Chapter 4 – Business Ethics

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The study of what constitutes right or wrong behavior
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Ethics
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A branch of philosophy focusing on morality and the way moral principles are derived and implemented
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Ethics
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Fairness, justness, rightness, or wrongness of an action
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Ethics
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What study looks at the decisions businesses make or have to make and whether those decisions are right or wrong?
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Business Ethics
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True/False: Public perception of the corporation has changed that entity from one that focuses on making profits into one that acts as a corporate citizen
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True:
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What was the original goal of a corporation?
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Make money
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True/False: In the ideal world, profit maximization leads to the most efficient allocation of scarce resources.
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True:
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When society started to become dissatisfied with the profit-maximizing theory, investors began to look beyond profits and went to consider the _______________________________
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Triple Bottom Line
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What are the 3 things the Triple Bottom Line considers?
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Corporation’s Profits Impact on Society Impact on Environment
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What was the expected role of a “corporate citizen”?
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Corporations were expected to participate in bettering communities and the society.
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What are the 4 things a corporation should consider when making decisions?
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Legal Consequences Public Relations Safety Risks for Consumers & Employees Financial Implications
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Does short-run profit maximization tend to be consistent with business ethics?
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NOP
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Does long-run profit maximization tend to be consistent with business ethics?
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YEP
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The case with OxyContin shows that: long-run profit maximization tend to be consistent with business ethics OR short-run profit maximization tend to be consistent with business ethics
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long-run profit maximization tend to be consistent with business ethics
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In the case with OxyContin, what did the manufacturer, Prudue Pharma, claim?
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Drug is not addictive
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In the case with OxyContin, did Prudue Pharma know that it’s drugs were addictive, yet chose to not tell the public?
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Yep
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In the case with OxyContin, was Prudue Pharma basically screwed for not telling the truth?
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Yep, they got screwed 🙂
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What did we learn from the case of OxyContin about the short-run profit maximization?
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Short-run profit maximization doesn’t work, don’t do it… kinda like drugs.. don’t do it.
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True/False: The Internet can increase the potential for a major corporation to suffer damages to its reputation or loss of profits through negative publicity
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True:
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Why do courts usually disregard such assertions made on the Internet about Walmart or Nike?
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1st Amendment BISH!
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True/False: Business ethics is thus concerned with the image of the business.
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True:
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True/False: Business ethics is also concerned with the impacts that the business has on the environment, consumers, suppliers, employees, and the global economy.
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True:
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Does the law cover all ethical requirements?
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NOPE
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If I comply with the law, does that mean I am always doing the right thing/ on good behavior?
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Nope
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True/False: Laws prohibit or require certain actions to avoid significant harm to society and they are broad in their purpose and scope.
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True:
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If 2 companies collude to jack up the price, the law is there to stop them! cause it’s illegal… Yes/no?
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Yep
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Compliance with just the law is also known as
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Moral Minimum
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True/False: The study of ethics goes beyond the legal requirements to determine what is right for society.
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True:
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If an action is legal, it must mean it’s ethical.. SURELY!
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wth.. no
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How do companies link/combine ethics and the law?
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Creation of the company code/company policy
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Are company codes/company policy the law?
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YOU BET IT’S NOT
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True/False: A company’s code of conduct typically outline that company’s policies on particular issues and indicates how employees are expected to act.
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True
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What’s Google’s motto?
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Don’t be Evil
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True/False: Violation of a company code usually result in TERMINATION!!!
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True:
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Why is ethics so difficult to understand?
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Highly subjective; subject to change over time
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True/False: Ethics is more certain than law
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False: prolly the only false one Ethics is less certain than law
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Can the law also be uncertain and contain “gray areas”?
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YOU BET UR POTATOES IT CAN!
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True/False: Since the law can be uncertain, decision makes need to proceed with caution and evaluate an action and its consequences from an ethical perspective.
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True:
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True/False: Ethics is based more on research than judgement
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False: Ethics is based more on research than judgement
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True/False: A company that can show it has acted ethically, responsibly, and in good faith has a better chance of winning a dispute.
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True:
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Hiring Procedures…. Employers can stalk you up on your social media.
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They can.
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Hiring Procedures…. Employers can choose not to hire you b/c you don’t have social media.
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They can.
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True/False: Costco’s social media policy said that its employees should not say stuff to damage the reputation of the company or violate company policy. Whoever does so can be FIREDDDDDDD
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True:
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What did the National Labor Relations Board say in response to Costco’s policy?
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Workers can say whatever the FLIP THEY WANNA SAY
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The application of morals and ethics to a situation
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Ethical Reasoning
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The study of ethics branches off into 2 major categories, what are they?
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Duty-based Ethics Outcome-based Ethics
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Duty-based Ethics or Outcome-based Ethics? Focuses on the obligations of the corporation.
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Duty-based Ethics
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Duty-based Ethics or Outcome-based Ethics? Deals with standards that derived from “reveal truths” -mystical ooOOOoooOOOOooo- jk The Bible, the Quran, etc.
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Duty-based Ethics
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Duty-based Ethics or Outcome-based Ethics? Focuses on the impacts of a decision on society or on key stakeholders
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Outcome-based Ethics
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Duty-based Ethics or Outcome-based Ethics? Based on religious ethical principles.
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Duty-based Ethics
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Duty-based Ethics or Outcome-based Ethics? Based on principles of rights, human beings have certain fundamental rights.
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Duty-based Ethics
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True/False: Those who believe in the principle of rights, where human beings have certain fundamental rights, believe that a key factor in determining whether a business decision is ethical is how that decision affects the RIGHTS of others.
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True:
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What’s a possible problem with the Principles of Rights,where human beings have certain fundamental rights?
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Which right is more important than the other?
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What’s a possible counterargument made by those who believe in Principles of Rights,where human beings have certain fundamental rights
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Whichever right is “stronger” in that specific circumstance is the most important.
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Duty-based Ethics or Outcome-based Ethics? Based off of Immanuel Kant’s ethical principles
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Duty-based Ethics
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True/False: Immanuel Kant’s ethical principles Don’t treat people as tools to accomplish your goals, treat them like human beings.
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True:
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If everyone does it, what will the consequences be? This is known as the…….
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Categorical Imperative.
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Duty-based Ethics or Outcome-based Ethics? Attempts to maximize benefits and minimize harm
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Outcome-based Ethics
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Duty-based Ethics or Outcome-based Ethics? Based on utilitarianism, developed by Jeremy Bentham modified by John Stuart Mill
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Outcome-based Ethics
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True/False: Under the utilitarian model, an act is deemed ethically right if it produces the greatest amount of good… “soo in that case, we should all have orgies b/c everyone will be happy!” – Scott Galloway
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True:
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True/False: Under the utilitarian model, an act is deemed ethically right if it produces the least amount of harm..
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True:
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Applying the utilitarian model will require 3 conditions
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Which individuals will be affected by the action A cost-benefit analysis, who benefits who is harmed Is there a better alternative?
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What’s a possible problem with the utilitarian approach?
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Action that produces the greatest good might not be super ethical.. a drug that helps 85% of the people but brings agonizing and excruciating pain to the other 15%
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By playing the “polymerization card” (from yu-gi-oh) theorists were able to combine duty-based ethics and outcome-based ethics to create————–!
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Corporate Social Responsibility (CSR)
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What combines a commitment to good citizenship with a commitment to making ethical decisions, improving society, and minimizing environment impacts?
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Corporate Social Responsibility (CSR)
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Is Corporate Social Responsibility (CSR) imposed on corporations by law?
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NOPEEE
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True/False: Corporate Social Responsibility (CSR) involes a commitment to self-regulation
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True:
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The social aspect of Corporate Social Responsibility (CSR) shows that
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Corporations are promoting goals that society thinks is worthwhile and are moving toward solving social problems
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The corporate aspect of Corporate Social Responsibility (CSR) shows that
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Corporations are willing to undertake activities that are significant and related to its business operations
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True/False: Corporate Social Responsibility (CSR) is dedicated only to shareholders.
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False: Corporate Social Responsibility (CSR) is dedicated also to stakeholders (other groups of people)
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What are the 5 steps in Leonard H. Bucklin’s Business Process Pragmatism?
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Inquiry Discussion Decision Justification Evaluation
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What is one of the most important ways to create and maintain an ethical workplace?
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Top management demonstrates commitment to ethical decision making
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True/False: Business owners’ misbehavior can have negative consequences for themselves and their business, which can prevent them from conducting business at all if court says so.
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True:
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Which act of 2002 requires companies to set up confidential systems so that employees and others can report illegal or unethical auditing.
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Sarbanes-Oxley Act
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In addition to the Sarbanes-Oxley Act, what online reporting system allows employees to report illegal or unethical behavior anonymously?
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NAVEX
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In response to American businesses bribing foreign representatives, Congress passed
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Foreign Corrupt Practices Act
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What are “grease payments”?
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Here’s an extra $100 if you can speed up verifying and authorizing that contract
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Do grease payments violate the Foreign Corrupt Practices Act?
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NOPE
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True/False: With respect to accountants, Foreign Corrupt Practices Act requires that all companies must keep detailed records that “accurately and fairly” reflect their financial activities.
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True:

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