Ch 2 Ethics & decision making

Question 1

What do Companies hire ethics officers to do?

Answer 1

Develop ethics policies
Listen to complaints of ethics violations
Investigate ethics abuses

Question 2

What is Sarbanes-Oxley Act (SOX) of 2002

Answer 2

Established “higher standards for corporate responsibility and governance”

Made by a Republican and a Democrat (during Bush)

SOX, new listing requirements by stock exchanges, governance standards, and new accounting rules have CREATED A NEW operating environment for business

SOX created the Public Company Accountability Oversight Board, reports to SEC.

Question 3

What is the trend in Contemporary business ethics?

Answer 3

Companies are self regulating with Ethics and compliance programs

Question 4

What are the changing values of ethics and society?

Answer 4

Changing values are changes in society, culture, race etc,

• need to find common principles
• leadership needs to also share values

Question 5

What is economic interdependence?

Answer 5

• All people are connected in the marketplace.
• business leaders decisions make an impact on all of us.
• Executives and managers manipulate corporate actions for their own benefit. Stockholders (owners) do not know it.

Question 6

How does the news media and internet effect ethics?

Answer 6

• Make visible the decisions executives/managers make.

- public can comment on the actions, are they fair, are the values reflected in those decisions compared to society’s?

Question 7

What is governments role in ethics?

Answer 7

When companies fail to live up to society’s expectations, the govt may step in.

• Companies have developed codes of ethics, Self regulation
• Federal law- reduce fines when a violation occurs b/c of companies self-police conduct.
• Businesses perceived as ethical and acting responsible, attract loyal customers, employees and investors.

Question 8

Sharing of moral values promotes

Answer 8

Social cooperation and is means of social control

Question 9

Morals involve …?

Answer 9

What we mean by our values of What is right and wrong

Question 10

Ethics is….

Answer 10

A formal system deciding of right and wrong …. with a philosophical system that justifies and necessitates rules of conduct
-examine morals, what is right and wrong and why

Question 11

End result of ethical examination…

Answer 11

Called: the good. It means being concerned about others. Moral goals and objectvies we pursue

Question 12

How are laws and ethics similar and different?

Answer 12

Similar: rules to guide conduct, social cooperation
Differences: legal is state. It enforces rules by civil and criminal sanctions.
Many ethical values not enforced by state, many laws do not address ethical concerns.
-Ethical, to observe rule is from within.
To observe the law , comes from outside yourself in form of sanctions

Question 13

An approach to ethics that affirms an absolute morality

Answer 13

Formalism- an act is right or wrong, always in every situation

• duty based view of ethics
• focused on worth of the individual (rights)
• ie Bill of Rights, Constitution

Question 14

What is categorical imperative?

Answer 14

Immanuel Kant- to be ethical to act with good intent. To be ethical requires Consistently acting with good intent.

• emphasis on consistency, Kant called the categorical imperative.
• You cannot say I can lie but others should not do (lie) this to me.

Question 15

What theory concerns itself with creating a just society given the many inequalities of wealth, knowledge, and social status?

Answer 15

Social Contract theory - first step, freeing ourselves of self-knowledge, John Rawls argues, improves our ability to evaluate the terms of a fair agreement ( contract) under which we enter society or join a corporation.
(origin in formalism)

Question 16

Another principal system of ethics that concerns itself with the moral consequences of actions.

Answer 16

Consequentialism - ie. lying is not unethical, it is the consequences or end result of lying that must be evaluated for their ethical implications.
-Focuses on common good.
does this action improve common good?

Question 17

The dominant form of consequentialism is…

Answer 17

utilitarianism - judges actions by usefulness, serve to increase the common good.
The ends justifies the means.

Question 18

What form of business ethics are reflected mostly today?

Answer 18

consequentialism - need to produce a profit.

Question 19

What is values-based management?

Answer 19

The emphasis is teaching ethical values to employees that enhance the profitability of the company.

Question 20

What is protestant ethics?

Answer 20

• promoted individual, hard work, success, and planning, but ultimately without moral values.
• the modern bureaucratic managerial system.
• promoting independence fueled commercial growth and our modern consumer society.
• Robert Jackall identified the ethics becoming the bureaucratic managerial system, goal is profit.
• a type of utilitarian consequentialism.

Question 21

Comparing the two ethical systems arriving to the same result

Answer 21

Formalism: test is, am I willing to permit others to act in this way?
Consequentialism: test is, Do the results promote the common good?

Question 22

What are the 5 major ethical rules that can be drawn from the Law?

Answer 22

1. respect for the liberty and rights of others
2. the importance of acting in good faith (intent)
3. the importance of exercising due care
4. the importance of honoring confidentiality (harmful consequences balanced against effort to avoid harm. conseq.
5. avoidance of conflicts of interest (serve two masters)

Question 23

What are professional codes of ethics?

Answer 23

ethical values that come from the development of group standards for ethical conduct. ie. marketing and accounting.
term is self-regulation

Question 24

what is code of conduct?

Answer 24

a business’s own code of ethics. can be detailed or short. -Has statements of shared ethical values

• sanctions for violation
• some are just a veneer to look good.

Question 25

What are the four sources of values for business ethics.

Answer 25

1. Legal regulation
2. Professional codes of ethics
3. Organizational codes of ethics
4. Individual values

Question 26

Five major ethical rules can be drawn from the law. These are:

Answer 26

• Respect for the liberty and rights of others. (privacy, equal employment opportunity, freedom of expression, due process of the law)
• The importance of acting in good faith. (intent)
• The importance of exercising due care. (torts - promotes common good, Harmful consequences balanced against effort to avoid harmful consequences)
• The importance of honoring confidentiality.
• Avoidance of conflicts of interest. (avoid serving 2 masters)

Question 27

What are ethical values that come from the development of group standards for ethical conduct?

Answer 27

Professional codes of ethics.

Question 28

The state will likely regulate professions if they do not do so themselves.. the terms is called?

Answer 28

self-regulation

Question 29

what are some obstacles to ethical corporate behavior?

Answer 29

1. Emphasis on profit
2. Effect of the group - Just following orders
3. Control of resources by Nonowners

Question 30

What are the steps to be taken to promote business ethics?

Answer 30

1. Involvement of Top management - how well an employee “fits in” with company management
2. Openness in Communication
3. consideration of All stakeholders (can be society)
   Stakeholder theory maintains that ethical corp. behavior depends on mangers who take into account all stakeholders who are impacted. Stakeholder theory includes and goes beyond the responsibilities of corporate governance, which focuses on the legal responsibilities of the mangers to society and investor-owners of the corp.