BUS 101 Chapter 2 Study Questions

What responsibilities does a business have toward its employees?

• A business should provide employees with a safe workplace, pay them adequately, listen to their grievances, and treat them fairly.

What is a code of ethics? How can one reduce unethical behavior in business?

• A code of ethics is a set of formalized rules and standards that describes what a company expects of its employee. • One can reduce unethical behavior in business by developing and promoting a code of ethics, and by using different methods such as training, group discussions, or corporate communications.

What is an ethical issue? What are some of the ethical issues discussed in your text? Why are they ethical issues?

• An ethical issue is an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. • The text categorizes a number of issues, including misuse of company time, bribery, abusive behavior, misuse of company resources, conflicts of interest, communications, and business relationships. • These are ethical issues because they involve actions that may be considered unacceptable by society, because they could be perceived as unfair, and/or because they could cause potential harm to other stakeholders.

List and discuss the arguments for and against social responsibility by business (Table 2.8). Can you think of additional arguments (for or against)?

• Arguments for social responsibility include (1) business helped create problems and should help to solve them; (2) business has the financial and technical resources to help solve problems; (3) as a member of society, business should do its fair share to help others; (4) social responsibility can help prevent increased government regulation; and (5) social responsibility helps to ensure economic survival. • Arguments against social responsibility include (1) social responsibility detracts from the profit-making objectives of business; (2) participation in social responsibility programs gives business power at the expense of other segments of society; (3) business may not have the expertise to solve social problems; and (4) social problems are the responsibility of government agencies.

Define business ethics. Who determines whether a business activity is ethical? Is unethical conduct always illegal?

• Business ethics refers to principles and standards that determine acceptable conduct in business. Ethical behavior is determined by the public, government regulators, interest groups, and competitors. • Unethical conduct is not always illegal, but it does not conform to the principles of society. Ethics goes beyond legal issues. It attempts to build trust among the participants of business.

What are a business's responsibilities toward the community in which it operates?

• Businesses have responsibilities to the general welfare of the communities and societies in which they operate. Many businesses simply want to make their communities better places for everyone to live and work.

What responsibilities does business have with regard to the environment? What steps have been taken by some responsible businesses to minimize the negative impact of their activities on the environment?

• Businesses have the responsibility of maintaining a healthy environment. Businesses must take responsibility for their actions as part of society. • Some companies focus on prevention as part of environmental responsibility. Others view the protection of the environment as a way of reducing costs and increasing profits. More companies are adopting social responsibility audits to determine how effective the programs have been and to help develop future programs.

Distinguish between ethics and social responsibility.

• Ethics relates to an individual's values and standards and the decisions he or she makes. • Social responsibility concerns the impact of a business's activities on society.

Why has ethics become so important in business?

• The negative publicity received by many unethical business practices has made consumers very much aware of ethical issues. Consumers are putting pressure on businesses to behave more ethically with all the parties involved directly or indirectly in business affairs.