Chapter 42: Ethics and Social Responsibility of Business

Question 1

ethics and the law

Answer 1

the relationship between ethics and the law. sometimes the rule of law and the rule of ethics demand the same response by a person confronted with a problem, while in other situations the law may permit an act that is ethically wrong.

Question 2

ethics

Answer 2

a set of moral principles or values that governs the conduct of an individual or a group.

Question 3

ethical fundementalism

Answer 3

a theory of ethics that says a person looks to an outside source for ethical rules or commands.

Question 4

utilitarianism

Answer 4

a theory of ethics that dictates that people must choose the action or follow the rile that provides the greatest good for society

Question 5

kantian ethics/duty ethics/deontological ethics

Answer 5

a theory of ethics that says that people owe moral duties that are based on universal rules, such as the cetagorical imperative “do unto others as you would have them do unto you.”

Question 6

section 43 of the lanham act

Answer 6

a section of a federal statute that alows a competitor to sue another competitor for engaging in unfair competition, including false advertising and misleading labeling.

Question 7

rawls’s social justice theory/social contract theory

Answer 7

a theory of ethics that asserts that fairness is the essence of justice. the theory proffers that each person is presumed to have entered into a social contract with all others in society to obey moral rules that are necessary for people to live in peace and harmony.

Question 8

ethical relativism

Answer 8

a theory of ethics that holds that individuals must decide what is ethical, based on their own feelings about what is right and wrong.

Question 9

social responsibility of business

Answer 9

a requirement that corporations and businesses act with awareness of the consequences and impact that their decisions will have on others.

Question 10

maximize profits

Answer 10

a theory of social responsibility that says a corporation owes a duty to take actions that maximize profits for shareholders.

Question 11

moral minimum

Answer 11

a theory of social responsibility that says a corporation’s duty is to make a profit while avoiding causing harm to others.

Question 12

sarbanes-oxley act (SOX)

Answer 12

a federal statute enacted by congress to:
-improve corporate governance
-bring more transparency to securities markets
-eliminate conflicts of interes that previously existed in the securities industry
-promote business ethics
-impose civil and criminal penalties for violations of the act

Question 13

section 406 of the sarbanes-oxley act

Answer 13

a section of a federal statute that requires a public company to disclose whether it has adopted a code of ethics for senior financial officers, including its principal financial officer and principal accounting officer.

Question 14

stakeholder interest

Answer 14

a theory of social responsibility that says a corporation must consider the effects its actions have on persons other than its own stockholders.

Question 15

corporate citizenship

Answer 15

a theory of social responsibility that says a business has a responsibility to do good.

Question 16

benefit corporation/b corp

Answer 16

a coproration that requires directors and officers to make decisions to accomplish general-public benefits and stipulated specific public benefit purposes stated in the articles of incorporation and to consider stakeholders other than shareholders, such as employees, customers, suppliers, and the community, when making corporate decisions