Ethics and Social Responsibility

Question 1

Ethical dilemma

Answer 1

quandary people find themselves in when they have to
decide if they should act in a way that might help another person or group even though doing so might go against their own self-interest.

Question 2

What are ethics

Answer 2

inner guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave.

Question 3

What’s the problem when dealing with ethics issues?

Answer 3

no absolute or indisputable rules or principles can be developed to decide whether an action is ethical or unethical.

Question 4

T/F - Individuals who do not conform to the law can be prosecuted, and those found guilty of breaking the law can be punished by those in charge of enforcing the law.

Answer 4

T

Question 5

What do ethics lead to?

Answer 5

development of laws to prevent certain behaviors or encourage others, laws change or even disappear as ethics change.

Question 6

Who are stakeholders?

Answer 6

the people and groups that supply a

company with its productive resources and so have a claim on and stake in the company.

Question 7

List of stakeholders

Answer 7

• stockholders
• managers
• employees
• suppliers
• suppliers/distributors
• societies.

Question 8

Stakeholders: Stockholders

Answer 8

have a claim on a company because when they buy its
stock or share they are granted ownership of a certain percentage of the company and the right to receive any future stock dividends.

Question 9

Why are stockholders interested in how a company operates?

Answer 9

they want to maximize the return on their investment.

Question 10

Why do stockholders keep an eye on managers?

Answer 10

to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation.

Question 11

Stakeholders: Managers

Answer 11

a vital stakeholder group because they are responsible for using a company’s financial, capital, and human resources to increase its performance and potentially its stock price.

Question 12

What do managers expect?

Answer 12

a good return or reward (increased salary,

benefits, stock options, promotion, etc.) by investing their human capital to improve a company’s performance.

Question 13

What role do managers play in the stakeholder group?

Answer 13

decides which goals an organization should pursue to benefit stakeholders.

Question 14

Managers role with stakeholders

Answer 14

juggle the interests of several different

stakeholders, which causes managers to make decisions that either uphold or ignore ethical values.

Question 15

Stakeholders: Employees

Answer 15

the hundreds of thousands of people who

work in its various departments and functions.

Question 16

How can companies can act ethically toward employees

Answer 16

by creating an occupational structure that fairly and equitably rewards employees for their contributions

Question 17

How do employees feel value?

Answer 17

appropriate pay, benefits, and fair treatment.

Question 18

Stakeholders: Suppliers and Distributors

Answer 18

Companies rely on relationships with suppliers who provide operational inputs, services, and human resources to the organization.

Question 19

Supplier and Distributor expectations

Answer 19

Suppliers expect to be paid fairly and promptly, while distributors expect to receive high quality goods at agreed upon prices.

Question 20

Ethical issues with suppliers/distributors

Answer 20

interactions based on expectations and business norms that surround labor practices and product/service representation.

Question 21

Stakeholders: Customers

Answer 21

often regarded as the most critical stakeholder group

as a company can’t stay in business without them.

Question 22

How companies can create loyal customers and attract new ones?

Answer 22

quality products, and offering superior service.

Question 23

Stakeholders: Community, Society, and Nation

Answer 23

Decisions made by companies and their managers directly effects aspects of communities, societies, and nations in which they operate.

Question 24

How does a company impact it’s community?

Answer 24

Through salaries and taxes a company directly contributes to the local economy and plays a role in its prosperity or decline.

Question 25

Why are business ethics important?

Answer 25

because the failure of a company can have a

catastrophic effect on a community or nation.

Question 26

Results of unethical behavior are;

Answer 26

• Loss of reputation and resources
• Shareholders selling their shares
• Skilled managers and employees leaving the company
• Customers turning to more reputable companies

Question 27

What are four ethical rules or principles to analyze the effects of their business decisions on stakeholders

Answer 27

• Utilitarian Rule
• Moral Rights Rule
• Justice Rule
• Practical Rule

Question 28

Ethical Rules: Utilitarian Rule

Answer 28

states that an ethical decision is a decision that

produces the greatest good for the greatest number of people.

Question 29

Ethical Rules: Moral Rights Rule

Answer 29

states that an ethical decision is one that best

maintains and protects the fundamental or inalienable rights and privileges of the people affected by it.

Question 30

Ethical Rules: Justice Rule

Answer 30

states that an ethical decision distributes benefits and

harms among people and groups in a fair, equitable, or impartial way.

Question 31

Ethical Rules: Practical Rule

Answer 31

states that an ethical decision is one that a manager
has no reluctance about communicating to people outside the company because the typical person in a society would think it is acceptable.

Question 32

Conscientiousness

Answer 32

is the tendency to be careful, scrupulous, and

persevering.

Question 33

Conscientiousness Managers

Answer 33

• Managers high on conscientiousness tend to be organized, and self-disciplined.
• Managers low on conscientiousness tend to have a lack of direction and self-discipline.

Question 34

Eight questions to analyse ethical situations

Answer 34

1. Fairness – How can I act equitably and balance all interests?
2. Outcomes – What are the short- and long-term
   outcomes of possible actions?
3. Rights – What rights (innate, legal, social, etc.)
   apply?
4. Character – What actions are acceptable (to business, stakeholders, society)?
5. Liberty – What principles of freedom and personal autonomy apply?
6. Empathy – How would I respond if I cared deeply about those involved?
7. Authority – What do legitimate authorities expect of me?
8. Responsibility – What duties and obligations apply to me as a manager?

Question 35

Managers have a responsibility to model behaviors that produce the following results:

Answer 35

• Preserves employee relationships
• Maintains a business’s reputation
• Maintains operational efficiencies
• Respects resources

Question 36

Code of ethics

Answer 36

formal standards and rules based on beliefs about right and wrong that managers use to make appropriate decisions in the interest of their stakeholders.

Question 37

The code of ethics derives from three principal sources in the organizational environment

Answer 37

• Societal Ethics
• Professional Ethics
• Individual Ethics

Question 38

Code of Ethics: Societal Ethics

Answer 38

standards that govern how members of a society

are to deal with each other on issues such as fairness, justice, poverty, and the rights of the individual.

Question 39

Code of Ethics: Individual Ethics

Answer 39

personal values and attitudes that govern how

individuals interact with other people.

Question 40

Code of Ethics: Professional Ethics

Answer 40

standards that govern how members of a

profession are to make decisions when the way they should behave is not clear-cut.

Question 41

Ethics ombudsman

Answer 41

an ethics officer who monitors an organization’s

practices and procedures to be sure they are ethical.

Question 42

A company’s ethics

Answer 42

the result of differences in societal, organizational, professional, and individual ethics.

Question 43

Obstructional Approach

Answer 43

An obstructional approach is when companies and their managers choose not to behave in a socially responsible way and instead behave unethically and illegally.

Question 44

Accommodative Approach

Answer 44

An accommodative approach is when companies and
their mangers behave legally and ethically and try to
balance the interests of different stakeholders as the
need arises.

Question 45

Defensive Approach

Answer 45

A defensive approach is when companies and their
managers behave ethically to the degree that they stay
within the law and strictly abide legal requirements.

Question 46

Proactive Approach

Answer 46

A proactive approach is when companies and their
managers actively embrace socially responsible
behavior, going out of their way to learn about the needs of different stakeholder groups and using organizational resources to promote the interests of all stakeholders.

Question 47

Approaches to Social Responsibility (low to high)

Answer 47

Obstructionist > Defensive > Accommodative > Proactive