Page 245 - Using MIS

“Look, Shelly, as you’re about to hear, our gross margin I’m plowing money back into R&D as fast as I can, but
last year was 74 percent. We’re a money machine! We’re there’s only so much that Jacob and his crew can absorb.
swimming in profit! We can’t spend money fast enough. Meanwhile, order the lobster and wait until you taste to-
One of the items on our agenda is whether we want to is- night’s wines.”
sue a $1 million, a $3 million, or a $5 million partners’ “That’s disgusting.”
distribution.” “OK,” Bart says. “Don’t drink the wine. You want your
“No!” Shelly sounds stunned. distribution?”
“Yup. Using the cloud, we’ve reduced our operational “No; I mean yes, but this is crazy. It can’t last.”
expense from 62 percent of our revenue to 9 percent. “Probably not. But it’s what we’ve got right now.”

DisCussion Questions

When answering the following questions, assume that c. Paying a semiannual distribution of $1 million, $3 mil-
Alliance has done nothing illegal, including paying all fed- lion, or $5 million? If so, which level is excessive to you?
eral, state, and local taxes on a timely basis. 5. Describe the primary driver in Alliance’s current
profitability.
1. From the perspective of Kant’s categorical imperative
(pages 20–21), are Alliance’s partners’ meeting expenses 6. From the data presented, what else might Alliance have
and intended partner distribution unethical? done with its excess profits?
2. From the utilitarian perspective (pages 56–57), are 7. Do you think profitable companies, especially very prof-
Alliance’s partners’ meeting expenses and intended itable companies, have an ethical obligation to:
partner distribution unethical? a. Contribute to charity?
3. Milton Friedman, world-renowned economist at the b. Lower prices when it is possible to do so and con-
University of Chicago, stated that corporate executives tinue to earn a reasonable profit?
have a responsibility to make as much money as pos- c. Contribute to environmental causes?
sible as long as they don’t violate rules embodied in law d. When possible, pay large bonuses to all employees,
and in ethical custom. 2 not just senior management?
a. Do you agree with his statement? Why or why not? 8. To most students, someone who earns $500,000 a year in
b. Friedman defined ethical custom narrowly to mean income is rich. To someone who makes $500,000 a year,
no fraud or deception. Using his definition, has partners who pay themselves $1 million to $5 million
Alliance acted ethically? every 6 months are rich. To someone making $2 million
c. Define, using your own words, ethical custom. to $10 million a year, billionaires are rich. What do you
d. Using your definition of ethical custom, has Alliance think classifies someone as rich?
acted ethically? 9. Do you think rich people have an ethical obligation to:
4. Do you find any of the following excessive? Explain your a. Contribute to charity?
answers: b. Contribute to environmental causes?
a. Spending nearly $200,000 on a five-day partners’ c. Forego governmental benefits to which they are en-
meeting for three partners and their spouses? titled, for example, not take Social Security that they
b. Earning a 74 percent gross profit? don’t need?

2
Milton Friedman, “The Social Responsibility of Business Is to Increase Its Profits,” The New York Times Magazine, September 13, 1970.
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