Chapter 2: Business Ethics

ABC Clothing Manufacturer, Inc., an American clothing manufacturer, chooses to use manufacturing plants in countries that do not prohibit child labor. Though this practice not illegal, many view this decision as unethical because of opposition to child labor in the United States. Identify the likely costs for the company associated with such unethical decisions.

- loss of sales - loss of contracts - loss of partnerships

Ethical dilemma

A question about how a person should behave that requires the person to reflect about the advantages and disadvantages of the optional choices for various stakeholders

WH process (of ethical decision making)

A set of ethical guidelines that urges us to consider whom an action affects, the purpose of the action, and how we view its morality (whether by utilitarian ethics, deontology, etc.)

Ethical guideline

A simple tool to help determine whether an action is moral

Identify the character traits that virtue ethics focuses on developing.

- Justice - Courage

______ utilitarianism urges managers to take those actions that provide the greatest pleasure after having subtracted the pain or harm associated with the action in question.

Act

______ is the application of ethics to the special problems and opportunities experienced by businesspeople.

Business ethics

The ______ Rule is the idea that we should interact with other people in a manner consistent with the way we would like them to interact with us.

Golden

Which philosopher proposed the categorical imperative to determine whether an action is right?

Immanuel Kant

The most famous of the deontological approaches to business ethics is referred to as ______ ethics.

Kantian

John is considering completing a commission-based sale to a regular customer of his co-worker, Lily. Lily stepped out of the office for an hour in order to have lunch with her mother, who is visiting from out of state. If John's decision-making were driven by the situational ethics theory, he should consider the effect of this decision on

Lily

social responsibility of business

The responsibility of firms doing business within a community to meet expectations that the community imposes on them

Business Ethics

The use of ethics and ethical principles to solve business dilemmas

After comparing the manufacturing costs in the United States and in offshore locations, Alpha Manufacturing has decided to move its operations offshore to increase its profits by reducing manufacturing costs. In the given scenario, Alpha Manufacturing has most likely conducted a ______ analysis, a form of utilitarianism commonly applied by firms and government.

cost-benefit

When a business makes decisions based on ______ analysis, it is comparing the pleasure and pain of its optional choices, as that pleasure and pain are measured in monetary terms.

cost-benefit

Abigail is starting a new business venture and she desires that all her employees subscribe to a consistent set of company values. To achieve this, Abigail should consider:

drafting a statement of core values

Abigail has to decide whether to terminate a long-time employee whose productivity has failed to meet minimum guidelines over a period of time. One of the values that would impact Abigail's decision is:

efficiency

Since opening almost 30 years ago, Abigail's Restaurant has always closed on Christmas Day. This year, the new owner of the restaurant is considering opening on Christmas. The restaurant would not be violating any local or state laws in remaining open. In considering the decision, the stakeholders who would be most affected by the decision to remain open are the :

employees

A(n) ______ dilemma is one in which the right answer is not always clearcut.

ethical

The Golden Rule is an example of a(n):

ethical guideline

Questions of morality cannot be judged on an objective basis under the theory of

ethical relativism

______ is the study and practice of decisions about what is good or right.

ethics

Absolutism is also referred to as ethical _____

fundamentalism

Applying the categorical ______ would lead you to conclude that you should not cheat on a drug test, because if everyone acted in the same way, the drug test would be meaningless.

imperative

A co-worker who has to leave work early to deal with a personal matter asks that you complete some time-sensitive paperwork and turn it into your supervisor before leaving at the end of the day. You agree and urge your co-worker to leave in order to address his personal matter, assuring him it will be addressed. At the end of the day, you neglect to carry through on your promise and do not complete the paperwork. The next day, your supervisor chastises your co-worker, indicating that a reprimand will be placed in their personnel file because of the failure. Your co-worker does not disclose that you had promised to complete the work. Using the Golden Rule as a guideline, you should:

intervene and tell the supervisor you had assumed responsibility for the paperwork and forgot

Regardless of whether a particular course of action is ethical, at a bare minimum, a business decision should be:

legal

Ethical ______ is a theory of ethics that denies the existence of objective moral standards.

relativism

Labor laws that prohibit employers from hiring children are founded on the ______ form of consequentialism.

rule utilitarianism

The business ethics theory of ______ requires that when we evaluate whether an action is ethical, we imagine ourselves in the position of the person facing the ethical dilemma.

situational ethics

In addition to employees, shareholders, and customers, businesses should also consider the effect decisions have on the community where the business is located. When the business considers the impact of its decisions on the community, it is being

socially responsible

A crucial consideration of all ethical guidelines or approaches is considering the effect of a particular decision on:

stakeholders

The WPH process of ethical decision-making requires a business manager to focus on the "whom", also known as the _______, that may be affected by a decision

stakeholders

The ______ of a firm are the many groups of people affected by the firm's decisions.

stakeholders

Business ethics refers to ______ business conduct.

standards of

______ ethics holds that once we put ourselves in another person's "shoes," we can evaluate whether that person's action was ethical.

Situational

deontology

The ethical theory which states that an action can be determined as ethical on the basis of right and wrong, regardless of its conseguences

categorical imperative

The principle that an act is ethical if we want all people to act according to its dictates

principle of rights

The principle that judges the morality of a decision on the basis of how it affects the rights of all those involved

Mr. Jacobs, a salesperson for Micro Corp., is considering padding his expense accounts slightly this month to cover a slight commission loss. Mr. Jacobs rationalizes this decision as acceptable because he has always been honest in his expense reports in the past, so he believes that the financial impact to his employer would be small. If Mr. Jacobs were to re-visit this decision by considering what the impact would be if all the salespeople took the same approach, he would be applying an ethical guideline known as the ______ Test

Universalization

The ______ test asks us to consider what the world would be like were our decision copied by everyone else.

Universalization

The morality or ethics of a decision to terminate an employee, when considered under the theory of absolutism, considers only whether the termination

conforms to a set of ethical rules

The deontological approach to ethics recognizes that certain actions are considered either right or wrong regardless of the:

consequences

Micro Corp. has been the national sponsor of a well-known charitable organization for years. Because Micro Corp. is having a particularly slow year, it is considering pulling its sponsorship from that charity. If considered against the Public Disclosure Test, Micro Corp. should

continue its sponsorship

Ethical principles of honesty and dependability have long shaped the legal framework associated with the law of:

contracts

values

positive abstractions that capture our sense of what is good and desirable

The premise behind the ______ test is that ethics is hard work - labor that we might avoid if we did not have frequent reminders that we live in a community.

public disclosure

The ultimate goal of virtue ethics as an ethical system is the achievement of

the good life

stakeholders

the groups of people affected by a firm's decisions

Ethics

the study and practice of decisions about what is good or right

Future business professionals ought to consider not just the moral and monetary costs of engaging in unethical business practices, but also the cost of lost business.

true

True or false: The principle of rights is foundational to Western culture.

true

In some countries, bribery of local officials is essential to complete a business transaction. Although these countries may not prohibit this practice, bribing local officials may still be considered: _______.

unethical

Business decisions are typically driven by a particular purpose. The WPH framework suggests that the purpose or end result of a particular decision often reflects the business's

values

The ethics of care presumes that when an individual cares for another, they are, in fact, caring for all individuals who fall within a(n):

web of care

A large construction company has purchased a piece of property in a small suburban community that values historic preservation. The piece of property contains buildings that have significant historic value to the town, however, the law does not provide any protection that requires preservation of the buildings. A socially responsible construction company would probably:

work with community leaders to find a compromise for use of the buildings, while preserving historic features.

When a company executive is considering engaging in profitable, yet dishonest, behavior, it is always wise to consider how that behavior

would be viewed if covered on the evening news