Chapter Two Business Law

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Ethics
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the study and practice of decisions about what is good or right. The best alternative in a situation. Ethics guides us when considering what is the right choice in situations. The bottom line is that it has to be legal.
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Business Ethics
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the application of ethics to special problems and opportunities experiences by business people.
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Ethical Dilemma
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a problem about what a firm should do when there is no clear, or right decision.
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Social Responsibility of a business
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expectations that the community imposes on firms doing business inside its borders. Businesses cannot ignore these obligations, because there is always the risk that legislation will impose obligations on them.
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Who is AIG and what happened?
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AIG is the largest insurance company in the United States. American International Group. October, 2011 there were questionings concerning the 2008 bail out of the group by the federal reserve. The company gave out risky bets in insurance mortgage backed securities. The co. paid 165 million in bonsuses two days before its bailout the public was made because the Federal reserve spend 85 billion to bail out the co.
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what are the three minimal standards that must be met for the firm to be an ethical business?
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1) legality of the decision in choosing a method of production. 2) how to compete with competing firms. 3). the social responsibilities of the firm.
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what should business professionals consider when acting immorally?
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moral and monetary costs of engaging in unethical business, and the cost of lost business. A bad reputation can mean losing contracts, sales, and partnerships in the future.
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Is there any correct decision in business ethics?
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Business ethics refers to standards or business conduct and does not result in a set of correct decisions. Business ethics improve business decisions serving as a reminder to not choose the first option that comes to mind.
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What is the WPH Framework for Business Ethics?
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Who (Stakeholders) Who is it that is involved? Who are the stakeholders? Purpose (Values) Values. What values are important to the stake holders How (Guidelines)
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Who section of the WPH Framework for Business Ethics. / who are the stake holders?
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The stakeholders could possibly be consumers, owners or investors, management, employees, community, and future generations.
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what is the definition of stake holders?
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The many groups that are affected by the firm’s decisions.
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Purpose of the decision; what are the purposes for making decisions?
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Businesses make decisions based of values – the positive abstractions that capture our sense of what is good and desirable. Values pull and push on our decisions
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What are the four most important values that businesses should have?
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Freedom, Security, Justice, and Efficiency.
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How do we make ethical decisions?
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There are a few ethical guidelines to assist us. An ethical guideline provides one path to ethical conduct.
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What is the most important part of the how decision?
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Consideration for the stake holder
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What are the three ethical considerations?
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The Golden Rule, Public Disclosure Test, and the Universalization Test
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Golden Rule:
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Treat others the way you want to be treated, . We should interact with other people in a manner consistent with the way we would like them to interact with us. The needs and rights of others are important.
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Public Disclosure Test
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Our actions are being broadcasted to everyone for all to see. This test considers how the community sees the organization.
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Universalization Test
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What the world would be like were our decisions copied by everyone else.

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