Business Ethics (C717)
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Free Business Ethics (C717) Questions
Which term best describes how a company as a whole behaves towards society
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corporate social responsibility
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business ethics
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social morality
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equal opportunity
Explanation
Correct Answer:
corporate social responsibility.
Explanation:
corporate social responsibility: This term refers to how a company manages its operations to have a positive effect on society. It involves initiatives that go beyond profit-making to consider the welfare of the community, environment, and broader society. It encompasses a company's commitment to ethical practices and social good.
Why the other options are wrong:
business ethics: Business ethics refers to the moral principles and rules guiding the behavior of individuals within a company, not necessarily how the company as a whole interacts with society.
social morality: Social morality refers to shared ethical principles and standards in society, but it does not specifically describe a company's actions toward society.
equal opportunity: Equal opportunity is about providing all individuals with fair chances, particularly in employment, but it doesn't fully capture a company's broader responsibilities to society.
The ethics and global strategy plan for improving global business ethics has as its central idea
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placing ethics ahead of profits as the number one priority.
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focusing on human rights rather than profits.
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employing only hypernorms for the MNC's ethical standards.
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utilizing ethical standards as significant inputs into top-level strategy formulation and implementation.
Explanation
Correct answer:
utilizing ethical standards as significant inputs into top-level strategy formulation and implementation.
Explanation:
The core idea behind a global strategy for improving business ethics is to integrate ethical standards into the overall strategy of multinational corporations (MNCs). Ethical considerations should play a central role in strategic decision-making, ensuring that business operations align with global ethical norms and the expectations of various stakeholders, rather than simply focusing on profits or human rights alone.
Why the other options are incorrect:
a) placing ethics ahead of profits as the number one priority:
While ethics should be a priority, business strategy should aim to balance both ethics and profits, rather than placing one ahead of the other.
b) focusing on human rights rather than profits:
Human rights are a critical component of business ethics, but focusing solely on them to the exclusion of other ethical considerations and profitability is not the key idea in global strategy.
c) employing only hypernorms for the MNC's ethical standards:
"Hypernorms" are universal ethical norms, but the idea of focusing solely on them is not the primary central idea of the global ethics and strategy plan, which should integrate broader ethical inputs.
The scope of business ethics in any organization all begins with
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Ethical Leadership
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Ethical behavior of employees
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Ethics of industry
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Ethics of organizational culture
Explanation
Correct answer:
A. Ethical Leadership
Explanation:
Ethical leadership is the foundation of business ethics within an organization. Leaders set the ethical tone and culture by establishing standards, modeling ethical behavior, and ensuring that ethical principles are integrated into decision-making and policies. When leadership prioritizes ethics, it influences employees and the entire organizational culture.
Why the other options are wrong:
B. Ethical behavior of employees: While employee behavior is important, it is largely shaped by the ethical leadership and culture established by the organization's leaders.
C. Ethics of industry: Industry-wide ethics set external standards, but business ethics within a specific organization begins internally, with leadership.
D. Ethics of organizational culture: Organizational culture reflects the ethical values promoted by leadership, but it is not the starting point—it develops over time under strong ethical leadership.
After the accounting scandals of the early 2000s, which of the following was/were enacted to restore confidence in financial reporting and business ethics
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Defense Industry Initiative on Business Ethics and Conduct
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Sarbanes-Oxley Act
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Federal Sentencing Guidelines for Organizations
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Foreign Corrupt Practices Act
Explanation
Correct answer:
B) Sarbanes-Oxley Act
Explanation:
The Sarbanes-Oxley Act (SOX) was enacted in 2002 to restore public confidence in financial reporting and business ethics after the accounting scandals of the early 2000s, including those involving Enron and WorldCom. The act includes provisions for stricter financial reporting, corporate governance, and accountability, with penalties for fraudulent financial activity.
Why the other options are wrong:
A) Defense Industry Initiative on Business Ethics and Conduct:
This initiative was established in the 1980s, prior to the early 2000s accounting scandals. It was focused on improving ethics in the defense industry, not financial reporting in general.
C) Federal Sentencing Guidelines for Organizations:
These guidelines were enacted earlier (in 1991) to provide a framework for sentencing organizations convicted of crimes, but they were not specifically enacted in response to the early 2000s accounting scandals.
D) Foreign Corrupt Practices Act:
This act was passed in 1977 to address bribery and corruption in foreign business dealings. It was not a direct response to the accounting scandals of the early 2000s, though it is an important part of U.S. business ethics law.
Which of the following statements is true concerning the thinking that the "business of business is business, not ethics"
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That type of thinking guides companies that consistently take measures to ensure that their policies are in line with their code of ethics.
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That type of thinking has been apparent in a number of business scandals covered in the media.
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That type of thinking is dangerous because it increases the likelihood that a company will adopt unethical strategies.
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That type of thinking has been an effective way for companies to avoid disciplinary action and public embarrassment.
Explanation
Correct answer:
B) That type of thinking has been apparent in a number of business scandals covered in the media.
Explanation:
The thinking that "the business of business is business, not ethics" suggests that some companies prioritize profits over ethical considerations. This mindset has led to various high-profile business scandals where companies made unethical decisions, which were later covered by the media. This approach often leads to negative consequences such as loss of reputation and legal trouble.
Why the other options are wrong:
A) That type of thinking guides companies that consistently take measures to ensure that their policies are in line with their code of ethics: This is incorrect because the thinking that "business is business, not ethics" generally ignores ethical considerations rather than ensuring policies align with ethical codes.
C) That type of thinking is dangerous because it increases the likelihood that a company will adopt unethical strategies: While true that this thinking can lead to unethical behavior, it does not directly align with the statement in the question. The correct answer focuses on its appearance in scandals.
D) That type of thinking has been an effective way for companies to avoid disciplinary action and public embarrassment: This is incorrect because this mindset typically leads to more scrutiny, scandals, and ultimately disciplinary actions or public embarrassment.
____ refers to the business conduct or morals of MNCs in their relationships with individuals and entities
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Global corporate culture
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Ethical relativism
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Moral universalism
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International business ethics
Explanation
Correct answer:
D) International business ethics
Explanation:
International business ethics refers to the ethical principles and standards that multinational corporations (MNCs) follow in their operations across different countries. It encompasses how these companies interact with individuals, other businesses, and governments in various cultural, legal, and economic environments, ensuring that their conduct aligns with ethical practices globally.
Why the other options are wrong:
A) Global corporate culture:
Global corporate culture refers to the shared values, beliefs, and practices within a multinational corporation, but it does not specifically address ethical conduct or business morals in relationships with individuals and entities.
B) Ethical relativism:
Ethical relativism is the idea that ethical standards vary across cultures and that what is considered morally right in one culture may not be in another. While it relates to ethics, it does not specifically focus on the conduct of MNCs in business relationships.
C) Moral universalism:
Moral universalism posits that there are universal ethical principles that apply to all people, regardless of culture or context. While related to ethics, it is a broader concept and not specifically focused on business conduct in international relations.
Rules of conduct that guide actions in the marketplace are called ___
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Social Obligation
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Social Responsibility
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Business Ethics
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Social Awareness
Explanation
Correct answer:
C) Business Ethics.
Explanation:
Business ethics refers to the rules, principles, and standards that guide the behavior and decision-making processes of individuals and organizations in the marketplace. It involves determining what is considered right and wrong in business transactions and practices, ensuring that companies act responsibly, fairly, and transparently.
Why the other options are wrong:
A) Social Obligation:
Social obligation refers to a business's responsibility to meet its basic legal and economic duties to society. It does not fully encompass the ethical rules governing behavior in the marketplace.
B) Social Responsibility:
Social responsibility refers to a broader concept that includes a company’s duty to act in a way that benefits society and the environment. While related, it is not specifically about the rules of conduct in the marketplace.
D) Social Awareness:
Social awareness is about being conscious of societal issues and concerns but does not directly pertain to the formal rules of conduct in the marketplace.
The legal rules and regulations that govern the conduct of business is referred to as
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business ethics
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corporate citizenship
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business law
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social responsibility
Explanation
Correct answer:
C) business law.
Explanation:
Business law refers to the legal rules and regulations that govern the conduct of business operations. It includes laws related to contracts, property rights, employment, intellectual property, and other areas that businesses must comply with to operate legally and ethically. Business law ensures that businesses follow legal requirements, protecting both businesses and individuals in their operations.
Why the other options are wrong:
A) business ethics: Business ethics refers to moral principles that guide the conduct of individuals and organizations in business, but it is not a set of legal rules and regulations. Business ethics concerns what is right or wrong, not necessarily what is legally required.
B) corporate citizenship: Corporate citizenship involves the responsibilities and roles a company plays in the community and society, including ethical practices and corporate social responsibility. While related to business conduct, it does not specifically refer to legal rules.
D) social responsibility: Social responsibility refers to the ethical obligations businesses have towards society, such as contributing to economic development, environmental protection, and social welfare. It involves voluntary actions beyond legal requirements.
Business Ethics are the norms of what is right and what is wrong codified as rules of ___ used by and in business to maximize and sustain shareholder wealth.
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conduct
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engagement
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assessment
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measurement
Explanation
Correct answer:
A) conduct
Explanation:
Business ethics refers to the principles and standards that guide behavior in the business world, particularly concerning what is right and wrong. These ethical rules are codified as rules of conduct, which businesses follow to ensure that their operations align with ethical standards while maximizing and sustaining shareholder wealth.
Why the other options are wrong:
B) engagement:
Engagement refers to the interaction or involvement with stakeholders but does not specifically address the norms or rules governing ethical behavior in business.
C) assessment:
Assessment refers to the evaluation or analysis of various aspects of business operations, not the rules of right and wrong guiding ethical behavior.
D) measurement:
Measurement refers to the process of quantifying or assessing performance, but it is not specifically about the ethical rules that guide conduct in business.
Organizational ethics can be thought of as
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Descriptions of how ethics occurs at a company
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Principles and standards of behavior that guide business decisions
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Rules of conduct that establish legal requirements for businesses
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Standards of reporting ethical violations
Explanation
Correct answer:
b) Principles and standards of behavior that guide business decisions
Explanation:
Organizational ethics refers to the principles and standards that guide the behavior of individuals within an organization, helping them make decisions that align with the company’s values and societal expectations. These standards ensure that ethical considerations are integrated into business operations.
Why the other options are wrong:
a) Descriptions of how ethics occurs at a company:
While describing ethical occurrences is important, organizational ethics focuses more on the principles and standards that guide behavior, rather than merely describing ethical situations.
c) Rules of conduct that establish legal requirements for businesses:
This refers more to legal regulations or compliance rules, whereas organizational ethics focuses on moral standards and behavior beyond just legal obligations.
d) Standards of reporting ethical violations:
Reporting standards are part of ethical systems, but organizational ethics is broader, encompassing principles and standards that guide all decisions, not just the reporting of violations.
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Study notes for BUS 3000 C717: Business Ethics.
Introduction to Business Ethics
Business ethics refers to the moral principles that guide the conduct of individuals and organizations in the business world. It involves determining what is right and wrong in business practices and applying these principles to everyday decision-making.
- Ethics vs. Laws: While laws are regulations established by government institutions, ethics are moral guidelines that individuals or organizations choose to follow.
- Importance: Ethics is essential for maintaining trust, reputation, and long-term success in business. Ethical behavior creates a positive work environment, enhances customer loyalty, and reduces legal risks.
Key Concepts in Business Ethics
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- Deontological Ethics: This approach, associated with Immanuel Kant, focuses on adherence to rules and duties. It suggests that actions are morally right if they follow a set of ethical rules, regardless of the consequences.
- Utilitarianism: Proposed by philosophers like John Stuart Mill, utilitarianism argues that actions are ethical if they promote the greatest good for the greatest number. This focuses on outcomes and consequences.
- Virtue Ethics: Focuses on the development of good character traits, such as honesty, fairness, and integrity. It emphasizes moral character over adherence to rules or consequences.
- Relativism: Suggests that ethical standards are not absolute but are shaped by cultural, societal, and situational contexts. It promotes tolerance but can lead to challenges when conflicting values arise.
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Corporate Social Responsibility (CSR)
- CSR refers to the responsibility that businesses have towards society beyond profit-making. It involves contributing to the welfare of employees, customers, communities, and the environment.
- Key Areas of CSR:
- Environmental Sustainability: Reducing the environmental footprint of business operations.
- Community Engagement: Businesses should give back to communities in which they operate.
- Employee Welfare: Ethical treatment of employees, fair wages, safe working conditions.
- Transparency and Accountability: Businesses should be open about their practices and take responsibility for their actions.
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- Ethical decision-making models help businesses navigate dilemmas where multiple stakeholders are involved. The most common model includes:
- Identifying the Problem: What is the ethical issue at hand?
- Evaluating the Alternatives: What are the possible courses of action?
- Analyzing the Consequences: What are the short-term and long-term impacts of each option?
- Making the Decision: Based on ethical principles, make a choice.
- Reflecting on the Decision: Evaluate the decision post-action to learn from the experience.
- Ethical decision-making models help businesses navigate dilemmas where multiple stakeholders are involved. The most common model includes:
Corporate Governance and Ethics
Corporate governance refers to the systems, principles, and processes by which companies are directed and controlled. Ethical corporate governance is about ensuring that an organization is run in a fair, accountable, and transparent manner.
- Board of Directors: The board is responsible for making high-level decisions and ensuring the company adheres to ethical practices. They play a key role in setting ethical standards and promoting corporate responsibility.
- Shareholder vs. Stakeholder Theory: Shareholder theory focuses on maximizing returns for shareholders, while stakeholder theory takes a broader approach, considering the interests of all parties affected by the business, including employees, customers, suppliers, and society at large.
Ethical Issues in Business
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Conflict of Interest
- Occurs when personal interests or relationships interfere with professional responsibilities. For example, a manager might favor a family member over a more qualified candidate for a promotion.
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Bribery and Corruption
- Bribery involves offering, giving, receiving, or soliciting something of value to influence actions. Corruption extends this to dishonest or illegal activities by people in power to gain personal advantage.
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Insider Trading
- The illegal practice of trading stocks based on non-public, material information. Ethical business practices require that all stakeholders are treated fairly and equally.
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Employee Rights and Fair Treatment
- Businesses must ensure employees are treated ethically by providing fair wages, ensuring diversity and inclusion, protecting against discrimination, and respecting privacy.
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Advertising Ethics
- Companies should avoid misleading advertising, exaggerations, or unethical claims. Ethical advertising should promote honesty and transparency.
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Environmental Ethics
- Businesses must consider their environmental impact. Unethical business practices include pollution, depletion of natural resources, and unsafe disposal of waste.
Ethics Programs and Codes of Conduct
Many businesses establish ethics programs and codes of conduct to provide guidance for employees in making ethical decisions.
- Code of Ethics: A formal document that outlines the ethical standards expected of employees. It provides clarity on how to handle common ethical dilemmas.
- Whistleblower Policies: Whistleblower programs protect employees who report unethical behavior within the organization. These policies encourage transparency and prevent retaliation against those who speak up.
Ethical Leadership
Ethical leadership is the practice of leading an organization based on ethical principles. Leaders set the tone for ethical behavior within the company.
- Role of Leaders in Business Ethics:
- Setting the Example: Ethical leaders model the behavior they expect from others.
- Empowering Employees: Ethical leaders create an environment where employees feel comfortable making ethical decisions.
- Making Ethical Choices: Leaders should make decisions based on ethical considerations and not solely on financial gain.
Global Business Ethics
In a globalized world, businesses must consider the ethical standards of different cultures and countries. Global ethical challenges include:
- Cultural Relativism: Some ethical practices are accepted in one culture but not in others. For example, gift-giving might be normal in one country but seen as bribery in another.
- Human Rights: Ensuring that businesses operate in a manner that respects human rights in all countries, especially in developing regions with weak labor laws.
Case Studies in Business Ethics
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Enron Scandal: This case illustrates the consequences of unethical accounting practices. The company's executives used fraudulent financial reporting to deceive stakeholders, leading to the collapse of the company.
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Volkswagen Emissions Scandal: Volkswagen used software to cheat on emissions tests, making their cars appear more environmentally friendly than they actually were. This case demonstrates the ethical failures in corporate transparency and accountability.
Frequently Asked Question
Ethical challenges in global business include navigating different labor laws, cultural differences in business practices, environmental regulations, and ensuring fair trade and human rights protection in foreign markets.
Companies can balance these goals by focusing on sustainable growth, making decisions that consider the long-term impact on stakeholders, and investing in responsible practices that align with their values.
Unethical practices can severely damage a company’s reputation, lead to legal penalties, loss of customer trust, and decreased employee morale, all of which harm long-term profitability.
Marketing plays a key role in business ethics by ensuring that products and services are accurately represented to consumers. Ethical marketing avoids misleading claims, respects consumer privacy, and provides truthful information.
Businesses can integrate ethics by developing clear ethical guidelines, training employees, establishing strong leadership that values integrity, and fostering an open culture where ethical concerns can be addressed.