Chapter 9 - Business ethics, social responsibility and good corporate citizenship

Question 1

The meaning of ethics

What are ethics in a business context?

Answer 1

Ethics are rules and principles of behavior that help in deciding between right and wrong, guiding organisational actions from the mission level.

Question 2

The meaning of ethics

What areas do business ethics cover?

Answer 2

Business ethics cover macro issues (e.g., pollution reduction, responsible raw material use, corporate reporting) and micro issues (e.g., fair pay, management practices, individual behavior).

Question 3

The meaning of ethics

When are ethical decisions made in business?

Answer 3

Ethical decisions are made whenever a decision impacts someone else; business ethics often involve multiple perspectives without a single correct answer.

Question 4

The meaning of ethics

Define ‘integrity’ in a business ethics context.

Answer 4

Integrity is the quality of being honest with strong moral principles, central to ethical behavior and expected in professional conduct.

Question 5

The meaning of ethics

What is ‘reputation’ and how is it affected by ethics?

Answer 5

Reputation is the beliefs or opinions generally held about an organisation or person, significantly impacted by ethical or unethical actions and decisions.

Question 6

The meaning of ethics

Give an example of how ethical decisions can affect reputation.

Answer 6

A multinational company may outsource production to reduce costs but face reputational damage if the media expose child labor in its supply chain.

Question 7

The meaning of ethics

What challenges do organisations face with ethical codes?

Answer 7

Ethical codes are continually evolving and vary across cultures, making it challenging for organisations to consistently align their practices with shifting ethical standards.

Question 8

Business ethics in the development of
strategy

What are the two key core dimensions of business ethics identified by Chryssides and Kaler?

Answer 8

The two core dimensions are principles and situation.

Question 9

Business ethics in the development of
strategy

List the five views of business ethics identified by Chryssides and Kaler.

Answer 9

Business is business: Profit maximisation outweighs ethical considerations.

Act consistently with the law: Ethical decisions should be based on legal requirements.

Good ethics mean good business: Ethical behaviour generates positive stakeholder perceptions.

Conventional morality: Business must operate within society’s prevailing moral codes.

Universal morality: Business should adhere to the same standards as in private life.

Question 10

Business ethics in the development of
strategy

Why is it important to remember that businesses are composed of individuals when considering business ethics?

Answer 10

Individuals implement strategy and help achieve business objectives, so ethical decision-making starts with personal responsibility and behavior.

Question 11

Business ethics in the development of
strategy

What is the purpose of a code of ethics in a business?

Answer 11

A code of ethics provides guidelines for handling ethical dilemmas in relationships with co-workers, management, clients, and partners, protecting the company’s reputation.

Question 12

Business ethics in the development of
strategy

What can happen if a code of ethics is not widely known and followed within an organisation?

Answer 12

If not integrated into company culture, a code of ethics can become ineffective and fail to guide employees in decision-making.

Question 13

Corporate social responsibility as part of strategy

What is the focus of corporate social responsibility (CSR)?

Answer 13

CSR focuses on the approach organisations take to benefit society in general, rather than specific stakeholders.

Question 14

Corporate social responsibility as part of strategy

What are the five principles that companies should apply according to Coyle (2010)?

Answer 14

Treat employees fairly and with respect.
Operate in an ethical way and with integrity.
Respect basic human rights.
Sustain the environment for future generations.
Be a responsible neighbour in the community.

Question 15

Corporate social responsibility as part of strategy

What is the key point to remember about CSR in relation to business viability?

Answer 15

While CSR covers ethical, social, and environmental issues, businesses must remain viable and profitable.

Question 16

Corporate social responsibility as part of strategy

What are the four levels in Carroll’s pyramid of CSR?

Answer 16

Philanthropic responsibilities: Going beyond society’s expectations and contributing resources.
Ethical responsibilities: Abiding by societal ethical norms.
Legal responsibilities: Complying with legislation.
Economic responsibilities: Ensuring profitability.

Question 17

Corporate social responsibility as part of strategy

What are the four basic types of corporate social responsibility stances?

Answer 17

Laissez-faire view: Companies comply with the law but have no obligation beyond that.

Enlightened self-interest: Corporate image is enhanced by taking wider responsibilities.

Forum for stakeholder interaction: Recognising stakeholders’ legitimacy and going beyond profit generation.

Shaper of society: Pursuing social and market change with visionary leadership and collaboration.

Question 18

Corporate social responsibility as part of strategy

What is the purpose of social auditing in CSR?

Answer 18

Social auditing ensures that CSR issues are regularly reviewed within organisations.

Question 19

Corporate social responsibility as part of strategy

What are some internal issues covered in CSR auditing?

Answer 19

Employee welfare, such as medical care and extended sickness leave.
Working conditions, including safety standards and social clubs.
Job design to increase worker satisfaction.

Question 20

Corporate social responsibility as part of strategy

What are some external issues covered in CSR auditing?

Answer 20

Environmental issues, such as reducing pollution beyond legal limits.
Marketing decisions, including ethical advertising standards.
Fair terms of trade with suppliers and community activity like sponsoring local events.

Question 21

Sustainability as part of strategy

What are the two main categories addressed by sustainability in business?

Answer 21

The effect business has on the environment.
The effect business has on society.

Question 22

Sustainability as part of strategy
Why is sustainability important in long-term business strategy?

Answer 22

Sustainability helps businesses consider their future impact on the environment and society, ensuring long-term viability and growth.

Question 23

Sustainability as part of strategy

What are the benefits of incorporating sustainability into strategic thinking?

Answer 23

Business protection: Identifying key risks to the business and stakeholders.

Business operation: Recognising costs (both indirect and direct).

Business growth: Enabling greater consideration of new opportunities.

Business reputation: Enhancing reputation as a business with a sustainable CSR approach.

Question 24

The role of individuals and managers

At what levels should ethical issues be considered?

Answer 24

Ethical issues must be considered at both the individual level and the corporate level.

Question 25

The role of individuals and managers

What challenges do managers face in dealing with ethical issues?

Answer 25

Managers face dilemmas as they balance individual and corporate perspectives on ethics, with limitations on their control over personal behaviors.

Question 26

The role of individuals and managers

What does Hamel (2012) suggest about values-based leadership?

Answer 26

Hamel suggests that while managers can expect obedience, diligence, and expertise from employees, they can inspire initiative, creativity, and passion, but cannot command them.