Lecture 10: Ethical dilemmas

Question 1

def. ethical behaviour

Answer 1

refers to actions
that conform to generally accepted
social norms.

Question 2

def. relativism

Answer 2

ethical truths depend on the groups holding them

Question 3

def. normativism

Answer 3

there are universal standards of behavior that all cultures should follow

Question 4

what is the teleological or consequential approach?

Answer 4

decisions are based on the consequences of the action

• Utilitarianism

Question 5

def. utilitarianism

Answer 5

an action is right if it produces the greatest amount of good for the
greatest number

Question 6

def. deontological approach

Answer 6

moral judgments are made and moral reasoning occurs

independently of consequences

Question 7

describe utilitarian ethics (Bentham, Hume, Mill)

Answer 7

– Action judged desirable based on consequences
– E.g. Best action is the one that results in greatest good
for the greatest number of people
– Pitfall: uncertainty of
outcomes

Question 8

describe the deontological approach-moral duty (Kant)

Answer 8

– Outcomes cannot justify means
– People must be treated as ends in
themselves not as means to ends of
others
– Deontology:
• Rightness of an action consists in its conformity to duty, regardless of the consequences that may result from it
– Categorical imperative:
• Act only according to that maxim by which you would want it to become a universal law

Question 9

what are the arguments for why legal justification being appropriate for ethical choices?

Answer 9

– The law embodies many of a country’s moral principles
– The law provides a clearly defined set of rules
– The law contains enforceable rules that apply to everyone
– The law reflects careful and wide-ranging discussions

Question 10

what are the arguments for why legal justification is not appropriate for ethical choices?

Answer 10

– Some things that are unethical are not illegal
– Laws are slow to develop in emerging areas of concern
– Laws may be based on imprecisely defined moral concepts
– Legal precedents in case law as distinct from legislated laws.
Judicial decisions may give rise to unforeseen interpretations
– The law is not very efficient: cumbersome to have laws to decide all possible ethical issues

Question 11

def. corruption

Answer 11

the misuse of entrusted power for private gain

Question 12

def. bribes

Answer 12

• payments or promises to pay cash or anything of value
   Occurs:
  – to obtain government contracts
  — to get public officials to do what they should be doing anyway – “facilitation payments”

Question 13

What are some potential sources of corruption (6)?

Answer 13

1. Corporate greed
2. Business people seeking advantage in landing a contract
3. Greed of government officials
4. Regulations that increase corruption
   opportunities
5. Discretionary powers of government in resource allocation that increase corruption opportunities
6. Low incomes of government officials

Question 14

what are the conditions favourable for corruption

Answer 14

– Non-democratic regimes
– Conflict: five of the 10 most corrupt countries also rank among the 10 least peaceful places in the world:
• Iraq, Libya, Southern Sudan, Afghanistan, Somalia
• Source: Transparency International
– Weak rule of law
– Lack of government transparency in decision-making
– Poorly-paid government officials
– Large amounts of public capital involved in a project

Question 15

What can reduce corruption (7 things)?

Answer 15

1. Severe fines and imprisonment for those who offer bribes
2. Severe fines and imprisonment for those who accept bribes
3. Corporate codes of conduct
4. National laws against bribery & corruption
5. Multilateral conduct codes (OECD anti bribery convention)
6. Higher income for government officials
7. Less regulation, fewer opportunities to bribe

Question 16

Why is ethical behaviour useful?

Answer 16

• Good corporate citizenship builds trust
• Good reputation as a competitive advantage
• Unethical and irresponsible behavior could
– Result in legal sanctions
– Result in consumer boycotts
– Lower employee morale
– Cost sales because of bad publicity
• Helpful “rule of thumb”
– If this were publicized on front page of Bloomberg, WSJ, NYT or
Globe & Mail, would you do it?
– Discuss ambiguous actions with peers & mentors
– Your reputation matters ! !

Question 17

def. code of conduct

Answer 17

– sets global policy that must be complied with
– communicates the code to employees, suppliers, and subcontractors
– ensures that policies are carried out
• Includes training programs and
• Key or all employees sign off on compliance
• May have internal audits on compliance
– reports results to external stakeholders

Question 18

What are ways to implement/think about corporate social responsibility?

Answer 18

 The UN Global Compact establishes guidelines for
appropriate corporate behavior in human rights
 labor
 the environment (sustainability)
 anti-corruption
• Informal dimensions of social responsibility
– Leadership
– Organizational culture
– Whistle-blowing
• Legal Compliance
• Ethical Compliance
• Philanthropic Giving

Question 19

def. tiered pricing (pharmaceutical industry)

Answer 19

differential pricing of same drug in different markets, often to improve affordability
–risk of reverse engineering

Question 20

describe the OECD Anti-Bribery Convention

Answer 20

• an international accord to stop bribery
• enforce prohibitions on bribery by their companies abroad
• half of OECD signatories are not meeting obligations under 1997 OECD anti-bribery connection