Chapter 5 business ethics

Marshall owns and operates a construction firm. He uses inexpensive and low-grade building products and accepts inferior carpentry work from his subcontractors. Nevertheless, Marshall complies with all the city building codes as well as all state and federal laws. Has he fulfilled all of his ethical obligations?
No, because legal compliance is regarded as the moral minimum.

Jeff believes in the principle of rights theory and uses it to make ethical decisions for his business. He must decide whether to expand his business into Asia. Several key employees do not want the business to expand overseas and have threatened to quit if Jeff makes this move. Under the principle of rights theory, he will make this decision by considering
how the expansion will affect the rights of his employees, his consumers, and the community into which he wishes to expand.

Bernard is the owner and manager of a small auto-parts store. He thinks that talking about business ethics with employees takes time that would be better spent paying attention to customers. He also does not believe that he has a right to tell other people how they should behave. Is Bernard likely to create an ethical workplace with this way of thinking? Why or why not?
Bernard is unlikely to create an ethical workplace, because the attitude of top management influences employee ethics.

Robert was employed as a sales representative by the United States Steel Corporation. It had a “whistleblowing” policy and procedure by which employees could make complaints about company policies and products. Robert, who was not a safety expert, believed that one of the company’s products had not been adequately tested and posed a serious danger. In accordance with company policy, Robert notified his supervisor of his concerns. The product was successfully tested and marketed and caused no harm. Robert had
fulfilled his ethical obligations as a salesperson because he followed company policy concerning unsafe products.

Bribery is acceptable in certain foreign countries. Indeed, U.S. Development, Inc., has found that the only way it can ensure delivery on certain contracts in these countries is to bribe the officials. This is
permitted by U.S. law if the payment is made to a minor official to speed up administrative procedures.

ethics can be defined as the study of
what constitutes right and wrong behavior

Business ethics does NOT focus on
Business ethics does NOT focus on

Investors dissatisfied with profit-maximization theory look beyond profits to consider the triple bottom line.
corporate profits
the impact of profits on people
the impact of profits on the planet

the ____ implications of each decision
the ____ public relations impact
the safety risks for ____ and employees
the___ implications

Business ethics are consistent only with short-run profit maximization.

Compliance with the law is sometimes called the____

you are starting a new company. You want your employees to act ethically. What will you NOT do? ____

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 _____

moral minimum

Let employees know that only short-run profits matter

yes, because federal labor law protects employees’ right to engage in “concerted activities”

The application of morals and ethics to a situation is usually called ethical .___

Outcome-based ethics looks at the impact of decisions on key _____.

Every person has certain duties to others, including humans and the planet____ ethics is rooted in this principle.




Religious ethical principles allow managers to make decisions with few possible negative consequences.

One view of duty-based ethics focuses on the principle of rights.
consumers of a firm’s products and services a firm’s suppliers
a firm’s owners (shareholders)
a firm’s employees

The application of the principle of rights, or rights theory, often involves conflicting rights.

You have to decide how to reduce labor costs by firing some of your workers, who will certainly be harmed. You must balance the interests of____ employees who have been loyal to the firm for a long time against the interests of .

Which of the following philosophers is most associated with general guiding principles for moral behavior?

Individuals should evaluate their actions in light of the consequences that would follow if everyone in society acted in the same way. This is called the

is a philosophical theory developed by two British philosophers, Bentham and Mill.
Drag and Drop the appropriate terms into the spaces provided.

A major premise of the _____ approach to ethics is “the greatest good for the greatest number.”
An action is morally correct when it creates the least amount of harm for the ____people.

a____analysis involves assessing the negative and positive affects of alternative actions.

Whenever an action affects the majority adversely, it is morally

your firm’s shareholders

immanuel kant

categorical imperative






Upper management wants to fire Gary because he is nonproductive. Using the utilitarian approach to business ethics, management would probably NOT consider
Gary’s fundamental rights

Corporate social responsibility combines a commitment to good corporate citizenship with a commitment to improving society and minimizing environmental impact.

Corporate social responsibility is typically imposed on corporations by state laws.



Choose the correct order for the following lists of steps involved in a systematic approach to implementing ethical concerns in business.

Managers who set unrealistic production or sales goals decrease the probability that employees will act unethically.

Lisa owns and manages a small auto-parts store. She hesitates to discuss business ethics with her employees because she wants them to spend more time with the customers and she also doesn’t think she should tell them how to behave. Is Lisa going to create an ethical workplace? Why or why not?
Lisa is unlikely to create an ethical workplace because the attitude of top management influences employee ethics.

act that requires companies to set up confidential systems so that “red flags” can be raised about suspected illegal and unethical business practices.
The Sarbanes-Oxley Act

Why is it important to monitor the employment practices of foreign suppliers?
. Because many corporate watch groups will discover and publicize the unethical behavior of your company’s foreign suppliers.

Since the late 1970s, the Foreign Corrupt Practices Act has prohibited U.S. businesspersons from bribing foreign officials to secure beneficial contracts.

Under the Foreign Corrupt Practices Act, some payments to minor foreign government officials are allowed to accelerate the performance of administrative services.



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