CH.3: Business ethics, social forces, and the law

Among the guidelines for balancing the interests of various stakeholders to resolve ethical dilemmas in business are:

A. identify potential parties who could be injured by the proposed action. B. define the problem from both the decision maker's and opposing viewpoints. C. ask whether you would be willing to describe a proposed action to your family, the board of directors, a congressional hearing, or other public forum. D. all of the above.

"Primum non nocere" is Latin for:

Above all, do no harm.

The ethical category of fairness is best expressed as:

Do unto others as you would have them do unto you.

Which of the following is not a question business ethicist Laura Nash has developed to help businesspeople reach the right decision in ethical dilemmas?

Does your proposed solution to the problem effectively balance the competing objectives of ethical decision-making and corporate profitability?

Despite the importance of ethical behavior for business success, few Fortune 500 companies have codes of ethics to resolve ethical dilemmas.

False

Differences among businesses preclude the development of any universal categories of ethical behavior.

False

Economic growth tends to be fastest among developing countries where payments to key administrators can increase transaction efficiency.

False

Ethical conduct is desirable but not necessary; business should be conducted through sole reliance on positive law and its enforcement in the courts.

False

In applying the stakeholder model of business ethics, only the interests of important constituencies affected by an action need to be satisfied.

False

Individual intentions, as expressed in contracts and wills, will not be given effect in the United States unless expressly authorized by law.

False

Mortgages, security interests, and surety relationships are legal mechanisms created primarily to promote stability and flexibility in trade.

False

Recognizing that an ethical dilemma exists is usually far more difficult than resolving the dilemma once its existence is recognized.

False

Situational ethics is a moral system whose rigidity makes it unnecessary to examine motivation behind conduct in order to label it right or wrong.

False

The field of business ethics recognizes that social values typically must yield to the profitability motive.

False

Under United States law, the legal owner (titleholder) of property is free to engage in any use of the property that he or she may desire.

False

Unfortunately, there is no evidence that commitment to ethical values is linked with financial performance of business organizations.

False

United States common law requires that case precedents be followed under all circumstances.

False

Unwillingness of businesses to voluntarily improve the ethics of their practices has little practical effect on the regulatory environment.

False

The Blanchard and Peale three-part test for resolving ethical dilemmas consists of the following questions:

Is it legal? Is it balanced? How does it make me feel?

A tenant's interest in fundamental fairness might outweigh the landlord's interest in freedom of trade.

True

An accumulation of complaints from employees, customers, or investors can lead to imposition of restrictive new regulations and laws.

True

Both freedom from political domination and freedom from economic domination are personal rights protected under United States law.

True

Civil disobedience is the remedy natural law proponents use to change positive law.

True

Escape clauses are mechanisms created to promote flexibility in the administration of laws that appear unfair in particular circumstances.

True

Ethical violations can cause lasting detriment to a company's ability to do business through impacts on the company's reputation.

True

Ethics is a philosophical concept that deals with values related to the nature of human conduct.

True

Evidence suggests that there may be relationships among ethical customer and employee relations and long-term ability to pay dividends.

True

In addition to issues of social responsibility, business values and ethics play an important role in the success or failure of a business.

True

Moral standards based on positive law may allow businesses to conduct themselves unfairly so long as their actions are not illegal.

True

Over half of all Fortune 500 firms train their employees to recognize and deal with particular types of behavior that breach their ethical codes.

True

Protection against fraud and exploitation are found both in securities laws and Food and Drug Administration regulations.

True

Regulation of the Federal Reserve system, negotiable instruments, and installment credit transactions are designed largely to facilitate trade.

True

The often competing rights of both debtors and creditors are balanced and protected from excesses under United States law

True

There is often a conflict between the goal of making money for shareholders and the goal of solving social problems through business.

True

Trust is a fundamental basis of the capitalist system that is central to the expectations of investors, customers, and other firm stakeholders.

True

In applying the "front-page-of-the-newspaper" test to a contemplated course of conduct one should ask:

Would I be willing to have my spouse, friends, and children read about this if it winds up on the front page of the newspaper?

Which of the following situations reflects a possible conflict of interest?

a. You offer a company contract to a friend without checking competing bids. b. You hire a relative for a company position although another candidate is more qualified. c. You buy a piece of realty that would be suitable for a planned company project. d. All of the above.

Which of the following has been linked with the long-term growth and profitability of business organizations?

a. high standards for product quality b. high standards for employee welfare c. high standards for customer service d. all of the above

An ethical duty of confidentiality could be breached where:

a. information obtained through research of the employer is disclosed. b. customer lists or leads are disclosed to a competitor. c. proprietary information or technology of a business is disclosed. d. all of the above.

The ethical category of integrity and truthfulness is best expressed as maintaining one's values and principles:

despite the consequences or costs.

The owner of a factory that releases toxic chemicals into the air and surrounding waterways may be in violation of:

environmental regulations.

Laws that prohibit theft, operation of a factory in areas zoned residential, and copyright infringement exist primarily:

for protection of property.

Laws that prohibit mislabeling of food, speeding, and sale of alcohol to minors exist primarily:

for protection of public health, safety, and morals.

Laws that prohibit defamation, invasions of privacy, and discrimination exist primarily:

for protection of the person.

The importance of trust as a fundamental principle underlying business transactions is illustrated by expectations that:

investors will be able to earn a return on their investments.

Voluntary improvements in the fairness and ethics of business behavior are:

less costly and intrusive than those brought about by government regulation.

In attempting to fulfill the ethical category of promise-keeping, it is important to avoid multiple conflicting commitments because:

repeatedly breaking promises will cost a business its reputation in the long run.

The passage of federal securities disclosure laws occurred largely as the result of:

the stock market crash of 1929.

Laws such as those authorizing tax collection and draft registration exist primarily:

to enable the government to continue to function.

Legislation and government regulations typically are enacted in response to:

widespread abuses of gaps in existing laws that are fundamentally unfair.