Business Ethics and CSR Quiz

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Questions and Answers

Which of the following is NOT a criterion of a Code of Conduct in companies?

Ensures compliance through training programs

Sets global policies for compliance

Communicates policies to all stakeholders

Evaluates policy impact based solely on financial performance (correct)

What is the main purpose of the Sustainable Development Goals set by the UN?

To enhance national wealth by 2030

To create a competitive corporate environment

To promote global military cooperation

To provide a blueprint for a sustainable future for all (correct)

Which aspect is a fundamental element of Corporate Social Responsibility (CSR)?

Taking into account the interests of various stakeholders (correct)

Avoiding engagement with local communities

Limiting transparency to protect business strategies

Maximizing shareholder profit at all costs

How do legal foundations relate to ethical behavior in business?

They establish boundaries that foster a culture of ethical behavior. Signup and view all the answers

In the context of ethical decision-making, what role do internal audits play?

They ensure that ethical policies are implemented effectively. Signup and view all the answers

Which ethical approach focuses on the consequences of actions to determine right from wrong?

Utilitarianism Signup and view all the answers

What does Stakeholder Theory emphasize in corporate governance?

Balancing the interests of all stakeholders Signup and view all the answers

What is one of the primary goals of Corporate Social Responsibility (CSR)?

Enhancing the company's public image Signup and view all the answers

The trolley problem illustrates a dilemma in which context?

Ethical decision-making in life and death situations Signup and view all the answers

Which of the following principles is essential to the Deontological approach to ethics?

Moral obligations exist independently of outcomes Signup and view all the answers

Legal Foundations of ethical behavior typically include which of the following aspects?

Statutory laws and regulations Signup and view all the answers

Which of the following best describes a common challenge in applying Corporate Social Responsibility (CSR)?

Measuring the direct financial impact of CSR Signup and view all the answers

In ethical decision-making, which approach evaluates actions based on their ability to generate overall happiness?

Teleological approach Signup and view all the answers

What ethical consideration is primarily questioned in the design of autonomous vehicles?

The moral decisions autonomously made in critical situations Signup and view all the answers

In the scenario presented, what dilemma does the programmer face regarding the two groups of individuals?

Choosing between swerving and crashing Signup and view all the answers

According to the stakeholder theory, who should have a say in the programming of autonomous cars?

A combination of engineers, ethicists, and the public Signup and view all the answers

Which approach to decision-making in ethics could help resolve moral dilemmas faced by autonomous vehicles?

Consequentialism, assessing outcomes of actions Signup and view all the answers

What is a major concern regarding the programming of moral machines like autonomous cars?

Potential bias in moral decision-making algorithms Signup and view all the answers

Corporate social responsibility (CSR) in the context of autonomous vehicles involves which of the following?

Addressing ethical implications of decision-making processes Signup and view all the answers

Which of the following best describes the moral machine dilemma involving children and elderly people?

A complex situation requiring subjective judgment Signup and view all the answers

What role does public input play in the decision-making process for autonomous vehicle programming?

It can influence moral decisions regarding safety Signup and view all the answers

Study Notes

Course Information

Course name: Business I
Course code: ENNEG310
Instructor: Alejandra Vasquez Delama
Email: [email protected]
Schedule: Monday & Wednesday, 11:00 – 12:20 / 12:30 – 13:50

Topics covered: Introduction and Case, Stakeholder theory, Corporate Social Responsibility (CSR), Ethics and moral dilemmas, Legal foundations of ethical behavior, What MNEs can do: Codes of Conduct

Introduction & Case

Key questions:
- To what extent are multinational corporations responsible for ensuring that workers' rights are respected?
- To what extent must multinational corporations stick to environmental protection?
- To which extent are MNCs responsible for their suppliers?

CSR at Apple

Source: Myers, C. (2012). Corporate Social Responsibility in the Consumer Electronics Industry: A Case Study of Apple Inc.
Apple's products are manufactured in 748 locations, more than 600 in Asia, 331 in Mainland China
China production allows Apple to minimize labor costs
According to estimates by the University of Manchester, assembling iPhones in China reduces costs to 47% of the cost in the United States
Major suppliers: Asustek and Foxconn

The Stark Reality of iPod's Chinese Factories

In 2006, Apple suppliers maintained dormitories on factory grounds enabling quick mobilization of workers and adjustments to assembly lines.

The Foxconn Case

First scandal: Child labor, legal working age in China is 16, but Foxconn employed children under 16. Student interns were paid about $244 a month and were forced to work overtime.
Second scandal: Suicides, between January and November 2010, 17 Foxconn workers attempted suicide, of whom 13 were successful. China's legal limit for overtime is 36 hours a month, but some workers were forced to work 80-100 hours per month, sometimes without pay.

The Foxconn Case (Fast-Paced Assembly)

Fast-paced assembly process required workers to finish each procedure within two seconds.
Workers were not allowed to make unnecessary movements.
Workers reported passing out during work.
24 percent of female workers experienced menstrual disorders due to stress.

Apple's Reactions

Establishment of a "Supplier Code of Conduct" in 2005
Workers and Manager Training (communication, anti-harassment, worker protections)
Elimination of Safety Hazards, Excessive overtime and Child Labor
Training for supplier personnel (PPE, chemical safety, hazardous energy control)
Apple began tracking working hours in 2011, contacting suppliers on code of conduct violations
Third-Party Oversight (Fair Labor Association, 2012) to oversee factories in China

Criticisms of Apple's FLA Involvement

Critics argue that the FLA has done little to improve working conditions, and that Apple’s membership merely serves as window dressing for image.
Example: FLA required Foxconn to increase the number of workers in a union leadership committee to at least three, but did not specify any requirements for the ratio of workers to management or how the workers were elected.

Overview

Introduction and Case
Stakeholder theory
Corporate Social Responsibility (CSR)
Ethics and moral dilemmas
Legal foundations of ethical behavior
What MNEs can do: Codes of Conduct

Shareholder vs. Stakeholder

Shareholders are individuals, companies, or institutions that own at least one share, having a financial interest in profitability.
Stakeholders are parties with an interest in a company's success or failure; they can affect or be affected by policies and objectives

Stakeholder Theory

Companies must create value for all stakeholders, not just shareholders.
Stresses the network character and interconnectedness of stakeholders.
Stakeholders (sometimes) pursue different goals and have different interests.
Examples: Shareholders (additional sales, increased productivity), Employees (safer workplaces, higher compensation), Customers (higher-quality products, lower prices), Society (more jobs, increased corporate taxes).

Cause-and-Effect Relationships (MNEs and Foreign Countries)

MNEs can harm foreign countries by perpetrating inequitable income distribution, political corruption, environmental debasement, and social deprivation
MNEs can benefit foreign countries by creating higher tax revenues, increasing employment, increasing trade and exports, and fostering greater innovation

CSR is the idea that businesses have a responsibility to the society around them.
Includes several measures and practices to respond to this responsibility on multiple levels.
No uniform definition.
Relies mostly on the triple bottom line (social, environmental, financial).

Triple Bottom Line

Societal (social)
Environmental
Financial

Why companies care about CSR?

Companies care about their image and reputation.
They can develop a competitive advantage.
Avoid negative perceptions (irresponsibility).
Avoiding sanctions (legal and social).

CSR: Reasons and Pressure

Companies are motivated to act responsibly due to Institutional Theory (Meyer & Rowan, 1977; DiMaggio & Powell, 1983) that shows companies operate under three types of pressure:
- Coercive, normative, and mimetic.
Motivations for CSR: legality, consumer relations, employee considerations, and image.

The Trolley Problem

A thought experiment in ethics, where an onlooker faces a choice to save five people by diverting a trolley to kill one person.

Teleological Approach (Consequences-Based Decision Making)

Decisions based on the results of the action.
Utilitarianism is a theory of moral reasoning that judges actions based on producing the greatest good for the greatest number.

Deontological Approach (Duty-Based Decision Making)

Actions are right or wrong independent of consequences.

Moral Dilemmas (Examples)

The Moral Machine experiment: an online platform exploring moral dilemmas faced by autonomous vehicles.

The Moral Machine: Situation

Engineers design autonomous vehicles, facing dilemmas when programming the cars.
Sometimes situations are more complex than experiments (e.g., people jaywalking). The ethical programming needs to be considered.

The Moral Machine: Scenarios

Different scenarios with various factors and ethical considerations, like deciding between elderly people and children, or rich vs poor man.

The Moral Machine: Method

Online experimental platform designed to explore moral dilemmas faced by autonomous vehicles.
A multilingual online "serious game" to collect and analyze large-scale data on how citizens prioritize when decisions about accidents have to be made.

The Moral Machine: Results (1)

Preferences and responses revealed in the machine are correlated with cultural and economic factors between countries.
- Individualistic vs. collectivistic cultures have differing priorities regarding saving lives.
- Respect and violation of laws are differently emphasized in nations with higher versus lower levels of prosperity.

The Moral Machine: Results (2)

Demographic differences regarding preferences and prioritization of lives
Higher level of inequality between rich and poor in countries correspond to how unequal are the social statuses treated.
Difference in treatment of gender with more preference toward females in countries with better health and survival prospects for women.

Country Clusters (Western, Southern, Eastern)

A breakdown of countries based on general similarities in responses and preferences.

Code of Conduct

Companies use the code of conduct as an ethical guideline for their stakeholders.
The criteria typically include global policies, compliance communications to stakeholders and suppliers, verification, and reporting.

Corruption and Bribery: The Case of Petrobras

Petrobras, a Brazilian oil company faced massive corruption, bribery and money laundering scandals.
Involves executives, other companies, and numerous politicians, leading to high-level political implications.

The Problem of Child Labor

Arguments for the use of children typically argue for better suitability and necessity.
Cases of child labor faced pressure, e.g., in Bangladesh, in the 1990s for child workers by the U.S. trade sanctions.

Ethical Dilemma (Child Labor)

Whether companies should encourage child labor, defined by the ILO as work that deprives children of their childhood and potential, and that may be harmful.
Factors include child's age, type of work, and associated conditions in the country. The answer largely depends on the specific country and situation.

IKEA and its Indian Rug Provider

IKEA is a company implicated in a controversial child labor case.
Response: Successfully improved conditions for workers.

Sustainability and Environmental Issues

Discussion around the concept of sustainability and its implications in business.

The Mariana and Brumadinho Dam Disasters (Brazil)

Environmental impact in the 2015/2019 dam breaks and the subsequent environmental damages.

Sustainable Development Goals

Collection of 17 interlinked global goals to acheive a better and more sustainable future.

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Description

Test your knowledge on essential aspects of business ethics, including the Code of Conduct, Corporate Social Responsibility (CSR), and Sustainable Development Goals. This quiz will challenge you to think critically about the ethical frameworks that guide corporate behavior and the role of internal audits in ethical decision-making.