Chapter 4: Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking Flashcards
What is ethics?
Is the study of how people should act
Also refers to the values and beliefs related to the nature of human conduct
- Based on ethical standards or moral orientation
Business ethics: business conduct that seeks to balance the values of society with the goal of profitable operation
What does the Teleological ethical theory focus on?
Focus on the consequences of a decision
What does the Deontological ethical theory focus on?
Focus on decisions or actions alone
What is the basic Deontological view?
Certain rights are fundamental
Kantianism applies the categorical imperative: judge an action by applying it universally
Modern Rights Theories soften Kant’s absolute duty approach, yet protect fundamental rights (a strength of the theory)
What are the basic Teleological views?
- A society’s benefits and burdens should be allocated fairly among its members (Justice Theory)
- Maximize utility for society as a whole with cost-benefit analysis (Utilitarianism)
- Maximize the firm’s long-run profits within the limits of law (Profit Maximization)
John Rawls argued for the:
- Greatest Equal Liberty Principle: each person has an equal right to basic rights and liberties
- Difference Principle: inequalities acceptable only if elimination would harm the poorest class
What are business stakeholders?
Stakeholders are internal and external to the firm and include society as a whole
Stakeholders have their own interests in the particular business actions of a company
What is a non sequiturs and appeal to pity?
Non sequiturs: A conclusion that does not follow from the facts
- Result: they miss the point
Appeal for pity: Gains support for an argument by focusing on a victim’s predicament
What is a false analogy?
Arguing that since a set of facts are similar to another set of facts, the two are alike in other ways
- Company X and Company Y are both large
- Company X did activity 1, so Company Y should also do activity 1
What is circular reasoning?
If a person assumes the thing the person is trying to prove, circular reasoning occurs (begging the question)
- Example: We should tell the truth because lying is wrong
What is argumentum ad populum?
An emotional appeal to popular beliefs
- The bandwagon fallacy is essentially the same flaw in reasoning
What is an argument from authority?
Relies on an opinion because of the speaker’s status as an expert or position of authority rather than the quality of the speaker’s argument
What is a false cause?
If a speaker observes two events and concludes there is a causal link between them when there is no such link, a false cause fallacy has occured
What is the gambler’s fallacy?
Results from the mistaken belief that independent prior outcomes affect future outcomes
- Example: The chances of getting heads when flipping a coin do not improve with each flip
What is an appeal to tradition?
If a speaker declares that something should be done a certain way because that is the way it has been done in the past, the speaker has made an appeal to tradition
What is reductio ad absurdum?
Carries an argument to its logical end, but does not consider whether it is an inevitable or probable result
- Often called the “slippery slope fallacy”
- Example: Eating fast food causes weight gain. If you are overweight you will die of a heart attack. Fast food leads to heart attacks.
