Chapter 2 - Business Ethics and Social Responsibility Flashcards
Define Ethics
The study of how people ought to act
What is the difference between ethics and the law?
The law dictates how people MUST behave, ethics dictates how people SHOULD behave.
What are Utilitarian Ethics?
When a correct decision was one that tended to maximize overall happiness and minimize overall pain. Risk management and cost-benefit analysis are examples of utilitarian business practices.
The needs of many outweigh the needs of the few or one
What are Deontological Ethics?
The thinking that results are not as important as the reason for which a decision was made.
The ends do not justify the means.
What is the Shareholder Model of ethics for businesses?
- The company must comply with the law
- They must make as much money as possible for the shareholders.
What is the Stakeholder Model of ethics for businesses?
That corporations should take care of more than shareholders alone. Shareholders aren’t ignored and included as one of the groups of stakeholders in a firm. But the company also must look out for (among others) its employees, its customers, and the communities in which they operate. It may even be that companies have an obligation to broader interests such as “society” or “the environment”
Define outsourcing
Cutting jobs at home and relocating them to another country.
What are the four reasons to act ethically?
- Society as a whole benefits from ethical behavior
- People feel better when they behave ethically
- Unethical behavior can be very costly
- Ethical behavior is more likely to pay off.
