Business ethics Exam Questions & Answers 100% Correct!!
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Business ethics
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Business Ethics
Responsible business management - ANSWERWhen businesses assumes responsibility for the Triple Bottom Line (SUSTAINABILITY) while delivering Value to Stakeholders (CORPORATE SOCIAL RESPONSIBILITY) and in doing so addressing Moral Dilemmas (BUSINESS ETHICS) being faced by the business.
The triad - A...
Business ethics Exam Questions &
Answers 100% Correct!!
Responsible business management - ANSWERWhen businesses assumes responsibility for the Triple
Bottom Line (SUSTAINABILITY) while delivering Value to Stakeholders (CORPORATE SOCIAL
RESPONSIBILITY) and in doing so addressing Moral Dilemmas (BUSINESS ETHICS) being faced by the
business.
The triad - ANSWER- Sustainability
- CSR
- Business ethics
Shareholder theory - ANSWERTheory
Milton Friedman said that "The social responsibility of business is to increase its profits" (The New
York Times Magazine 1970)
Friedman argued against the notion of social
responsibilities for corporations based on three main arguments:
- Only human beings have a moral responsibility for their actions
- It is managers' responsibility to act solely in the interests of shareholders
- Social issues and problems are the proper province of the state rather than corporate managers
Stakeholder theory - ANSWERTheory states that the organisation has a responsibility for any group or
individuals who can be affected or is affected by the achievements of an organisation.
(Edward Freeman, 1984).
●Principle of Corporate Rights - the corporation has the obligation not to violate the rights of others
,●Principle of Corporate Effect - companies are responsible for the effects of their actions on others
Corporation and social responsibility debates - ANSWER- Legal Identity: Corporations are typically
regarded as 'artificial persons' in the eyes of the law as they can sue and they can also be sued
(Corporate Personhood). Hence, like humans, they have social obligations.
- Organizational Culture: All organisations manifest a set of beliefs and values that lay out what is
generally regarded as right or wrong in the organisation.
- Power Argument: As powerful social actors with recourse to substantial resources, corporations
should use their power and resources responsibly.
- Dependency Argument: Corporations rely on the contribution of a larger set of constituents or
stakeholders in society, hence have a duty to take into account the interest and goals of these
stakeholders.
Corporate Social Responsibility - ANSWERAn attempt by companies to meet the economic, legal,
ethical, and philanthropic demands of a given society at a particular point in time. (Carroll (1991)
comprises of:
-The responsibilities of business in wider society
-How the responsibilities are defined and negotiated
-How the responsibilities are managed and organised
Evolution of CSR - ANSWER
Carrol's four part model of CSR - ANSWERThe four responsibilities displayed on the pyramid are:
ECONOMIC - This is the responsibility of business to be profitable
Only way to survive and benefit society in long-term
LEGAL - This is the responsibility to obey laws and other regulations
E.g. Employment, Competition, Health & Safety
ETHICAL -This is the responsibility to act morally and ethically
,With this responsibility, businesses should go beyond narrow requirements of the law
E.g. Treatment of suppliers & employees
PHILANTHROPIC -This is the responsibility to give back to society. The responsibility is discretionary,
but still important
E.g. charitable donations, staff time on projects
Business ethics - ANSWERIt is the study of business situations, activities, and decisions where issues
of right and wrong are addressed.
Crane and Matten (2016)
It comprises organizational principles, values, and norms that may originate from individuals,
organizational statements, or from the legal system that primarily guide individual and group
behavior in business.
Ferrell et al, 2017
Constituents of business ethics - ANSWER● Morality
- Concerned with the norms, values and beliefs embedded in social processes which define right and
wrong for an individual or a community.
➢Morals for individuals are personal and singular
● Principles
- specific and pervasive boundaries for behavior that should not be violated
➢Human Rights, Freedom of Speech and Justice
● Values
- Enduring beliefs and ideals that are socially enforced
➢Teamwork, Trust and Integrity
Ethical theories - ANSWERRules and principles of ethics
, These theories are Normative in nature, that is, they are prescriptive and they propose to prescribe
the morally correct way of acting.
The relationship between morality, ethics and ethical theory - ANSWER
Ethical decision making - ANSWER- Ethical decisions occur when accepted rules/law no longer serve
and decision makers must weigh values and reach a judgement.
- Values and judgements play a critical role when we make ethical decisions
Ethics and law - ANSWER
Main drivers of business ethics - ANSWERGovernment
- law
- public policies
- infrastructure
Business
- speed
- funding
- globalisation
Civil society
- voting
- power of many
- activism
Drivers of business ethics - sectorial level of action - ANSWER
Development of business ethics - ANSWER- Before 1960: Ethics in business
Theological discussions of ethics emerged
➢Catholic Social Ethics were concerned with morality in business, workers' rights, and living wages
➢The Protestant Work Ethic encouraged individuals to be
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