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(Business Law) Chapter 2 – Business Ethics

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Ethics
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Definition: Moral principles and values applied to social behavior.
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Business ethics
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Definition: What constitutes right or wrong behavior and the application of moral principles in a business context.
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triple bottom line
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Definition: Focuses on a corporation’s profits, its impact on people, and its impact on the planet.
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moral minimum
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Definition: The minimum degree of ethical behavior expected of a business firm, which is usually defined as compliance with the law.
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ethical reasoning
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Definition: A reasoning process in which an individual links his or her moral convictions or ethical standards to the particular situation at hand.
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Duty-based ethics
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Definition: An ethical philosophy rooted in the idea that every person has certain duties to others, including both humans and the planet. Those duties may be derived from religious principles or from other philosophical reasoning.
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Outcome-based ethics
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Definition: An ethical philosophy that focuses on the impacts of a decision on society or on key stakeholders.
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principle of rights
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Definition: The belief that human beings have certain fundamental rights. Whether an action or decision is ethical depends on how it affects the rights of various groups, such as owners, employees, consumers, suppliers, the community, and society.
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categorical imperative
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Definition: An ethical guideline developed by Immanuel Kant under which an action is evaluated in terms of what would happen if everybody else in the same situation, or category, acted the same way.
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utilitarianism
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Definition: An approach to ethical reasoning in which an action is evaluated in terms of its consequences for those whom it will affect. A “good” action is one that results in the greatest good for the greatest number of people.
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cost-benefit analysis
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Definition: A decision-making technique that involves weighing the costs of a given action against the benefits of that action.
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Corporate social responsibility (CSR)
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Definition: The idea that corporations can and should act ethically and be accountable to society for their actions.
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stakeholders
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Definition: Groups, other than the company’s shareholders, that are affected by corporate decisions. Stakeholders include employees, customers, creditors, suppliers, and the community in which the corporation operates.
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1. Ethics can be defined as the study of ____________.
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What constitutes right and wrong behavior.
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2. Business ethics does NOT focus on:
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a. how businesses are treated under international law.
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3. Investors dissatisfied with profit-maximization theory look beyond profits to consider the triple bottom line.
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Corporate Profits, The impact of profits on people, and The impact of profits on the planet.
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4. When making decisions, a business should evaluate the following.
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The legal implications of each decision. The Public relations impact. The safety risks for consumers and employees. The financial implications.
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5. Business ethics are consistent only with short-run profit maximization.
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False
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6. Compliance with the law is sometimes called the _________.
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Moral Minimum
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7. Violations of company or industry codes of ethics will result in jail time for the employee.
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False
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8. When a company is involved in a dispute and ethics are at issue, it is best if the company can show that it _____________.
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Acted in good faith
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9. Olivia makes a statement on her Twitter account that casts a negative light on her employer. Her manager fires her for violating her company’s social media policy. Olivia claims that federal law prohibits her from being fired. Does she have a valid argument?
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c. Yes, because federal labor law protects employees’ right to engage in “concerted activities.”