Alcantara, Gutierrez 1

Jasson Alcantara

Silvio Gutierrez

Dr. Anne Delaney

Legal and Ethical Environment of Business

September 25th, 2017

Assignment - Chapter 4

Answer the following questions:

4-1 Business Ethics

Even though Trevors conduct was legal, was it unethical for him to sell goods that had

once tested positive for salmonella? Why or why not?

Most of the time people do not pay close attention to what being ethical means, and being

unethical is considered, from my point of view, a really wrong action. According to the book,

Legal and ethical environment of business, ethics is actually the study of what constitutes right of

wrong. Business people have to take ethical decision to have good relations impact and to take

less risk for consumers and his or her business workers. Jason Trevor was facing a dilemma

between earning profits and delivering quality products. Selling products that tested positive in

salmonella is unethical because they are potentially harmful to people. The Food and Drugs

Administration agency does not require the company to submit the test results. Therefore, the

company can manipulate the tests result to prove that their products meet hygienic and safety

requirement, which is acting at the moral minimum. Then, if we analyze there are many actions

and ramifications to this case. The first is stopping the production of the poisoned products unitl

eradicating the bacteria. The consequence is losing money from selling the products and

investing time on finding a solution to the salmonella issue. Another action is to take all the

poisoned products out of the market and stop selling the product definitely, which results in
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losing money and earning a bad reputation. A third choice is to keep selling the product until

many people die or get harmed, and they sue the company. This choice might result in a public

scandal harming the image of the company. Finally, selling the product infected by salmonella

was unethical due to business people have to care about their consumers and by his or her own

benefits and safety. The action itself is not ethical due to the customers do not know about the

higher possibility of getting ill by salmonella. Using common sense by taking ethical decisions is

a good way to avoid higher risk in business and to success at the same time.

4-2 Ethical Conduct

Is it ethical for Zoidle to avoid paying taxes? Why or why not?

The UK government set its tax rate between 20 and 24 percent; however, Zoidle actions are not

illegal since the government has not sanctioned them. The CEO of Zoidle is actually using an

ethical behavior since he is complying with the law and his actions do not harm the society. At

first, he owns a duty to the shareholders of the company, which is to maximize their profits. If he

pays the actual tax rate, this will result in less income to the shareholders. Producing less income

might induce the executive board to fire him. Furthermore, if the government forces the company

to pay a high tax rate, the owners of the company might decide to close the company. This will

generate unemployment and losses to country. On the other hand, if he keeps paying the

established tax rate, he will satisfy the executive board expectations and thus accomplish his

duty. In addition, the money payed to the government will still be used for the social and

administrative purposes. Finally, it is ethical to avoid paying taxes since they are a fulfill the law

requirement while generating well-being to stockholders and the society.

4-4 Ethical Leadership

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How do a managers attitudes and actions affect the workplace? [Krasner v. HSH

Nordbank AG, 680 F.Supp.2d 502 (S.D.N.Y. 2010)] (See page 88.)

Leadership consists on organizing, leading, motivation, guiding, and implementing

ethical actions in order to increase good relationships among employees. The behavior of the

managers in a company is so important. They are the ones who teach their employees and

coworkers how to react in difficult situations by taking the best decisions as good as possible. In

addition, their practices are a code of ethics in which they have to treat every single person in the

company respectfully and in the same manner due to every single person has the same rights as

others. Indeed, whenever a manager performs an unethical action is telling all other employees

that behaving unethically is right. In this case, Kisers behavior is affecting the human capital of

the company. His actions discourage employees to give their best because the will not be

awarded for their performance. At the same time, Kisers actions encourage employees to behave

unethically. They will think that they have the right to commit wrongful actions such as gender

discrimination and sexual harassment. Therefore, managers and leaders actions have to be a

model where employees can follow in order to behave correctly while working and out of the

workplace. When management in a company is poor, it is easy to predict that the company will

have many difficulties while growing and employees will not develop great skills and will not

success as business persons. In other words, no matter how many ethical rules there are set in a

workplace, employees would feel free to break them if they see their leader is doing so. In

addition, ethics in a company is necessary to stablish good teamwork, avoid misunderstanding,

and to have good communication at the work place.

4-9 Global Business Ethics

(a) One group should use the principles of ethical reasoning discussed in this chapter to
develop three arguments that Pfizers conduct was a violation of ethical standards.
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1. Principles of Rights: Under the duty based ethics, Pfizer action was a violation of ethical

standards because it did not take into account peoples rights. The principles of right are

based on the basic human rights or fundamental rights to life, freedom, and pursuit of

happiness. Pfizers actions killed eleven children leaving other with terrible conditions.

2. Corporate Social Responsibility: it combines a commitment to good citizenship and

making ethical decision due to society is involved in those actions. It can be considered

an excellent strategy for business to success, but in this case this company did not react in

the correct and ethical manner. In our personal opinion, the company did not showed a

commitment to good citizenship nor making ethical decisions.

3. Costs Benefit Analysis: this action is actually under a utilitarian model of ethics in which

an action is morally correct or right when it talks about people wellbeing. In this case,

Pfizer did not look at determining the consequences of its actions.

(b) A second group should take a pro-Pfizer position and argue that the company did not
violate any ethical standards (and counter the first group).

Under a cost benefit analysis, we must analyze the negative and positive effects of an action. In

this case, Pfizer was trying to determine if its drug has efficient to infectious diseases. Pfizer

thought that giving the antibiotic to ill children would produce the maximum societal utility in

the future. However, Pfizer did not cause ill on those children intentionally. It is true that the

company wanted to help and they basically did not have time to prove that the treatment was the

best option due to children needed at the moment. Also, I can say that they acted ethically

because they were expecting the treatment to do well on children, they never said we have the

cure for them, it was better to try than not trying, they just took the challenge in order to help.

Additionally, we have to consider that the terrible conditions those children got were caused by

the meningitis and not by the treatment.

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(c) A third group should come up with proposals for what Pfizer might have done
differently to avert the consequences.

1. Pfizer should have warning labels about the side effects of its experimental drug to

society, so people would decide whether to take it or not.

2. Also, they should take more time on analyzing a product and hiring specialized people to

do those analyses. In addition, they should invest more in researching their experimental

drugs. However, Pfizer should take the necessary methods of preventions while testing

their drugs on people.

3. Pfizer wanted to help the Nigerian hospital, but to do that, they should took into account

that sending medical treatment before testing them in human would produce different

reactions and possible harmful consequences such as getting ill.

I pledge upon my honor that I have neither given nor received any authorized aid on this
assignment

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References

Cross, F. B., & Miller, R. L. (2015). The legal environment of business: text and cases.
Stamford, CT: Cengage Learning.