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What is included with this book?
UNIT: Capitalism and the Corporation
Issue 1. Is Increasing Profits the Only Social Responsibility of Business?
Yes: Milton Friedman, from "The Social Responsibility of Business Is to Increase Its Profits", The New York Times Magazine (1970).
No: Joseph Hart, from "The New Capitalists", Utne Reader (2006).
Milton Friedman argues that businesses have neither the right nor the ability to make social responsibility a priority. Profit making must be the priority. Businesses serve employees and customers best when they do their work with maximum efficiency. The only restrictions on the pursuit of profit that Friedman accepts are the requirements of law and the “rules of the game” (“open and free competition without deception or fraud”). Joseph Hart disagrees. He states, “It’s no longer enough more and more corporations are conceding, for capitalism to simply make money. It must also make a difference.” Using logic developed by Alan Greenspan, Hart avers that business must make room for values other than self-interest.
Issue 2. Can Ethics Codes Build "True" Corporate Ethics?
Yes: Eric Krell, from "How to Conduct an Ethics Audit: An Ethics Audit Can Reveal Gaps in Your Ethics Policies and Practices", HR Magazine (2010).
No: Greg Young and David S. Hasler, from "Managing Reputational Risks: Using Risk Management for Business Ethics and Reputational Capital", Strategic Finance (2010).
Eric Krell finds that one of the major corporate goals of the human resource office is to build true corporate ethics. He believes this can be done with a code of ethics, through performance reviews, and with ethics audits. Through this process, employees’ good and corporate good can become the same. Greg Young and David S. Hasler believe that strengthening the role of ethical and reputational capital has been given the short shrift within corporations. It may be that one day ethics audits and ethics codes could be essential in building capital. However, they state that until management understands that poor ethics make for poor profits, business practices will continue to ignore the place of an ethics core within their organization.
Issue 3. Have the Antitrust Laws Outlived Their Effectiveness vis-à-vis Technology?
Yes: Craig Timberg, from "FTC: Google Did Not Break Antitrust Law with Search Practices", The Washington Post (2013).
No: Marvin Ammori, from "The Case for Net Neutrality", Foreign Affairs (2014).
Craig Timberg claims that “The murky standards for establishing consumer harm” have gotten in the way of more serious charges of business practices that hurt competitors and limit consumer choice. Attorney Marvin Ammori argues that the Federal Communications Commission (FCC) should regulate Internet service providers to assure that some websites are neither given preferential treatment nor charged arbitrary fees in order to reach end users.
Issue 4. Are Stock Buybacks the Best Strategy to Drive Corporate Value?
Yes: Justin Pettit, from "Is a Share Buyback Right for Your Company?", Harvard Business Review (2001).
No: William Lazonick, from "Profits Without Prosperity", Harvard Business Review (2014).
Justin Pettit has found that managers routinely underestimate how many shares they need to buy to send a credible signal to the markets, and he offers a way to calculate that number. He also goes through the iterative steps involved in working out how many shares must be purchased to reach a target level of debt. Then he takes a look at the advantages and disadvantages of the three most common ways that companies make the actual purchases — open-market purchases, fixed-price tender offers, and auction-based tender offers. William Lazonick explains that though corporate profits are high, and the stock market is booming, most Americans are not sharing in the economic recovery. While the top 0.1% of income recipients reap almost all the income gains, good jobs keep disappearing, and new ones tend to be insecure and underpaid. One of the major causes: Instead of investing their profits in growth opportunities, corporations are using them for stock repurchases.
Issue 5. Is the Federal Reserve Good for Business?
Yes: Daniel Indiviglio, from "Why We Need the Fed", The Atlantic (2011).
No: Robert Larson, from "Fed Up: The Federal Reserve's Balance Sheet Is Exploding on Both Sides", Dollars & Sense (2011).
Daniel Indiviglio explains that historically the Federal Reserve was introduced to stabilize the financial systems throughout the United States. This organization has numerous powers available to control interest rates and inflation. Ethically, for Indiviglio, the Federal Reserve is needed to maintain fairness and stability throughout the monetary system. Robert Larson argues that the Federal Reserve has outlived its usefulness. He believes that the organization makes money too easily and inexpensively available for the marketplace. He believes this creates artificial economic and ethical problems that could easily be solved if the Federal Reserve no longer existed.
UNIT: Human Resources: The Corporation and Employment
Issue 6. Is Employer Monitoring of Employee Social Media Justified?
Yes: Brian Elzweig and Donna K. Peeples, from "Using Social Networking Web Sites in Hiring and Retention Decisions", SAM Advanced Management Journal (2009).
No: Steven Greenhouse, from "Even if It Enrages Your Boss, Social Net Speech Is Protected", The New York Times Magazine (2013).
Brian Elzweig and Donna K. Peeples write that although employers do need to be respectful of their employees’ privacy, they also have the responsibility to avoid negligent hiring and negligent retention. They find that the monitoring an employee’s, or a potential employee’s, social media is a viable way to avoid these potentially serious problems. This is not to say that an employer’s monitoring of social media should be without limits. Special care should be taken in respect to state privacy laws regarding the protection of employees outside of company time. Steven Greenhouse explains that new findings from the National Labor Relations Board state it is illegal for employers to fire employees based on social media posts. Often when an employee begins a job, part of the policy discussion revolves around social media use. In the majority of cases, the employee is told not to post materials that make the firm, the employer, and other employees appear in a bad light. It appears that many firms should begin rewriting their policy manuals based on the findings from the National Labor Relations Board as well as state law.
Issue 7. Is CEO Compensation Justified?
Yes: Ira T. Kay, from "Don't Mess with CEO Pay", Across the Board (2006).
No: Edgar Woolard, Jr., from "CEOs Are Being Paid Too Much", Across the Board (2006).
Ira T. Kay, a consultant on executive compensation for Watson Wyatt Worldwide, argues that in general the pay of the CEO tracks the company’s performance, so in general CEOs are simply paid to do what they were hired to do—bring up the price of the stock to increase shareholder wealth. Edgar Woolard, Jr., a former CEO himself, holds that the methods by which CEO compensation is determined are fundamentally flawed, and he suggests some significant changes.
Issue 8. Will Robots Help the American Worker?
Yes: Jeffrey R. Young, from "The New Industrial Revolution: A Coming Wave of Robots Could Redefine Our Jobs. Will That Redefine Us?", The Chronicle Review (2013).
No: Mark Kingwell, from "The Barbed Gift of Leisure", The Chronicle Review (2013).
Jeffrey R. Young explains that automation is cheap and efficient. Although technology’s increasing versatility may take some jobs away from humans, robots primarily will absorb the drudgery that humans may be glad to be rid of. He foresees a future of increased leisure and creativity for us. Mark Kingwell focuses on what it means to be human rather than machine and to live in a culture and community with other human beings. He argues that we are used to deriving much of the meaning of our lives from our work and wonders what individuals might do with their leisure time.
Issue 9. Should You Associate Yourself with an Organization That Has a History of Scandal?
Yes: Taylor Branch, from "The Shame of College Sports", The Atlantic (2011).
No: David A. Jones, Chelsea R. Willness, and Sarah Madey, from "Why Are Job Seekers Attracted by Corporate Social Performance? Experimental and Field Tests of Three Signal-Based Mechanisms", Academy of Management Journal (2014).
Taylor Branch writes about the NCAA, “We profess outrage each time we learn that yet another student-athlete has been taking money under the table. But the real scandal is the very structure of college sports, wherein student-athletes generate billions of dollars for universities and private companies while earning nothing for themselves.” He asserts that it is not the fault of the athletes and they should not be blamed. Jones, Willness, and Madey’s study shows that potential job seekers consider corporate social performance important to the overall assessment of a company at all stages of the job search. They use signal theory to assert the importance of community involvement, environmental practices, prestige and anticipated pride of belonging, and perceived values fit and expected treatment to make a decision about the desirability of associating oneself with a specific company.
Issue 10. Is Minimum Wage Justified?
Yes: Steve Coll, from "Higher Calling", The New Yorker (2013).
No: Mark Wilson, from "The Negative Effects of Minimum Wage Laws", Policy Analysis (2012).
Steve Coll, dean of the Columbia School of Journalism, believes that the case for a strong minimum wage has always been, in part, civic and moral. He details cities and industries that have voluntarily raised wages above the suggested minimum wage to demonstrate that pride in jobs and community make for a better economy. Minimum wages are intended to raise the dignity of work as well as strengthen individual economic independence. Minimum wages are not about welfare, entitlement programs, or the value of government. They are about the value of an individual, community, and workforce. Mark Wilson, who is a former deputy assistant secretary of the U.S. Department of Labor, argues that minimum wage harms workers and the broader economy by forcing higher wage payments on employers. Businesses respond by cutting employment as well as making other decisions to keep their net income at the levels needed for profitability. This article argues that minimum wage is not necessary for entry-level employees because the majority of employees who are employed for a year often reach the minimum wage level as part of their employment experience. This experience gives the worker the opportunity to find another job at a wage above minimum wage. Additionally, when minimum wage is required, employers generally cut back on hiring or lay off employees to maintain their profitability standards.
UNIT: Consumer Issues
Issue 11. Should Big Pharma Be Permitted to Discourage Access to Generic Drugs?
Yes: Agnes Shanley, from "Legitimate Concerns over Patent Protection, Profits and Shareholder Value Are Being Balanced by Ethics and Humanism", PharmaManufacturing.com (2005).
No: Arthur Caplan and Zachary Caplan, from "How Big Pharma Rips You Off", CNN Opinion (2013).
Agnes Shanley argues that the enormous cost of developing a new drug justifies attempts to protect its exclusive access to the market after the patent has expired. Arthur Caplan and Zachary Caplan are skeptical of the “staggering cost” claims and argue that consumers should have access to the generic version of the drug as soon as possible.
Issue 12. Should Advertising Directed at Children Be Restricted?
Yes: Stephanie Clifford, from "A Fine Line When Ads and Children Mix", The New York Times (2010).
No: Patrick Basham and John Luik, from "A Happy Meal Ban Is Nothing to Smile About", cato.org (2010).
Stephanie Clifford cites studies that show that advertising for children is often barely distinguishable from regular programming. She cites harm that can come to children through advertising that seems more promotion than fact to the child. Patrick Basham and John Luik find no credence in studies linking harms to child-directed advertising. They cite research that contends that advertising has little effect on the market associated with children.
Issue 13. Should We Require Labeling of Genetically Modified Food?
Yes: Gary Hirshberg, from "Why Labeling Makes Sense", Just Label It (2013).
No: Cameron English, from "GMO Foods: Why We Shouldn't Label (Or Worry About) Genetically Modified Products", Policymic.com (2012).
Gary Hirshberg claims that the consumers’ interests in knowing where their food comes from does not necessarily have to do with the chemical and nutritional properties of the food. Kosher pastrami, for instance, is identical to the nonkosher product, and dolphin-safe tuna is still tuna. But we have an ethical and personal interest in knowing the processes by which our foods arrive on the table. He argues that the demand for a label for bioengineered foods is entirely legitimate. Cameron English points out that as far as the law is concerned, only the nutritional traits and characteristics of foods are subject to safety assessment. Labeling has been required only where health risks exist, or where there is danger that a product’s marketing claims may mislead the consumer as to the food’s characteristics. Breeding techniques have never been subject to labeling, nor should genetic engineering techniques, English claims.
Issue 14. Is the Consumer Financial Protection Bureau (CFPB) a Necessary Regulatory Agency?
Yes: Arthur E. Wilmarth, Jr., from "The Financial Services Industry’s Misguided Quest to Undermine the Consumer Financial Protection Bureau", Review of Banking & Financial Law (2012).
No: Todd J. Zywicki, from "The Consumer Financial Protection Bureau: Savior or Menace?", George Mason University Law and Economics Research Paper Series (2013).
Arthur Wilmarth, a professor of law at George Washington University’s College of Law, argues that the Dodd-Frank Wall Street Reform and Consumer Protection Act (CFPB) was created to protect consumers from fraudulent activities within the financial services industry. It was established with autonomy in order to insulate it from political and lobbying pressures that have been evident in the current federal regulatory agencies. The effects of the catastrophic crash of 2008 on Wall Street are still felt by many consumers. Many of the problems were caused by the mortgage industry, the investment banking industry, and the insurance industry. After extensive bailout from the American taxpayers, the bureau was put in place to maintain financial protection and safety for consumers. Todd Zywicki, a professor of law at George Mason University School of Law, claims that the Consumer Financial Protection Bureau (CFPB) is not necessary because several federal agencies are already doing the work of the CFPB. The Bureau has extensive autonomy, which can endanger the financial industry’s progress and profits through excessive regulation and reform. He argues that the 2010 Dodd-Frank Consumer Financial Protection Act can function well with the existing federal agencies.
UNIT: Global Objectives
Issue 15. Should Hydrofracking Be Permitted?
Yes: Danny Hakim, from "Gas Drilling Is Called Safe in New York", The New York Times Magazine (2013).
No: Ben Goldfarb, from "Hydrofracking Poses Serious Risks to Human Health", Policymic.com (2012).
Danny Hakim reports that the New York Health Department will be issuing a report claiming that the practice of hydrofracking is safe as it is practiced in the state of New York; after significant pressure from the drilling industry and landowners, the moratorium on hydrofracking was lifted for the Southern Tier of the state in the summer of 2012. Ben Goldfarb disagrees, citing a recently released Environmental Protection Agency report that links hydraulic fracturing to contaminated well-water in Wyoming. He also points out that an abundance of clean water is needed for the process—a commodity which is scarce in the western United States.
Issue 16. Should the World Continue to Rely on Oil as a Major Source of Energy?
Yes: Red Cavaney, from "Global Oil Production about to Peak? A Recurring Myth", World Watch (2006).
No: James Howard Kunstler, from "The Long Emergency", Grove/Atlantic (2005).
Red Cavaney, president and chief executive officer of the American Petroleum Institute, argues that recent revolutionary advances in technology will yield sufficient quantities of available oil for the foreseeable future. James Howard Kunstler contends that the peak of oil production, Hubbert’s Peak, was itself the important turning point in our species’ relationship to petroleum. Unless strong conservation measures are put in place, the new scarcity will destroy much that we have come to expect in our lives.
Issue 17. Is the Foreign Corrupt Practices Act Obsolete?
Yes: Joseph W. Yockey, from "Choosing Governance in the FCPA Reform Debate", Journal of Corporation Law (2013).
No: Peter J. Henning, from "Taking Aim at the Foreign Corrupt Practices Act", The New York Times (2012).
Joseph Yockey claims that ambiguity in the statute creates perpetual uncertainty about what constitutes an FCPA violation and that reform is needed urgently. New governance can replace the existing concerns about implementation of the FCPA. Peter Henning states that “business leaders have long contended that the law is overly broad and too aggressively enforced,” but believes that “it does little good to charge someone when there is not a realistic prospect that the person can be brought to the United States.”
Issue 18. Should U.S. Companies Take Primary Responsibility for Working Conditions in Their International Suppliers' Factories?
Yes: Denis G. Arnold and Norman E. Bowie, from "Sweatshops and Respect for Persons ", Business Ethics Quarterly (2003).
No: Charles Duhigg and David Barboza, from "In China, Human Costs Are Built into an iPad", The New York Times (2012).
Arnold and Bowie claim that multinational corporations are responsible for the actions of their suppliers based on the Kantian doctrine of respect for persons. Corporations must ensure minimum safety standards are met, along with living wage and local labor laws. Duhigg and Barboza report that Apple contends that their industry behavior is governed by market desire for cheaper and more advanced technology. Until market desire changes, factory conditions are secondary.