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Legal? Yes. Ethical? Maybe not.

Speakers present ethical dilemmas for discussion during two-day conference

by Carol Elliott, Director of Newswriting, Mendoza College of Business

November 10, 2006


Let’s say you are a blue voter living in a red state with no hope that your favored presidential candidate will collect your state’s Electoral College votes. Do take advantage of Internet sites that let you “swap” your vote with someone in a swing state where it might have some impact?

Given America’s civic “one person, one vote” philosophy, is it ethical to cast a ballot for anyone other than your true choice in an attempt to manipulate the Electoral College system?

What about this scenario: You own a national doughnut chain and announce the company will be spending $30 million on a new mixing plant. But the $30 million never shows up on the balance sheet because you lease the plant, even though your company has all the practical benefits and liabilities of ownership. As a result, the debt stays off your books, but you can still deduct interest and depreciation as if you mortgaged the plant.

It may be legal, but is this “synthetic lease” ethical?

Vote swapping and synthetic leases were just two of the eight topics presented by speakers during the annual “Ethical Dimensions in Business: Reflections from the Business Academic Community” conference held in the Giovanini Commons at the Mendoza College of Business on Oct. 26-27.

One of the purposes of the conference is to invite established business scholars in mainstream disciplines to present their research and identify real-world ethical questions that impact business and society, said Management Professor Ann Tenbrunsel, who serves as co-director with Marketing Professor Patrick Murphy of the Institute for Ethical Business Worldwide. The Mendoza-based institute sponsors the event, which is in its fourth year.

The idea is to show that ethics isn’t a fenced-off territory strictly delineated from other disciplines, but is integral in management, finance, marketing, accounting and others areas of study.

For example, Accountacy Professor Thomas Frecka showed how financial officers can abide by the rules of accounting law and keep capital leases off the balance sheets, but then he raised plausible ethical questions about the practice for discussion.

In the case of vote swapping, Management Professor David Hartvigsen explained how the practice came into play during the 2000 presidential elections. Through Internet sites set up for trading, a voter could “strategically vote” by pairing with another voter in agreement to cast a vote for the other’s preferred candidate. Though currently legal, vote swapping raises questions about whether it is ethical for a voter essentially to give up his or her candidate preference in order to increase the likelihood of a desired outcome.

Each year, the conference organizers invite four Notre Dame professors to present topics from their research. In turn, the professors each invite a guest speaker from an outside university. This year, the Notre Dame faculty members were Frecka, Hartvigsen, Finance Professor Tim Loughran and Marketing Professor John Sherry Jr. Guest speakers included Tina Diekmann, University of Utah; Ronald Hill, Villanova School of Business; Steve Kaplan, Arizona State University; and David Barker, University of Chicago.

Also attending the conference were five doctoral students at the pre-proposal stage who are interested in pursuing research that addresses ethical issues in business. Each student received a $500 scholarship to cover travel expenses.

Two years ago, conference organizers added a dissertation competition, which has the objective of recognizing doctoral candidates whose research furthers the understanding of business ethics. Of this year’s five entries, Morela Hernandez of Duke University won and received $1,000 honorarium for her dissertation topic, “Stewardship: Theoretical Development and Test of its Determinants.”

For the previous three years, the essays presented during the conference were published in the “Journal of Business Ethics.”

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