Business Ethics Chapter 5

What are ethical responsibilities?

Things one should do even if one would prefer not to do them

According to philosopher Norman Bowie, people have only a prima facie duty to _____.

do good

The __________ ___________ of corporate social responsibility holds that businesses' sole responsibility is to fulfill the economic functions they were designed to serve.

economic model

Enlightened self-interest, as a justification for corporate social responsibility, focuses on real-life examples of _____.

ethical practices paying off in the long run

An example of ethical responsibilities to do good is a business _____.

financing the construction of schools for the underprivileged in different parts of the world

The ____________ _____________ of corporate social responsibility involves business firms fully integrating social responsibility with their mission or strategic plan.

integrative model

The term _____________ ____________ ____________ (CSR) refers to the ethical responsibilities that a business has to the society in which it operates.

corporate social responsibility

The _____________ _____________ of corporate social responsibility states that business exists within a web of social and ethical relationships and that it exists to create value for a range of stakeholders, including employees, customers, suppliers, and local communities as well as investors and stockholders.

stakeholder model

Stakeholder theory requires that _____.

the costs imposed by business decisions on people be acknowledged

The stakeholder model of corporate social responsibility holds that business managers are responsible _____.

to anyone who is affected by the success or failure of their firm

The economic model of corporate social responsibility is rooted in _____.

utilitarianism

Based on the study titled "Developing Value: The Business Case for Sustainability in Emerging Markets," identify the greatest benefits of multinational enterprises engaging in sustainability activities. (Check all that apply.) -Increases in employee turnover -Growth of revenue -Improvements in productivity -Cost savings -Minimal regulations -Access to markets

-Growth of revenue -Improvements in productivity -Cost savings -Access to markets

Arrange the levels of ethical responsibility as distinguished by philosophers on a scale that goes from less to more obligatory.

1. Ethical responsibilities to do good 2. Ethical responsibilities to prevent harm 3. Ethical responsibilities not to cause harm to others

Identify an example of corporate philanthropy. -A company acquiring or merging with another company in the same industry -A company providing programs to support community projects related to arts -A company starting an employee assistance program in pursuit of profit -A company giving stocks to its employees and other stakeholders

A company providing programs to support community projects related to arts

Which of the following is an example of the ethical responsibility to prevent harm? -A nuclear power plant uses sewage as a coolant to avoid depleting freshwater sources. -An advertising agency is asked to censor its advertisements because they contain inappropriate content. -A gourmet restaurant sets aside a part of each meal it makes and donates the food to an orphanage. -A dog food company is forced to recall its product after it causes many dogs to lose all their fur.

A nuclear power plant uses sewage as a coolant to avoid depleting freshwater sources.

Why are people ethically expected to fulfill their responsibilities?

Because they are accountable to others if they do not fulfill their responsibilities

True or false: The economic model of corporate social responsibility states that businesses have social responsibilities beyond the economic and legal ends for which they were created.

False Reason: The economic model of corporate social responsibility denies that business has any social responsibilities beyond the economic and legal ends for which they were created. Corporations are only required to obey the legal mandates established by society.

True or false: Stakeholder theory supports the view of the economic model of corporate social responsibility that management can ignore duties to everyone but stockholders.

False Reason: The law now recognizes a wide range of managerial obligations to such stakeholders as consumers, employees, competitors, the environment, and individuals with disabilities. Stakeholder theory requires that these obligations be acknowledged.

True or false: David Vogel cautions firms to avoid investing in corporate social responsibility when consumers are reluctant to support that investment by paying higher prices.

True Reason: David Vogel warns firms to avoid investing in corporate social responsibility (CSR) when consumers are not willing to pay higher prices to support that investment. He argues that CSR caters to only a small group of consumers or investors.

David Vogel warns against investment in corporate social responsibility (CSR) when _____.

a firm is unable to carry out its CSR missions and initiatives

Sustainability is a topic within corporate social responsibility that requires firms to _____.

balance their financial goals with environmental considerations

According to the philanthropic offshoot of the economic model of corporate social responsibility, _____.

business is not obligated to support social causes

One of the features of reputation management is that _____.

it increases the trust of stakeholders and consumers

Stakeholder theory rejects the economic model of corporate social responsibility because the economic model fails to consider _____.

legal precedent that arises from legislative enactments and case law

Philosopher Norman Bowie stated that the responsibility to _____ overrides other ethical concerns.

not cause harm

According to Norman Bowie's defense of the stakeholder model of corporate social responsibility, what is the "moral minimum" that is expected of all people?

Respecting human rights

Identify a true statement about the ethical responsibility not to cause harm to others. -Good Samaritan cases are typical examples of this responsibility. -Society utilizes the full force of social sanctioning to enforce this responsibility. -This responsibility is the least demanding sense of responsibility. -Volunteering and charitable work are typical examples of this responsibility.

Society utilizes the full force of social sanctioning to enforce this responsibility.

___________ ____________ is a theory that begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

Stakeholder theory

What does enlightened self-interest as a justification for corporate social responsibility (CSR) presume?

That good ethics can lead to good business

Which model of corporate social responsibility asserts that shareholders are the center of a corporation and that management's ethical responsibility is to serve them?

The economic model

Which type of ethical responsibilities offers a model of corporate social responsibility that encourages all businesses to integrate ethical goals into their mission?

Ethical responsibilities associated with sustainability

What is the least obligatory level of ethical responsibilities according to philosophers?

Ethical responsibilities to do good

Match the models of corporate social responsibility (CSR) with their descriptions.

The economic model: It maintains that managers possess an obligation to maximize profit and shareholder wealth and identifies only legal limitations on the pursuit of profit. The stakeholder model: It maintains that a business or individuals who work for it are not exempt from the ordinary ethical responsibilities that everyone has to cause no harm, to prevent harm, and to sometimes do good. The integrative model: It maintains that serving the social good is part of managerial responsibilities to shareholders.

Which level of ethical responsibilities is enforced by society through the law and legal punishment in addition to the full force of social sanctioning?

The ethical responsibility not to cause harm

Based on the study titled "Developing Value: The Business Case for Sustainability in Emerging Markets," identify the most significant areas of sustainability action for corporations. (Check all that apply.) -Improvements in environmental process -Investments in advertising and marketing -Management of human resources -Limitation of market access

-Improvements in environmental process -Management of human resources

According to the sustainability version of corporate social responsibility, which of the following is an example of an industry that is failing its fundamental social responsibility? -An industry that invests all its profits into a non-mandatory waste filtration plant -An industry that releases its wastes into a nearby lake, killing all its fauna -An industry that uses nonbiodegradable waste as its raw material -An industry that switches to cleaner, but less effective, sources of energy

An industry that releases its wastes into a nearby lake, killing all its fauna

How does the pursuit of profit maximization help maximize the overall good in an economic model of corporate social responsibility?

By allowing firms to work toward optimally satisfying consumer demand

Which of the following is true of a firm that uses corporate social responsibility merely to build its reputation? -The firm does not engage in any philanthropic or charitable activities. -The firm fails to present a positive image of itself. -The firm loses its customers support and loyalty. -The firm is not truly committed to fulfilling its social responsibilities.

The firm is not truly committed to fulfilling its social responsibilities.

What is the issue with a firm's engagement in corporate social responsibility for primarily reputational purposes?

The firm reduces social responsibility to social marketing.

What is the most demanding sense of ethical responsibility?

The responsibility not to inflict harm on others

True or false: There are competing understandings of corporate social responsibility (CSR) and the role of a company's management in fulfilling these responsibilities.

True Reason: Some people argue that, like all cases of charity, philanthropy is something that deserves praise and admiration, but it is not something that every business ought to do. Others argue that business does have an obligation to support good causes and to give back to the community. These considerations suggest that there are competing understandings of corporate social responsibility (CSR) and management's role in fulfilling these responsibilities.

In his defense of the stakeholder model of corporate social responsibility, Norman Bowie argues that _____.

one of the ethical responsibilities of business is respecting human rights

One of the levels of ethical responsibilities that philosophers distinguish among is the ethical responsibility to _____.

prevent harm

According to the economic model of corporate social responsibility, a direct indicator of how well a corporation is satisfying the expectations of society is _____.

profit

The primary responsibility of managers according to the economic model of corporate social responsibility is to _____.

pursue profit within the bounds of the law

The practice of attending to the "image" of a firm is referred to as ________ __________.

reputation management

In the context of corporate philanthropy, some philosophers maintain that companies have an obligation to support good causes and to give back to the community. This sense of responsibility is _____.

similar to a debt of thankfulness and gratitude

The philanthropic approach of the economic model of corporate social responsibility is common among _____.

small-scale, privately owned businesses

The concept of corporate social responsibility involves the notion that corporations are _____.

social institutions formed by society to serve the ends of human beings

Milton Friedman, in his article "The Social Responsibility of Business Is to Increase Its Profits," suggests that _____.

the ethical responsibilities of managers are fulfilled when they pursue profit and increase shareholder wealth