REDEEMERS UNIVERSITY

KM 46/48 LAGOS IBADAN EXPRESSWAY, REDEMPTION CITY, OGUN STATE

COLLEGE OF MANAGEMENT SCIENCES

DEPARTMENT OF ECONOMICS AND BUSINESS STUDIES
COURSE CODE /TITLE: BUS 406 / BUSINESS ETHICS and CORPORATE
GOVERNANCE
ND
2 SEMESTER EXAMINATIONS
2013/2014 SESSION
INSTRUCTIONS ON CHOICE OF QUESTIONS TO BE ANSWERED:

Answer questions 1

& 2 and any other two questions.

TIME ALLOWED: 3 hours

1. Several years ago, B.F Goodrich, a manufacturer of vehicle parts, won a military
contract to design, test and manufacture aircraft brakes for the A7D, a new air plane
the Air Force was designing. To conserve weight, Goodrich guaranteed that its
compact brake would weigh no more than 106 pounds, contain no more than four
small braking disks or rotor, and stop the aircraft within a reasonable certain
distance. The contract was potentially quite lucrative for the company and so
managers were anxious to deliver a brake that qualified by successfully passing
tests showing it could stop the aircraft as required. Kermit Veejay, a Goodrich
employee, was given the job of working with Goodrich engineers to write up the
report of tests run on the brake, which the government was unlikely to question and
even less, likely to repeat. The first test was conducted and Veejay wrote the first
preliminary report that when the small brake was tested, the brake linings on the
rotors repeatedly disintegrated because there was simply not enough surface area on
the disks to stop the aircraft without generating the excessive heat that caused the
lining to fail. His superiors, however, told him that regardless of what the brake
does on tests, we are going to qualify it. After several tests were run, Veejay was told
to write up a report stating that the brake had passed the tests. Veejay
explained to
his superior that the only way such a report could written is to falsify test data to
which the superior replied, he was well aware of what was required, but that he had
been ordered to get a report written regardless of how or what had to be done.
Veejay talked with the senior executive assigned to the project and his response was
the same with that of his supervisor. Veejay however, asked the senior executive if
his conscience would hurt if such a thing caused the death of a pilot, and he replied
that I was worrying about too many things that did not concern me and advised me
to do what you are told
Required:
What should Kermit Veejay do? Answer this question using the AAA ethical decision
making model
2. In 1936, Standard Oil Company of California (SOCAL) found oil in Saudi Arabia and the
following year it joined with Texaco to form CASOC renamed ARAMCO in 1948 a
jointly owned subsidiary staffed by American managers and formed to drill for oil in Saudi
Arabia. Saudi Arabias oil became and remains till today, an economic necessity for the

United States. The managers of SOCAL and TEXACO, however, were unsure how much
of Saudi culture they should accept or go along with.
Saudi Arabia is the birth place of Islam, and their legal, political and social systems, which
are based on the Sunni version of Islam, are viewed by the Saudis as divinely inspired.
For the Saudis, Islam is the only legitimate source of morality. This morality, however,
does not recognise basic right such as freedom of speech, freedom of press, the right to
vote, or the right to run for office. It does not recognise the right to a trial by jury; crimes
are tried before Islamic judges who base their decisions on the teaching of Islam. It does
not recognise freedom of religion: every Saudis must be Muslim under penalty of death.
The Saudi brand of Islam treats women in ways that Westerners would label
discriminatory. Women cannot supervise men, must wear in public a black veil covering
the entire body including the head and face, must be accompanied by a male relative, and
must enter buses from the rear door and sit in special sections. Men can have up to four
wives but women only one husband. Although men can divorce without giving cause,
women can divorce only for cause. Saudi Arabia does not recognise the right of free
association or the right to unionize. Saudis repeatedly asserted that Saudi morality did not
accept Westerners understanding of human rights. Saudis claimed that Islam set the moral
norms people should follow, and apart from these, other moral standards have no validity.
Use theory of cultural relativism to advise the management of SOCAL and TEXACO on
what to do.
3 (a) Differentiate between conventional decision making and ethical decision making
(b) Discuss briefly the strengths and weaknesses of the AAA ethical decision as a model for
ethical behaviour.
4. In the wake of corrupt practices in the country, most of the erudite scholars have identified
corporate governance as a tool to curb this menace in organisations irrespective of the size
and nature. As a management student who has completed 13 weeks of intensive training in
corporate governance, how do you think the call for corporate governance can be a
panacea to the corrupt practices in the countrys business organisation?
5 (a) As a management student, succinctly justify the need to study business ethics and
corporate governance as a course unit in the course of being awarded a B.Sc degree in
Business Administration.
(b) Use appropriate ethical theory to buttress and justify the general belief that Do not
wish for quick results nor look for small advantages
6. Discuss the significance of culture on business organisation and show clearly how culture
can be institutionalised.