Lesson 2.4 – Resolving Ethical Issues Flashcards
Why is resolving ethical issues more complex than legal issues?
Ethics deals with morality and personal values, and there is no single law that provides the correct answer.
What is the first step in resolving an ethical issue?
Identify the stakeholders and assess how they will be affected by the decision.
Who are the key stakeholders in a business decision?
Business owners – Concerned about profitability and reputation.
Shareholders – Expect financial returns on investments.
Employees – Concerned about fair wages, health, safety, and job security.
Management (Directors & Officers) – Oversee company policies and operations.
Customers/Clients – Expect quality products, fair pricing, and safety.
Suppliers – Depend on business for consistent demand and revenue.
Creditors – Banks and lenders want to ensure they get repaid.
Local communities – Rely on the business for jobs, economic stability, and municipal tax revenue.
How does a business impact the local community?
Creates stable employment – Encourages homeownership and spending.
Increases property values & taxes – Funds municipal services.
Supports infrastructure and services – Schools, healthcare, public transport.
What happens when a major employer shuts down in a community?
The entire community can decline, leading to economic hardship and population loss.
What are two key obligations businesses must consider when making ethical decisions?
Legal obligations – Contracts with employees, suppliers, banks, and landlords.
Ethical obligations – Minimizing harm to all affected stakeholders.
What is an ethical best practice when closing a business or factory?
Ensure that stakeholders are informed and involved in discussions throughout the decision-making process.
Why should businesses consider how they are perceived when making ethical decisions?
Others will judge the company’s reputation based on whether the decision was fair and responsible.
How can a company demonstrate ethical responsibility beyond legal requirements?
By offering more support to affected stakeholders than the minimum required by law.
Give an example of an ethical vs. unethical business decision.
Unethical: Closing a factory without warning, leaving workers jobless.
Ethical: Working with local governments and employees to create transition programs and job opportunities.
