Taking Sides: Clashing Views in Management

PART 1. Ethical Issues for Managers

ISSUE 1. Do Corporations Have a Responsibility to Society that Extends Beyond Merely Maximizing Profit?

YES: Robert D. Hay and Edmund R. Gray, from “Introduction to Social Responsibility,” in David Keller, man. ed., Ethics and Values: Basic Readings in Theory and Practice (Pearson Custom Publishing, 2002)

NO: Alexei M. Marcoux, from “Business Ethics Gone Wrong,” Cato Institute, (July 24, 2000)

Robert D. Hay and Edmund R. Gray believe that corporations should be held accountable for more than profit maximization. Their argument is based on stakeholder theory and is presented in the form of an historical account of the evolution of managerial thinking on this important topic. In answering "no" to this question, Alexei Marcoux presents a frontal attack on stakeholder theory. Consistent with the views of Nobel Laureate Milton Friedman, Marcoux argues that the very nature of stakeholder theory is immoral and can only lead to disastrous results for all involved.

ISSUE 2. Is the Corporate Strategy of Downsizing Unethical?

YES: Larry Gross, from “Downsizing: Are Employers Reneging on Their Social Promise?” CPCU Journal (Summer 2001)

NO: Joseph T. Gilbert, from “Sorrow and Guilt: An Ethical Analysis of Layoffs,” SAM Advanced Management Journal (vol. 65, 2000)

Larry Gross contends that downsizing violates the psychological and social contracts implicit in the employer-employee relationship since there is an implied sense of job security afforded the employee as long as he or she is productively advancing the goals of the organization. Downsizing productive employees is a clear violation of this contract and, therefore, immoral. Professor Joseph Gilbert analyzes the ethicality of downsizing through the application of three prominent approaches to the study of ethics: utilitarianism, rights and duties, and justice and fairness. Gilbert concludes that, with one notable exception, downsizing is an ethically valid and morally responsible corporate behavior.

ISSUE 3. Is Bluffing During Negotiations Unethical?

YES: Chris Provis, from “Ethics, Deception and Labor Negotiation,” Journal of Business Ethics (Kluwar Academic Publishers, The Netherlands, 2000)

NO: Fritz Allhof, from “Business Bluffing Reconsidered,” Journal of Business Ethics (Kluwar Academic Publishers, The Netherlands, 2003)

Ethics scholar Chris Provis examines bluffing within the context of labor negotiations and concludes that it does indeed constitute unethical behavior. Bluffing, he argues, is deception and therefore, unethical, regardless of whether it occurs in or out of the negotiation process. University of California, Santa Barbara philosopher Fritz Allhoff presents a clever and unique defense of bluffing in business negotiations. The central tenet in Allhoff’s position is that certain roles that we are required to assume allow us to morally justify behaviors that might otherwise be considered immoral.

ISSUE 4. Should Insider Trading Be Legalized?

YES: Robert B. Thompson, from “Insider Trading, Investor Harm, and Executive Compensation,” Case Western Reserve Law Review (Winter 1999)

NO: Stephen Bainbridge, from “Why Regulate Insider Trading?” Tech Central Station (September 8, 2004)

Legal scholar Robert B. Thompson presents Manne’s argument on insider regulation. Thompson then provides us with an analysis of the status and relevance of Manne’s position three decades after the publication of his seminal text. UCLA professor of law Stephen Bainbridge does not accept Manne’s arguments. Bainbridge believes that insider trading ultimately causes inefficiency in the markets and, therefore, must be subject to regulation.

PART 2. Organizational Behavior and Human Resource Management

ISSUE 5. Has Affirmative Action Outlived Its Usefulness in the Workplace?

YES: John H. McWhorter, from “The Campus Diversity Fraud,” City Journal (Winter 2002)

NO: Judith C. Appelbaum, from “Affirmative Action: End It or Defend It?” National Women’s Law Center, Speech at State University of New York at Binghamton (November 2, 2000)

In an article calling for the end to affirmative action, African American social commentator Dr. McWhorter draws on his experiences as a previous supporter of affirmative action while providing numerous insightful observations. Judith Appelbaum, speaking before the SUNY, Binghamton, argues that discrimination in the workplace is still very much with us today. And, since affirmative is needed to combat ongoing discrimination, it’s still needed today.

ISSUE 6. Is Workplace Drug Testing a Wise Corporate Policy?

YES: Ying-Tzu Lu and Brian H. Kleiner, from “Drug Testing in the Workplace,” Management Research News (vol. 27, no. 4/5, 2004)

NO: Jacob Sullum, from “Urine—Or You’re Out,” Reason (November 2002)

Human resource management scholars Ying-Tzu Lu and Brian H. Kleiner believe that workplace drug testing does not inherently violate employee privacy rights. They suggest that workplace drug testing can lead to increased firm profitability, primarily as a result of increased worker productivity. Reason magazine senior editor Jacob Sullum argues that not only is drug testing invasive and insulting, but that it has no real bearing on job performance.

ISSUE 7. Is Diversity in the Workplace a Worthwhile Goal for Corporations?

YES: Nancy R. Lockwood, from “Workplace Diversity: Leveraging the Power of Difference for Competitive Advantage,” HRMagazine (June 2005)

NO: Roger Clegg, from “Diversity Nonsense,” National Review Online (January 21, 2002)

Society for Human Resource Management human resource expert Nancy Lockwood discusses several important benefits that result from workplace diversity. Included among these is the possibility of increased organizational productivity and profitability. The opposing view is presented by social critic Roger Clegg, who attacks the notion that pursuing diversity for its own sake is a wise strategy regardless of whether it occurs in the workplace or in the educational system.

ISSUE 8. Is Gender Discrimination the Main Reason Women Are Paid Less Than Men?

YES: Stephen J. Rose and Heidi I. Hartmann, from “Still a Man’s Labor Market: The Long-Term Earnings Gap,” Institute for Women’s Policy Research (2004)

NO: Naomi Lopez, from “Free Markets, Free Choices II: Smashing the Wage Gap and Glass Ceiling Myths,” Pacific Research Institute (1999)

Stephen J. Rose and Heidi I. Hartmann, scholars at the Institute for Women’s Policy Research, argue in their 2004 study that discrimination is still the main reason for the persistence in the gender gap. Naomi Lopez, director of the Center for Enterprise and Opportunity at the Pacific Research Institute in San Francisco, provides evidence that the wage gap is a function of several different variables beyond gender discrimination. She concludes her analysis with the observation that we may never reduce the wage gap entirely and that such an outcome is not necessarily undesirable.

ISSUE 9. Would Reforming Social Security Be Good for American Business?

YES: James Morrison, from “Social Security Reform Helps Small Business,” The Heritage Foundation Backgrounder (October 17, 2001)

NO: Greg Anrig, Jr. and Bernard Wasow, from “Twelve Reasons Why Privatizing Social Security Is a Bad Idea,” TCF Issue Brief, The Century Foundation (December 14, 2004)

Political consultant and Social Security expert Dr. James Morrison presents an argument supporting Social Security reform and shows how it would be extremely beneficial to American business, particularly small business. The con side of this debate is provided by two important members of The Century Foundation: vice president Greg Anrig, Jr. and senior fellow Bernard Wasow. Their article consists of 12 reasons why privatizing Social Security is bad for business and bad for the country.

PART 3. Strategic Management

ISSUE 10. Is Outsourcing a Wise Corporate Strategy?

YES: Sarah Anderson and John Cavanagh, from “Outsourcing: A Policy Agenda,” Foreign Policy in Focus (April 2004)

NO: Daniel W. Drezner, from “The Outsourcing Bogeyman,” Foreign Affairs (May/June 2004)

Sarah Anderson and John Cavanagh argue that outsourcing is a real threat to the economic health of the United States and provide several suggestions as to the types of governmental actions necessary to keep American jobs from moving overseas. Included in their discussion is an analysis of the views of the two 2004 presidential candidates, John Kerry and George W. Bush. Dr. Daniel Drezner argues that the controversy surrounding outsourcing is not new and that its current form is more hype than substance. He shows how outsourcing is actually economically beneficial to America, despite the warnings of critics. Dr. Drezner also asserts that the concept of outsourcing is consistent with a solid understanding of free-mar ket capitalism and an appreciation of traditional American principles and values.

ISSUE 11. Are U.S. CEOs Overpaid?

YES: Lisa H. Newton, from “The Care and Feeding of the Truly Greedy: CEO Salaries in Wo...