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Just days after his resignation from Berkshire Hathaway, David Sokol, the former heir apparent to Warren Buffet discussed his plans for the future. Justifying the actions that were reported as the basis for his resignation, Sokol claimed he did nothing wrong. Instead, he contended that the resignation was a move he considered for at least two years. He discounts talk that he was supposed to take over Berkshire Hathaway and indicates that he wants to start a similar company of his own.

QUESTIONS:

  1. Carefully read the details of David Sokol’s dealings with Lubrizol. All situations have an ethics component to some degree. What are the ethical issues here? Was Sokol’s behavior ethical? Why or why not?
  2. Mr. Sokol defends his stock purchase as evidence that he had strong faith in Lubrizol. What alternative view of ethics is expressed in this explanation?
  3. Make an argument that an ethical dilemma existed. Of the dilemmas presented in the text, which one most closely fits the situation at Berkshire?
  4. Assuming Warren Buffett asked Mr. Sokol to resign, what do you think about his handling of the situation? Does it reflect ethical decision making?

SOURCE: J. Funk, “Ex-Berkshire Exec Sokol Says He Wants to Start ‘Mini’ Berkshire Hathaway,” USA Today (Retrievable online at http://www.usatoday.com/money/industries/insurance/2011-03-31-sokol-berkshire-hathaway.htm)

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