Ethics and Regulation

Question 1

The four key responsibilities of businesses

Answer 1

1. Economic
   
   2. Legal
   3. Ethical
   4. Discretionary

Question 2

Economic

Answer 2

• Business entities have an economic responsibility to;
○ provide goods and services at a fair price
○ repay their creditors
○ to seek a reasonable return for their shareholders

Question 3

Legal

Answer 3

• Business entities have a legal responsibility to;

○ Uphold the laws and regulations of government

Question 4

Ethical

Answer 4

Businesses are obliged to act in the way expected of them by society

Question 5

Discretionary

Answer 5

• Discretionary responsibilities are carried out voluntarily
○ Can become legal or regulatory responsibilities over time as expectations change

Example: Dismissing women workers who married was acceptable in the 1950s but now discrimination against women is legally punishable