Select the true statement about the relationship between law, ethics, and
business.
- Our laws express the minimums of socially desired ethical business
conduct.
Marielle is a personal trainer, and she’s taking her business to the next level by
creating and selling a line of energy bars and protein drinks. She’s not as
concerned with making money as she is with inspiring others to eat healthy, take
care of their bodies, and live their best lives. This message is at the core of her
marketing and guides her decisions as a business owner.
Which ethical theory is Marielle most likely applying to her business model?
- Virtue ethics
- Jonah owns a cleaning business with many satisfied customers who like the green
cleaning products he uses. He recently discovered that his cleaning spray was
misrepresented by its supplier and contains chemicals that are harmful to the
environment. Even though Jonah now has to purchase a more expensive cleaning
spray, he decided it was the right thing to do because lying is wrong, and if
everyone lied, society could not function.
Which ethical theory is Jonah most likely applying to his decision? - Deontology
Luna is the CEO of a social media company. Her engineers proposed developing a
new app that would allow users to see the social networks of their online friends
regardless of privacy settings. When deciding not to develop the app, Luna’s
company thought carefully about what the long-term benefits to society as a whole
would be and whether there was a different app they could develop that would
better maximize happiness.
Which ethical theory is Luna’s company applying in its decision-making?
- Utilitarianism
Select the true statement about Josephson’s Core Values Model for ethical
decision-making. - The model is a useful guide, but cannot guarantee that businesses will
choose to behave in accordance with the results of the process.
Select the true statement about Josephson’s Core Values Model for ethical
decision-making
7 - Profitability is one consideration of the model, especially as it relates to
stakeholders, but it is not the most important consideration.
Select the true statement about Josephson’s Core Values Model for ethical
decision-making. - Its primary purpose is to promote consideration of specific values and the
welfare of stakeholders when making business decisions.
The CEO of an auto manufacturing corporation announces that the company will
attempt to reduce emissions in its vehicles beyond the levels mandated by the
government within ten years. Even though the company will have to invest heavily
in new technologies to achieve this goal, the CEO believes everyone has a moral
obligation to reduce their carbon footprint.
According to Milton Friedman, did the corporation fulfill its duty?- No, because the company should not spend shareholder money to go
beyond what is required by law, unless there is an expected financial return on
investment.
After a nationwide spike in gun-related violent crime, a corporation decides to
discontinue gun sales in its retail stores, even though this will probably hurt the
company’s sales in the next quarter.
According to stakeholder theory, did the corporation fulfill its duty?- Yes, because the company has a responsibility to uphold public interests
like reducing the number of guns in the community.
A pharmaceutical company spends hundreds of millions of dollars developing a
drug that successfully treats a rare form of cancer. The drug has no other
competitors on the market, but the corporation decides to sell it at a very low price
in an effort to make it easily available to those who need the life-saving treatment.
According to stakeholder theory, did the corporation fulfill its duty?- Yes, because the company is advancing an important social interest by
making its drug affordable.
Branch workers at a U.S. bank receive bonuses that are tied to the number of new
accounts they sell to clients each month. Some workers have begun opening
fraudulent accounts in order to boost their numbers. This activity clearly violates
the company’s code of ethics, which the CEO speaks about often. Still, branch managers are afraid to raise the issue with corporate headquarters. The CEO and
other officers are thrilled with the company’s rising profits, which have translated
into a rising stock price.
Consider what you have learned about the factors that impact corporate
culture. What is the ethical strength of the corporation in the example?- Weak, because the corporation is “managing by the numbers.”
An auto manufacturer discovers that the brake system occasionally fails in one of
its models, resulting in a handful of terrible accidents and one death. In response,
the company issues a recall of the vehicle model and promises to install new brake
systems and fix the design flaw at the production level. The recall is projected to
cost the company hundreds of millions of dollars, and its stock price plunges.
Consider what you have learned about the factors that impact corporate
culture. What is the ethical strength of the corporation in the example? - Strong, because the company is prioritizing long-term ethical behavior over
short-term gains.
An employee with a nuclear power company begins keeping a list of major safety
violations that she’s noticed at the power plant. Her supervisor is aware of these
violations but is not acting on them, so the employee goes to upper management to
report what she knows. The company’s code of ethics encourages employees to
disclose any information the public has a right to know, including such serious
safety violations. However, the employee ends up losing her job.
Consider what you have learned about the factors that impact corporate
culture. What is the ethical strength of the corporation in the example?- Weak, because the corporation is “killing the messenger.”
Corporate leadership has detected several instances of potentially illegal behavior
by employees of the company. The corporation is concerned about being held
liable for the actions of its employees.
Select the strategy that would be least effective in reducing the company’s
criminal liability.- It could refuse to cooperate with any external investigations of its
employees.
It comes to the attention of a corporate CEO that several accountants within the
corporation have been falsifying records. The CEO is concerned about corporate
liability for the accountants’ actions.
Select the strategy that would be least effective in reducing the company’s
criminal liability. - The CEO could encourage the accountants to quit their jobs.
A corporation fires its CEO after an employee turns the CEO in to the police for
insider trading. Although the corporation isn’t liable in this instance, the board is
concerned about reducing criminal liability in the future.
Select the strategy that would be least effective in reducing the company’s
criminal liability. - It could encourage employees to investigate one another.
