11 Scenarios for Ethical Thinking and Reasoning

Annette Holba

Use these scenarios to practice ethical thinking and reasoning. As we use this OER for Senior Seminar each semester, PSU seniors in t his course will add scenarios that are relevant to them! Be prepared to get creative and offer your own contribution for this section.

Scenario 1

Rajat Gupta is an Indian American businessman who was the managing director of management consultancy McKinsey & Company  and a business leader in India and the United States. Gupta also served as corporate chairman, board director or strategic advisor to Goldman Sachs, Procter and Gamble, American Airlines, and some non-profit organizations …

Gupta was convicted in June 2012 on insider trading charges. He was sentenced in October 2012 to two years in prison, an additional year on supervised release and ordered to pay $5 million in fines. His trial began on May 22, 2012. On June 15, 2012, Gupta was found guilty on three counts of securities fraud and one count of conspiracy.

The primary parties affected are Rajat Gupta, McKinsley & Company, Goldman Sachs, Raj Rajaratnam, Galleon Group, Warren Buffet, and the U.S. equity markets. Other parties indirectly affected are family and friends of Rajat Gupta, employees at McKinsley & Company and Galleon Group, investors in Goldman Sachs and its creditors, and government and officials involved with the case.

The Situation

In September 2008 Warren Buffet agrees to pay $5 billion to Goldman Sachs in exchange for preferred shares in the company. This news is likely to raise the share price of Goldman Sachs. The news is not supposed to be announced and made public until the end of day. Less than a minute after the board approved the Buffet purchase, Gupta calls his longtime friend Raj Rajaratnam, a hedge fund manager and billionaire founder of the Galleon Group. Once Rajaratnam gets this information, he immediately buys shares of Goldman Sachs. The next day when the stock market opens, Raj Rajaratnam makes nearly $1.2 million in profits as Goldman Sachs shares rose. The SEC estimates the tip leaked by Rajat Gupta generated profits and avoided losses of more than $23 million.

Adapted from from: https://sevenpillarsinstitute.org/ethics-101/applying-virtue-ethics-the-rajat-gupta-case/

Questions to think about: (you can add your own questions too)

While this situation violates the law (and is therefore, illegal), what lens of ethics do you think Gupta used to make that phone call to his friend?

Would a virtuous person have leaked the information to Raj Rajaratnam? Why or Why not?

Would a consequentialist have leaked the information? Why or Why not?

Would a deontological ethicist have leaked the information? Why or Why not?

 

 

Scenario 2

People Involved:

Jenna – Company manager hired 30 days ago

George – CEO who hired Jenna

Jason – employee of 4 years

Lucy – employee of 12 years

Frank – employee of 6 months

Sandy – newest employee

 

Sandy is now at work for a week and enjoying her job. The most important thing to her is to have a job with flexibility and Company X gave her this. More specifically, Sandy has two children, 6 months and 2 years. She can’t afford childcare if she works full-time, so she has flex hours (works 25 hours a week and sets the hours to her convenience) which enable her to have family watch her children so she does not have to pay the high costs at a for-profit daycare.

As other employees notice her flexibility in her schedule, they start to grumble. Lucy is angry because she says that Sandy gets easier cases/clients to work with because she has flex hours. This leaves the more complex clients for Lucy, the most experienced. Lucy feels it is unfair that Sandy gets to pick and choose her hours while she (Lucy) is stuck with working 9-5, five days a week. Lucy puts in a request to Jenna to work four days a week in the office and have a floating day each week where she can work from home. Jenna receives Lucy’s request in writing and asks Lucy for a meeting. In the meeting Jenna asks Lucy why she needs to change her hours and Lucy responds, “It doesn’t matter why. That is my personal business.” Jenna tells Lucy she will consider the request and let her know later in the week.

Jason requests to work half days so he can train for a marathon. He is an avid runner and says that this keeps him healthy and mentally fresh in his job. He says he can make up his work from home at night and on weekends. Jenna, tells Jason she will consider his request and let him know later in the week.

Frank sends an email to Jenna claiming he will be filing a lawsuit against the company because he was hired 6 months ago and did not have the option to negotiate a flex schedule like Sandy did. He says he will not file the suit if he can make his schedule more flexible so that he can take courses in a graduate program. Jenna again tells Frank she will get back to him.

Jenna meets with George and asks him what she should do. George says, “Well Jenna, this is why I hired you. You are on your own with these requests.”

What should Jenna do with each request? Before you lay out an action plan, discuss the situation and identify all of the implications as you see them. Also, identify what Jenna should do through a consequentialist ethics framework.

(Adapted from Neher, W. W., & Sandin, P. J. (2007) Communicating ethically: Character, duties, consequences, and relationships. Allyn & Bacon.)

 

 

Scenario 3

Is Lying on your Resume Ethical (and what does it mean to lie on your resume?)

Graduation is months away, and Nicole still doesn’t have a job. Thousands of dollars in college loans are backing up and payments are due soon. Furthermore, her mother was recently laid off, and her parents are in need of some supplemental income. Stress and pressure, then, is building as Nicole remains jobless.

Fortunately, she just received a request from a marketing firm to send in her resume. However, Nicole’s resume is not quite up to the standard that this job expects. She has had an internship in marketing before, even excelled in the subject at school, but she doesn’t have the proper list of real-world experience her employers will desire. When pondering the issue, she realizes that she could exaggerate her responsibilities from her internship. Although she was typically filing and making coffee, she could say that she “wrote” a report she had in truth transcribed. When she staffed the front desk, she could claim she was doing “client intake.” And even though she quit after a quarter due to boredom, she could say she worked there for six months.

Nicole knows she’s competent and capable of doing the job well; it’s just that her employers might not recognize it based solely on her resume. Since she is buried in debt and her family is in need, is it all right for Nicole to simply alter or embellish some facts?

Consider this from each of the ethical perspectives (virtue, deontological, consequentialist, and dialogic ethics lens) and be able to explain your reasoning.

 

 

 

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