CHAPTER 2 Business Ethics

ethics: đạo đức

STEP Listen and Apply New Strategies

T h i n k about the topic A. Look at t h e newspaper. Then work w i t h a p a r t n e r to d i s c u s s t h e

q u e s t i o n s below.

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YOUR LOCAL NEWS S O U R C E

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Executives found guilty of fraud

Corporate scandal sends

stock market prices down

we

1. What kinds of crimes do you think business executives are most tempted

to commit? Give some examples.

2. How would you define "business ethics"?

14 CHAPTER 2 Business Ethics

l
 Read to b u i l d B. Read t h i s a r t i c l e a b o u t corporate s c a n d a l s .

background knowledge

See p a g e 2

- Corporate Crime on the Rise

8
,

U n d o u b t e d l y , t h e r e h a s b e e n a l o t of b a d news I n v e s t o r s lost t h e i r m o n e y , a n d e m p l o y e e s lost n o t

co m i n g o u t of t h e b u s i n e s s w o r l d i n recent years. only their jobs, but a l s o t h e i r retirement savings.

R22 W h i l e p e o p l e w o r r y a b o u t t h e e co n o m y , t h e y

are a l s o co n c e rn e d a b o u t t h e r i s e of co r p o r a t e
Bernie Madoff's Ponzi Scheme
c r i m e . I n fact, t h e r e i s r e a l r e a s o n fo r co n c e rn . A

s u r v e y of co r p o r a t i o n s i n 54 co u n t r i e s s h o w e d B e rn i e Ma d o ff is fa m o u s fo r o n e of t h e b i g g e s t

t h a t b e t w e e n 1999 a n d 2 0 0 9 , t h e r e was a s h a r p c a s e s of fr a u d in history. For decades, people

r i s e i n co r p o r a t e cr i m e . Of t h e m o r e t h a n 5 , 0 0 0 t r u s t e d h i m to i n v e s t t h e i r m o n e y . What they

co m p a n i e s s u r v e y e d , 43 p e r c e n t r e p o r t e d a n d i d n ' t know was that Madoff was running a Ponzi

i n c r e a s e i n fraud. I n f i n a n c i a l s e r v i c e s , s u c h as s c h e m e , a type of fr a u d in which investors are

banks a n d i n v e s t m e n t co m p a n i e s , t h e i n cr e a s e paid fr o m t h e i r own m o n e y o r by m o n e y fr o m

was 56 p e r c e n t. o t h e r investors, instead of fr o m a c t u a l e a rn i n g s .

By the time Madoff was caught, he had taken $65

Why d o co m p a n i e s e n g a g e i n fr a u d ? M a i n l y ,
billion fr o m t h o u s a n d s of i n v e s t o r s . I n 2009, h e
t h e y w a n t to m e e t shareholders' e a rn i n g s
was a r r e s t e d a n d s e n t e n c e d t o 150 y e a r s i n p r i s o n
e x p e c t a t i o n s , h i d e t h e co m p a n y ' s f i n a n c i a l
fo r h i s cr i m e s .
p ro b l e m s , o r i n cr e a s e t h e i r o w n e a rn i n g s .

Mortgage Fraud at American Banks

Accounting Fraud at Enron

The fi n a n c i a l c r i s i s of 2 0 0 8 b ro u g h t w i t h it
O n e of t h e m o s t fa m o u s c a s e s of co r p o r a t e
m a n y n e w co n c e rn s a b o u t white-collar cr i m e , t h i s
fr a u d was t h e E n ro n scandal. I n 2 0 0 0 , E n ro n was
time in the banking industry. When banks began
t h e w o r l d ' s l a r g e s t e n e r g y t r a d e r . It e m p l o y e d
to fa i l , it b e c a m e c l e a r t h a t m a n y of t h e m had
2 1 , 0 0 0 p e o p l e i n 40 co u n t r i e s , a n d it r e co r d e d
participated in mortgage fr a u d . B a n k l o a n o ff i c e r s
s a l e s of m o r e t h a n $100 b i l l i o n . T h e n , i n December
h a d l i e d o n l o a n p a p e r w o r k a b o u t b o r ro w e r s '
2001, E n ro n w e n t bankrupt. E n ro n fa i l e d , m a n y
i n co m e s a n d a s s e t s to g i v e t h e m l o a n s t h a t t h e y
say, b e c a u s e of t h e " g e t - r i c h - q u i c k " t h i n k i n g o n
w e r e n o t a b l e to r e p a y . Loan o ffi c e r s d i d t h i s
t h e p a r t of t h e co m p a n y ' s e x e cu t i v e s . R e p o r t e d l y ,
b e c a u s e they were p a i d b o n u s e s fo r s i g n i n g t h e
E n r o n ' s executives m a d e b a d i n v e s t m e n t s a n d
loans. Many say t h e fr a u d was n o t l i m i t e d to l o a n
b o r ro w e d b i l l i o n s of d o l l a r s to co v e r t h e i r l o s s e s .
o ffi c e r s b u t i n v o l v e d t o p - l e v e l e x e cu t i v e s who not
T h e n , t h e co m p a n y ' s a c co u n t a n t s h i d t h e s e l o s s e s
o n l y knew a b o u t the fr a u d , but s u p p o r t e d it.
a n d e x a g g e r a t e d t h e co m p a n y ' s p r o f i t s . E n r o n ' s

e x e c u t i v e s d e n i e d a n y p r o b l e m s a n d co n t i n u e d T h e s e r e p o r t s of w ro n g - d o i n g h a v e left

1pted to co l l e c t l a r g e s a l a r i e s a n d p ro f i t fr o m s a l e s many people angry and c a l l i n g fo r greater

of E n ro n s t o c k s . E v e n t u a l l y , E n ro n was u n a b l e accountability. Hopefully o u r l e a d e r s w i l l be a b l e

to pay its d e b t s , a n d t h e co m p a n y co l l a p s e d . I n to h o l d co r p o r a t i o n s r e s p o n s i b l e fo r their actions

2004, s e v e r a l E n r o n e x e c u t i v e s w e r e a r r e s t e d a n d and p u t a stop to t h i s d a n g e ro u s i n c r e a s e in

c h a r g e d with f r a u d a n d o t h e r c o r p o r a t e c r i m e s . corruption.

UNIT 1 Business 15
 Check your C. W i t h a partner, d i s c u s s t h e s e q u e s t i o n s a b o u t t h e r e a d i n g .

comprehension

1. What caused the collapse of Enron?

2. What type of fraud did Bernie Madoff commit?

3. Why did bankers give home loans to unqualified borrowers? What was

the result?

E x p a n d your D. M a t c h t h e words from t h e r e a d i n g with t h e i r d e f i n i t i o n s . Look b a c k at

vocabulary the a r t i c l e on p a g e 1 5 to c h e c k your a n s w e r s .

1. fraud a. a person who owns stock in a company

2. shareholder b. not having enough money to pay your debts

3. scandal c. a person who has a high position in a business

4. bankrupt d. the expectation that you will be responsible

for your actions

5. executive e. dishonest or illegal behavior, usually by

people in official positions

6. accountability f. the act of tricking or deceiving someone,

usually to get money

7. corruption g. a shocking action, situation, or behavior

E. C i r c l e the phrase w i t h a s i m il a r m e a n i n g to t h e u n d e r l i n e d i d i o m .

As a result of corporate corruption, four executives went to prison for

white-collar crime.

a. serious b. business related c. violent

Discuss the F, D i s c u s s these q u e s t i o n s i n a g r o u p . S h a r e your answers w i t h t h e c l a s s .

reading

1. Do you know any other cases of business fraud or corruption? Who was

involved? What happened?

2. Why do you think corporate crime has increased?

3. What do you think should be done to prevent corporate crime?

Review what G. w i t h a partner, d i s c u s s t h r e e t h i n g s t h a t you have l e a rn e d from t h e

you know r e a d i n g a n d from your d i s c u s s i o n s a b o u t corporate c o r r u p t i o n .

16 CHAPTER 2 Business Ethics

 LISTENING Recognize Lecture L a n g u a g e for Transitions

STRATEGY
D u r i n g a l e c t u r e , professors often s i g n a l w h e n t h e y are i n t ro d u c i n g or

c h a n g i n g t o p i c s or i d e a s .

L i s t e n fo r t r a n s i t i o n s - t h e words a n d e x p r e s s i o n s t h a t professors u s e

to i n d i c a t e w h e n t h e y are m o v i n g to a new i d e a .
Vas

E x p r e s s i o n s That S i g n a l a New I d e a

• Let m e s t a r t w i t h . . . • Okay, l e t ' s move on t o . . .

t • Let's start b y . . . • N e x t , I ' d l i k e to d i s c u s s . . .

• Now l e t ' s t a l k a b o u t . . . • L e t ' s l o o k at . . .

• N o w t h a t we've t a l k e d a b o u t . . . • N o w I w a n t to d i s c u s s . . .

A n o t h e r way t h a t a p ro f e s s o r c a n s i g n a l a t r a n s i t i o n i s to a s k a

ts r h e t o r i c a l q u e s t i o n . T h e s e q u e s t i o n s p r e p a r e l i s t e n e r s fo r t h e a n s w e r .

T h e p ro f e s s o r d o e s n o t w a n t s t u d e n t s to a n s w e r .
less
• H o w c a n we e x p l a i n t h i s ? W e l l , . . .

• W h a t d o e s t h i s a l l m e a n ? L e t ' s l o o k at . . .

List more e x a m p l e s H. Work w i t h a p a r t n e r to t h i n k of o t h e r e x p r e s s i o n s t h a t s i g n a l a new i d e a .

Write y o u r e x a m p l e s here.

Recognize transition I. R e a d t h e excerpt from a l e c t u r e a b o u t corporate r e s p o n s i b i l i t y .

lecture l a n g u a g e U n d e r l i n e the lecture l a n g u a g e that s i g n a l s a t r a n s i t i o n .

Now that we've dis cus se d some well-known cases of corporate crime,

I'd like to discuss a U.S. law that was passed to h e l p prevent it: the

Sarbanes-Oxley Act. The a i m of this law was to improve a c c o u n t a b i l i t y of

corporations and to prevent future cases of accounting fraud. Let's take

a look at s o m e of its requirements. First of all, it requires c o m p a n i e s to

establish i n d e p e n d e n t a u d i t committees-independent accountants who

as
are r e q u i r e d to report honestly about company finances. It also pr o h i b i ts

companies from m a k i n g loans to their executives. I n a d d i t i o n , it holds

top executives r e s p o n s i b l e for any mistakes or false statements on a

company's fi n a n c i a l records, and it creates strict p e n a l t i e s for c o m m i tt i n g

corporate fraud. Finally, it protects whistleblowers-employees who

report fraud w i t h i n the company. So, what has been the effect of

Sarbanes-Oxley? Well, c o m p a n i e s c o m p l a i n that the regulations i n

Sarbanes-Oxley are too expensive to i m p l e m e n t , and t h i s hurts business.

However, supporters of t h i s law feel that it is necessary for preventing

and p u n i s h i n g w h i t e - c o ll a r c r i m e . Others argue that even more action

needs to be taken.

UNIT 1 Business 17
 Listen to the audio J. Listen to the b e g i n n i n g of a l e c t u r e a b o u t t h e e t h i c a l b e h a v i o r of m e n

f @,owe a n d w o m e n executives. Write T for t r u e or F for f a l s e for e a c h statement.

1. Corporations with both men and women on the board of directors

set the same ethical standards as corporations led by men only.

2. Women commit more crimes that involve stealing from their

employers.

3. Women tend to steal larger amounts of money over longer periods.

Listen for K. Listen to t h e lecture a g a i n . Write down t h e l e c t u r e l a n g u a g e that s i g n a l s

transitions a t r a n s i t i o n . T h e n l i s t e n a g a i n , a n d w r i t e down t h e idea that follows t h e

transition.
@owe

1. New idea lecture language:

New idea: _

2. Transition lecture language: _

New idea: _

3. Transition lecture land9C _

New idea: _

4. Transition lecture language: _

New idea: _

5. Transition lecture language: _

New idea: _

18 CHAPTER 2 Business Ethics

men STEP 2 Take Notes
tement.

irectors

NOTE-TAKING
nly. Use A b b r e v i a t i o n s a n d S y m b o l s
STRATEGY

B e c a u s e p ro f e s s o r s often s p e a k q u i c k l y , u s i n g a b b r e v i a t i o n s a n d

s y m b o l s w i l l h e l p you keep u p w i t h t h e l e c t u r e . Use a b b r e v i a t i o n s

a n d s y m b o l s i n p l a c e of f u l l w o r d s a n d p h r a s e s to w r i t e d o w n

periods.
i d e a s q u i c k l y.

C o m m o n l y Used S y m b o l s a n d A b b r e v i a t i o n s

signals
e q u a l s , is the s a m e etc. a n d so on
vs the

% percent e.g. for e x a m p l e

I or i.e. t h a t is

! to g o d o w n , d e c r e a s e , l o w e r imp important

t to g o u p , i n c r e a s e , h i g h e r w/ with

< is less t h a n w/out without

> is more t h a n sb somebody, someone

+ and sth something

# number b/t between

List more e x a m p l e s A. Work w i t h a p a r t n e r to t h i n k of other s y m b o l s a n d a b b r e v i a t i o n s you

m i g h t use i n a b u s i n e s s l e c t u r e . Write your e x a m p l e s h e r e .

Use symbols and B. Read t h e s e sentences from a lecture on b u s i n e s s e t h i c s . Take notes i n

abbreviations your notebook u s i n g s y m b o l s a n d a b b r e v i a t i o n s to represent words a n d

i d e a s . C o m p a r e y o u r notes w i t h a partner.

1. A whistleblower is someone who reports that his or her own company

or business is doing something wrong or illegal.

2. For example, Jeffrey Wigard and Michael Woodford are two executives

who exposed corporate crimes.

3. Between 2009 and 2 0 1 1 , the number of workplace theft cases increased

by 40 percent.

4. An auditor is someone who officially examines the tax records of a

business or company-in other words, someone who is required to give

an honest and independent report.

UNIT 1 Business 19
 Make predictions C. Before the l e c t u r e , t h i n k a b o u t e v e r y t h i n g you have l e a rn e d a n d

See p a g e s d i s c u s s e d on t h e t o p i c of corporate e t h i c s . W h a t d o you expect to

l e a rn from t h e l e c t u r e ? Write three p r e d i c t i o n s below. C o m p a r e your

p r e d i c t i o n s with a partner.

1. -----------------------------

2. -----------------------------

3. -------------------------------

Watch the lecture D. Watch t h e l e c t u r e , a n d take notes u s i n g s y m b o l s a n d a b b r e v i a t i o n s to

r e p r e s e n t words a n d i d e a s . R e m e m b e r to l i s t e n for t h e l e c t u r e l a n g u a g e

that s i g n a l s a t r a n s i t i o n .
@owe

To p i c :

Goals of b u s i n e s s e t h i c s :

Why people are concerned with b u s i n e s s ethics:

I m p a c t of corruption:

How ethical work environments help b u s i n e s s e s succeed:

Th i n g s a company can do to promote ethics:

20 CHAPTER 2 Business Ethics

 Make predictions C. Before t h e l e c t u r e , t h i n k a b o u t e v e r y t h i n g you have l e a rn e d a n d

See p a g e 8 d i s c u s s e d on t h e t o p i c of corporate e t h i c s . W h a t d o you expect to

l e a rn from t h e l e c t u r e ? W r i t e t h r e e p r e d i c t i o n s below. C o m p a r e your

p r e d i c t i o n s w i t h a partner.

1.

2.

3.

Watch the lecture D. Watch t h e l e c t u r e , a n d take notes u s i n g s y m b o l s a n d a b b r e v i a t i o n s to

represent words a n d i d e a s . R e m e m b e r to listen for t h e l e c t u r e l a n g u a g e

I

that s i g n a l s a transition.
@oue

I
Topic:

Goals of b u s i n e s s e t h i c s :
I

Why p e o p l e are concerned with b u s i n e s s ethics:

Impact of c o r r u p t i o n :

How ethical work e n v i r o n m e n t s help businesses s u c c e e d :

Th i n g s a company can do to promote ethics:

20 CHAPTER 2 Business Ethics

 Assess your E. C h e c k t h e s t a t e m e n t t h a t best d e s c r i b e s how w e l l you u n d e r s t o o d t h e

to comprehension lecture l a n g u a g e .

your

I was able to recognize when the lecturer moved to a new idea _

a. all of the time b. most of the time c. sometimes d. not often

F. use y o u r notes to a n s w e r t h e s e q u e s t i o n s .

1. What is the goal of business ethics?

ns to

inguage

2. What are two examples of the impact of corruption on companies and

the economy?

3. How can promoting business ethics help a company to succeed?

4. Name three things that can be done to encourage an ethical work

e n v i ro n m e n t.

Assess and revise G. Were you a b l e to a n s w e r t h e q u e s t i o n s i n E x e r c i s e F u s i n g t h e

your notes i n f o r m a t i o n i n y o u r notes? C o m p a r e a n d d i s c u s s y o u r notes w i t h a few

See p a g e 9 o t h e r s t u d e n t s . H e l p e a c h other fi ll i n a n y m i s s i n g i n fo r m a t i o n . Revise

y o u r notes.

NOTE-TAKING S u m m a r i z e the Lecture

STRATEGY
A g o o d way to h e l p r e m e m b e r t h e i n fo r m a t i o n i n a l e c t u r e i s to p u t

t h e key i d e a s i n t o y o u r own words. T h i s w i l l a l s o h e l p you c o n f i r m t h a t

you u n d e r s t o o d t h e l e c t u r e a n d t h a t y o u r notes are c o m p l e t e .

As s o o n as p o s s i b l e after a l e c t u r e , p u t t h e key i d e a s i n t o y o u r own

w o r d s a n d s p e a k t h e m o u t l o u d to a s t u d y p a r t n e r or to y o u r s e l f .

S u m m a r i z e the H. Work w i t h a partner, a n d take t u rn s s u m m a r i z i n g t h e m a i n p o i n t s of t h e

lecture l e c t u r e . T a l k for 2-3 m i n u t e s only.

UNIT 1 Business 21