Business Ethics and Social Responsibility
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Questions and Answers

What does Friedman argue is the primary responsibility of businesses?

  • To maximize profits within competitive rules (correct)
  • To support community initiatives
  • To engage in ethical decision-making
  • To promote social welfare

According to Friedman, who has moral responsibility for actions?

  • Shareholders
  • Individuals (correct)
  • Corporations as entities
  • Government officials

What do Bebchuk and Tallarita say about stakeholder theories?

  • They exclusively benefit employees
  • They are either irrelevant or impractical (correct)
  • They are practical and beneficial
  • They encourage deception for profits

What challenge do businesses face according to the document?

<p>Navigating ethical gray areas (D)</p> Signup and view all the answers

What is one reason businesses might delay ethical behavior?

<p>Immediate financial success conflicts with long-term ethics (C)</p> Signup and view all the answers

Friedman's perspective on CSR implies that social issues should be addressed by:

<p>Government responsibilities (A)</p> Signup and view all the answers

What do critics believe stakeholder theories ultimately serve?

<p>Shareholder interests (D)</p> Signup and view all the answers

How do pluralistic ethical frameworks affect businesses?

<p>They allow for conflicting interpretations of morality (C)</p> Signup and view all the answers

What was a consequence of the fear-based culture at the organization?

<p>Coercion and wrongful termination (D)</p> Signup and view all the answers

Which psychological bias involved justifying unethical acts despite knowing they were wrong?

<p>Ethical Illusions (D)</p> Signup and view all the answers

What is one recommendation for restoring ethical standards in an organization?

<p>Strengthening ethical leadership and cultural reforms (C)</p> Signup and view all the answers

What does motivated blindness refer to in an ethical context?

<p>Ignoring ethical breaches for financial gain (A)</p> Signup and view all the answers

Which of the following was a significant psychological factor contributing to misconduct?

<p>Overvaluing Outcomes based on sales quotas (A)</p> Signup and view all the answers

What was one effect of the company's cross-selling strategy on customers?

<p>Victimization by fraudulent accounts (A)</p> Signup and view all the answers

What aspect of ethical leadership is highlighted as crucial for preventing unethical conduct?

<p>Demonstrating integrity, transparency, and fairness (B)</p> Signup and view all the answers

What is a key component of a robust ethics program?

<p>Establishing whistleblowing channels (A)</p> Signup and view all the answers

What was a significant consequence of Shell's failure in stakeholder engagement during the 1990s?

<p>Erosion of trust among stakeholders (D)</p> Signup and view all the answers

Which factor has reshaped the role of CSR in business strategy?

<p>Increased regulatory pressures (D)</p> Signup and view all the answers

What aspect of Wells Fargo's culture contributed to the cross-selling scandal?

<p>Top-down pressure to meet aggressive sales targets (C)</p> Signup and view all the answers

What major strategy did Wells Fargo implement that contradicted its ethical standards?

<p>Go for Gr-Eight initiative (B)</p> Signup and view all the answers

What is a critical lesson learned from Shell's stakeholder engagement efforts?

<p>Authentic engagement is vital for legitimacy (C)</p> Signup and view all the answers

What did Wells Fargo's initiative emphasize in terms of employee performance?

<p>Revenue generation over ethical considerations (B)</p> Signup and view all the answers

What driving force is highlighted as integral to modern CSR practices?

<p>Ethics and social values (D)</p> Signup and view all the answers

What unintended consequence arose from the aggressive sales culture at Wells Fargo?

<p>Creation of unauthorized accounts (C)</p> Signup and view all the answers

What does relativism emphasize in ethical considerations?

<p>A context-dependent and subjective approach (B)</p> Signup and view all the answers

What is a potential downside of relativism?

<p>It can undermine universal principles (A)</p> Signup and view all the answers

How does pluralism relate to relativism and absolutism?

<p>It advocates for consensus on universal ethical principles (C)</p> Signup and view all the answers

What is the main focus of egoism in ethical theories?

<p>Serving the decision-maker's long-term interests (A)</p> Signup and view all the answers

What challenge does utilitarianism face?

<p>Difficulty in quantifying outcomes (A)</p> Signup and view all the answers

Which ethical theory emphasizes actions based on universal principles?

<p>Ethics of Duties (Kant) (C)</p> Signup and view all the answers

Ethics of Rights is primarily focused on what?

<p>Safeguarding fundamental human rights (C)</p> Signup and view all the answers

One critique of the Ethics of Rights framework is:

<p>It may exhibit Western-centric biases (C)</p> Signup and view all the answers

What is a key advantage of Creating Shared Value (CSV)?

<p>Enhanced competitiveness through societal alignment (B)</p> Signup and view all the answers

Which of the following is a challenge faced in the implementation of CSV?

<p>Balancing short-term profits with long-term goals (C)</p> Signup and view all the answers

What societal initiative is Coca-Cola known for in relation to CSV?

<p>Water stewardship and conservation (C)</p> Signup and view all the answers

Which organization certifies B Corporations for accountability and social performance?

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

What is the primary focus shift for B Corporations compared to traditional corporations?

<p>Integrating stakeholder needs and environmental concerns (D)</p> Signup and view all the answers

How do CSV initiatives often reduce business risks?

<p>Through proactive engagement with societal challenges (B)</p> Signup and view all the answers

In the context of CSV, what does stakeholder engagement foster?

<p>Trust and collaboration (A)</p> Signup and view all the answers

What is one of the features that protect B Corporations' societal goals?

<p>Legal frameworks securing mission integrity (D)</p> Signup and view all the answers

What is the first step in the ethical decision-making framework?

<p>Recognize the Moral Issue (D)</p> Signup and view all the answers

Which psychological driver of unethical behavior involves justifying unethical actions based on outcomes?

<p>Overvaluing Outcomes (A)</p> Signup and view all the answers

What phenomenon does Lance Armstrong's case illustrate regarding the influence of environment?

<p>Systemic Pressures (D)</p> Signup and view all the answers

What does establishing moral intent involve in ethical decision-making?

<p>Committing to ethical action (A)</p> Signup and view all the answers

Which term describes the gradual compromise of ethics leading to larger breaches over time?

<p>Slippery Slope (D)</p> Signup and view all the answers

What critical aspect do professionals need to consider when working in ethically controversial industries?

<p>Long-term impacts (A)</p> Signup and view all the answers

Which cognitive bias contributes to ignoring unethical actions benefiting the observer?

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

What challenge does ethical decision-making often face within organizations?

<p>Cultural and organizational pressures (A)</p> Signup and view all the answers

Flashcards

Ethical Decision-Making Framework

A process for making ethical decisions that involves recognizing a moral issue, evaluating options based on ethical principles, committing to ethical action despite competing interests, and executing actions aligned with ethical intent.

Overvaluing Outcomes

The tendency to prioritize desirable economic or relational outcomes, even if it means justifying unethical actions to achieve them.

Motivated Blindness

The tendency to overlook unethical actions by others if it benefits the observer.

Ethical Illusions

An overestimation of one's own ethical integrity, leading to blind spots in judgment.

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Slippery Slope

The gradual acceptance of increasingly unethical behavior over time, starting with small compromises.

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Ethical Spillover

A situation where unethical behavior spreads within a group or organization, influencing individuals to conform to the prevailing norms.

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Systemic Pressures

The pressures and influences that exist within a system, such as an industry or organization, that can encourage unethical behavior.

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Gradual Normalization

The process where small unethical acts, repeated over time, become normalized and accepted within an environment.

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Friedman's View on Business Ethics

Friedman argued that the sole responsibility of businesses is to maximize profits for shareholders within legal bounds.

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Corporations Lacking Moral Responsibility

Friedman believes corporations lack individual morality, so CSR is unnecessary; social issues belong to the government.

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Enlightened Shareholder Capitalism

The idea that focusing on stakeholder interests ultimately benefits shareholders by fostering long-term success.

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Critique of Stakeholder Theories

Bebchuk and Tallarita argue that prioritizing stakeholders is essentially just a well-disguised way to serve shareholders.

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Ethical Gray Areas

Decisions where the lines between right and wrong are unclear due to competing values and interpretations.

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Pluralistic Ethical Frameworks

Multiple ethical frameworks exist, leading to different beliefs about what's right and wrong in various situations.

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Profit vs. Ethics Tension

The conflict between striving for short-term financial gain and acting ethically in the long run.

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Lance Armstrong Case Study

Lance Armstrong provides a case study of unethical behavior driven by systemic and psychological factors.

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Symbolic Stakeholder Engagement

A company's actions or statements that appear to support ethical behavior but lack genuine commitment to its values.

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Prioritizing Revenue Over Ethics

The situation where a company prioritizes meeting revenue targets over ethical conduct, leading to unethical practices.

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Top-Down Pressure

The use of coercive techniques by management to influence employees to meet aggressive sales goals, often resulting in unethical behavior.

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Cross-Selling

The practice of persuading customers to buy multiple financial products to increase revenue, which can lead to unethical practices if sales targets become too high.

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Values-Action Gap

The situation where a company's stated values and principles are not reflected in its daily operations or practices, leading to a gap between words and actions.

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Ethical Consumption

The shift in consumer behavior towards supporting businesses that align with their ethical values, driving the importance of ethical practices for companies.

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Evolving Regulatory Pressures

The growing pressure from governments and regulations for companies to adopt ethical practices, impacting business strategy and decision-making.

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CSR's Role in Business Strategy

The integration of social and environmental considerations into business operations alongside financial goals, driven by stakeholder expectations and regulatory pressures.

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Fear-Based Culture

Employees were afraid of losing their jobs if they didn't meet goals, leading to unethical behaviors.

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Supervisory Complicity

Supervisors tolerated or even encouraged unethical practices, creating an environment where misconduct was normal.

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Denial of Responsibility

Shifting blame to lower-ranking employees for unethical practices.

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Ethical Leadership

Ethical leaders set the tone for ethical behavior, emphasizing ethical conduct alongside business goals.

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Formal Ethics Programs

Formal programs with training, reporting channels, and enforcement mechanisms to prevent unethical behavior.

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Ethical Relativism

Focuses on understanding ethical principles from different cultural standpoints. It highlights that ethics can vary based on individual or cultural perspectives.

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Ethical Pluralism

Seeks a balance between universal ethical standards and cultural variations. It believes in core ethical principles applying universally, but respects diverse interpretations.

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Ethical Absolutism

Asserts the existence of absolute, universal moral truths that apply to everyone, regardless of cultural background. These principles are viewed as unchanging.

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Egoism

This theory suggests acting ethically when it benefits the individual or organization in the long run. It focuses on self-interest.

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Utilitarianism

Focuses on maximizing overall happiness and minimizing harm for the greatest number of people. It involves weighing the outcomes of actions to determine the best course.

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Ethics of Duties (Kantian Ethics)

Emphasizes acting based on universal principles like honesty, respect, and fairness, regardless of consequences. It focuses on the inherent rightness or wrongness of actions.

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Ethics of Rights

Protecting fundamental human rights, such as life, liberty, and education, is central to this approach. Actions are judged based on whether they uphold these rights.

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Universality Principle (Kantian Ethics)

Evaluates actions based on the consistency and universality of the principles they uphold. It asks whether an action would be considered acceptable across all situations.

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Creating Shared Value (CSV)

A business model that integrates societal impact into its core strategy, striving for both profit and positive social change.

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B Corporations (B Corps)

Companies that legally embed stakeholder considerations into their operations, prioritizing long-term societal and environmental accountability beyond shareholder interests.

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Stakeholder Governance

A critical aspect of B Corporations that shifts focus from maximizing profits solely for shareholders to balancing the needs of all involved like customers, employees, and the environment.

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B Lab Certification

A rigorous certification process for B Corps that assesses their social and environmental performance, transparency, and accountability.

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Mission Protection

A key aspect of B Corps where legal frameworks protect their societal goals even during leadership changes or funding.

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Strategic Implications of CSV

A business strategy focused on creating win-win situations where societal issues are addressed in a way that also benefits the company.

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Case Studies of CSV

Real-world examples showcasing the application of CSV principles, demonstrating its effectiveness and impact.

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Challenges in CSV Implementation

Challenges businesses face when implementing CSV, including balancing short-term gains with long-term goals, effectively communicating impact, and integrating CSV with organizational culture.

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Study Notes

Business Ethics and Social Responsibility

  • Business ethics is the study of business situations, activities, and decisions involving morally right or wrong actions.
  • Ethical dilemmas occur in grey areas where a clear right or wrong answer is absent.
  • Corporate social responsibility is the responsibility of businesses for the impacts they have on society.
  • Businesses should comply with laws and agreements.
  • CSR integration includes social, environmental, ethical, human rights, and consumer concerns within operations.
  • CSR aims to identify, prevent, and mitigate negative impacts while maximizing shared value for stakeholders and society.
  • Arguments against CSR often question its sincerity.
  • Some argue that businesses primarily focus on profit maximization and that social responsibility is the responsibility of governments, not companies.
  • Ethical decision-making involves recognizing moral issues, making judgments based on ethical principles, establishing moral intent, and acting ethically.
  • Psychological biases, such as overvaluing outcomes, motivated blindness, ethical illusions, and the slippery slope, contribute to unethical behavior.

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Business Ethics and Social Responsibility Notes PDF

Description

Explore the important concepts of business ethics and social responsibility in this quiz. Dive into topics like ethical dilemmas, corporate social responsibility (CSR), and the implications of ethical decision-making in business practices. Understand how businesses can balance profit with social and environmental concerns.

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