Chapter 15 - MC Related Ethical Issues

Question 1

What is Utilitarianism?

Answer 1

The rightness of actions is based upon the consequences. An action is morally right if it maximises the total good in the world; that is, if it produces a net good.

Question 2

Limitations of Utilitarianism?

Answer 2

1. How does one quantify net good? Many of the benefits of actions are hard to measure eg job satisfaction, stress etc.
2. This reasoning makes it east to sacrifice the welfare of a few individuals for the benefit of others. Eg Ford Motor Company lax safety checks estimated only 180 people would die so it would not be cost effective.

Question 3

What is the rights and duties model?

Answer 3

Every individual has certain moral entitlements in virtue of being human. Commonly cited: rights to dignity, respect and freedom. Every right that someone has creates a duty for someone else to provide.

Question 4

Limitations of rights and duties model?

Answer 4

Difficult to agree as to what rights different groups or individuals should have.

2. Rights can proliferation (increase/multiply)
3. They can also conflict. Do smokers have the right to smoke, or do others have the right to be free from second hand smoke?

Question 5

What is the justice/fairness model?

Answer 5

People should be treated the same except when they are different in relevant ways. Processes, not necessarily outcomes should be fair.

Question 6

Limitations of the justice/fairness model?

Answer 6

1. Determining these differences can be difficult.

2. Easy to ignore effects on both aggregate social welfare and specific individuals.

Question 7

What is the virtues model?

Answer 7

Integrity, loyalty, and courage. Individuals with integrity have the intent to do what is ethically right without regard to self-interest. Loyalty is faithfulness to one’s allegiances. Courage is the strength to stand firm in the face of difficulty or pressure.

Question 8

Limitations of virtue based approaches?

Answer 8

List of possible virtues is long - not always obvious which virtues should be applied in a given setting.
In addition, some characteristics considered virtuous can actually impede ethical behaviour. Courage is something essential to commit fraud.

Question 9

Steps to analysing ethical issues: 6

Answer 9

1. Clarify the facts
2. Define the ethical issue
3. Specify the alternatives
4. Compare values and alternatives
5. Assess the consequences
6. Make the decision

Question 10

What is budget slack?

Answer 10

Manipulation of budgeting information in order to achieve targets thus mitigating unearned rewards. This can demotivate staff, particularly if they have already achieved the targets and the reward is guaranteed.
On the other hand, it can be argued that slack budgeting is a good thing as it protects managers against an uncertain future.

Question 11

“Tone at the top”

Answer 11

Top management leading by example top down