FACTS: Stilton was promoted to chief executive officer (CEO) of Tamik, Inc. a pharmaceutical company that manufactures a vaccine called Kafluk, which supposedly provides some defense against bird flu. The company began marketing Kafluk throughout Asia. After numerous media reports that bird flu might soon become a worldwide epidemic, the demand for Kafluk increased, sales soared, and Tamik earned record profits. Tamik’s CEO, Stilton, then began receiving disturbing reports from Southeast Asia that in some patients, Kafluk had caused psychiatric disturbances, including severe hallucinations, and heart and lung problems. Stilton, was informed that six children in Japan had died after receiving the vaccine. To cover up the story and prevent negative publicity, instructed Tamik’s partners in Asia to offer cash to the Japanese families whose children had died in exchanged for their silence. Silton also refused to authorize additional research within the company to study the potential side effects of Kafluk. Using the information presented in chapter 7 of the 11th ed. textbook, answer the following questions: 1) What is business ethics, and why is it important? and how can business leaders encourage their companies to act ethically?

2) How do duty-based ethical standards differ from outcome-based ethical standards?

3) If Kafluk prevented fifty Asian people who were exposed to bird flu from dying, would Stilton’s conduct in this situation be ethical under a outcome-based ethical standard? Why or why not?

4) Would Stilton’s conduct be ethical under a duty- based ethical standard? Why or why not?

5) Did Tamik or Silton violate the Foreign Corrupt Practice Act in this scenario? Why or why not?