Module 4

Question 1

accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization

Answer 1

ethics

Question 2

is a strategy, or course of action, that does not violate these accepted principles

Answer 2

ethical strategy

Question 3

refers to the idea that business people should take the social benefits into account when making business decisions, and that there should be a belief in decisions that have both good economic and good social benefits.

Answer 3

social responsibility

Question 4

the roots of unethical behavior

Answer 4

-personal ethics
-decision making processes
-organizational culture
-leadership
-unrealistic performance expectations

Question 5

Business ethics reflect personal ethics (the generally accepted principles of right and wrong leading the conduct of individuals). Managers may face pressure to violate their personal ethics because they are away from their ordinary social context and supporting culture, and they are psychologically and geographically distant from the parent company

Answer 5

personal ethics

Question 6

Studies show that business people may behave unethically because they fail to ask the relevant question—is this decision or action ethical? – Decisions are made based on economic logic, without consideration for ethics.

Answer 6

decision making processes

Question 7

Unethical behavior may exist in firms with an organization culture (the values and standards that are shared among employees of an organization) that does not stress business ethics. – Values and standards shape the culture of a firm, and that culture influences decision making.

Answer 7

organizational culture

Question 8

If a firm’s leaders fail to act in an ethical manner, other employees may not act ethically – Actions speak louder than words

Answer 8

leadership

Question 9

Pressure from the parent company to meet performance goals that are unrealistic, and can only be achieved by acting in an unethical manner which causes unethical behavior.

Answer 9

unrealistic performance expectations

Question 10

ensures awareness and concern for the future and for the right way of action in each particular situation.

Answer 10

ethical behavior

Question 11

The most common ethical issues in business involve

Answer 11

-employment practices
-human rights
-environmental regulations
-corruption
-the moral obligation of multinational companies

Question 12

If work conditions in a host nation are clearly inferior to those in a multinational’s home nation, should companies apply: - Home country standards - Host country standards - Something in between

Answer 12

employment practices

Question 13

Ethical issues arise when environmental regulations in host nations are far inferior to those in the home nation. Environmental questions take on added importance because some parts of the environment are a public good that no one owns, but anyone can despoil. The tragedy of the commons occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation.

Answer 13

environmental pollution

Question 14

refers to the idea that business people should take the social consequences of economic actions into account when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences .

Answer 14

social responsibility

Question 15

Social responsibility refers to the idea that business people should take the social consequences of economic actions into account when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences . People argue that businesses need to recognize their noblesse oblige and give something back to the societies that have made their success possible. BP supports this notion, and has made it company policy to give back to the community. For example, in Algeria the company built two desalination plants to provide drinking water to residents in Salah.

Answer 15

moral obligations

Question 16

Managers often face situations where the appropriate course of action is not clear Situations in which none of the available alternatives seems ethically acceptable They exist because real world decisions are complex, difficult to frame, and involve various consequences that are difficult to quantify.

Answer 16

ethical dilemmas

Question 17

suggests that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.

Answer 17

Friedman doctrine

Question 18

argues that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate, or in other words, “when in Rome, do as the Romans do”.

Answer 18

cultural relativism

Question 19

claims that a multinational’s home country standards of ethics should be followed in foreign countries.

Answer 19

righteous moralist

Question 20

asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either .

Answer 20

naïve immoralist

Question 21

are based on the philosophy of Immanuel Kant who argued that people should be treated as ends and never purely as means to the ends of others. People have dignity and need to be respected, they are not machines.

Answer 21

Kantian Ethics

Question 22

approaches to ethics hold that the moral worth of actions or practices is determined by their consequences. Actions are desirable if they lead to the best possible balance of good consequences over bad consequences Problems with this ethics include measuring the benefits, costs, and risks of an action, and the fact that the approach fails to consider justice

Answer 22

Utilitarian Approach

Question 23

recognize that human beings have fundamental rights and privileges which transcend national boundaries and cultures . It establishes a minimum level of morally acceptable behavior.

Answer 23

rights theories

Question 24

focus on the attainment of a just distribution of economic goods and services. A just distribution is one that is considered fair and equitable. One theory of justice that is particularly important was proposed by John Rawls who argued that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage.

Answer 24

justice theories

Question 25

An individual or a company can do anything that isn’t illegal. Pro: The law is a good basis for ethical behavior as it embodies cultural values Con: legal justification for behavior may not be sufficient because not everything that is unethical is illegal.

Answer 25

legal justification theory

Question 26

would be put forward as an appropriate conduct guide for international business ethicsencourages business everywhere to advance and honor the internationally accepted human rights, to uphold the right of collective bargaining, to avoid being involved with human rights’ abuses, to have no part in compulsory human labor, to do away with child labor, to support a caring and cautious approach to the environment, to reduce any kind of employment discrimination, to encourage the creation of technologies that are friendly to the environment, to encourage more significant personal environmental responsibility, and to work to stamp out corruption in all of its many ugly guises, such as bribery and extortion.

Answer 26

United National Global Compact

Question 27

is defined by the World Bank (2005) as ‘the extent to which public power is exercised for private gain, including petty and grand forms of corruption, as well as “capture” of the state by elites and private interests.’

Answer 27

corruption

Question 28

Causes of corruption

Answer 28

personal greed
Institutional Regulations and inefficient controls.

Question 29

Slow judicial processes. Organizational Lack of moral criteria in promotions Downplaying or reacting mildly to corruption charges

Answer 29

Institutional Regulations and inefficient controls.

Question 30

Decline of personal ethical sensitivity, No sense of service when working in public or private institutions Low awareness or lack of courage to denounce corrupt behavior Cultural Cultural environments that condone corruption Lack of transparency, especially at the institutional level

Answer 30

personal greed

Question 31

Cultures that are high on masculinity ( assertiveness, ambition, power etc) tends to be more competitive and ambitious.

Answer 31

Low masculinity – less corruption

Question 32

Corruption tends to decline when information including internet communication becomes more accessible.

Answer 32

High political and economic freedom- less corruption

Question 33

is the abuse of entrusted power for private gain. It hurts everyone whose life, livelihood or happiness depends on the integrity of people in a position of authority’ - Business principles for Countering Bribery

Answer 33

transparency international corruption

Question 34

In 2007 SA became the 37th signatory and the first African member to enact anti bribery laws based on this convention. It targets the supply side of corruption(activities of bribe seekers) in cross border deals.

Answer 34

Organization for Economic Cooperation and Development (OECD)

Question 35

Private sector and demand side of cross border economics, where extortion by public officials is a favorite criminal practice

Answer 35

International Chamber of Commerce

Question 36

Enacted as a response to an epidemic of well known corporate scandals involving such companies as Enron and Tyco International. Focuses on corporate governance, financial disclosure and oversight of accounting and auditing practices. Aims to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise, as well as improve the accuracy of corporate disclosures.

Answer 36

Sarbanes Oxley Act (SOX)

Question 37

means meeting the needs of the present without compromising the ability of future generations to meet their own needs while taking into account what’s best for both people and environment

Answer 37

sustainability

Question 38

is a result of an increase in carbon dioxide If carbon dioxide emissions are not reduced and controlled , rising temperature could have catastrophic consequences

Answer 38

global warming

Question 39

It was an extension of the UN Framework Convention on Climate Change of 1994 It was signed in 1997 to require countries to cut their green house gas emissions to 5.2 percent below 1990 levels between 2008 and 2012 By June 2007, 175 nations and regional economic organisations had ratified the protocol The US (25%), initially signed the agreement but withdrew in 2001

Answer 39

The Kyoto Protocol

Question 40

is concerned with the norms, values, and beliefs embedded in social processes which define right and wrong for an individual or a community

Answer 40

Morality

Question 41

is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for a given situation.

Answer 41

Ethics

Question 42

are the accepted principles of right or wrong governing the conduct of business people

Answer 42

business ethics

Question 43

the generally accepted principles of right and wrong leading the conduct of individuals

Answer 43

personal ethics

Question 44

the values and standards that are shared among employees of an organization

Answer 44

organization culture

Question 45

: In developed countries, basic human rights such as freedom of association, freedom of speech, freedom of assembly, and freedom of movement, are taken for granted In other countries, these rights may not exist

Answer 45

human rights

Question 46

the practice of paying bribes to foreign government officials in order to gain business.

Answer 46

corruption

Question 47

argue that fundamental human rights form the basis for the moral compass that managers should navigate by when making decisions which have an ethical component.

Answer 47

moral theorists