BMAL-590 Business Ethnics
The difference between an ordinary decision and an ethical one: - CORRECT
ANSWER-accepted rules or standard practices are not clearly applicable, and the
decision maker must weigh values and diverging perspectives in a situation which is not
quite the same as any he or she has faced previously.
Values and judgments play a critical role in the making of ethical decisions, as does
recognizing how different groups may be impacted by a decision.
Business ethics - CORRECT ANSWER-comprises principles and standards that guide
behavior in the world of business.
Investors, employees, customers, interest groups, the legal system, and the community
often determine whether a specific action is right or wrong -- ethical or unethical.
Some special aspects must be considered when applying ethics to business:
Businesses must earn a profit to survive. Businesses must balance their desires for
profits against the needs and desires of society, and maintaining this balance often
requires compromises or tradeoffs.
Reports of unethical activities: - CORRECT ANSWER-accounting fraud, insider trading,
falsifying documents, deceptive advertising, defective products, bribery, abusive
behavior, harassment, and employee theft regularly appear in the media
Many examples of unethical activities go unreported and/or undetected. But many do
come to light, with devastating implications for the individuals involved, and potentially
impacting many other innocent individuals.
Organizations that develop a culture where ethical considerations are part of every
decision are more likely to make a positive impact on society, and less likely to be
embroiled in scandals.
Reasons for Studying Business Ethics: - CORRECT ANSWER-1. an individual's
personal values and morality are only one factor in the ethical decision-making process
2. being a good person and having sound personal ethics may not be sufficient to
handle the ethical issues that arise in a business organization
3. business strategy decisions involve complex and detailed discussions, and a high
level of personal moral development may not prevent an individual from violating the
law in an organizational context
,4. the values people learn from family, religion, and school may not provide specific
guidelines for complex business decisions.
Studying ethics helps business people begin to identify ethical issues, recognize the
approaches available to resolve them, learn about the ethical decision-making process
and ways to promote ethical behavior, and begin to understand how to cope with
conflicts between personal, organizational, and societal values.
Historic Tensions of business ethics: - CORRECT ANSWER-With the development of
big businesses, large mining operations, and expansive agricultural firms, along with the
"Industrial Revolution," society struggled to determine the appropriate role of these large
organizations. Unions developed to ensure workers' interests and well-being were
considered, and the idea of a living wage that was sufficient for education, recreation,
health, and retirement began to take hold.
Industrialization also led to concerns about pollution and the environment
Consumer protection became increasingly important, with legislation in many countries
that sought to safeguard consumers from potentially dangerous products.
The sense that corporations could become too large, and have too much power over
consumers, workers, and governments led to the enactment of anti-trust legislation that
split up some large firms, and prevented others from becoming too powerful.
social responsibility - CORRECT ANSWER-the duty of a business to contribute to the
well-being of a community
an organization's obligation to maximize its positive impact on stakeholders and to
minimize its negative impact.
Milton Friedman - CORRECT ANSWER-He was a famous American economist. He
strongly promoted the idea of free trade and condemned government regulation and
socialism.
argued persuasively that the business of business was business, and that the primary
role of a business was to maximize profits within the rules dictated by governments and
society.
He and others argued that companies should make charitable contributions and engage
in social issues only if these actions also contributed to the companies' reputation,
ability to recruit qualified employees, or other factors that ultimately contributed to profits
and shareholder value.
, In society, he argued, there are other entities such as governments and non-profit
organizations that bear the primary social responsibilities of society, and are best
equipped to deal with social issues.
Utilitarian approach - CORRECT ANSWER-ethical philosophy that advocates a decision
that provides the most good or the least harm
Hence a community might decide to build a road that will improve the flow of traffic for
many citizens, even if that means that some individuals may be forced to sell their land,
homes, or farms to allow for the road.
Similarly, a company should develop an employee benefits package that serves the
interests of most employees, although some employees would prefer a slightly different
package.
Moral Rights approach - CORRECT ANSWER-guided by respect for the fundamental
rights of human beings
suggests that every human being has some fundamental rights that must always be
protected, and that no decision should infringe upon those fundamental rights.
Employees should not be expected, for example, to perform dangerous operations
unless they are properly trained and are fully aware of the risks (e.g., firefighters).
Justice approach - CORRECT ANSWER-moral decisions must be based on standards
of equity, fairness, and impartiality
Justice can apply to both the outcomes of decisions (are differences in salaries paid to
different employees justified by differences in the work they do) as well as the
procedures by which decisions are made (was every applicant for a job evaluated using
the same criteria). The first is referred to as distributive justice, while the second is
procedural justice.
golden rule - CORRECT ANSWER-Treat others the way you want to be treated
Sarbanes-Oxley Act - CORRECT ANSWER-The law made securities fraud a criminal
offense and stiffened penalties for corporate fraud.
It created an accounting oversight board that requires corporations to establish codes of
ethics for financial reporting and to develop greater transparency in financial reports to
investors and other interested parties.
It required top executives to sign off on their firm's financial reports, and risk fines and
long jail sentences if they misrepresented their company's financial position.
The difference between an ordinary decision and an ethical one: - CORRECT
ANSWER-accepted rules or standard practices are not clearly applicable, and the
decision maker must weigh values and diverging perspectives in a situation which is not
quite the same as any he or she has faced previously.
Values and judgments play a critical role in the making of ethical decisions, as does
recognizing how different groups may be impacted by a decision.
Business ethics - CORRECT ANSWER-comprises principles and standards that guide
behavior in the world of business.
Investors, employees, customers, interest groups, the legal system, and the community
often determine whether a specific action is right or wrong -- ethical or unethical.
Some special aspects must be considered when applying ethics to business:
Businesses must earn a profit to survive. Businesses must balance their desires for
profits against the needs and desires of society, and maintaining this balance often
requires compromises or tradeoffs.
Reports of unethical activities: - CORRECT ANSWER-accounting fraud, insider trading,
falsifying documents, deceptive advertising, defective products, bribery, abusive
behavior, harassment, and employee theft regularly appear in the media
Many examples of unethical activities go unreported and/or undetected. But many do
come to light, with devastating implications for the individuals involved, and potentially
impacting many other innocent individuals.
Organizations that develop a culture where ethical considerations are part of every
decision are more likely to make a positive impact on society, and less likely to be
embroiled in scandals.
Reasons for Studying Business Ethics: - CORRECT ANSWER-1. an individual's
personal values and morality are only one factor in the ethical decision-making process
2. being a good person and having sound personal ethics may not be sufficient to
handle the ethical issues that arise in a business organization
3. business strategy decisions involve complex and detailed discussions, and a high
level of personal moral development may not prevent an individual from violating the
law in an organizational context
,4. the values people learn from family, religion, and school may not provide specific
guidelines for complex business decisions.
Studying ethics helps business people begin to identify ethical issues, recognize the
approaches available to resolve them, learn about the ethical decision-making process
and ways to promote ethical behavior, and begin to understand how to cope with
conflicts between personal, organizational, and societal values.
Historic Tensions of business ethics: - CORRECT ANSWER-With the development of
big businesses, large mining operations, and expansive agricultural firms, along with the
"Industrial Revolution," society struggled to determine the appropriate role of these large
organizations. Unions developed to ensure workers' interests and well-being were
considered, and the idea of a living wage that was sufficient for education, recreation,
health, and retirement began to take hold.
Industrialization also led to concerns about pollution and the environment
Consumer protection became increasingly important, with legislation in many countries
that sought to safeguard consumers from potentially dangerous products.
The sense that corporations could become too large, and have too much power over
consumers, workers, and governments led to the enactment of anti-trust legislation that
split up some large firms, and prevented others from becoming too powerful.
social responsibility - CORRECT ANSWER-the duty of a business to contribute to the
well-being of a community
an organization's obligation to maximize its positive impact on stakeholders and to
minimize its negative impact.
Milton Friedman - CORRECT ANSWER-He was a famous American economist. He
strongly promoted the idea of free trade and condemned government regulation and
socialism.
argued persuasively that the business of business was business, and that the primary
role of a business was to maximize profits within the rules dictated by governments and
society.
He and others argued that companies should make charitable contributions and engage
in social issues only if these actions also contributed to the companies' reputation,
ability to recruit qualified employees, or other factors that ultimately contributed to profits
and shareholder value.
, In society, he argued, there are other entities such as governments and non-profit
organizations that bear the primary social responsibilities of society, and are best
equipped to deal with social issues.
Utilitarian approach - CORRECT ANSWER-ethical philosophy that advocates a decision
that provides the most good or the least harm
Hence a community might decide to build a road that will improve the flow of traffic for
many citizens, even if that means that some individuals may be forced to sell their land,
homes, or farms to allow for the road.
Similarly, a company should develop an employee benefits package that serves the
interests of most employees, although some employees would prefer a slightly different
package.
Moral Rights approach - CORRECT ANSWER-guided by respect for the fundamental
rights of human beings
suggests that every human being has some fundamental rights that must always be
protected, and that no decision should infringe upon those fundamental rights.
Employees should not be expected, for example, to perform dangerous operations
unless they are properly trained and are fully aware of the risks (e.g., firefighters).
Justice approach - CORRECT ANSWER-moral decisions must be based on standards
of equity, fairness, and impartiality
Justice can apply to both the outcomes of decisions (are differences in salaries paid to
different employees justified by differences in the work they do) as well as the
procedures by which decisions are made (was every applicant for a job evaluated using
the same criteria). The first is referred to as distributive justice, while the second is
procedural justice.
golden rule - CORRECT ANSWER-Treat others the way you want to be treated
Sarbanes-Oxley Act - CORRECT ANSWER-The law made securities fraud a criminal
offense and stiffened penalties for corporate fraud.
It created an accounting oversight board that requires corporations to establish codes of
ethics for financial reporting and to develop greater transparency in financial reports to
investors and other interested parties.
It required top executives to sign off on their firm's financial reports, and risk fines and
long jail sentences if they misrepresented their company's financial position.
