Chapter 2: Ethical Decision Making

Question 1

______ are generally defined as a set of values and standards that guide individual behaviour.

Answer 1

Ethics

Question 2

Ethics as a concept can be defined more specifically in three ways:

Answer 2

• The rules or standards governing behaviour of a particular group or profession
• A set of moral principles or values
• The study of the general nature of morals and the moral choices made by individuals

Question 3

___________ are the rules and habits of a society’s conduct that are established according to perceived standards of right and wrong.

Answer 3

Morals

Question 4

Moral principles are based on _______.

Answer 4

Reason

Question 5

_________ are the individual or cultural measures of the worth we place on certain ideas and behaviour.

Answer 5

Values

Question 6

________ are a set of moral principles that govern our behaviour

Answer 6

Ethics

Question 7

________ are based on values held by society.

Answer 7

Laws

Question 8

______, _______, and _______ are all values that are prized by professionals in the securities industry. The security industry justifies its right to be self-regulating on the basis of a claim to these core values.

Answer 8

Integrity, Trust, and Honesty

Question 9

Despite their ambiguous nature, _________ do have several common characteristics:

• They are beliefs, not facts.
• They are long lasting, not fleeting; however, they are not fixed or unchangeable.
• They guide your goals and behaviour on both a personal and corporate level.

Answer 9

Values

Question 10

The process of becoming aware of the values that drive your day-to-day decisions and behaviour is called

Answer 10

Values Clarification

Question 11

If you fail to develop a conscious understanding of your value system, many of your decisions will be influenced by what psychologist call

Answer 11

Unconscious Drives

Question 12

The two types of values:

Answer 12

Ends Values & Means Values

Question 13

_______ Values include a sense of accomplishment, service to people, security, a world at peace, a social recognition, which can be viewed as goals for which we strive

Answer 13

End Values

Question 14

______ Values, include ambition, openness, or competence, which can be viewed as actions we take to achieve our goals.

Answer 14

Means

Question 15

A ______________ is one in which end values and means values mutually reinforce and support each other.

Answer 15

Unified Value System

Question 16

In the financial services industry in particular, the ideal most firms strive for is a climate of ethical behaviour where trust can flourish. The term commonly used to describe this ethical climate is

Answer 16

Tone At The Top

Question 17

An _________ ________ of organizational values helps to harmonize the firm’s values with its day-to-day activities.

Answer 17

Explicit Statement

Question 18

The first question to ask in the values clarification process is

Answer 18

“What are my core value?”

Question 19

______ ______ states that there is no such thing as a universal moral principle that governs our behaviour. Everthing is relative, situational, negotiable, and personal.

Answer 19

Ethical Relativism

Question 20

One of the securities industry’s answers to ethical relativism is the concept of professional ____ __ ____ under which the client’s’ interests come before those of the RR’s

Answer 20

duty of care

Question 21

An _______ ______ arises when we are faced with two or more choices, and we must make an ethical decision. However, not all ethical decision making involves an ethical dilemma.

Answer 21

Ethical Dilemma

Question 22

Every ethical decision falls into one of two categories:

Answer 22

Right-versus-wrong issues

Right-versus-right issues

Question 23

An ______ ______ occurs when our central beliefs regarding the right way to act are present in two or more of the possible choices. In other words, when our core values are in conflict.

Answer 23

Ethical Dilemma

Question 24

The first step in solving a right-versus-right dilemma is

Answer 24

recognizing it as a dilemma

Question 25

Types of Ethical Dilemmas:

In a _____ vs ______ dilemma, the values of honesty or integrity clash with the values of commitment, personal responsibility, or promise keeping.

Answer 25

Truth-versus-Loyalty

Question 26

Types of Ethical Dilemmas:

In an _______ vs ________ dilemma, the rights and values of the few clash with the rights and values of many.

Answer 26

Individual-versus-Group

Question 27

Types of Ethical Dilemmas:

In a ________ vs _________ dilemma, the values of fairness, equity, and righteousness conflict with he values of compassion, empathy, and love.

Answer 27

Justice-Versus-Mercy

Question 28

Types of Ethical Dilemmas:

In a _________ vs __________ dilemma, a conflict arises when immediate needs or desires run counter to future goals or prospects. In other words, means values clash with ends values.

Answer 28

Short-term vs Long-term

Question 29

The three tests that can be used to determine whether you are dealing with a right-versus-wrong issue:

Answer 29

The legal test, the front page test, and the mom test

Question 30

In dealing with Ethical Dilemmas

The resolution principles consist of four modes of problem solving, as follows:

Answer 30

End- based ethical thinking
Rule-based ethical thinking
Social contract based ethical thinking
Personalistic based ethical thinking

Question 31

this resolution principle demands a cost benefit analysis to determine who will benefit and who will suffer. It asks that we look at our actions from the point of view of their consequences for various parties involved.

Answer 31

End-Based Ethical Thinking

Question 32

This resolution principle requires the decision maker to act the way they would want others to act in similar circumstances. It demands that any action taken be turned into a universal principle.

Answer 32

Rule-Based Ethical Thinking

Question 33

This resolution principle aims to create harmonious relationships within a group. The decision maker should ask how his or her actions affect the cohesiveness and the well being of the group.

Answer 33

Social Contract Ethical Thinking

Question 34

This resolution principle requires that you act in a way that is authentic to who you are and that follows the dictates of your conscience.

Answer 34

Personalistic Based Ethical Thinking

Question 35

The rules or standards governing the behaviour of a particular group or profession

Answer 35

Ethics

Question 36

These are the rules and habits of a society’s conduct that are established according to perceived standards of right and wrong

Answer 36

Morals

Question 37

The study of the general nature of morals and the moral choices made by individuals

Answer 37

Ethics

Question 38

Describe the 8 step process in Ethical Decision-Making:

Answer 38

1. Recognize that there is a moral issue.- Identify where the moral issue exists
2. Determine whose moral issue it is.- Determine who must take responsibility for making a decision and who must be accountable for the consequences
3. Gather the facts.-
   To whom do you owe a duty?
   Is there another way to follow the firm’s policy?
   Are you acting in a professional manner?
   Is the firm acting in a professional manner?
4. Test for right-versus-wrong issues.- Use the legal test, the front page test, and the Mom test
5. Test for right-versus-right paradigms.- Determine if there are core values in conflict
6. Apply the resolution principles.- End-based thinking, Rule-based thinking, personalistic based thinking, Social Contract based thinking.
7. Make the decision.- Make sure you review the steps
8. Reflect on the process.- The reflection stage is not a momentary step; it is one you should apply over time, especially when similar situations arise. How did you reach your final decision?

Question 39

Personal Goals are __________ values

Answer 39

Ends