Chapter 10 Critical Legal Questions

Question 1

What are ethics- definition?

Answer 1

a system of moral principles, quality, or practice

Question 2

What do ethics study?

Answer 2

what is right and good for humans

Question 3

What do ethics deal with?

Answer 3

moral duty

Question 4

What 3 platitudes express a statement of the idea that “good ethics makes good business?”

Answer 4

(1) unethical companies rarely prosper
(2) honesty is best policy
(3) there can be substantial consequences to misbehaving as a corporation or individual

Question 5

Which makes more money- bad businesses or good businesses?

Answer 5

good business

Question 6

What 2 things are wrong with the assertion that “good ethics make good business”?

Answer 6

(1) it often isn’t true

(2) it has nothing to do with ethics

Question 7

What are 5 consequences of the idea that “unethical behavior breeds cynicism”?

Answer 7

(1) we don’t trust the person who behaved badly
(2) lies weaken our confidence in other people besides the liar
(3) every act of shirking affects the whole group
(4) influence of a bad example lowers the morale of an entire community
(5) when a community gets a reputation for being unethical, other people don’t want to do business with them.

Question 8

If people behave differently than they know to be “right” what is it psychologists say they would be prone to suffer?

Answer 8

Cognitive Dissonance

Question 9

What is Cognitive Dissonance

Answer 9

people behaving differently than they know to be “right”

Question 10

What does the maintenance of high ethical standards measure?

Answer 10

our sympath with our fellow humsn, an affirmation that we exist here to serve more than ourselves, that there is a larger purpose than us

Question 11

Who is Milton Freidman?

Answer 11

famous economist for the University of Chicago

Question 12

What does Milton Freidman equate with economic freedom?

Answer 12

political freedom

Question 13

What does Friedman think is a “fundamental misconception of the character of a free economy?”

Answer 13

corporate officials and labor leaders have a “social responsibility” that goes beyond serving the interest of their stockholders or their members

Question 14

What does Freidman state is the “one and only social responsibility of business”?

Answer 14

use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game

Question 15

What is the “nub” of Friedman’s assertion?

Answer 15

the responsibility of businesses is to make as much money for their stockholders as possible as long as it’s legal

Question 16

What objection is there to Friedman’s idea?

Answer 16

it has been tried and found that people want a government interaction

Question 17

What is the problem with the assertion that “the business of business is money?”

Answer 17

it ignores other aspects of good business and focuses solely on making money

Question 18

What 3 things does business affect?

Answer 18

(1) the economy
(2) the society
(3) the environment

Question 19

What does failure to take all 3 affects of business lead to?

Answer 19

dislocations

Question 20

When the goal of a business is to make as much money as possible, who is the main interested party?

Answer 20

shareholder

Question 21

Who is it possible to recognize as an interested party when the goal of business is to make as much money as possible?

Answer 21

stakeholders

Question 22

What does a company using the stakeholder model consider shareholders?

Answer 22

society, workers, customers, competitors

Question 23

What type of profit do such companies seek to make?

Answer 23

satisfactory profit- profit in the short term

Question 24

What are the 2 critiques of the Stakeholder Model from the political left?

Answer 24

it doesn’t go far enough, it doesn’t acknowledge many stockholders and fails to compel the business to honor those interests

Question 25

Who is Abraham Maslow?

Answer 25

American psychologist

Question 26

What concept did Abraham Maslow develop?

Answer 26

the concept of “hierarchy needs

Question 27

What are the 5 levels of the Hierarchy of Needs?

Answer 27

(1) physiological need
(2) safety needs
(3) social needs
(4) esteem needs
(5) self-actualization

Question 28

What is capitalistic business generally very happy to reinforce?

Answer 28

society’s belief that consumption is a good thing, even a patriotic thing

Question 29

What is the “construction of social reality” that business reinforces?

Answer 29

mechanism by which business constricts social reality and projects itself into our lives (advertising)

Question 30

What is broadly protected by the First Amendment?

Answer 30

advertising and commercial speech

Question 31

What did the 20th Century bring about in the US?

Answer 31

“a new social order in the US based on the principle of national commercial exchange”

(everything matters from a money’s point of view)

Question 32

What is the first necessary thing to establish and maintain an ethical standard of business?

Answer 32

determine what your ethical standards are

Question 33

What must top management set?

Answer 33

an example for the firm

Question 34

What are 3 ways ethical standards can be communicated to employees?

Answer 34

(1) code of ethics
(2) general principles at employee orientation and staff meetings
(3) by example