BUSI 211: Business Ethics

CLASSES 35-36 (10TH AND 13TH APR 2014):

MARKETING CONCLD
AND
INTRO TO HR

AGENDA
2

A. Tobacco lawsuits
B. Functions of HRM
C. Overview of UAE Labor Law
D. Ethical issues in HR
E. Thought of the Day
F. Academic Integrity Project
G. Nike Boardroom role-play
H. Business for Better Competition
I.

Homework

A. TOBACCO LAWSUITS
3

Smoking statistics:
Each year about 443,000 people in US die from illnesses related to
tobacco use (including second-hand smoke).
Smoking cigarettes kills more Americans than alcohol, car accidents,
suicide, AIDS, homicide, and illegal drugs combined. Cigarette
smoking causes about 1 of every 5 deaths in the United States each
year.
Average male smoker is 15 times more likely to die of lung cancer than
non-smoker.
Second-hand smoke exposure can cause heart disease and lung cancer
in non-smoking adults.
Cigarette manufacturers spend $11.22 billion on advertising and
promotion.
(Source: http://www.cancer.org/cancer/cancercauses/tobaccocancer/cigarettesmoking/cigarette-smoking-who-and-how-affects-health )

Tobacco lawsuits
4

United States v. Philip Morris

In 1999, US Department of Justice (DOJ) sued major tobacco
companies for fraudulent and unlawful conduct.
DOJ sued for decades-long conspiracy to:
(1) mislead public about risks of smoking,
(2) mislead the public about danger of second-hand smoke;
(3) misrepresent addictiveness of nicotine,
(4) manipulate nicotine delivery of cigarettes,
(5) deceptively market cigarettes characterized as light or low
tar, although they are as hazardous as full flavored cigarettes,
(6) target youth market; and
(7) not produce safer cigarettes.

Tobacco lawsuits contd

5

After a long complicated process, in May 2004: Court imposed sanctions

against Philip Morris, Reynolds and Ligett for $280 billion.

Appeals made by tobacco companies.
August 2006: tobacco companies found liable for fraudulently covering
up health risks associated with smoking and for marketing their products
to children in a massive 50-year scheme to defraud the public, including
consumers of cigarettes.
Appeal made again, but decision upheld in May 2009 and found that First
Amendment (freedom of expression) does not protect fraudulent
statements. Defendants knew of their falsity and made statements with
intent to deceive.
(Source:
http://
publichealthlawcenter.org/topics/tobacco-control/tobacco-control-litigation/united-states-v-philip-morris-doj-law
suit
)

Other recent tobacco lawsuits by smokers

6

Feb 2009: Judge reduced record-breaking $28

BILLION award to a former smoker to $28

MILLION because jury's decision on punitive
damages was excessive while $28 million was "a
reasonable sum. Philip Morris was at least partially
responsible for smokers cancer.
(Source: http://www.cbsnews.com/2100-201_162-524400.html)

Light tobacco lawsuits

7

10 year-old lawsuit re: fraudulent labelling of cigarettes as

light against Philip Morris still ongoing

In 2009: prohibited use of light, low or mild in all
cigarette labeling and marketing, effective June 2010.
Light (low-tar/ultra-light/mild) cigarettes list tar and
nicotine as being lower than in regular or "full flavor"
cigarettes.
Plaintiffs say not accurate portrayals of actual tar and nicotine
so people believe theyre safer/healthier to smoke, but not true.
Tobacco companies argued light" = lighter in taste, not
healthier. Consumers should know this.
(Source:http://www.nytimes.com/2009/11/21/business/21smoke.html?_r=0)

Tobacco litigation: Discussion

8

ON YOUR OWN, write down your response to this question:

What do you think of these tobacco lawsuits? Analyze the

tobacco companies actions using course theories and
concepts.

B. HUMAN RESOURCE MANAGEMENT (HRM)

9

What is HRM?
What are the 4 functions of HR described in the

text?

Four main functions of HRM

10

1. Employee resourcing: Recruitment and

retention.
2. Employee reward: Pay, recognition and
motivation.
3. Employee relations: Managing employee
contract and relationship.
4. Training and development: Organizing and
managing training programs.

C. UAE LABOR LAW

11

Ministry of Labor is responsible for all

employment matters in country.

Labor law generally protects employees to ensure:
they receive minimum wage;
dont exceed maximum working hours;
they are not subject to more than 6 month probation
period;
safe working conditions;
termination provisions are complied with;
employees receive end of service gratuity.

D. ETHICAL ISSUES IN HR
12

1. Discrimination and gender inequality

2. Harassment, sexual harassment, workplace

bullying, and insubordination

3. Breach of privacy and confidentiality
4. Employee motivation/morale/productivity

1. Discrimination and inequality

13

Discrimination and favoritism in hiring,

promotion, pay, discipline: old boys network,

wasta.

UAE Internal Audit Association is checking recruitment

procedures to ensure government bodies and businesses
are not offering jobs to people based on wasta alone:
http://www.thenational.ae/news/uae-news/uae-to-conduc
t-recruitment-checks-in-bid-to-beat-wasta

Gender inequality
14
Unequal pay: Women get paid 10 to 40% less than what men make.

UK survey Nov 2012 shows a woman manager earns 25% less than a man (500k pounds or
AED 3 million over lifetime) and have bonuses half those of their male counterparts in
SAME JOB path:
http://www.telegraph.co.uk/finance/jobs/9659232/Women-earn-500000-less-than-men-over-working-lives
.html
. Another article says a 2010 British article says that equal pay still 57 years away.

Gulf

News article (16 March 2013): Women in GCC make less than a of
what men make (due to type of work etc). Middle East and Africa have worst
gender inequality in world.
When control for occupation, majors in uni, etc. women still make 10% < men in
US.
Women also less effective at negotiating salaries than men because undervalue
worth or feel bad.
President Obama declared 8th April 2014 Equal Pay Day: Today, women still
make only 77 cents to every man's dollar, and the pay gap is even wider for women of
color: http://www.whitehouse.gov/the-press-office/2014/04/07/presidential-proclamation-national-equal-pay-day-2014

Gender inequality
15

Glass ceiling: Invisible barrier that separates women from top

management positions. Can look through glass ceiling and see top
management, but stereotypes or attitudes provide obstacles to their
advancement. => Old boys network

Women comprised 10% of executives on Wall St in 2008 and about 20% of financial
advisors. Despite lower representation, 5 times as many got laid off.

Opt-out: Women select themselves out of the process by not

applying for management roles, get on the Mommy Track, or leave

on their own for various reasons.

Survey of financial industry: 32% of women experienced harassment; 13% received

unwanted sexual attention (San Antonio Woman Magazine)
Double standard: If a stressed man throw something, seen as aggressive and macho
which is praised vs. woman seen as weak, unstable and emotional.
Wharton Management Professor: In school, at least half class are women, why would
they choose a field that is male-dominated, where its going to be hard and not pleasant?

Lehman Sisters?
16

Effects of women opting out or somehow prevented

from entering certain professions

Davos World Economic Forum (2010): Would Lehman

Brothers failed if was Lehman Sisters? No, but would also
made less money during boom years.

if women ran Wall Street, would have saved world from corrosive
gambling culture that dominated many a trading room.
Women are more cautious and less corrupt.
Neelie Kroes, the European competition commissioner, convinced
testosterone was one reason financial system collapsed. "females
are less ego-driven and more responsible than men".

17

Harvard economist: Germany's chancellor, Angela

Merkel, called for transparency in financial markets

and regulation of nonbank financial sector in 2008.
"She didn't even want heavy regulation - she was just
completely sane and sensible - but she was squashed
by all the men. She was a lone voice, and that's the
problem. We need more gender diversity in the
finance sector.":
http://www.nytimes.com/2009/02/01/business/wor
ldbusiness/01iht-gender.3-420354.html?_r=0

Gender inequality and body chemistry

18

According to behavioral finance, Wall Streets volatility is

driven by body chemistry.
Testosterone (men have 15 times > women) linked to
increased aggression, confidence, hostility, violence,
sensation-seeking. Level influenced by environment, e.g.
stay-at-home-dad can have less over time; higher in single
guys/morning/when eat meat /around other guys. Being
married reduces risk-taking behaviour.
Having too many men involved in business might cause
them to take more risks, and having more women would
probably be good in lots of settings. Women are the brake
pedal.

19

Women traders classified selves as more conservative.

Generally, women more likely to admit theyre wrong,
faster. Theres less ego.if something went wrong, I would
get advice from other people. Its like asking for directions
when driving.
Neuroscientist: Banking crisis caused by doing what no
society ever allows, permitting young males to behave in
unregulated way. Anyone who studied neurobiology would
have predicted disaster.

(New York magazine)

http://nymag.com/news/businessfinance/64950/

2. HARASSMENT, BULLYING,
INSUBORDINATION
20

a) Harassment:
any unwanted behavior that humiliates, offends, or intimidates
a person. Impact on complainant is important determinant.
Harassment occurs when an employee or group of
employees must endure a work environment that is hostile,
offensive or intimidating to them.
Harassing conduct includes insults, mockery or demeaning
jokes, and implied and explicit threats of violence.
Usually is a series of events, but legally just one act can
constitute harassment.

21

Harassment can take many forms. Depending upon whether

behavior is welcome or not, following could be harassment:

material that is racist, sexist, sexually explicit, homophobic etc. and is

displayed publicly, circulated or put in someones work space or belongings;
verbal abuse or comments that put down or stereotype people generally, or an
individual particularly, because of their sex, pregnancy, race, disability etc
jokes based on gender, race, marital status, disability, age etc
sexually, racially, etc offensive gestures or conduct
ignoring, isolating or segregating a person or group because of their sex, race
etc.

Each case is unique and should be examined in its own context

and according to surrounding circumstances as a whole.

22

b) Sexual Harassment: any unwelcome sexual advance or conduct

on the job that creates an intimidating, hostile or offensive working
environment
Ranges from repeated offensive or belittling jokes to a workplace full of
offensive pornography to an outright sexual assault.
No special laws or regulations in the UAE, but covered under UAE Penal Code.

(Definitions from ProConsult Advocates and Legal Consultants)

Harassment is degrading, frightening, and sometimes physically

violent; frequently extends over a considerable period of time; and

can result in profound job-related, psychological, and health-related
consequences.
Both men and women can be victims Horrible Bosses movie.

23

What steps should you take to stop harassment?

Tell the harasser to stop. If harassment is in form of jokes, inappropriate

comments about appearance or repeated requests for dates, often likely
to stop if you address it with them.
Write to harraser by e-mail after having conversation to document what
has happened.
It is also important if later take more formal action against harasser.
Document what's going on by keeping a journal of events and have
witness accounts or keep other evidence.
Inform your manager or HR if it is not a minor incident or if you feel
physically threatened. In some countries, companies can be liable for
failure to prevent such harassment.
Al Ameen hotline (800 4888 or sms 4444), which was set up to
encourage women to report incidents of sexual harassment.

24

Manager/employers duty:
Monitor workplace behavior, enforce respect.
Treat all complaints seriously and confidentially. Do not ignore any allegation.
Post/disseminate EEO Policy.
Respond to allegations immediately; investigate, as appropriate.
Be sensitive but impartial.
Interview parties and relevant witnesses.
Ask opened-questions.
Collect relevant documentation/evidence.
Take appropriate corrective action, follow-up
Ensure no retaliation.
Document your actions.

(Source: Presentation from member of US Department of Veteran Affairs

c) Bullying
25

Similar to harassment, but not on grounds of race, gender, religion etc, but can
be for whatever reason.
Many definitions of bullying: "Offensive, intimidating, malicious or insulting
behaviour, an abuse or misuse of power through means intended to undermine,
humiliate, denigrate or injure the recipient."
Can be done by manager, colleagues, even people who report to you. If it is
humiliating or degrading, its bullying.
Bullying behaviour can be:
Verbal, e.g. name calling, teasing, abuse, putdowns, sarcasm, insults, threats
Physical, e.g. hitting, punching, kicking, scratching, tripping, spitting
Social, e.g. ignoring, excluding, ostracising, alienating, making inappropriate gestures
Psychological, e.g. spreading rumours, dirty looks, hiding or damaging possessions,
malicious SMS and email messages, inappropriate use of camera phones.
(Source:
http://www.atl.org.uk/publications-and-resources/report/2012/february-legal-bullying-harassme
nt.asp#
)

(d) Insubordination
26

Insubordination(generally): anyone disrespectful or defiant to

authority.
Insubordination (at work): an employee who refuses a direct order
from a superior or employee and superior have a confrontation.
Examples: failing to perform work as prescribed, to use safety
equipment or to follow established procedures, refusal to correct or
report faulty work, to perform alternate duties, using abusive language
to boss (if boss didnt use such language, not part of shop talk)
Employee is breaching employment contract and can be dismissed in
right circumstances.
Even if the employee thinks order is unfair or improper, still must
comply unless order is illegal or will immediately endanger him or
others.

Case Study 1
27

William keeps a large bible on his desk at work and always wears a large
silver cross around his neck. At times William will use biblical quotations
to support his comments and assertions that his observations are correct in
conversations with his co-workers. Additionally, he usually tells people to
have a Blessed Day.
Sarah, one of Williams co-workers, has started referring to him as Saint
Will. This has gotten a lot of laughs around the office. William has
confronted Sarah about this and asked him to stop. Sarahs response was
cant you take a joke?. Sarah not only has not stopped referring to
William as Saint Will, but she has encouraged others to do so.
What type of issue is this?
What should William do?

Case Study 2
28

Mohammed works with Lorraine in Finance. Their manager,

Barbara, has recently taken on more work and is clearly finding
the pressures hard to cope with. Lorraine, who is Barbaras
Personal Assistant appears to be bearing the brunt of this.
Mohammed has frequently overheard Barbara shouting at
Lorraine in her office and is aware that Lorraine never seems to
get the leave she requests. Mohammed is concerned that the
situation is getting worse and he doesnt know what to do.
What type of issue is this?
What should Mohammed do?

Case Study 3
29

Sanjay, an employee in his late fifties, and Vivian, an employee in her early fifties,
work on a project team. The remaining members of the team range in age from 25 to
35. The team members like to joke around with each other and frequently tease
Sanjay that he cant perform certain job duties because he is too old.
They also joke with Vivian when they help her with a technical issue on the
computer that she reminds them of their Mom or they say things like, This is how
I helped my Mom learn this. Sometimes the team members say they like helping
out an old guy and many team members have begun to call Vivian, Mom.
At first Sanjay and Vivian laughed along, but now the jokes are coming so fast that
they are beginning to be offended by them.
What type of issue is this?
What should Sanjay and Vivian do?

Case Study 4
30

Ron is a supervisor of a project team. This team, including

Ron, spends many hours working at computers. It is an
accepted practice among team members to massage each
others necks and shoulders to relieve stress throughout the
day.
Jeff is new to the team and is uncomfortable with this
practice although he feels the best way to handle the
situation is to not say anything.
What type of issue is this?
What should Jeff do?

Case study 5
31

Four months ago, Amira filed a complaint alleging her supervisor discriminated
against her based on religion (which is now in investigation).
After filing the complaint, she began to feel alienated; her co-workers stated
limiting their contact with her; and she believed she was not receiving any prime
assignments.
This week she received her performance evaluation which rated her as satisfactory.
In the past 3 years, her rating has been twice at the highly effective level, and once
at the outstanding level. Her supervisors justification for rating - She was not
performing work expected of employees at her level, and that she was not working
well within the team.
What type of issue is this?
What should Amira do?

Case Study 6
32

Pam, an attractive female employee, likes to wear blouses with a

plunging neckline, short tight skirts and high heels. When she walks
down the hall in the office, many times her male co-workers and some
females stare at her, some with a knowing smiles, others just shake
their heads.
Occasionally, one individual silently acts as if he is having a heart
attack. She has repeatedly indicated to her co-workers that their
conduct embarrasses her, and has asked them to stop, but without
much success. Some of her female co-workers have mentioned that
she causes her problems by the way she dresses which invites sexual
advances.
What type of issue is this?
What should Pam do?

E. THOUGHT OF THE DAY

33

I've learned that people will forget what you said,

people will forget what you did, but people will never
forget how you made them feel. ~ Maya Angelou
One's job is a major part of one's life, and life is too
precious to spend in misery ~ Sheikh Mohammed bin
Rashid al Maktoum

F. ACADEMIC INTEGRITY PROEJCT

34

Ive e-mailed some of you to verify your quotes for:

International Center for Academic Integrity (ICAI)

website or newsletter and/or AUD website: http://
www.academicintegrity.org/icai/home.php

Mission: To combat cheating, plagiarism, and academic

dishonesty in higher education and to cultivate a culture of
integrity.

Those of you who DIDNT get an e-mail, but would

like to be quoted, please e-mail me a statement about

the importance of courage in academic integrity.

G. ROLE-PLAY
35

Nike boardroom role-play (3% of total course grade) will be

on Tues 22nd April. Please diarize this date now as this is your
LAST opportunity to improve your grade before the final exam.
There will be NO make-up for this and anyone who comes
without the notes printed, highlighted or notated will be asked to
leave the class.
As I do not have time to quiz you, I must SEE tangible evidence
of preparation through notes and highlights not just in your
head.
Next week, information will be posted in Content Area in folder
called Nike Boardroom to help you choose which role you
choose to play. Sign-up sheet will be provided IN CLASS next
week.

H. BUSINESS FOR BETTER CONTEST

36
Information session: Tuesday, April 15th from 1-2pm, in C227.
Inter-university contest for second year students.
Contest deliverable: submit out-of-the-box, sustainable and for-profit business

proposals.
Great for your learning and CV as writing business proposal is an
important skill.
To participate, teams of 2 to 3 students must submit a fully accomplished
application form and concept paper online at www.business4better.ae from March
25 to May 5, 2014. An evaluation team from Western Union and Al Ansari
Exchange will choose the finalists. Shortlisted teams present during final round
before the panel of judges from Al Ansari Exchange, Western Union, and others.
Prizes:

First Prize: AED 45,000 scholarship for each group member

Second Prize: AED 30,000 scholarship for each group member
Third Prize: AED 20,000 scholarship for each group member

I. HOMEWORK
37

Reading: from Chap 8 (HRM and OB)

NOTE: Read these sections and pages only:

Section 8.4 (pp 174 to 176);

Section 8.6 (p.178), and
Section 8.8 + case study (pp.181-186). We will be discussing
case study next class.

Other parts of chapter NOT on exam.