for risking their capital in a business venture - and other stakeholders, such as customers, suppliers, employees, etc. Since management control systems in firms usually create incentives for managers to reward shareholders, they create a further difficult tradeoff for managers - between their own self-interest and that of other stakeholders.

The difficulty for the manager is the lack of unambiguous criteria by which the morality of various alternatives can be evaluated. All moral choices require tradeoffs between unattractive alternatives - there are rarely clear-cut right or wrong answers, and multiple criteria are applicable to every decision. These criteria include: the rights, obligations and claims of the parties involved, justice and fairness to all parties, the legitimate self-interest of the decision-maker, and achieving the greatest good for the greatest number. Decisions are often based on the decision-maker's personal values, or on the shared values of the decision-maker and his or her peers. The case learning method permits discussion of multiple points of view, the exchange of opinions, and results in better decisions. "Better" in this instance means that more alternatives are identified, each has been thoughtfully evaluated, and a decision reached that balances fairly the various criteria listed above. It is unlikely that all participants in a discussion will reach complete agreement.

The cases in this book address a wide range of ethical issues in business, and provide an opportunity not merely for analysis, but, more importantly, for making decisions and following through with action. Corporate responsibility is addressed first in Tremobin, which explores a company's responsibility to regulatory agencies, whose rules are sometimes complex, inconsistent, and often seem to be unreasonably strict and detailed. Peter Farber (A), set in the financial services industry, explores a similar issue from an individual employee's point of view. Noram Foods is, on the surface, a problem in statistical quality control, but also raises issues of corporate responsibility to customers when regulations themselves are badly written.

Because the opportunity to make money through fraudulent means is especially problematic in capital markets, there exists a well-established regulatory infrastructure, which plays a critical role in their effective functioning. Several cases in this volume provide insights into the important role of ethics in the securities industry. The decision-maker in Jane Lennox has to decide what to do when her boss requires her to make a trade which is illegal under securities regulations. Jason Leigh explores the responsibilities of a brokerage firm and its employees to a client, and the responsibilities of a manager when a subordinate violates regulations and shows poor judgment of a client's needs. Tanya Silk permits an exploration of insider trading regulations, and the fiduciary responsibility of employees.

Accounting, and particularly control systems, play a vital role in promoting (or discouraging, if badly designed) ethical behaviour. Acme Hardware traces the relationship between rewards and behaviour in a situation where the reward system creates strong incentives for dysfunctional behaviour. Fardo Industries explores the ethical responsibilities of the professional accountant, in a situation where financial accounting standards permit flexibility, which has adverse consequences for a client.

The final group of cases deals explicitly with international, cross-cultural issues. Footwear International requires students to address differing religious beliefs, and how to resolve dispute arising from an offensive trademark. In Phil Chan (A), we have a company executive charged with the responsibility of closing a foreign business deal which seems too good to be true. DSL de Mexico S.A. de C.V. (A) explores the issue of bribery. Abbott Consultants Ltd. takes this further, by addressing issues of organization design and control; Abbott's managers had been involved in fraud, conspiracy and secret commissions while acting as purchasing agents for a Canadian aid program in Nigeria.