Business Ethics and Corporate Governance
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Questions and Answers

Which of the following actions could be considered ethical?

  • A company recalling a defective product at great cost.
  • An executive speaking to a student about career options.
  • A business choosing to upgrade local factories instead of moving operations overseas.
  • All of the above. (correct)

Ethical behavior is solely defined by what the majority of people consider to be right.

False (B)

Besides the majority opinion, name one other basis for determining an action's ethical nature?

treating someone the way you would want to be treated

An ethical business might give an opportunity to someone who is in greater ______ than most people.

<p>need</p> Signup and view all the answers

Match the scenario with the ethical consideration it represents:

<p>A customer helps an elderly person with heavy packages = Treating someone the way you would want to be treated A company recalls a product at cost = Obeying a notion of rightness A business gives an opportunity to a former prisoner = Helping someone who deserves aid A business upgrades a factory instead of moving operations overseas = Taking advantage of the resources entrusted to it by society</p> Signup and view all the answers

Which of the following reasons is NOT mentioned as a factor contributing to unethical behavior in business?

<p>Apathy towards corporate responsibilities. (D)</p> Signup and view all the answers

According to the information provided, business managers are inherently more unethical now than in the past.

<p>False (B)</p> Signup and view all the answers

What is the primary purpose of studying business ethics, as stated in the text?

<p>To make better decisions for ourselves, the businesses we work for, and the society we live in.</p> Signup and view all the answers

The text describes a strategic framework for making decisions that provides a process for systematic ethical _________.

<p>analysis</p> Signup and view all the answers

Match the following companies with the unethical actions associated with them:

<p>General Motors = Faulty car ignitions Target = Failure to protect customer credit card information Enron = Moving liabilities off balance sheet WorldCom = Fraudulent accounting to increase stock price</p> Signup and view all the answers

What was the primary purpose of the Sarbanes-Oxley Act of 2002?

<p>To encourage corporate executives to be ethical and socially responsible. (A)</p> Signup and view all the answers

Complying with the law is the only reason to be ethical and socially responsible.

<p>False (B)</p> Signup and view all the answers

Besides avoiding liability, what are two other reasons that encourage business executives to study ethics?

<p>Noble and economic reasons are other reasons to study ethics.</p> Signup and view all the answers

Studying ethics can help us to understand both ______ and other people better.

<p>ourselves</p> Signup and view all the answers

Match the following with the correct description:

<p>Shareholders = Individuals with stake in a company's success. Creditors = Those who lend money to a company. Attorneys General = Officials involved in legal actions against corporations. Sarbanes-Oxley Act = Legislation to deter corporate wrongdoing.</p> Signup and view all the answers

What does the study of ethics enable individuals to do?

<p>Develop a better understanding of why others do what they do. (C)</p> Signup and view all the answers

The text implies that all corporate executives are inherently unethical and irresponsible.

<p>False (B)</p> Signup and view all the answers

Besides decision-making and understanding others, what other benefit comes from studying ethics?

<p>A more rigorous, critical thinking ability, as well as being a more persuasive speaker and writer.</p> Signup and view all the answers

What is the primary function of large corporations, according to the text?

<p>To perform essential national and global economic functions. (A)</p> Signup and view all the answers

Critics of corporations argue that their pursuit of profits has no negative consequences.

<p>False (B)</p> Signup and view all the answers

According to some defenders of business, what is the main goal of businesses in a capitalist society?

<p>Profit maximization</p> Signup and view all the answers

Ethical decision-making requires a business executive to anticipate the effects of a corporate decision on the various corporate ______.

<p>stakeholders</p> Signup and view all the answers

Match the following concepts with their descriptions:

<p>Corporate Misbehavior = Actions by corporations that are considered unethical or harmful. Profit Maximization = The act of increasing a company's earnings as much as possible within legal regulations. Ethical Decision-Making = A process that anticipates the effects of decisions on various corporate stakeholders. Corporate Stakeholders = Individuals or groups who are impacted by the actions of a company</p> Signup and view all the answers

What did Alan Greenspan suggest in 1963?

<p>Moral values are the power behind capitalism. (B)</p> Signup and view all the answers

The text suggests that there is no debate regarding the control over the modern corporation.

<p>False (B)</p> Signup and view all the answers

Flashcards

Ethical Behavior

Acting in a way that is considered morally good and right.

Fundamental Notion of Rightness

The belief that individuals should be treated fairly and with respect, regardless of their circumstances. It focuses on promoting the well-being of others, even when it's not personally beneficial.

Giving an Opportunity to Someone in Need

Acting in a way that helps those in need, especially when it's not required.

Corporate Social Responsibility

Actions taken by companies to benefit society, even if it means sacrificing some profits.

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Taking Full Advantage of Resources

The use of a company's resources to maximize profits for shareholders, even if it means harming society.

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Ethical Behavior in Business

The use of resources in a manner that is both productive and fair. It involves considering the impact of actions on both the company and society.

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Strategic Framework for Ethical Decision-Making

A systematic approach to ethical decision-making that involves identifying and evaluating ethical issues, considering various perspectives, and making a reasoned decision.

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Critical Thinking in Ethics

The ability to critically assess your own and others' ethical reasoning, recognizing potential biases, flaws, and logical errors in arguments.

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Ethical Pressure

The influence of one person on another to adopt a particular course of action, often involving pressure or persuasion.

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Ethical Leadership

The quality of acting ethically in leadership positions, setting a positive example for others and promoting an ethical culture within an organization.

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Corporate Wrongdoing

Situations where companies or executives break the law, often leading to lawsuits or criminal charges.

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Sarbanes-Oxley Act

A law passed in 2002 to make it harder for companies to commit fraud and hold executives accountable.

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Social Responsibility

The idea that companies should act in ways that benefit society, not just focusing on profits.

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Ethical Decision Making

A logical approach to making decisions based on principles of right and wrong.

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Reasoning Fallacies

Common mistakes in reasoning that can lead to faulty conclusions.

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Critical Thinking

The ability to analyze information clearly and effectively, identifying strengths and weaknesses in arguments.

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Persuasive Communication

Expressing your ideas in a persuasive and convincing manner.

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Empathy in Communication

The ability to understand and appreciate diverse viewpoints and perspectives.

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Corporate Social Responsibility (CSR)

The idea that businesses should be held accountable for their actions and impacts on society, including the environment, employees, and consumers.

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Profit Maximization

The belief that businesses should maximize profits for their shareholders and prioritize economic growth, even if it means compromising ethics.

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Legal Compliance as Ethics

The argument that businesses are ethical when they operate within the law and prioritize profitability.

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Corporate Power and Influence

The idea that corporations have power and influence that can impact society in positive or negative ways.

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Stakeholder Theory

The idea that businesses should consider the impact of their decisions on all relevant stakeholders, not just shareholders.

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Balancing Profits and Ethics

The ethical dilemma of balancing a company's responsibility to shareholders with its responsibility to society.

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Debate About Corporate Role in Society

The claim that corporations contribute to society through economic growth and innovation, but also face criticism for potential negative impacts.

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Study Notes

Business Ethics, Social Responsibility, Corporate Governance, and Critical Thinking

  • Defining ethical behavior: Ethical behavior involves actions like helping others, giving someone an umbrella during a storm, or an executive helping a young person understand a career path. It also involves companies like those recalling a potentially faulty product, at significant cost, or choosing not to move manufacturing overseas.

  • Stakeholder Theory: A theory suggesting that corporations should balance the interests of all stakeholders including investors, employees, suppliers, customers, and community.

  • Ethical Theories: Different frameworks for understanding ethical conduct

    • Rights Theory: Focuses on fundamental human rights and whether actions and decisions respect these.
    • Justice Theory: Emphasizes the fairness in distribution of benefits and burdens.
    • Utilitarianism: The goal to achieve the highest level of satisfaction for the greatest number of people.
    • Shareholder Theory: Focuses on maximizing profits for investors.
    • Virtue Theory: Emphasizes character development and moral values.

  • Criticisms of Profit Maximization: This theory is criticized for potentially leading to unethical actions due to flaws in corporate governance, incentives, and executive decision-making.

  • Ethical Decision Making Guidelines: Nine-step framework for better ethical decision making

    • Facts: Identifying the relevant facts impacting the decision.
    • Alternatives: Exploring the possible courses of action.
    • Stakeholders: Determining the individuals affected by the decision.
    • Societal Impact: Analyzing how each alternative impacts society.
    • Business Impact: Assessing the impact on the business.
    • Individual Impact: Assessing the decision maker's personal impact.
    • Ethics of Alternatives: Evaluating the ethical considerations of each alternative.
    • Practical Constraints: Evaluating the practical constraints of each alternative.
    • Action and Implementation: Developing a strategy for implementing the chosen action.

  • Ethical Decision Making Pitfalls: Common errors in reasoning like non sequiturs, appeals to pity, false analogies, appeals to tradition, fallacy of the gambler, etc.

  • Corporate Governance: Improving governance structures is crucial to preventing unethical business practices; it includes creating independent board members, ethical codes, and ethical education.

  • Conflicts of Interest: The need to avoid conflicts of interest in decision-making.

  • Resisting Unethical Requests/Bosses: Strategies to resist unethical requests from a superior, including seeking advice from mentors, colleagues, and support groups.

  • Preparing to Lose Your Job: Discussing strategies for dealing with unethical requests when other strategies fail.

  • Communicating Core Values: How a firm's leaders can communicate ethical values to promote ethical behavior within the organization.

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Business Ethics PDF

Description

Explore the fundamental concepts of business ethics, social responsibility, and corporate governance in this quiz. Learn about ethical behaviors, stakeholder theory, and various ethical frameworks like rights theory, justice theory, and utilitarianism. Perfect for students and professionals interested in ethical decision-making in the business world.

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