Business Ethics and Social Responsibility

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Questions and Answers

Which of the following best defines ethical behavior?

Behavior that conforms to laws and regulations only

Behavior that is legal but may not be morally right

Behavior conforming to individual beliefs and social norms about what’s right and good (correct)

Behavior that ignores individual and social beliefs about right and wrong

Which source is NOT typically considered a foundation for personal codes of ethics?

Influence of peers

Experiences in adulthood

Professional training (correct)

Childhood responses to adult behavior

In assessing ethical behavior, which step is generally taken first?

Gather the relevant facts (correct)

Consult with peers

Make an ethical judgment

Analyze the facts

Which of the following ethical norms focuses on fairness?

Justice Signup and view all the answers

What aspect of business ethics involves the behavior of employees while on the job?

Business ethics Signup and view all the answers

What is one key reason why ethics are important in the workplace?

They foster a positive work environment and promote trust. Signup and view all the answers

Which of the following best describes the difference between ethics and social responsibility?

Ethics is focused on individual behavior, while social responsibility pertains to organizational practices. Signup and view all the answers

What is NOT one of the four general approaches to social responsibility?

Productivity improvement approach Signup and view all the answers

Which step is NOT part of the process to implement a social responsibility program?

Incorporating personal values into the program Signup and view all the answers

How do social responsibility and ethics affect small businesses?

They can enhance reputation and lead to greater customer loyalty. Signup and view all the answers

Which stance involves a company doing everything required legally but no more?

Defensive Stance Signup and view all the answers

What is the primary focus of a company that adopts an obstructionist stance?

Covering up violations and doing as little as possible Signup and view all the answers

Which of the following statements best supports the argument for corporate social responsibility (CSR)?

Corporations possess the resources to address social challenges. Signup and view all the answers

What is one essential step in managing social responsibility programs within a company?

Assign a single individual to oversee the CSR agenda Signup and view all the answers

How do small businesses typically differ from large businesses regarding social responsibility?

Small businesses focus on individual ethics rather than collective actions. Signup and view all the answers

Which of the following responsibilities is highlighted in the proactive stance of corporate social responsibility?

To contribute to societal well-being without legal obligation Signup and view all the answers

What is an important component of effective social audits within an organization?

Analyzing success in using funds earmarked for social responsibility Signup and view all the answers

Which term best describes a company's efforts to exceed legal and ethical responsibilities?

Proactive Stance Signup and view all the answers

Which of the following is NOT a component of encouraging ethical behavior in an organization?

Profiting from unethical practices Signup and view all the answers

What is meant by organizational stakeholders?

Any group or individual affected by the organization's practices Signup and view all the answers

Which aspect reflects the responsibility toward employees?

Providing opportunities to balance work and life Signup and view all the answers

Which of the following is an example of greenwashing?

Advertising a product as environmentally friendly without actual changes Signup and view all the answers

What is a key principle included in the Basic Consumer Bill of Rights?

The right to be informed about products Signup and view all the answers

What does price gouging refer to in the context of business ethics?

Implementing unfairly steep price increases during high demand Signup and view all the answers

Which argument is often presented against implementing Social Responsibility (SR) programs?

They can lead to a loss in profits Signup and view all the answers

What does the term 'collusion' imply within the context of unfair pricing?

Firms agreeing to engage in price fixing Signup and view all the answers

Which of the following statements best describes the concept of accountability in contemporary social consciousness?

Businesses are expected to protect and enhance societal welfare Signup and view all the answers

What is one responsibility organizations have toward their investors?

Providing transparent financial reporting Signup and view all the answers

Study Notes

This chapter covers business ethics and social responsibility
Learning objectives include explaining how individuals develop personal codes of ethics, distinguishing social responsibility from ethics, and showing how social responsibility relates to environmental issues.

Learning Objectives

Explain how individuals develop their personal codes of ethics and why ethics are important in the workplace.
Distinguish social responsibility from ethics, identify organizational stakeholders, and characterize social consciousness today.
Show how the concept of social responsibility applies to both environmental issues and to a firm's operations.
Identify four general approaches to social responsibility and describe the four steps a firm must take to implement a social responsibility program.
Explain how issues of social responsibility and ethics affect small businesses.

What's in It for Me?

Understanding the material will help assess ethical and socially responsible issues as an employee or business owner.
It will help understand the ethical and socially responsible actions of businesses in dealings as a consumer and investor.

Ethics in the Workplace

Ethics are beliefs about what's right and wrong.
Ethical behavior conforms to individual and societal values.
Unethical behavior contradicts individual and social values.
Business ethics encompasses ethical or unethical behaviors by employees in the workplace.

Individual Ethics

Sources of personal codes of ethics include childhood responses to adult behavior, influence of peers, life experiences, and personal morals and values.

Business and Managerial Ethics

Managerial ethics guides managers' behaviors in their workplace interactions with: employees, the organization, and other economic agents.

Assessing Ethical Behavior

Gathering relevant facts and analyzing them are simple steps in applying ethical judgments.
Ethical norms include utility (benefit to all), rights (respecting rights of all), justice (fairness), and caring (consistent with everyone's responsibilities to each other).

Company Practices and Business Ethics

Encouraging ethical behavior involves adopting written codes of conduct, top management support of ethical standards, instituting ethics programs, and establishing ethical hotlines.

Balancing organizational responsibilities to groups and individuals (stakeholders) in society.
Organizational stakeholders are affected by organizational practices.

The Stakeholder Model of Responsibility

Treat customers fairly and honestly.
Treat employees fairly, respecting their dignity and basic needs.
Follow proper accounting procedures and share financial performance information with investors.
Establish mutually beneficial partnerships with suppliers.
Engage in programs and charities to support local and international communities.

Accountability includes increased expectations of business roles in protecting and improving societal welfare.

Responsibility toward the environment includes proper disposal of toxic waste, recycling, control of air, water, and land pollution, and avoiding greenwashing.
Responsibility toward consumers involves offering quality products and fair pricing, also protecting consumer rights (safe products, informed choices, and fair treatment).
Unfair pricing practices such as collusion and price gouging are considered unethical.
Ethics in advertising include truth in advertising and avoiding morally objectionable content.
Responsibility toward employees includes adherence to legal and social commitments like not discriminating, creating a safe workplace, and balancing work/life considerations.
Responsibility toward investors includes appropriate financial management and reporting (avoiding insider trading).

Arguments against SR often cite its cost effects on profit and potential overreach of business control over SR issues. Businesses may lack expertise in SR matters.
Arguments for SR emphasize that corporations are citizens with responsibility to help others. Corporations have resources and can solve problems they create.

The obstructionist stance involves doing the minimum possible and covering up any violations.
The defensive stance involves meeting legal and ethical requirements, but not going beyond them.
The accommodative stance meets legal and ethical requirements and may expand on them.
The proactive stance actively seeks to contribute to the well-being of people and groups.

Establishing social responsibility at the top, integrating it into strategic planning, showing top management support, assigning an executive for oversight, and performing regular social audits are important management practices.

Small businesses face primarily size-related distinctions from large businesses in social responsibility. Individual ethics more often drive SR decisions.

Key Terms

A list of key terms related to business ethics and social responsibility.

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Description

This quiz covers Chapter Two on Business Ethics and Social Responsibility. It explores how individuals develop personal ethical codes, the distinction between ethics and social responsibility, and their relation to environmental issues and firm operations. Assess your understanding of the key concepts and learning objectives in this important area of study.