BLE 215: Midterm---Due in class on March 7, 2013

This is not a group project. Each question must be answered separately. Use course materials to elaborate on your answers. The examination must be handed in during the regularly scheduled class period. Please do not e-mail your exam. The exam should be 6-10 pages, 1 inch margins, double spaced. Do not repeat the questions in the body of the paper.

  1. Question 1 (25 points)

Joseph Johnston argues, in his article, Natural Law and the Fiduciary Duties of Business Managers that…”Simply put, stakeholder theory sounds good in social theory but will not work in practice.”

  1. Explain his reasoning
  2. Do you agree or disagree? Make sure to explain your reasons and use course materials to support your argument.
  1. Question 2 (30 points)

Steven Kellman provides a critique of the cost/benefit analysis and whether it leads to a “flawed ethical result.”

  1. Do you agree or disagree with his analysis? Make sure to explain your reasons and use course materials to support your argument.
  2. Explain the value of corporate sustainability using case studies and examples from the class materials.

III:Question 3 (25 points)

ExplainEdward Freeman’s model of Stakeholder Analysis and how it applies to corporate social responsibility. Does it conflict with the fiduciary duties of management and the board of directors to maximize shareholder wealth? Explain your reasons.

IV:Question 4 (20 points)

Read the attached case study (Hosmer Case 3-1) and answer each of the following questions.

Using the Hosmer model, answer the following questions:

What groups will be benefited by shipping the defective wafers to the inner city?

  1. What groups will be harmed by shipping the defective wafers to the inner city?
  2. What groups will be able to exercise their rights by shipping the defective wafers?
  3. What groups will have their right ignored by this shipment?
  4. Express the moral problem so that everyone involved will believe that their particular interests (their well being and their rights) have been recognized and included.
  5. What are the economic outcomes?
  6. What are the legal requirements?
  7. What are the moral duties?