Business Ethics Overview

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Questions and Answers

What is the relationship between business ethics and corporate social responsibility (CSR)?

CSR undermines the importance of business ethics.

Business ethics and CSR are completely unrelated.

CSR is business ethics concretized in corporate values. (correct)

Business ethics is a subset of CSR.

Which of the following is NOT considered an issue in CSR?

Bribery

Executive management

Fraud

Environmental sustainability (correct)

According to the content, how can ethical management contribute to a corporation?

By serving only shareholder interests.

By minimizing transparency in operations.

By promoting competition at all costs.

By supporting corporate excellence. (correct)

Which of the following best describes the goal of CSR?

To engage more individuals in social development efforts. Signup and view all the answers

What is indicated as the consequence of increased engagement in ethical management?

Improvement in corporate accountability. Signup and view all the answers

Which case exemplifies severe issues related to CSR?

WorldCom Signup and view all the answers

What aspect of corporate behavior is CSR integrated into?

Corporate code of conduct. Signup and view all the answers

In stakeholder theory, what is linked to CSR according to Philips?

Organizational ethics. Signup and view all the answers

What is the primary concern regarding profit in business as outlined?

Profit should be compatible with social needs. Signup and view all the answers

What negative consequences can arise without adherence to moral values in business?

The rise of unethical practices. Signup and view all the answers

According to the discussion, which vice is particularly highlighted as morally unacceptable?

Greed. Signup and view all the answers

What characteristic of moral values is highlighted as being permanent?

They are universally applicable. Signup and view all the answers

How should managers approach the interests of stakeholders?

Stakeholders are of intrinsic value and should be considered. Signup and view all the answers

What does the term 'Stakeholder theory' imply about business operations?

Business must balance the interests of various stakeholders. Signup and view all the answers

What is considered generally morally wrong according to the implications of the text?

Engaging in fraudulent dealings Signup and view all the answers

What is the contrasting view presented regarding greed and its role in business?

Greed is beneficial as it fosters competition. Signup and view all the answers

According to Wu's study, what do business practitioners in China, Vietnam, and Indonesia primarily respect?

Environmental conservation Signup and view all the answers

What does the text suggest about individual perceptions of moral standards?

They are affected by sociocultural factors. Signup and view all the answers

What can result from allowing greed to influence corporate behavior?

Social responsibility becomes secondary. Signup and view all the answers

What is the role of human nature in the permanence of moral values?

It provides a constant foundation for moral values. Signup and view all the answers

What historical example is referenced to illustrate the consequences of disregarding moral values in business?

The Enron scandal. Signup and view all the answers

How do cultural attitudes change according to the text?

They shift with the passage of time. Signup and view all the answers

What conclusion can be drawn about global ethical principles?

They are universally recognized Signup and view all the answers

Which aspect of ethical standards is emphasized by suggesting they should be universally valid?

They should apply to all people and places. Signup and view all the answers

What is a key requirement for a law to be considered effective?

It must be promulgated, broadcasted, and disseminated. Signup and view all the answers

Which of the following statements is true regarding the common good and law?

The law is intended for the common good of society. Signup and view all the answers

Which feature makes a law morally acceptable?

It does not impose illegal or immoral actions. Signup and view all the answers

What short-term benefit may advocates of the utilitarian principle prioritize during the construction of a cement plant?

Increased employment opportunities Signup and view all the answers

Which aspect of utilitarianism is criticized in decisions involving basic rights?

Its inadequacy in addressing human rights Signup and view all the answers

What is considered a rare exception to obeying laws?

Civil disobedience. Signup and view all the answers

What may be a consequence of prioritizing beautification projects according to the utilitarian principle?

Violation of the rights of marginalized communities Signup and view all the answers

Which characteristic must an ordinance possess to be recognized as a law?

It must be morally and physically possible to comply with. Signup and view all the answers

What is the primary purpose of an ordinance according to the content?

To serve the common good and public interest Signup and view all the answers

How are the poor viewed in the distribution of benefits according to the utilitarian principle?

As deserving of a preferential option Signup and view all the answers

Which statement best describes the difference between ethics and law?

Ethics involves internal conscience, while law requires external evidence. Signup and view all the answers

What is a potential consequence for violating an ordinance?

Arrest, fines, or imprisonment. Signup and view all the answers

What happens to a law that is crafted solely for the welfare of a privileged few?

It loses its moral authority and should not become a law. Signup and view all the answers

Which of the following is NOT a characteristic associated with criminal law?

It urges immoral actions. Signup and view all the answers

What is a potential justification for government action in demolition of shanties for beautification projects?

To promote economic growth through tourism Signup and view all the answers

What dilemma can arise from a law that is impossible to enforce?

Lawmakers may need to reconsider or amend the law. Signup and view all the answers

According to the content, how should one respond to an unjust law?

By engaging in civil disobedience. Signup and view all the answers

Which group is often adversely affected by projects inspired by the utilitarian principle?

Indigenous tribes Signup and view all the answers

Which of the following is NOT recognized as a form of moral law?

Fair competition practices Signup and view all the answers

What is a major criticism of utilitarian approaches to government decision-making?

They can lead to unjust outcomes for disadvantaged groups Signup and view all the answers

What long-term benefit is often overlooked by advocates of the utilitarian principle in favor of short-term gains?

Environmental health Signup and view all the answers

What should the law primarily impose according to ethical considerations?

Universal values accepted by all Signup and view all the answers

In what way does ethics exceed the law?

It examines internal dispositions beyond observable actions. Signup and view all the answers

Which of the following accurately describes the relationship between law and ethics?

Law represents the minimum requirement of ethics. Signup and view all the answers

Study Notes

Business Ethics

Business ethics is a form of applied ethics that examines ethical rules, theories, and principles in a business context. It includes correct understanding of moral duties or obligations in commerce. It's a normative discipline; advocating specific ethical standards and applying them.
Business ethics are about ethical decision-making in accordance with moral concepts. This encompasses questions like fairness, honesty, and responsibility towards customers, environment, and employees.
Managers balance profits for shareholders with ethical conduct like paying taxes.
Ethical management is a foundation of corporate social responsibility (CSR). This covers preventing discrimination, sexual harassment, and ensuring fair treatment of workers based on age, gender, or religion.
Ethical management concerns intellectual property rights, like bioprospecting, biopiracy, copyright, patent, and trademark infringement, etc.
Aspects include ethical management in: sales, advertising, marketing, production, finance, accounting, and auditing.

Ethical Management in Specific Areas

Sales, advertising, and marketing: Addresses pricing, anti-trust, deceptive advertising, and ethical issues in marketing techniques.
Production: Focuses on ensuring products and processes do not harm consumers, the public, and the environment, including issues like mobile phone radiation, genetically modified food, and environmental hazards.
Finance, accounting, and auditing: Encompasses accurate financial reporting, ethics of executive compensation, manipulation of financial markets, bribery, fraud, and false reporting.

Business Ethics and CSR

Business ethics is a branch of professional ethics.
CSR (corporate social responsibility) is about corporate excellence, alongside ethical conduct of individual actors.
Business ethics is linked to CSR. It's a basis for corporate citizenship, including issues of preventing unethical behaviour, employee volunteerism, and social investment.
A CSR department should not be headed by a lawyer because ethical management goes beyond legal compliance, it should involve all employees.

Ethical Management and Profit

Profit, in its original meaning, is considered as "to make progress, to advance, to to move forward, making things better"
Economists define profit as the difference between the value of output and costs like labour, wages, property (rent), capital (interest), and raw materials.
Profit is related to social costs. A company's social costs can impact profit in a positive or negative way.
Companies should consider profits alongside societal and environmental factors.
Economic Value Added (EVA) is an after-tax profit, calculated by exceeding the average cost of capital. It's a measure of total cost for operational capital.

Shareholder Value Maximization

Shareholder value is the primary goal of a business, where stakeholders benefit by paying dividends.
Shareholders benefit when stock price goes up.
Valuations are about estimating the market value of assets.
This is done for various business transactions.
Value-based management (VBM) is required for shareholder value maximization.

Utilitarianism

Focuses on the result of an action rather than the motive.
Considers all foreseeable consequences, future costs and benefits.
Aims for greatest good for the greatest number.

Ethical Relativism

Moral values are relative to a given situation.
Ethical standards vary across cultures.
There are no absolute moral truths.

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Description

Explore the fundamental principles of business ethics in this quiz. Delve into ethical decision-making, corporate social responsibility, and the balance between profit and morality. Test your understanding of ethical management practices in a business context.