Ethical Decision-Making Chapter

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson
Download our mobile app to listen on the go
Get App

Questions and Answers

What is one of the primary benefits of an explicit values statement within an organization?

  • Increases workforce productivity
  • Provides a framework for ethical decision-making (correct)
  • Enhances financial performance
  • Reduces employee turnover

How do clearly defined core values influence an individual's life?

  • They primarily affect social status
  • They impact ethical behavior perception (correct)
  • They eliminate the need for personal philosophies
  • They dictate financial success

What societal phenomenon reflects a shift toward valuing the individual over the group?

  • Altruism
  • Social conformity
  • Collectivism
  • Me generation (correct)

What role do societal values play in the moral development of individuals?

<p>They influence how individuals interpret ethical norms (A)</p> Signup and view all the answers

Which of the following statements regarding ethical relativism is true?

<p>It reflects a viewpoint that ethics are culturally determined (D)</p> Signup and view all the answers

What fundamental flaw does ethical relativism present?

<p>It argues that morality is inherently subjective and varies by context. (B)</p> Signup and view all the answers

What is a potential consequence of ethical relativism in the context of the securities industry?

<p>Individuals placing their own interests above clients’ needs. (B)</p> Signup and view all the answers

Which of the following is NOT a characteristic of ethical relativism?

<p>Acknowledgment of shared moral principles across cultures. (D)</p> Signup and view all the answers

What moral principles did Hans Küng identify as being commonly taught by major world religions?

<p>The impermissibility of lying, stealing, and killing. (B)</p> Signup and view all the answers

What mindset might an ethical relativist display when advising a client?

<p>Choosing actions based on personal values rather than client needs. (A)</p> Signup and view all the answers

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

<p>Recognize that there is a moral issue (A)</p> Signup and view all the answers

Why is determining whose moral issue it is critical in the ethical decision-making process?

<p>It ensures accountability for the decision (A)</p> Signup and view all the answers

In the third step of the ethical decision-making process, what type of questions should be asked?

<p>Fact-oriented questions about the situation (A)</p> Signup and view all the answers

What does 'testing for right-versus-right paradigms' involve?

<p>Evaluating conflicting values that both support a decision (C)</p> Signup and view all the answers

What is the primary productivity requirement for RRs at WMS?

<p>They need to keep only their top 90 clients to meet the firm's targets. (C)</p> Signup and view all the answers

Which factor complicates Murray's decision regarding his clients?

<p>The risk of losing loyal elderly clients if he reshuffles his account base. (A)</p> Signup and view all the answers

What potential future benefit does Murray see in maintaining accounts for his clients' children?

<p>These children may become lucrative clients in their own right. (A)</p> Signup and view all the answers

What ethical dilemma does Murray face regarding his elderly clients?

<p>He has to choose between loyalty and financial profitability. (B)</p> Signup and view all the answers

What outcome might result from Murray closing accounts belonging to the parents of his young clients?

<p>The parents may become offended and close their own accounts with him. (B)</p> Signup and view all the answers

Flashcards

Explicit Values Statement

A declaration that guides employee behavior and promotes ethics.

Core Values

Fundamental beliefs that guide personal decisions and behavior.

Ethical Decision-Making Framework

A set of principles to guide choices in moral dilemmas.

Ethical Relativism

The belief that morality changes based on cultural or societal context.

Signup and view all the flashcards

Moral Courage

The strength to act according to your values, despite pressure.

Signup and view all the flashcards

Ethical Decision-Making Process

An eight-step framework to resolve moral issues responsibly.

Signup and view all the flashcards

Recognize Moral Issue

Identify if an action poses a moral dilemma.

Signup and view all the flashcards

Determine Accountability

Identify who is responsible for the decision and its outcomes.

Signup and view all the flashcards

Gather Facts

Collect relevant information to inform the decision-making process.

Signup and view all the flashcards

Apply Resolution Principles

Use ethical principles to resolve conflicts in moral issues.

Signup and view all the flashcards

Productivity Requirement

The expected performance level RRs must achieve to maintain their position.

Signup and view all the flashcards

Ethical Dilemma

A complex situation where a person must choose between conflicting ethical principles.

Signup and view all the flashcards

Top 90 Clients

The most important clients that Murray must retain to meet his targets.

Signup and view all the flashcards

Elderly Clients

Clients who rely on Murray for personal financial advice and loyalty.

Signup and view all the flashcards

Day Traders

Clients who make frequent trades, generating commission, but depend on market activity.

Signup and view all the flashcards

Consequences of Ethical Relativism

It prioritizes individual needs over community needs, potentially leading to ethical violations.

Signup and view all the flashcards

Case in Securities Industry

Ethical relativism can cause individuals in power to act in self-interest, harming clients.

Signup and view all the flashcards

Universal Moral Principles

Core moral teachings common in many cultures: do not lie, steal, or kill.

Signup and view all the flashcards

Hans Küng's Findings

Research shows that all major religions share similar moral values and principles.

Signup and view all the flashcards

Study Notes

Ethical Decision-Making

  • This chapter investigates values, ethics, and the law.
  • Case studies illustrate ethical concepts.
  • Practical guidance regarding ethical decision-making is provided.

Learning Objectives

  • Define ethics and explain the difference between ethics and rules.
  • Explain the relationship between values, ethics, and the law.
  • Explain what values are and the importance of value awareness.
  • Explain what happens when values conflict.
  • Apply the ethical decision-making process.

Content Areas

  • Overview of Ethics
  • Relationships Between Values, Ethics, and the Law
  • Value Awareness
  • Ethical Dilemmas
  • Ethical Decision-Making Process

Key Terms

  • end values
  • ethical dilemma
  • ethical relativism
  • front page test
  • legal test
  • means values
  • Mom test
  • morals
  • unified value system
  • values

Introduction

  • The securities industry needs public trust and confidence.
  • Ethical conduct is important for Registered Representatives (RRs).
  • Ethics provide a foundation for industry rules and regulation.
  • Ethics guide evaluation of potential wrongdoings.

Overview of Ethics

  • Ethics are defined as a set of values and standards guiding behaviour.
  • Personal values drive a person's ethical standards.
  • Ethics can be defined as behaviours of a group or profession, as moral principles, or as the study of morals.
  • Morals are rules and habits of a society about right and wrong
  • Ethics and rules differ as regulations are followed through obligation but ethics are about moral principles.

Ethics Versus Rules

  • Ethical behaviour differs from following rules.
  • Rules are standards to be followed while ethics are moral judgments.
  • Ethical behaviour goes beyond compliance with rules.
  • Rules may be unclear in or contradictory in some situations.
  • Ethics are founded on theory and principles.

Relationships Between Values, Ethics, and the Law

  • Values are measures of worth for ideas and behaviours.
  • Values influence life goals and decisions.
  • Values show importance placed on people, money, work, leisure and family.
  • Ethical standards are based on values, those of the person, or those of society.
  • Laws are part of society's ethical stance.
  • Moral principles have basis in reason not authoritive bodies.

Value Awareness

  • Values like integrity and trust guide professional conduct.
  • Values affect industry reputation.
  • Values influence every decision.
  • Education, knowledge, and experience affect values.

Ethical Dilemmas

  • Ethical dilemmas happen when multiple choices are right.
  • Right versus Wrong: easy choices
  • Right Versus Right: difficult choices, core values are in conflict.
  • Ethical decision making needs a process.

Ethical Decision-Making Process

  • Recognize a moral issue
  • Determine who must make the decision (accountability).
  • Gather facts (identifying those involved / situation).
  • Test issues for right versus wrong
  • Test issues for right versus right dilemmas.
  • Apply resolution principles (ends based, rule, social contract, personal).
  • Make the decision.
  • Reflect on the process.

Types of Dilemmas

  • Truth versus loyalty
  • Individual versus group
  • Short term versus long term
  • Justice versus mercy

Case Study: Murray

  • Murray manages accounts, faces conflicts as he wants to keep many clients while meeting a new firm's account limit.
  • The case analyses conflicts between values and how those choices may impact clients.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

Ethical Decision-Making in the Securities Industry PDF

More Like This

Use Quizgecko on...
Browser
Open
Browser
Browser