Chapter 3

Question 1

Ethics

Answer 1

BELIEFS of what is right and wrong

Question 2

Managerial ethics

Answer 2

Standard of behaviour that guide managers in their work.

Question 3

Categories of managerial ethics

Answer 3

Toward employees (hiring/firing, wages/working conditions, and privacy)
Toward the organization
(how employees behave toward their employers/firms. Stealing supplies/padding expense accounts)
Toward other economic agents
(the relationship between a company and its customers, competitors, stockholders, suppliers, dealers, and unions)

Question 4

Conflict of interest

Answer 4

Behaviour that benefits a person at the expense of another.

Question 5

Four ethical norms to determine appropriate moral values

Answer 5

Utility: does the act do whats best for everyone
Rights: does it respect the rights of everyone
Justice: is it fair?
Caring: does it consider everyone’s responsibilities

Question 6

Why does unethical behaviours occur?

Answer 6

Pressure
Opportunity
Rationalization

Question 7

Corporate social responsibility (CSR)

Answer 7

Way that business attempts to balance their commitments to important individuals/groups in the external environment. Seeking the balance between financial and social/environmental goals.

Question 8

Managerial capitalism vs CSR

Answer 8

Some believe businesses should only focus on their survival and maximizing their profits for the shareholders vs Some believe businesses, just like any other human being, take responsibility and try to improve their lives.

Question 9

Fair trade movement

Answer 9

example of social responsibility. Addresses concerns for poorly treated workers in developing countries, unfair payments for their work, and child labour.

Question 10

Organizational stakeholders

Answer 10

Individuals or groups that are directly affected by an organization’s activities.

Question 11

the 5 major corporate stake holders

Answer 11

Customers
Suppliers
Investors
Employees 
Community where they do business

Question 12

Consumerism

Answer 12

Movement dedicated to protect rights of consumers

Question 13

Collusion

Answer 13

Companies getting together to “fix” prices. (illegal)

Question 14

Four ethical issues in advertising

Answer 14

Truth in advertising: Advertisements must be demonstrably true
Stealth advertising: Companies pay individual to secretly advertise their products to other individuals.
Morally objectionable advertising: Portrayals of individuals or products offend customers.
Advertising of counterfeit brands: Problem areas in many product lines such as cigarettes, alcohol, perfume, etc.

Question 15

Whistle blowers

Answer 15

Employee who discovers and tries to put an end to a company’s unethical, illegal, or socially irresponsible actions by publicizing them.

Question 16

Four ethical issues towards investors

Answer 16

Improper financial management: Paying themselves excessive salaries/bonuses or using investor’s money for personal use.
Misrepresentation of finances: Producing false financial statements for the company’s image
Cheque kiting: Transferring money between accounts through cheques, and using the money before the transaction has been completed, so no money had really gone through.
Insider knowledge: using confidential info to gain from the purchase/sale of stocks.

Question 17

Four stances to social responsibility (ODAP)

Answer 17

Obstructionist: does little as possible to solve social/environmental problems
Defensive: Does the bare minimum, as required by the law.
Accommodative: Does the minimum, and likely to do more if prompted by a worthy enough program.
Proactive: Actively seeks opportunities to contribute.

Question 18

Social audit

Answer 18

Formal way of managing social responsibilities. Summarizes how funds are being allocated for its social responsibility goals and how effective the goals are being met.

Question 19

Sustainable development

Answer 19

Formal way of managing social responsibilities. Pursuing current needs, but not at the expense of putting future generations at a disadvantage.

Question 20

Triple-bottom-line reporting

Answer 20

Combination of social audits and sustainability reports. Measures social, environmental, and economic performance of a company.

Question 21

Informal way to manage social responsibility

Answer 21

Developing an appropriate culture to inhibit/facilitate SR activities. Comes from the leadership roles in an organization.

Question 22

Dilemmas of small businesses

Answer 22

Small businesses, even if they want to, may lack resources,time, or ability to pursue social responsibility goals as they must focus on their survival first.