Chapter 2 (Ethics and SR)

Question 1

Ethics

Answer 1

The study of right and wrong and of the morality of the choices individuals make

Question 2

Business Ethics

Answer 2

The application of moral standards to business situations

Question 3

Four Ethical Issues

Answer 3

1. Fairness and honesty
2. Organisational relationships
3. Conflict of interest
4. Communication

Question 4

Fairness and Honesty

Answer 4

Businesspeople are expected to refrain from knowingly deceiving, misrepresenting, or intimidating others

Question 5

Organisational relationships

Answer 5

A business person should put the welfare of others and that of the organisation above his or her own personal welfare

Question 6

Conflict of interest

Answer 6

Issues arise when a businessperson takes advantage of a situation for personal gain rather than for the employer’s interest

Question 7

Communications

Answer 7

false, misleading, or deceptive

Question 8

Factors affecting ethical behaviour

Answer 8

1. Individual Factors
2. Social Factors
3. Opportunity

Question 9

Individual Factors

Answer 9

Individual knowledge of an issue
Personal values
Personal goals

Question 10

Social Factors

Answer 10

Cultural norms
Coworkers
Significant others
Use of the Internet

Question 11

Opportunity

Answer 11

Presence of opportunity
Ethical codes
Enforcement

Question 12

Encouraging ethical behaviour

Answer 12

1. Government’s role in encouraging ethics
2. Trade association guidelines
3. Individual companies

Question 13

Individual Companies

Answer 13

1. Code of Ethics
2. Organisational Environment
3. Whistle Blowing

Question 14

Ethics in South Africa

Answer 14

No legislation.
The King report (currently King IV TM).
The Ethics Institute.
The South African Business Ethics Survey 2019.

Question 15

Social responsibility (SR)

Answer 15

The recognition that business activities have an impact on society and the consideration of that impact in business decision-making.

Question 16

Two View of SR

Answer 16

Economic Model
Socio-Economic Model

Question 17

Economic Model

Answer 17

Society will benefit most when business is left alone to produce and market profitable products that society needs.
Managerial attitude: SR is someone else’s job; the firm’s primary responsibility is to make a profit for its shareholders.
SR is the problem of the government, environmental groups, and charitable foundations.

Question 18

Socio-Economic Model

Answer 18

Businesses should emphasize not only profits but also the impact of their decisions on society.
The corporation is a creation of society and it must act as any responsible citizen would.
Firms take pride in their social responsibility obligations.
It is in the best interest of firms to take the initiative in social responsibility matters.

Question 19

Implementing a program of social responsibility

Answer 19

Funding
Program

Question 20

Program

Answer 20

Secure the commitment of top executives.
Plan the program.
Appoint top-level executive as director to implement the plan.
Prepare a social audit.
A comprehensive report – how the organisation has done and is doing with regard to social issues that affect it

Question 21

Funding

Answer 21

Pass program costs on to consumers as higher prices.
Absorb the program costs as a business expense.
Seek tax reductions or other incentives.