Ch. 2 Business Ethics

Question 0

Ethics

Answer 0

the study of what is right or good for human beings

Question 1

Ethical Fundamentalism

Answer 1

individuals look to a central authority or set of rules to guide them in ethical decision making

Question 2

Business Ethics

Answer 2

the study and determination of what is right & good in business settings

Question 3

What is the Seeing-Knowing-Doing model?

Answer 3

In resolving business ethical issues, the decision maker should:

1. ) SEE the ethical issues involved in the proposed conduct, as well as the possible solutions
2. ) KNOW what to do by choosing the best solution
3. ) DO the chosen solution by developing & implementing strategies

Question 4

Ethical Relativism

Answer 4

Actions are judged by what individuals feel is right or wrong for themselves

Question 5

Situational Ethics

Answer 5

Developing precise guidelines for effectively navigating ethical dilemmas is difficult because real-life decision making is so complex.

• Prior to evaluation, a person’s decision or act must be viewed from the actor’s perspective.

Question 6

Act Utilitarianism

Answer 6

Assesses each separate act according to whether it maximizes pleasure over pain

Question 7

Utilitarianism

Answer 7

Those actions that produce the greatest net pleasure compared with net pain are better in a moral sense.

• Jeremy Bentham said that a moral act is one that results in “the greatest happiness for the greatest number.”

Question 8

Cost-Benefit Analysis

Answer 8

seeks the greatest economic efficiency according to the underlying notion that the act achieving the greatest output at the least cost promotes the greatest marginal happiness over the less efficient act, cetaris parabis.

Question 9

Rule Utilitarianism

Answer 9

General rules must be established and followed even though, in some instances, following rules may produce less overall pleasure than not following them.

Question 10

Deontological

Answer 10

Actions must be judged by means and motives, not just consequences and results

Question 11

Teleological

Answer 11

ends-based; results rather than intentions; good behavior

Question 12

Categorical Imperative

Answer 12

The best-known deontological theory, proffered by the 18th-century philosopher Immanuel Kant. For an action to be moral:

1. ) It must potentially be a universal law that could be applied consistently.
2. ) It must respect the autonomy and rationality of all human beings and not treat them as an expedient.

Question 13

Social Ethics Theories

Answer 13

Focus not only on each person’s obligations to other members of society but also on the individual’s rights and obligations within society

Question 14

Social Egalitarians

Answer 14

Believe that society should provide each person with equal amounts of goods & services regardless of the contribution each makes to increase society’s wealth

Question 15

Distributive Justice

Answer 15

Ethics theory proposed by Harvard philosopher John Rawls which stressed equality of opportunity, as well as paying heed to the least advantaged to ensure they enjoyed society’s benefits.

• analyzed type of society people in a “natural state” would establish if they could not determine in advance whether they would be talented, rich, healthy, or ambitious, relative to other members of society.

Question 16

Libertarians

Answer 16

Stress market outcomes as the basis for distributing society’s rewards

Question 17

Institutionism

Answer 17

Every rational person possesses inherent powers to assess the correctness of actions, although some are better at it than others.

Question 18

Good Person Philosphy

Answer 18

Individuals should seek out and emulate those who always seem to know the right choice in any given situation and who do the right thing.

Question 19

Television Test

Answer 19

Imagining that every ethical decision we make is being broadcast on nationwide television. An appropriate decision is one we would be comfortable broadcasting on tv.

Question 20

Name & Describe Kohlberg’s 3 Stages of Moral Development

Answer 20

1. ) Preconventional: a child’s conduct is a reaction to the fear of punishment, and later to the pleasure of reward.
2. ) Conventional: during adolescence, people conform their behavior to meet the expectations of groups, such as family, peers, and eventually society.
3. ) Postconventional: people understand WHY moral principles are right and binding. Moral principles are voluntarily internalized, not externally imposed. Individuals develop their own ethical principles and may even question society’s laws and values.

Kohlberg believed not everyone reached the third or second stages.

Question 21

What Are the 4 Functions of Regulation of Business?

Answer 21

1. ) To regulate both legal and natural monopolies
2. ) To preserve competition by correcting imperfections in the market system
3. ) To protect specific groups from marketplace failures
4. ) To promote other social goals

Question 22

Stakeholder Model

Answer 22

A corporation has fiduciary responsibilities– duty of loyalty and good faith– to all of its stakeholders, not just its stockholders.

Question 23

Stockholder Model

Answer 23

A corporation is viewed as private property owned by and for the benefit of the stockholders.

Question 24

Preconventional Level

Answer 24

A child's conduct is a reaction to the fear of punishment, and later, to the pleasure of reward

Question 25

Conventional Level

Answer 25

People conform their behavior to meet the expectations of groups, such as family, peers, & eventually society

Question 26

Postconventional Level

Answer 26

Some reach this level; people accept & conform to moral principles because they understand why the principles are right and binding

Question 27

Regulation of Business

Answer 27

To preserve the competitive process in our economic system while achieving social goals extrinsic to the efficient allocation of resources, the "invisible hand" and self-regulation