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Chapter 1: The Nature of Moral Problems of Management (p.

1-23) By: Daniel Grouzman Step 1: Understand the Different Standards: The problem is that our moral standards of behaviors are subjective. They are personal The first step is to understand that moral standards are not an adequate framework for decision because they are variable as well as personal. Moral standards differ between people, cultures, religions, e.t.c... This list of moral standards includes: personal goals, personal norms, personal beliefs and personal values. These norms, goals, beliefs and values will vary depending upon cultural and religious traditions of that person. Clearly, some people will benefit and some people will be harmed. How would u attempt to bridge these differences in moral standards? You have to work through each of the next six stages . Step 2: Recognize the Moral Impacts In this step you have to identify who is going to be benefited and who is going to be harmed and who is going to freely exercise their rights and whose rights will be denied. Make a stakeholder table and power/interest grid to ease this process Step 3: State the Moral Problem If you listed all harms and benefits , then clearly you have a moral problem Therefore a compromise that meets the test of economic benefits, legal requirements , and ethical duties is possible. That is why you want to define and state the moral problem as clearly as you can. You have to do this in a form of a question so it is less threatening and far more considerate. State the complete moral problem in question form Step 4: Determine the Economic Outcomes Economic analysis refers to the net balance of benefits over costs for the full society. This concept is known as Pareto Optimality( allocative efficiency ) This can be expressed as the greatest possible economic benefit at the least possible economic cost. This theory can be used as long as: all markets must be competitive , all customers and all suppliers must be informed and all costs must be included. Economic outcomes focus upon a balance between benefits and harms. Step 5: Consider the Legal Requirements Legal requirements refer to the laws adopted by members of society to regulate the behaviors of members of society

Legal requirements focus on a balance between an increase in rights for some and a decrease in rights for others. We cannot solve a moral problem legally; to reach a truly equitable balance between benefits for some and harms for others or between rights recognized for some and rights denied for others, we must examine the ethical duties.

Step 6: Evaluate the Ethical Duties To evaluate the ethical duties we need to examine each theory and see if the ethical duties have been breached. 1. Long Term Interests : Never take any action that will bring immediate benefits to you now , but that is likely to provoke adverse reactions in the future 2. Personal Virtues: Never take any action that is not honest, open, and truthful and that you would not feel pride to see reported on national newspapers. 3. Religious Injunction: Never take any action that is not kind and compassionate, and that does not build a sense of community, a sense of all of us working together for commonly accepted goals. 4. Government requirements: Never take any action that violates the law because law respects the basic rights of life, liberty and property. 5. Utilitarian benefits: Is the greatest good for the greatest number. Never take any action that does not result in greater good than harm for society. 6. Universal rules: Never take any action that you would not be willing to see others, faced with the same or a closely similar situation, also be free and even forced to take. 7. Distributive Justice: Never take any action in which the least among us will be harmed in any way. 8. Contributive Liberty: Never take any action that will interfere with the rights of others for selfdevelopment and self-improvement. If any of these duties are not obeyed, you must list them and say how they were not obeyed. Case 1-1 Condominium Owners Who: The condominium board of directors. What: The board wanted to replace the unionized cleaning contractor who worked for the condo for many years, with a non-unionized crew for cost savings of 35 K. However, many people lost jobs. When: 2009 Why: To save money Where: 273 Unit Condominium Case 1-2 Motel Rates after Hurricane Katrina Who: Motel owners What: Motels in New Orleans raised their prices during Hurricane Katrina to make money.

When: 2005 Why: To make money of victims of the hurricane Where: New Orleans Case 1.3 Citigroup and the 100 Million $ Bonus Who: Citigroup What: Gave 100 million in bonuses to employees even though they were facing bankruptcy and were funded by the government. When: 2007 Why: To make money during the financial crisis while the government was giving them money. Where: wall Street and a farm Case 1.4 Bernard Madoff and the Largest Financial Scam in History Who: Bernard Madoff What: Used the Ponzi scheme to make billon of dollars. This involves taking money from investors and if using money from new investors to pay interest. There were no actual investments, he just put the money into his own bank account. When: 2009 Why: To make billions of dollars Where: New York Case 1.5 Lead Pain on Childrens Toys Who: RC2 Corporation and Chinese manufacturers What: Chinese manufacturers used lead paint on childrens toys and then sold it to RC2 who then distributed it all over the world. When: 2007 Why: To save money on manufacturing. Where: China