...ENGINEERING AND COMPUTING SCHOOL OF ENGINEERING Business Ethics Case Study Sears, Roebuck & Co, the Auto Center Scandal Ethical Issues 1. The first issue that presents itself is the aggressive, Profit seeking approach been taken by Sears in their implementation of an extremely tight incentive system within their Auto centers to increase productivity and reduce cost. 2. Sears was acting very unethical as they disregarded stake holders such as employees, customers and partners in their efforts to reel in profits. 3. Sear president and managers tactically combative approach to criticism from the different interest groups Discussion of Issues Sears, Roebuck, and Co, is a well developed and reputable group of companies in the United States of America. Entering the 1980s the market had undergone several changes in demand and customer affection. One of the roles of an effective management is the detection of these before mentioned changes and the appropriate implementation of measures to combat or position one’s self to remain unaffected or benefit from the before said . Did Sears take the right approach in responding to the changes in their market? From a consequentialist view perspective where the moral worth of an action is determined only by its resulting outcome, it can strongly be argued that post the outcome of this approach taken by Sears in the implementation of an incentive system in their extremely task and accuracy focused...
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...Quality Management at Sears Holding Corporation Felicia J Town Keller Graduate School of Management Managing Quality GM588 Professor Taylor October 10, 2011 Quality Management at Sears Holding Corporation Richard Sears, a Minneapolis railway station agent, sold lumber and coal to the local residents to make extra money. One day he received an unwanted shipment of watches from a neighboring jeweler and the light bulb in his head lit up, he was ready to start his own watch company. In 1886 Richard W. Sears began Sears Watch Company with the watches that he purchased for resale. In 1887 he teamed up with a watchmaker Alvah C. Roebuck, a young Indiana native to later form the firm Sears, Roebuck and Co. in 1893. In 1896 the first general catalog was created. By 1945, Sears had opened a retail store on the west side of Chicago and sales exceeded $1 billion. Sears continued to expand and offer a variety of services. It was until the early 1990s that Sears noticed a significant blow to its sales. 1992 was the start of the retail giant’s culture shift from senior management down to the hourly sales associates (Sears, 2011). A deliveryman, clerk, bookkeeper and teacher- these were all the hats worn by Sebastian S. Kresge. His ambition to succeed and his penny-pinching attitude led him to become a successful businessman. Through five and dime stores to Kmart stores, he became a millionaire. In 1966 sales topped the $1 billion mark. Kresge once said, "I think I was successful...
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...What affects our Self: Self-esteem is how we assess ourselves as people, and how open-minded are we to receive feedback from a friend, family member, co-worker, etc. How we react to it all matters on high self-esteem or low self-esteem. According to research by Amanda Forrest of the University of California and Joanne Wood at Waterloo University, published in Psychological Science, they found those with low self-esteem feel safer sharing on Facebook. However, the study also found that those with low self-esteem frequently post updates that work against them. They tend to criticize their friends with negative details of their lives, making them less likeable as "friends." Forrest and Wood also found that those people with high self-esteem, who usually posted more positive updates, received more positive responses (Williams, R. 2012, March 2). Self-Knowledge Socialization is being a participant of different activities and interactions with people, being part of a culture that we are born into or a religion, etc. Reflected Appraisals are reactions about our actions with people and how we evaluate them and or perceive us. Self-perception theory says that, 'When people are unsure about their feelings and motivations, they will use their own behavior to infer what they feel (Sears, D. O., Peplau, L. A., & Taylor, S., 2012). Social identity, relates to how we identify ourselves in relation to others according to what we have in common (Sears, D. O., Peplau, L. A., & Taylor, S....
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...Janis Graham American Intercontinental University General Electric and the Kitchen Range October 20, 2013 Abstract General Electric (GE) has been a major successful brand name for so many years for its large and small appliances. GE’s iconic history and technological advancements have contributed to a loyal and lasting consumer base, one which will be analyzed further in this document. The following document will not only explore the history and present, but will outline in detail the future demographic trends that are essential to GE’s future success in the home appliance industry. General Electric and the Kitchen Range Introduction Kitchen ranges have gone through major transitions since wood burning and cast iron devices to induction, convection and dual fuel from gas to electric. The industrial revolution was a turning factor for many companies to expand in the marketplace by trying to make kitchen chores easier and faster for women through the development of appliances. This area was the beginning of progressive inventions in this market which many companies such as Whirlpool, Electrolux and General Electric (GE) all became major players and still are today in this very competitive industry of home appliances. Part 1: Competitor Selection In 1892, two companies combined Edison General Electric, developed by Thomas Alva Edison and the Thomas-Houston Company, owned by Charles A. Coffin to originate the organization of General Electric Company soon...
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...Whistleblowing and Sarbanes-Oxley Act Student Name College or University Name LEG500 – Law, Ethics, and Corporate Governance Professor’s Title Date Whistleblowing and Sarbanes-Oxley The federal government passed and put into law the Sarbanes-Oxley Act of 2002 (SOX) to primarily protect whistleblowers from retaliation for reporting corporate fraud and financial malfeasance to the government. The negligence became apparent in the 1990’s when corporations such as Enron, HealthSouth, Tyco and WorldCom were found to have grossly overstated their earnings. This cost billions of dollars in losses to shareholders and caused the near-collapse of the stock market (Prentice, 2010, p. 17). The companies were able to hide, scam or misrepresent their earnings due to the dot-com boom, soaring investments, and auditor fraud. The Sarbanes-Oxley Act contains many sections, sub-sections and creation of other agencies to enforce it. It was a sweeping change to standard reporting practices and was created to restore investor confidence, hold corporations and auditors financially and criminally accountable, and protect whistleblowers. Prior to the creation of SOX the whistleblower had no protection from retaliation by the organization. Whistleblowers had fears of criminal prosecution, bodily harm and job loss if they reported the misdeeds of their employer both publicly and privately. The Sarbanes-Oxley Act of 2002 redefined the whistleblower. An examination of the characteristics of a whistleblower...
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...Chapter 10 - Incentive Conflicts And Contracts CHAPTER 10 INCENTIVE CONFLICTS AND CONTRACTS CHAPTER SUMMARY This chapter provides an overview of incentive conflicts and contracting within firms. It begins by defining the firm as a focal point for a set of contracts. It then discusses the many incentive conflicts that exist between the parties that make up the firm. The role of contracts in reducing these conflicts is examined. The importance of asymmetric information in limiting the ability to solve these problems in a costless manner is stressed. Both postcontractual and precontractual information problems are examined. The role of implicit contracts and reputational concerns in reducing incentive conflicts is discussed. CHAPTER OUTLINE FIRMS Managerial Application—Enforceability of Implicit contracts INCENTIVE CONFLICTS IN FIRMS Owner-Manager Conflicts Choice of effort Perquisite taking Differential risk exposure Managerial Application—The Spectrum of Organizations Differential horizons Overinvestment Other Conflicts Managerial Application—Buyer-Supplier Conflicts Managerial Application—Experimental Evidence on Free-Rider Problems Managerial Application—Incentive Conflicts throughout the World CONTROLLING INCENTIVE PROBLEMS THROUGH CONTRACTS Costless Contracting Managerial Application—Jack Welch’s Perquisites Costly Contracting and Asymmetric Information Managerial Application—Agency Problems with Owner-Managers Postcontractual Information Problems Agency Problems...
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...Companies As an accountant and being in the public or the private sector you have to remain loyal to your clients and to be loyal to the ethical guidelines and rules when it comes to a company or and individual person financial records for the purpose of reporting. Being an accountant you will run across some unethical issues and this would be regardless of the type of industry and their goal would be to reduce any and all factors that they would face when it comes to manipulating financial records and this could lead to an ethical issue or criminal violations. The Sears Auto Center Scandal As stated in the textbook (Duska, 2011) “Those who appeal to consequences over fairness and rights are called consequentialist. Finally, the theory that gives precedence to the issues of fairness, rights, and commitment, and advocates doing the right thing – no matter what the consequences to self and others – is called deontological theory. Under this theory, the end does not justify means.” (Duska, 2011; pg. 52 & 62) Identify the ethical issues involved in the case from a consequentialist and deontological perspective (refer to Chapter 2). Ethics will always be a key factor when it comes to deciding what society would deem as being acceptable in order to live out one’s life. This factor would develop as a person and would include the morale as a whole when possible. Applied ethics would cover the different categories that are used in cases that would help determine...
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...Mark Atia 7/25/2012 Extra Credit Assignment THE PRACTICE OF MANAGEMENT BY PETER DRUCKER The introduction is titled “The Nature of Management” and features three chapters. The first chapter is titled “The Role of Management”. The first two sentences in this chapter might be the best definition of a manager anyone has ever written. Drucker states that “the manager is the dynamic, life-giving element in every business. Without his leadership the “resources of production” remain resources and never become production”. To me this sums up what being a manager is all about. Later in the chapter he says “from the peak there is only one easy way to go: downwards. It always requires twice as much effort and skill to stay up as it did to climb up”. A powerful statement, that many do not realize. The second chapter, titled “The Jobs of Management”, Drucker talks about how the jobs of management are usually not known by people within the company. People know who the managers are but aren’t quite sure what they do. He breaks down what a managers’ job involves into a couple of key areas. The first of which is “economic performance”. With this Drucker say that management must always put economic performance first in every decision and action they make because this will justify their existence. Other areas of this chapter focus on management functions which include: their first job is managing a business, managing managers and managing both worker and work. The third chapter is called...
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...research is the key to uncovering causal relationships between variables. In experimental research, the experimenter randomly assigns participants to one of two groups: (1) the control group; and (2) the experimental group. The control group receives no treatment and serves as a baseline. Researchers manipulate the levels of some independent variable in the experimental group and then measure the effects. Since, researchers are able to control the independent variables, experimental research can be used to find causal relationships between variables. Field Versus Laboratory Settings The bulk of social psychological research relies on experimentation and two-thirds of all experimental studies occur in the lab (e.g., Taylor, Peplau, & Sears, 2006). Social psychologists often speak of...
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...Lederer’s and Burdick’s book, the day-by-day business of American policy implementation and foreign aid to other countries is described. Central to The Ugly American is the historical reality of the cold war. Behind all the individual stories lies the larger picture of a global struggle between two superpowers that embrace competing ideologies and compete ruthlessly for influence and control over smaller countries not only in Southeast Asia, but all over the world. Given the fact that both superpowers in the book have the capacity to destroy each other several times over through the use of nuclear weapons, reading the descriptions of cringe-worthy behavior employed by many of the books’ American characters was terrifying. It begs the question: Will World War III begin due to a lack of something as basic as knowledge of local etiquette and simple civility? The Ugly American is an unusual novel in that there’s only a loose connection between all the different stories. The only nod to a unified plot is in Ambassador Gilbert MacWhite's gradual accumulation of the knowledge about how to win the struggle against communism. Each story serves as a fable, illustrating either the recklessness of U.S. behavior and policy, or a positive alternative. The aim of the all the stories novel and the novel as a whole is to point out...
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...In 2012, the Tazreen Fashions factory outside of Dhaka, Bangladesh caught on fire, killing 112 employees. The Bangladesh factory produced garments for several well-known retailers, such as Wal-Mart Stores, Inc. and Sears Holding Corporation. According to the article, For Wal-Mart, Sears, Tough Questions in Bangladesh Fire, “Bangladesh has become the world’s second-largest clothing exporter, thanks in part to some of the lowest labor costs anywhere: The government sets the minimum wage for entry-level garment workers there at less than $37 a month” (Bustillo, Wright, & Banjo 2013, pg. 2). Wal-Mart Stores, Inc, faces the dilemma of seeking the lowest prices from suppliers globally to deliver low price products while projecting a corporate image of high ethical standards and corporate social responsibility. Traditionally, the purpose of a firm is profit creation, and sale of goods and services in a legal and moral manner. However, what has not always been a part of that tradition was the welfare of society and/or philanthropic endeavors. Due to numerous tragic events, like the one in Bangladesh, the issues of the role of business in social responsibility more frequently appears to be a topic of discussion. This has forced the corporate world to concern itself with the social impact of its decision-making. Firms are turning to ethical business models such as the Wall Street Journal Model to help them understand business ethics and to make ethical business decisions. The...
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...Chapter 7 Managing for Ethical Conduct Contents: (Please note: the Instructor Guide for every chapter will follow this structure.) 1. Chapter Outline 2. Teaching Notes 3. In-Class Exercises 4. Homework Assignments 5. Additional Resources Chapter Outline I. Introduction II. In Business, Ethics Is about Behavior A. Practical Advice for Managers: Ethical Behavior III. Our Multiple Ethical Selves A. The Kenneth Lay Example B. The Dennis Levine Example C. Practical Advice for Managers’ Multiple Ethical Selves IV. Rewards and Discipline A. People Do What is Rewarded and Avoid Doing What is Punished B. People Will Go the Extra Mile to Achieve Goals Set by Managers C. How Goals Combined with Rewards Can Encourage Unethical Behavior D. Practical Advice for Managers: Goals, Rewards, and Discipline E. Recognize the Power of Indirect Rewards and Punishments F. Can Managers Really Reward Ethical Behavior? G. What about the Role of Discipline? H. Practical Advice for Managers: Discipline V. “Everyone’s Doing It” A. People Follow Group Norms B. Rationalizing Unethical Behavior C. Practical Advice for Managers: Group Norms VI. People Fulfill Assigned Roles A. The Zimbardo Prison Experiment B. Roles at Work C. Conflicting Roles can Lead to Unethical Behavior D. Roles Can Also Support Ethical Behavior E. Practical Advice for Managers: Roles...
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...airport security should not be stronger. September 11, 2011 will be a day that I will never forget. Being picked up from kindergarten by my mother, listening on the radio and hearing the fear in my mother’s voice, something was wrong. Being five years old, I knew very little as to what the situation was. At 8:45 AM ET on that day, the first plane hijacked the north tower of the World Trade Center. The building goes into smoke as bodies jump to their deaths, one by one, as life flashed before their eyes. Exactly 18 minutes later, at 9:03 AM ET, the second plane crashed into the south tower of the World Trade Center. America knew that this wasn’t an accident, but this was a terrorist attack on the United States. Situations as such make me question how strong airport security really is. It is not just terrorism that I am worried about when it comes to the strength of airport’s security systems, but other situations like Ebola coming from Africa into the United States and illegal drug smuggling concerns me, as well. Although airport security is a frustrating job that requires a lot of patience, however, it is a very serious job that needs to be stronger in fixing situations such as terrorism, disease spreading (such as Ebola), and illegal drug smuggling. Airport security is defined as, “The area in an airport where people are checked to make sure they...
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...Chapter 7 Managing for Ethical Conduct Contents: (Please note: the Instructor Guide for every chapter will follow this structure.) 1. Chapter Outline 2. Teaching Notes 3. In-Class Exercises 4. Homework Assignments 5. Additional Resources Chapter Outline I. Introduction II. In Business, Ethics Is about Behavior A. Practical Advice for Managers: Ethical Behavior III. Our Multiple Ethical Selves A. The Kenneth Lay Example B. The Dennis Levine Example C. Practical Advice for Managers’ Multiple Ethical Selves IV. Rewards and Discipline A. People Do What is Rewarded and Avoid Doing What is Punished B. People Will Go the Extra Mile to Achieve Goals Set by Managers C. How Goals Combined with Rewards Can Encourage Unethical Behavior D. Practical Advice for Managers: Goals, Rewards, and Discipline E. Recognize the Power of Indirect Rewards and Punishments F. Can Managers Really Reward Ethical Behavior? G. What about the Role of Discipline? H. Practical Advice for Managers: Discipline V. “Everyone’s Doing It” A. People Follow Group Norms B. Rationalizing Unethical Behavior C. Practical Advice for Managers: Group Norms VI. People Fulfill Assigned Roles A. The Zimbardo Prison Experiment B. Roles at Work C. Conflicting Roles can Lead to Unethical Behavior D. Roles Can Also Support Ethical Behavior ...
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...Chapter 7 Managing for Ethical Conduct Contents: (Please note: the Instructor Guide for every chapter will follow this structure.) 1. Chapter Outline 2. Teaching Notes 3. In-Class Exercises 4. Homework Assignments 5. Additional Resources Chapter Outline I. Introduction II. In Business, Ethics Is about Behavior A. Practical Advice for Managers: Ethical Behavior III. Our Multiple Ethical Selves A. The Kenneth Lay Example B. The Dennis Levine Example C. Practical Advice for Managers’ Multiple Ethical Selves IV. Rewards and Discipline A. People Do What is Rewarded and Avoid Doing What is Punished B. People Will Go the Extra Mile to Achieve Goals Set by Managers C. How Goals Combined with Rewards Can Encourage Unethical Behavior D. Practical Advice for Managers: Goals, Rewards, and Discipline E. Recognize the Power of Indirect Rewards and Punishments F. Can Managers Really Reward Ethical Behavior? G. What about the Role of Discipline? H. Practical Advice for Managers: Discipline V. “Everyone’s Doing It” A. People Follow Group Norms B. Rationalizing Unethical Behavior C. Practical Advice for Managers: Group Norms VI. People Fulfill Assigned Roles A. The Zimbardo Prison Experiment B. Roles at Work C. Conflicting Roles can Lead to Unethical Behavior D. Roles Can Also Support Ethical Behavior ...
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