Business Ethics Chapter 3: Individual Responsibilities
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Questions and Answers

What is the primary reason companies engage in "cooking the books" in accounting fraud?

  • To gain an unfair advantage over competitors.
  • To evade taxes and reduce financial liabilities.
  • To secure loans and attract potential investors. (correct)
  • To manipulate financial statements in order to increase revenue.
  • In the context of the Enron scandal, what did the company do to create a deceptive financial picture?

  • They engaged in insider trading and illegally benefited from their own company's stock.
  • They manipulated stock prices to artificially inflate profits.
  • They concealed massive debts and losses in their financial reports. (correct)
  • They fabricated revenue through sham transactions with subsidiaries. (correct)
  • Which of the following individuals or entities were directly impacted by Enron's fraudulent actions?

  • Shareholders
  • Potential investors
  • Employees and their families
  • All of the above (correct)
  • In the Volkswagen scandal, what was the primary ethical violation committed by the company?

    <p>They knowingly produced and sold cars programmed to cheat emissions tests. (C)</p> Signup and view all the answers

    Which of the following questions raised by the Volkswagen scandal reflects a complex ethical dilemma?

    <p>How to hold individuals responsible when a company as a whole is involved in wrongdoing? (D)</p> Signup and view all the answers

    What is the defining characteristic of a conflict of interest in a business setting?

    <p>A situation where a person's personal interests may influence professional judgment. (A)</p> Signup and view all the answers

    Which of the following is a potential consequence of a conflict of interest in a business?

    <p>All of the above (D)</p> Signup and view all the answers

    Why is it important to address conflicts of interest in a business setting?

    <p>All of the above (D)</p> Signup and view all the answers

    Which of the following actions would be considered a conflict of interest for Alice in her role as business manager?

    <p>Alice awarding the cleaning contract to Daniel's father's company despite concerns about the quality of their services. (A)</p> Signup and view all the answers

    What is the main ethical issue that Alice faces in this case study?

    <p>Alice's potential bias towards a company linked to her family. (A)</p> Signup and view all the answers

    What does the term 'conflict of interest' essentially mean?

    <p>A scenario where personal interests could influence professional decisions. (B)</p> Signup and view all the answers

    What is the best way to address the concerns raised by staff and students regarding the cleanliness of the school?

    <p>Objectively assessing the cleaning services based on specific criteria and considering other potential providers. (C)</p> Signup and view all the answers

    Based on the case study, what action would NOT be considered transparent by Alice?

    <p>Avoiding discussions about the cleaning contract with colleagues outside of formal meetings. (D)</p> Signup and view all the answers

    Which of the following situations DOES NOT represent a conflict of interest?

    <p>A manager promoting a deserving employee who worked on a project with them. (C)</p> Signup and view all the answers

    Which element is crucial for Alice to avoid a conflict of interest?

    <p>Alice's ability to make objective decisions about the cleaning contract renewal. (E)</p> Signup and view all the answers

    What could be a potential consequence of Alice choosing to award the contract to Daniel's father's company despite the concerns about the cleaning quality?

    <p>Damage to the school's reputation and potential legal issues. (C)</p> Signup and view all the answers

    What is an example of misuse of company time?

    <p>Using company time to surf the internet for personal purposes. (C)</p> Signup and view all the answers

    Which of the following is NOT considered a form of intellectual property?

    <p>Bank accounts (A)</p> Signup and view all the answers

    What is an example of infringing intellectual property?

    <p>All of the above. (D)</p> Signup and view all the answers

    Why is it considered unethical for employees to use company time for personal purposes?

    <p>All of the above. (D)</p> Signup and view all the answers

    What is an example of 'time clock theft'?

    <p>Asking a coworker to clock you in while you are late. (D)</p> Signup and view all the answers

    Which of the following scenarios describes a violation of intellectual property rights?

    <p>A musician samples a short excerpt from a copyrighted song without permission. (C)</p> Signup and view all the answers

    What is the main ethical concern related to using company resources for personal use?

    <p>It can undermine trust and fairness in the workplace. (C)</p> Signup and view all the answers

    What is the difference between copyright and trademark?

    <p>Copyright protects artistic works, while a trademark protects brand names and logos. (D)</p> Signup and view all the answers

    What is a potential problem with the principal not mentioning his daughter's potential candidacy for the education support officer role?

    <p>It creates a perception of bias and unfairness in the selection process. (A), It could lead to accusations of nepotism. (B), It violates the school's conflict of interest policy. (C)</p> Signup and view all the answers

    Which statement best describes the ethical problem with tax evasion?

    <p>All of the above (D)</p> Signup and view all the answers

    What is the Latin root word for 'responsibility'?

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

    What are the two main assumptions of the concept of responsibility?

    <p>The existence of someone else to whom we are responsible and the freedom of action. (D)</p> Signup and view all the answers

    What is the key difference between tax evasion and tax avoidance?

    <p>Tax evasion involves intentionally breaking the law, while tax avoidance uses legal methods to reduce tax liability. (B)</p> Signup and view all the answers

    According to Koehn, how is responsibility understood in the Anglo-American culture?

    <p>As a combination of duty fulfillment and intentionality. (A)</p> Signup and view all the answers

    Which of the following is NOT a potential ethical concern related to tax avoidance?

    <p>It can lead to the prosecution of companies and individuals. (D)</p> Signup and view all the answers

    Which of the following is an example of responsibility understood as duty fulfillment?

    <p>A company that prioritizes stakeholder interests above profits. (A)</p> Signup and view all the answers

    What is the main ethical concern related to the principal's actions in the case study?

    <p>He may have created a perception of bias and unfairness. (A)</p> Signup and view all the answers

    How is responsibility understood in the context of criminal law?

    <p>As a matter of intent and agency. (A)</p> Signup and view all the answers

    Which of the following statements accurately describes tax evasion?

    <p>An illegal act of intentionally avoiding tax payments. (C)</p> Signup and view all the answers

    Which of the following is NOT an example of responsibility understood as intentional agency?

    <p>A government that imposes strict regulations on businesses. (C)</p> Signup and view all the answers

    What is the purpose of disclosing a conflict of interest in the case study?

    <p>To ensure transparency and fairness in the selection process. (A)</p> Signup and view all the answers

    What is the main point of the text?

    <p>To define the term 'responsibility' and how it is understood in different contexts. (D)</p> Signup and view all the answers

    Why is it important for companies to be ethically responsible when it comes to taxes?

    <p>All of the above (D)</p> Signup and view all the answers

    What is the main influence on the understanding of responsibility in Anglo-American culture?

    <p>The legal system. (B)</p> Signup and view all the answers

    Which type of ignorance is considered morally the worst?

    <p>Intentional ignorance (D)</p> Signup and view all the answers

    What is the defining characteristic of surmountable ignorance?

    <p>The individual is aware of the relevant information but chooses to ignore it. (D)</p> Signup and view all the answers

    In which type of ignorance are actions not considered the responsibility of the agent?

    <p>Invincible ignorance (D)</p> Signup and view all the answers

    Which of the following is an example of surmountable ignorance?

    <p>A student chooses not to attend a lecture because they prefer to watch television. (C)</p> Signup and view all the answers

    What does the text state about the responsibility of an individual who unknowingly supports a company's deceptive practices?

    <p>They are not responsible unless they have the ability to easily find out what is happening. (A)</p> Signup and view all the answers

    Which of the following is NOT mentioned as a factor that influences moral responsibility?

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

    What is the central argument presented in the text regarding the relationship between knowledge and moral responsibility?

    <p>The level of knowledge directly impacts the extent of individual responsibility. (A)</p> Signup and view all the answers

    What is the main implication of a lack of consent in relation to performing an action?

    <p>It diminishes the extent of moral responsibility. (C)</p> Signup and view all the answers

    Flashcards

    Misappropriation of resources

    Unauthorized use of company resources like money or supplies.

    Misuse of company time

    Using paid work hours for personal activities rather than job duties.

    Internet surfing during work

    Browsing personal websites instead of focusing on job tasks.

    Excessive breaks

    Taking longer breaks than allowed during work hours.

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    Time clock theft

    Getting someone else to clock in or out for you when not at work.

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    Intellectual property

    Legal rights protecting creations like inventions, designs, and brands.

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    Infringing intellectual property

    Using protected ideas or products without permission.

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    Counterfeiting

    Creating a fake version of a product to deceive buyers.

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    Responsibility

    A concept related to being answerable for one's actions or behaviors, rooted in the ability to respond.

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    Origin of Responsibility

    Derived from the Latin word 'respondere', meaning 'to respond'.

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    Assumptions of Responsibility

    Includes having someone or something to respond to and the freedom to act.

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    Duty Fulfilment

    Understanding responsibility as doing what one is supposed to do, fulfilling obligations.

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    Intentional Agency

    Responsibility that involves intentional actions causing harm, often referenced in criminal law.

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    Daryl Koehn's Analysis

    Explores responsibility in the context of Fourth Industrial Revolution and its cultural influences.

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    Influences on Responsibility

    Responsibility shaped by analytical philosophy and the legal tradition of the West.

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    Causal Responsibility

    Being accountable for the outcome of actions, particularly in legal terms.

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    Fraud

    Deceptive activity to secure unfair gain, often involving individuals or companies.

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    Accounting Fraud

    Dishonest accounting practices to misrepresent a company's financial health.

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    Enron Scandal

    Major accounting fraud involving Enron Corp, misrepresenting financial status.

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    Volkswagen Scandal

    A scandal where Volkswagen falsely advertised emissions data for vehicles.

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    Corporate Responsibility

    The accountability of a corporation for its actions, especially ethical behavior.

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    Conflicts of Interest

    Situations where personal interests could influence professional decisions.

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    Stakeholders

    Individuals or groups affected by a company's actions or decisions.

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    Ethical Issues in Business

    Dilemmas involving morals and ethics in business practices.

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    Moral Responsibility

    The obligation to act ethically based on knowledge and consent.

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    Ignorance

    The lack of knowledge necessary to make informed decisions.

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    Invincible Ignorance

    An unovercomeable lack of awareness regarding circumstances.

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    Surmountable Ignorance

    The ability to gain knowledge but choosing not to due to negligence.

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    Intentional Ignorance

    Acting as if one does not know relevant information to protect an interest.

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    Lack of Consent

    The absence of agreement to perform an action.

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    Knowledge's Impact on Responsibility

    Full knowledge influences whether one is held accountable for actions.

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    Consent's Role in Ethics

    Without consent, the moral legitimacy of actions is compromised.

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    Conflict of Interest (COI)

    A situation where personal interests may influence professional decisions.

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    Disclosure Timing

    The moment when a potential conflict of interest is made known.

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    Tax Evasion

    The illegal act of avoiding tax payments intentionally.

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    Tax Avoidance

    Legally minimizing tax liabilities within the law.

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    Ethical Aspects of Tax

    Moral considerations regarding how companies handle taxes.

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    Education Support Officer

    A role in schools to assist learning, may involve conflicts.

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    Selection Panel

    Group responsible for interviewing and choosing candidates for a job.

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    Leadership Team

    Group of senior staff overseeing decisions in an organization.

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    Internal Standards

    Rules set by organizations to prevent conflicts of interest.

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    Transparency in Business

    Openness about relationships that may affect work decisions.

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    Hiring Process Standards

    Procedures to ensure fair hiring without conflicts.

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    Vendor Selection Criteria

    Guidelines for choosing service providers to avoid bias.

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    Personal Associations in Business

    Relationships that may influence professional decisions.

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    Contract Renewal Review

    Assessment of a contract’s performance before continuation.

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    Professional Responsibilities

    Duties one is expected to fulfill in a job role.

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    Study Notes

    Chapter 3: Individual Ethics in Business

    • Introduces responsibility and ethical issues in business
    • Covers the meaning of responsibility in business
    • Discusses the actions individuals can take within organizations
    • Explores ethical issues that can arise in business

    3.1 What Makes a Dilemma? A Case Study

    • Examines dilemmas faced by business professionals
    • Discusses how alternative choices can lead to difficult decisions
    • Highlights a case study of Sam, an accounting employee
    • Sam finds out her supervisor Sarah was fired unfairly
    • Sam overhears a conversation suggesting Sarah was unaware
    • She must decide whether to take action given the situation

    3.1.1 Sam's Dilemma

    • Sam, a new hire, learns of Sarah's unjust dismissal
    • Sarah, a supervisor, was fired for falsifying financial statements
    • Sam has no prior relationship or communication with Sarah
    • Sam overheard a conversation where John, Sarah's boss, was the one who gave Sarah the data to falsify

    3.1.2 Your thoughts

    • If you were Sam, what would you do?

    3.2 What is Responsibility in Business?

    • Responsibility's roots trace back to the Latin word 'respondere' (to respond)
    • Responsibility aligns with freedom of action and accountability for actions, stemming from intentions.
    • Responsibility is determined by intentions, not just performance
    • Examines duty fulfilment alongside intentional agency as concepts of responsibility

    3.2.1 Where does the Concept of Responsibility Come From?

    • Professor Daryl Koehn (2019) reviews responsibility within the Fourth Industrial Revolution
    • Analyzes responsibility within Anglo-American culture, influenced by philosophy and legal traditions.
    • Responsibility encompasses duty fulfilment & causal, intentional agency
    • Responsibility encompasses company obligations to shareholders and other agents

    3.3 Modifiers of Responsibility

    • Responsibility depends on several factors
    • Invincible ignorance: Action performed by unpreventable unawareness
    • Surmountable ignorance: Actions that could be corrected with more effort, but aren't
    • Intentional ignorance: A purposeful choice to remain ignorant despite available knowledge
    • Lack of consent: Actions performed under coercion or influence such as mental illness, physical coercion, psychological coercion, or intellectual fear

    3.3.1 Lack of Full Knowledge

    • Examines various types of ignorance
    • Outlines invincible ignorance, surmountable ignorance, and intentional ignorance
    • Discusses when ignorance excuses actions
    • Highlights cases where actions lack full consent.
    • Explains factors that influence consent such as mental illness, physical coercion, and strong emotions.

    3.4 Actions and Responsibility

    • Classification of actions based on different categories.
    • Outlines the classification of actions as actions, omissions, induction, and cooperation
    • Illustrates how actions are transformative interventions with consequences.

    3.4.1 Reflect

    • Examining the ethical implications of situations involving cooperation

    3.5 Responsibility in Action: Milgram's Experiment

    • Explains the Milgram Experiment as a classic example illustrating responsibility.
    • Explains how obedience to authority can influence responsibility

    3.6 The Person in the Business Organization

    • Discusses ethical issues arising from business activities.
    • Examines small/large amounts of money/ resources, and personal interests
    • Explores issues like using company resources for personal use, and how actions can have consequences

    3.7 Ethical Issues in Business

    • Identifies frequent ethical issues in business
    • Examines misappropriation, misuse of company resources, misuse of company time, intellectual property issues, conflicts of interest, fraud, tax evasion/avoidance

    3.7.1 Misappropriation

    • Misappropriation describes taking something without permission
    • Discusses misuse of company resources, time, and intellectual property
    • Explains examples of misuse through case studies or examples

    3.7.2 Fraud

    • Fraud is intentional deception for personal gain
    • Highlights how trust can be broken in business environments
    • Examines examples like Enron and Volkswagen scandals to illustrate fraud

    3.7.3 Conflicts of Interest

    • Defining the issue of conflicts of interest in business interactions
    • Discusses the ethical concerns surrounding familial or personal relationships in work environments

    3.7.3.1 Case Study 1: Managing a Personal Association with a School Contractor

    • Alice, a school business manager, faces a conflict of interest when her daughter's father's cleaning company is contracted with the school
    • Examines the ethical dilemma of maintaining transparency and avoiding bias

    3.7.3.2 Case Study 2: Employment of a Family Member

    • A principal hires their daughter for an education support officer position
    • Examines the ethical considerations related to family member employment, highlighting potential conflicts of interest and questionable timing

    3.7.4 Tax Evasion and Tax Avoidance

    • Tax evasion is defined as intentionally avoiding tax payments
    • Tax avoidance involves conforming to the law while minimizing tax payments
    • Discusses the ethical considerations surrounding tax evasion and avoidance practices

    3.8 Review of Chapter 3

    • Summarizes the chapter's key concepts of responsibility in business
    • Outlines how to define business responsibility, list the actions individuals can take, and describe ethical misbehaviour

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    Description

    This quiz focuses on Chapter 3, which delves into individual ethics in business, highlighting the importance of responsibility and ethical dilemmas faced by professionals. It features a notable case study involving Sam and Sarah, shedding light on the tough decisions one must make in the workplace. Test your understanding of ethical issues and responsibility in business contexts.

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