Chapter 2 - Business Ethics and CSR

Question 1

Business environment

Answer 1

(ccgeo)
consumers
-community
government 
employees
owners

Question 2

The need for oversight

Answer 2

Adam Smith

Question 3

The Regulatory challenge

Answer 3

Global commerce presents gaps in regulatory structures

Question 4

The Nascent Regulatory Infrastructure

Answer 4

Composed of corporations, nation stats, and citizens

Question 5

The Social Context

Answer 5

Business to and from Society have an understanding of each other, however society oe societal Stakeholder groups now the Rule of the game, (ie impose laws and regulations)

Question 6

The Social environment

Answer 6

1. rising expectations amplifies social problems
   - leads to gaps between social expectations and social conditions/realities
2. affluence and education
   - higher expectations of major institutions
   - growing public awareness through media and the internet

Question 7

The social environment raises three questions…

Answer 7

entitlement, rights, and fairness

Question 8

Four components of the CSR

Answer 8

1. Economic (required)
2. Legal (required)
3. Ethical (expected)
4. Philanthropic (expected/desired)

Question 9

Arguments against CSR

Answer 9

Classical economics, diluted business purpose, business not equipped, too much power already, global competitveness

Question 10

Argument for CSR

Answer 10

Enlightened self-interest, warding gov regulations, resources available, proaction is less costly than reaction, the public strongly agrees with CSR

Question 11

Benefits of CSR

Answer 11

1. Employee relations
2. customer relationships
3. business performances
4. enhanced market efforts
5. influence and education

Question 12

Social expectation vs business social performance

Answer 12

Society had a higher expectation of business performance than business’s actual social performance

Question 13

Allegations Against Business

Answer 13

1. Not enough concern for consumers
2. Cares little about the deteriorating social order
3. unsophisticated understanding of ethical behaviour
4. indifferent to the problem of the powerless and non-economic stakeholders
5. claims have generated many pleas for companies to be socially responsible

Question 14

Basic meaning of CSR

Answer 14

• requires businesses to focus beyond economic and legal obligations…. corporate leaders much consider their actions in term of the whole social system, and how their actions will effect everyone in that system

Question 15

The Stakeholder concept, what is a stake

Answer 15

• an interest ( affected or affected by) or a share in an undertaking

Question 16

Stake can be categorized as what 3 things?

Answer 16

an interest, a right (legal and moral) and ownership

Question 17

Who are business stakeholder?

Answer 17

Stakeholders, market stakeholder, and non-market stakeholders

Question 18

Define Stakeholders

Answer 18

Individuals and groups of people that have an interest or expectation about a businesses operations and impact of those operations on themselves and others

Question 19

Define Market Stakeholder

Answer 19

Those who have a financial stake in the organization and its success

Question 20

Define non-market stakeholder

Answer 20

Those who have a public or non-financial interest in the organization

Question 21

How to decide who gets business attention?

Answer 21

1. Legitimacy - the validity of the stakeholder’s claim in the stake
2. Power- the ability and capacity of the stakeholder to produce an effect
3. Urgency - the degree in which the stakeholders claim needs immediate attention

Question 22

2 bases for stakeholder management

Answer 22

1. Instrumental base - it is in the interest of shareholders for managers to include all stakeholder in their business operation (more profitable , growth and sustainability
2. normative base - Shareholders have a right to be a part of all decisions that affect them, managers have a fiduciary duty to serve stakeholder, and the objectivity of the firm should be to promote the interests of everyone and not just shareholder

Question 23

FADS: Creating Shared Value

Answer 23

1. It’s unoriginal
2. ignored tension between social and economic goals
3. it’s pollyanish about business compliance

Question 24

4 Ethical Foundations

Answer 24

1. Duty - ensure the protection of human dignity while acting in a consistant and impartial way
2. Virtue - ensures that managers act in such a way that follow integrity, courage, and humility
3. Rights - right to property law and human right laws
4. Utility - results in economic, social, and environmental benefits