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Chapter 03 - Philosophical Ethics and Business

True / False Questions

1. (p. 98) Ethical theories attempt to answer the question of how we should live, but do
not give reasons to support their answers.
FALSE

Ethical theories attempt to answer the question of how we should live, but they also
give reasons to support their answers.

2. (p. 98) Philosophical ethics provides justifications that must be applicable to all people
regardless of their religious starting points.
TRUE

Unlike religious ethics which explains human well-being in religious terms,


philosophical ethics provides justifications that must be applicable to all people
regardless of their religious starting points.

3. (p. 100) Deontological ethical traditions direct us to consider the moral character of
individuals and how various character traits can contribute to, or obstruct, a happy and
meaningful human life.
FALSE

Virtue ethics directs us to consider the moral character of individuals and how various
character traits can contribute to, or obstruct, a happy and meaningful human life.

4. (p. 100) Utilitarianism has been called a consequentialist approach to ethics and social
policy.
TRUE

Utilitarianism's fundamental insight is that we should decide what to do by


considering the consequences of our actions. In this sense, utilitarianism has been
called a consequentialist approach to ethics and social policy.
5. (p. 100) The ultimate ethical goal of deontology is to produce the best consequences
for all parties affected by the decisions.
FALSE

The ultimate ethical goal, according to utilitarians, is to produce the best


consequences for all parties affected by the decisions.

6. (p. 101) Utilitarianism opposes policies that aim to benefit only a small social,
economic, or political minority.
TRUE

The emphasis on the overall good, and upon producing the greatest good for the
greatest number, make utilitarianism a social philosophy that opposes policies that
aim to benefit only a small social, economic, or political minority.

7. (p. 101) It is possible to argue on utilitarian grounds that child labor is ethically
permissible because it produces better overall consequence than the alternatives.
TRUE

Child labor can have beneficial results for bringing foreign investment and money into
a poor country. Thus, one might argue on utilitarian grounds that such labor practices
are ethically permissible because they produce better overall consequences than the
alternatives.

8. (p. 103) The "administrative" version of utilitarianism considers competitive markets


to be the most efficient means of maximizing happiness.
FALSE

One movement within utilitarian thinking invokes the tradition of Adam Smith and
claims that free and competitive markets are the best means for attaining utilitarian
goals. This "market" version would promote policies that deregulate private industry,
protect property rights, allow for free exchanges, and encourage competition.
9. (p. 104) The "market" version of utilitarianism argues that questions of safety and risk
should be determined by experts who establish standards that the business is required
to meet.
FALSE

The "administrative" version of utilitarianism argues that questions of safety and risk
should be determined by experts who then establish standards that business is required
to meet

10. (p. 106) Utilitarians would object to child labor as a matter of principle.
FALSE

Utilitarians would object to child labor, not as a matter of principle, but only if and to
the degree that it detracts from the overall good.

11. (p. 107) The idea behind deontological ethics is commonsensical.


TRUE

The language of "deontology" and "deontological ethics" is very abstract and is likely
to strike many students as so much academic gobbledygook. But the idea behind this
approach is commonsensical.

12. (p. 108-109) A social contract functions to organize and ease relations between
individuals.
TRUE

Rules can be thought of as part of a social agreement, or social contract, which


functions to organize and ease relations between individuals.

13. (p. 111) The concept of a human or moral right is central to the consequence-
based ethical tradition.
FALSE
The concept of a human or moral right is central to the principle-based ethical
tradition.

14. (p. 114) Employees have a right to a minimum wage, equal opportunity, and to
bargain collectively as part of a union. These rights are examples of contractual
agreements with employers.
FALSE

Legal rights are granted to employees on the basis of legislation or judicial rulings.
Thus, employees have a right to a minimum wage, equal opportunity, to bargain
collectively as part of a union, to be free from sexual harassment, and so forth.

15. (p. 117) An ethics of virtue shifts the focus from questions about who a person is, to
what that person should do.
FALSE

An ethics of virtue shifts the focus from questions about what a person should do, to a
focus on who that person is.

16. (p. 119) Virtue ethics emphasizes the more affective side of our character.
TRUE

Virtue ethics emphasizes the more affective side of our character.

Multiple Choice Questions

17. (p. 97-98) Ethical reasoning falls into three major categories. Identify them.
A.Utility, virtue, and values
B.Universal rights, values, and moral principles
C.Universal rights, cultural norms, and mores
D. Personal character, consequences, and principles

The three categories are consequences, principles, and personal character.


18. (p. 100) An ethical tradition that directs us to decide based on overall consequences
of our acts is:
A.deontological ethics.
B.spinozism.
C. utilitarianism.
D. virtue ethics.

Utilitarianism is an ethical tradition that directs us to decide based on overall


consequences of our act.

19. (p. 100) Identify the ethical tradition that directs us to act on the basis of moral
principles.

A.Deontological ethical tradition


B.Utilitarianism
C.Virtue ethics
D.Spinozism

Deontological ethical traditions direct us to act on the basis of moral principles such
as respecting human rights.

20. (p. 100) The study of various character traits that can contribute to, or obstruct, a
happy and meaningful human life is part of:
A. philosophical ethics.B. virtue ethics.
C.deontological ethics.
D.utilitarianism.

Virtue ethics directs us to consider the moral character of individuals and how various
character traits can contribute to, or obstruct a happy and meaningful human life.
21. (p. 100) Utilitarianism's fundamental insight is that we should decide what to do by:
A.considering the moral character of individuals.
B.thinking rationally and following rules and regulations.
C.following our instincts.
D. considering the consequences of our actions.

Utilitarianism's fundamental insight is that we should decide what to do by


considering the consequences of our actions.

22. (p. 100) Utilitarianism has been called a(n):


A.commonsensical approach to ethics.
B.behavioral approach to ethics.
C. consequentialist approach to ethics.
D. intuitive approach to ethics.

Utilitarianism has been called a consequentialist approach to ethics and social policy.

23. (p. 100) Which of the following traditions is commonly identified with the principle
of producing "the greatest good for the greatest number"?
A.Deontological
B.Kantian
C.Virtue
D. Utilitarianism

Utilitarianism is commonly identified with the principle of "maximize the overall


good" or, in a slightly different version, of producing "the greatest good for the
greatest number."

24. (p. 101) Which of the following principles of utilitarianism indicates its support for
democratic institutions and policies?
A. The greatest good for the greatest number
B.Doing the right thing
C.Fairness is a matter of opinion
D.Obey the law, keep your promises

The emphasis on the overall good, and upon producing the greatest good for the
greatest number, make utilitarianism a social philosophy that opposes policies that
aim to benefit only a small social, economic, or political minority. In this way,
utilitarianism provides strong support for democratic institutions and policies.

25. (p. 101) Which of the following traditions would support child labor because it
produces better overall consequences than the available alternatives?
A.Virtue ethics
B.Deontological ethics
C.Utilitarianism
D.Classicism

One might argue on utilitarian grounds that child labor is ethically permissible
because it produces better overall consequences than the alternatives.

26. (p. 101) The utilitarian tradition has a long history of relying on _____ for deciding
on the ethical legitimacy of alternative decisions.
A.intuition
B.experience
C.variable analysis
D.social sciences

Deciding on the ethical legitimacy of alternative decisions requires that we make


judgments about the likely consequences of our actions. Within the utilitarian
tradition, there is a strong inclination to turn to social science for help in making such
predictions.

27. (p. 102) The "market" version of utilitarianism would promote all of the following
policies except:
A.deregulation of private industry.
B.protection of property rights.
C.regulation of advertising.
D.allow for free exchanges.

Utilitarian thinking invokes the tradition of Adam Smith, claiming that free and
competitive markets are the best means for attaining utilitarian goals. This "market"
version would promote policies that deregulate private industry, protect property
rights, allow for free exchanges, and encourage competition.
28. (p. 103) Economists that view profit maximization as a central idea to corporate
social responsibility are following the:
A.kantian framework of ethics.
B.deontological framework of ethics.
C.utilitarian framework of ethics.
D.virtue-based framework of ethics.

One movement within utilitarian thinking invokes the tradition of Adam Smith,
claiming that free and competitive markets are the best means for attaining utilitarian
goals. Given this utilitarian goal, current free market economics advises us that the
most efficient economy is structured according to the principles of free market
capitalism. This requires that business managers, in turn, should seek to maximize
profits. This idea is central to one common perspective on corporate social
responsibility.

29. (p. 104) Which of the following would be advocated by the "administrative" version
of utilitarianism?
A.Abolition of private enterprise
B.Reliance on free and competitive markets
C.Profit maximization of private enterprises
D.Government regulation of business

The "administrative" approach to public policy underlies one theory of the entire
administrative and bureaucratic side of government and organizations. This utilitarian
approach would be sympathetic with government regulation of business on the
grounds that such regulation will insure that business activities do contribute to the
overall good.

30. (p. 106) The essence of utilitarianism is its:A. focus on personal character.
B. reliance on consequences.
C.focus on principles.
D.reliance on moral systems.

The essence of utilitarianism is its reliance on consequences.


31. (p. 106) The statement, "the end justifies the means," reflects the principle
of: A.utilitarianism.
B.kantian ethics.
C.virtue ethics.
D.deontology.

In utilitarianism, ethical and unethical acts are determined by their consequences. In


short, the end justifies the means.

32. (p. 106) Which ethical framework goes against the ethical principle of obeying
certain duties or responsibilities, no matter the end result?
A.Deontological framework of ethics
B.Kantian framework of ethics
C.Virtue ethics framework of ethics
D.Utilitarian framework of ethics

The essence of utilitarianism is its reliance on consequences. Ethical and unethical


acts are determined by their consequences. In short, the end justifies the means.

33. (p. 107) The idea behind deontological approach to ethics is:
A.intuitive.
B.consequentialist.
C.behavioral.
D. commonsensical.

The language of "deontology" and "deontological ethics" is very abstract and is likely
to strike many students as so much academic gobbledygook. But the idea behind this
approach is commonsensical.
34. (p. 107) Which of the following approaches to ethics tells us that there are some rules
that we ought to follow even if doing so prevents good consequences from happening
or even if it results in some bad consequences?
A.Classicism
B.Utilitarianism
C.Deontological
D.Virtue ethics

The deontological approach to ethics tells us that there are some rules that we ought to
follow even if doing so prevents good consequences from happening or even if it
results in some bad consequences.

35. (p. 107) Which of the following statements reflects the deontological ethical
tradition? A.Obey the law
B.Ends justify the means
C.Maximize the overall good
D.Survival of the fittest

Ethical principles can simply be thought of as a type of rule, and the deontological
approach to ethics tells us that there are some rules that we ought to follow even if
doing so prevents good consequences from happening or even if it results in some bad
consequences.

36. (p. 107) "All of my friends trust me because I never back down on my word and I
never break promises, no matter what." Identify the ethical approach that reflects this
line of thought.
A.Classicism
B.Utilitarianism
C.Deontological
D.Spinozism

Ethical principles can simply be thought of as a type of rule, and the deontological
approach to ethics tells us that there are some rules that we ought to follow even if
doing so prevents good consequences from happening or even if it results in some bad
consequences. Rules or principles (e.g., "obey the law," "keep your promises,"
"uphold your contracts") create duties that bind us to act or decide in certain ways.
37. (p. 108) "We ought to stop at a red light, even if no cars are coming and I could get to
my destination that much sooner." Identify the ethical approach that follows this line
of thought.
A.Virtue ethics
B.Utilitarianism
C.Classicism
D.Deontological

The deontological approach to ethics tells us that there are some rules that we ought to
follow even if doing so prevents good consequences from happening or even if it
results in some bad consequences.

38. (p. 108) Lawyers, accountants, auditors, financial analysts, bankers have important
roles to play within political and economic institutions. These roles insure the
integrity and proper functioning of the economic, legal, or financial system and are
termed as:
A.initiating functions.
B.authentic roles.
C.critical path functions.
D.gatekeeper functions.

Professionals within business have important roles to play within political and
economic institutions. Many of these roles, often described as "gatekeeper functions,"
insure the integrity and proper functioning of the economic, legal, or financial system.

39. (p. 108-109) No group could function if members were free at all times to decide for
themselves what to do and how to act. Which of the following functions to organize
and ease relations between individuals?
A. Gatekeepers B.Social contracts
C.Social mores
D.Personal norms

Legal rules, organizational rules, role-based rules, and professional rules can be
thought of being a part of a social agreement, or social contract, which functions to
organize and ease relations between individuals. No group could function if members
were free at all times to decide for themselves what to do and how to act.
40. (p. 110) According to Immanuel Kant, there is essentially one fundamental moral
duty:
A.always speak the truth.
B.remain loyal to your family.
C. respect the dignity of each individual.
D. you should never steal.

The 18th-century German philosopher Immanuel Kant, argued that there is essentially
one such fundamental moral duty, one categorical imperative: respect the dignity of
each individual human being.

41. (p. 110) Immanuel Kant claimed that the duty to respect human dignity could be
expressed in several ways. One version directs us to act according to those rules that
could be universally agreed to by all people. This is the first form of the:
A.Kantian hypothetical imperative.
B.Kantian decisive correlations.
C.Kantian categorical imperative.
D.Kantian moral objectivism.

Kant claimed that the duty to respect human dignity could be expressed in several
ways. One version directs us to act according to those rules that could be universally
agreed to by all people. (This is the first form of the famous "Kantian categorical
imperative.")

42. (p. 111) Which of the following is also known as the Kantian tradition in ethics?
A.Utilitarianism
B.Virtue ethics
C.Classicism
D. Deontological ethics

Deontology is also known as the Kantian tradition in ethics.


43. (p. 111) The concept of moral rights is central to the:
A.tradition of virtue ethics.
B.consequence-based ethical tradition.
C.behavior-based ethical tradition.
D. principle-based ethical tradition.

The concept of a human or moral right is central to the principle-based ethical


tradition.

44. (p. 112) The Kantian tradition claims that humans do not act only out of instinct and
conditioning; they make free choices about how they live their lives, about their own
ends. In this sense, humans are said to have a fundamental human right of:
A.dignity.
B.rationality.
C.autonomy.
D.equality.

The Kantian tradition claims that our fundamental human rights, and the duties that
follow from them, are derived from our nature as free and rational beings. Humans do
not act only out of instinct and conditioning; they make free choices about how they
live their lives, about their own ends. In this sense, humans are said to have a
fundamental human right of autonomy, or "self-rule."

45. (p. 114) Which among the following is a legal right? A.Right to select a specific health
care package.
B. Right to bargain collectively as part of a union.
C.Right to select a particular pension fund.
D.Right to select the number of paid holidays.

Legal rights granted to employees on the basis of legislation or judicial rulings are a
right to a minimum wage, equal opportunity, to bargain collectively as part of a union,
to be free from sexual harassment, and so forth.
46. (p. 116-117) Which of the following approaches conceive of practical reason in terms
of deciding how to act and what to do?
A. Utilitarianism and deontology
B.Utilitarianism and virtue ethics
C.Kantian ethics and virtue ethics
D.Virtue ethics and deontology

Utilitarian and deontological approaches to ethics focus on rules that we might follow
in deciding what we should do, both as individuals and as citizens. These approaches
conceive of practical reason in terms of deciding how to act and what to do.

47. (p. 117) Which of the following traditions seeks a full and detailed description of
those character traits that would constitute a good and full human life?
A.Kantian ethics
B.Deontological ethics
C.Utilitarianism
D. Virtue ethics

Virtue Ethics is a tradition within philosophical ethics that seeks a full and detailed
description of those character traits, or virtues, that would constitute a good and full
human life.

48. (p. 117) Identify the view which holds that people act only out of a self-
interest. A.Altruism
B. Egoism
C.Epistemic
D.Solipsism

Egoism is a view which holds that people act only out of a self-interest.
49. (p. 117) Identify the approach to ethics that shifts the focus from questions about
what a person should do, to a focus on who that person is.
A.Classicism
B.Deontological
C.Utilitarianism
D.Virtue ethics

An ethics of virtue shifts the focus from questions about what a person should do, to a
focus on who that person is.

50. (p. 119) Virtue ethics emphasizes the more _____ side of our character. A.affective
B.cognitive
C.conative
D.intuitive

Chapter 04 The Corporate CultureImpact and Implications

True / False Questions

1.(p. 145) Due to diverse employee groups and management styles, the work culture of a
large global firm in one country will differ significantly from the work culture of the
same firm halfway around the world.
FALSE

Despite the fact that corporations have many locations, with diverse employee groups
and management styles, an individual working for a large global firm in one country
will share various aspects of her or his working culture with someone working for the
same firm halfway around the world.

2.(p. 146) Corporate culture shapes, and is shaped, by the people who are members of the
organization.
TRUE

While culture shapes the people who are members of the organization, it is also
shaped by the people who comprise it.
3.(p. 148) Differing individual perception of culture makes it easier to define the specific
culture within an organization.
FALSE

Defining the specific culture within an organization is not an easy task since it is
partially based on each participant's perception of the culture.

4.(p. 149) In situations where an organization lacks strong leadership for ethical decision
making despite the clarity of law, the business culture is likely to be the determining
factor in the decision.

FALSE

In situations where the law provides an incomplete answer for ethical decision
making, the business culture is likely to be the determining factor in the decision.

5.(p. 151) Organizations with similar missions, rules, and legal regulations, can have
significantly different cultures.
TRUE

According to the examples of FEMA and the Coast Guard provided in the text, it is
fair to say that FEMA and the Coast Guard are two very similar organizations with
similar missions, rules, and legal regulations; but they have significantly different
cultures.

6.(p. 152) Organizations that have a traditional approach to culture can be classified
ascompliance-based cultures.
TRUE

In the 1990s, a distinction came to be recognized in types of corporate culture: some


firms were classified as compliance-based cultures (the traditional approach) while
others were considered to be values-based or integrity-based cultures.

7.(p. 153) A values-based culture recognizes that where rules do not apply, the firm must
rely on the personal integrity of its workforce during decision-making.
TRUE

A values-based culture recognizes that where a rule does not apply the firm must rely
on the personal integrity of its workforce when decisions need to be made.
8.(p. 155) Ethics is held as a priority if the general counsel serves as the ethics officer in
her "spare time," even if no additional resources are allocated to that activity.
FALSE

Ethics was not a priority if the general counsel served as the ethics officer in her
"spare time," and no additional resources were allocated to that activity.

9.(p. 157) "Quietly ethical" executives within the confines of the top management team
are likely to be perceived as ethical leaders because they have the support of the top
management.

FALSE

If an executive is "quietly ethical" within the confines of the top management team,
but more distant employees do not know about her or his ethical stance, they are not
likely to be perceived as an ethical leader.

10.(p. 158) An appropriate method of leadership is insufficient to establish a leader as


being ethical.
TRUE

Certainly ethically appropriate methods of leadership are central to becoming an


ethical leader. But while some means may be ethically better than others (e.g.,
persuasion rather than coercion), it is not the method alone that establishes a leader as
ethical.

11.(p. 161) In the absence of other values denoted by a code of conduct within an
organization, the only value becomes profitat any cost.
TRUE

Before impacting the culture through a code of conduct or statement of values, a firm
must first determine its mission so that decision makers have direction when
determining dilemmas. In the absence of other values, the only value
is profitat any cost.
12.(p. 162) In the development of guiding principles for the firm, articulation of a clear
vision regarding the firm's direction is a step that precedes the step of asking yourself
what you stand for or what the company stands for.
FALSE

In the development of guiding principles for the firm, it is critical to first ask yourself
what you stand for or what the company stands for. The second step is the articulation
of a clear vision regarding the firm's direction.

13.(p. 163) One of the most determinative elements of integration is communication.


TRUE

One of the most determinative elements of integration is communication because


without it there is no clarity of purpose, priorities, or process.

14.(p. 165) Whistleblowing to external groups is usually preferred over internal


mechanisms for reporting wrongdoing.
FALSE

Because whistleblowing to external groups, such as the press and the legal authorities,
can be so harmful to both the whistleblower and to the firm itself, internal
mechanisms for reporting wrongdoing are preferable for all concerned.

15.(p. 167) Lack of any generally accepted fundamental values for the organization is a
clear sign of a "toxic" culture.
TRUE

The first clear sign of a "toxic" culture would be a lack of any generally accepted
fundamental values for the organization.

16.(p. 169) The United States Sentencing Commission is an independent agency that
regulates sentencing policies in the federal court system.
TRUE

The United States Sentencing Commission (USSC), an independent agency in the


United States Judiciary, was created in 1984 to regulate sentencing policy in the
federal court system.
Multiple Choice Questions

17.(p. 145) Which of the following is true about corporate culture?


A.Corporate cultures shape the people of the organization, without getting affected by them.
B.Corporate cultures are generally static, but can be changed by voluntary action of the top
managers.
C.Corporate cultures can hinder individuals in making the "right" decisions.
D.In large global firms, corporate cultures differ significantly for two firms located in different
countries.

Individuals can be helpedor hinderedin making the "right" or "wrong" decision


(according to their own values) by the expectations, values and structure of the
organization in which they live and work.

18.(p. 146) Which of the following statements is incorrect about corporate


culture? A. One strong business leader is not enough to have an impact on corporate
culture.
B.Even in decentralized corporations, there is a sense of culture in organizations.
C.Businesses have unspoken yet influential standards and expectations.
D.Corporate culture is always changing.

Organizational cultures are a bit like moving an iceberg. One person cannot alter its
course alone; but strong leaderssometimes from within, but often at
the topcan have a significant impact on a culture. A strong business leader can
certainly have a significant impact on a corporate culture.

19.(p. 148) Defining the specific culture within an organization is a difficult task. Which
of the following is a factor that is partially responsible for this difficulty and impacts
the organizational culture in a circular way?
A.Method for feedback
B.Openness in communication
C.Transparency of operation
D.Perception of participants

Defining the specific culture within an organization is not an easy task since it is
partially based on each participant's perception of the culture. In fact, perception may
actually impact the culture in a circular waya culture exists, we perceive it to be a
certain type of culture, we respond to the culture on the basis of our perception, and
we thereby impact others' experience of the culture.
20.(p. 149) Which of the following situations could result in the business culture
becoming a determining factor in ethical decision-making?
A. Lack of adequate judgmentB. Laws being ambiguous
C.Lack of strong leadership
D.Stagnant or decreasing profits

In situations where the law provides an incomplete answer for ethical decision
making, the business culture is likely to be the determining factor in the decision.

21.(p. 151) The comparison between the Federal Emergency Management Agency
(FEMA) and the United States Coast Guard shows:
A.the efficiency levels within federal bodies.
B.the inequity encountered in all professional organizations.
C.that decisions need to be made to benefit the stakeholders.
D. that similar missions, legal regulations, and rules do not translate into similar
cultures.

It is fair to say that FEMA and the Coast Guard are two very similar organizations
with similar missions, rules, and legal regulations, but with very different cultures.
The decisions made throughout both organizations reflect the culture of each.

22.(p. 152) Which of the following statements is true about ethical corporate
cultures? A.Ethical organizational culture cannot have a direct impact on the bottom
line.
B. If attended to and supported, a strong ethical culture can serve as a deterrent to
stakeholder damage.
C.Even if ignored, organizational culture could reinforce a perception that "anything goes," and
"any way to a better bottom line is acceptable," building long-term sustainability.
D.The responsibility for creating and sustaining ethical corporate cultures rests on law
enforcement agencies.

If attended to and supported, a strong ethical culture can serve as a deterrent to


stakeholder damage and improve bottom line sustainability.
23.(p. 152) Which of the following approaches to culture is traditional?
A.Values-based
B.Integrity-based
C.Customer-based
D.Compliance-based

In the 1990s, a distinction came to be recognized in types of corporate culture: some


firms were classified as compliance-based cultures (the traditional approach) while
others were considered to be values-based or integrity-based cultures.

24.(p. 152-153) The distinction between compliance-based and integrity-based cultures is


most evident in:
A.marketing and economics.
B.business administration and law.
C.accounting and auditing.
D.training and sales.

The distinction between compliance-based and values-based cultures perhaps is most


evident in accounting and auditing situations; but it can also be used more generally to
understand wider corporate cultures.

25.(p. 153) Which of the following cultures will empower legal counsel and audit offices
to mandate and to monitor conformity with the law and with internal codes?
A.Customer-based culture
B.Integrity-based culture
C.Values-based culture
D. Compliance-based culture

A compliance-based culture will empower legal counsel and audit offices to mandate
and to monitor compliance with the law and with internal codes.
26.(p. 153) Which of the following is true about corporate culture?
A. An integrity-based culture is one that reinforces a particular set of rules.
B. A compliance culture is only as strong and as precise as the rules that workers are
expected to follow.
C.Values-based organizations do not include a compliance structure.
D.A values-based culture emphasizes obedience to the rules as the primary
responsibility of ethics.

The argument in favor of a values-based culture is that a compliance culture is only as


strong and as precise as the rules with which workers are expected to comply.

27.(p. 153) When would a values-based organization rely on the personal integrity of its
workforce when decisions need to be made?
A. In a situation where rules do not apply.
B.In a crisis situation where the leader is absent.
C.In a situation where the goal is to change the organizational culture drastically.
D.In a situation where immediate decision is required.

A values-based culture recognizes that where a rule does not apply the firm must rely
on the personal integrity of its workforce when decisions need to be made.

28.(p. 153) Which of the following is a feature of an evolved and inclusive ethics
program, as opposed to a traditional compliance-oriented program?
A. Meeting regulatory requirements
B. Helping to unify a firm's global operations
C.Minimizing risks of litigation and indictment
D.Improving accountability mechanisms

The goals of a more evolved and inclusive ethics program may entail a broader and
more expansive application to the firm, including maintaining brand and reputation,
recruiting and retaining desirable employees, helping to unify a firm's global
operations, creating a better working environment for employees, and doing the right
thing in addition to doing things right.
29.(p. 155) Which of the following statements about ethics and ethics officers is correct?
A.Ethics officers were first introduced to the corporate structure in the early 1980s.
B.Ethics is not taken seriously if an individual is hired into an exclusive position as ethics
officer.

C.Ethics is taken as a priority even if no additional resources are allocated to that activity.
D.Ethics was not a priority if the general counsel served as the ethics officer in her "spare time."

Ethics was not a priority if the general counsel served as the ethics officer in her
"spare time," and no additional resources were allocated to that activity.

30.(p. 157) Identify the correct statement about ethical leaders.


A.Individuals perceived as ethical leaders avoid doing things that "traditional leaders" do.
B.A "quietly ethical" executive is likely to be perceived as an ethical leader.
C. An ethical leaders' traits and behaviors must be socially visible.
D. People perceive that the ethical leader's goal is consistent job performance by being
"quietly ethical."

An ethical leader's traits and behaviors must be socially visible and understood in
order to be noticed and influence perceptions.

31.(p. 158) In the corporate context, Enron executives Ken Lay and Jeffrey Skilling
were:
A.effective and ethical leaders.
B.ineffective and unethical leaders.
C.effective but unethical leaders.
D.ineffective but ethical leaders.

In the corporate context, Enron executives Ken Lay and Jeffrey Skilling were
successful, effective business leaders. They were also unethical leaders.

32.(p. 158) The means used to motivate others and achieve one's goals plays a key role in
distinguishing between:
A. silent leaders and visible leaders. B.effective leaders and ethical leaders.
C.informal leaders and formal leaders.
D.silent leaders and ethical leaders.

One key difference between effective leaders and ethical leaders lies with the means
used to motivate others and achieve one's goals.
33.(p. 158) Ethically appropriate methods of leadership alone are insufficient for
establishing ethical leadership. Identify the other element.
A. The ends or objective towards which the leader leads.
B.The prevailing culture in the external environment.
C.The ethical nature of the team members.
D.The personality traits of the team members.

While some means may be ethically more appropriate than others (e.g., persuasion
rather than coercion), it is not the method alone that establishes a leader as ethical.
The other element of ethical leadership involves the end or objective towards which
the leader leads.

34.(p. 159) If we judge a leader solely by the results produced, we are following the
ethical tradition of:
A.deontological ethics.
B.virtual ethics.
C.classicism.
D. utilitarianism.

If we judge a leader solely by the results producedthe utilitarian greatest good for
the greatestnumberwe may ignore the mistreatment of workers that was necessary
to achieve that end.

35.(p. 161) Which of the following is usually the only "value" in an organization in the
absence of any other established values?
A. Profit-at any cost
B.Ethical behavior
C.Legal compliance even when laws are ambiguous
D.Customer satisfaction

In the absence of values in an organization, the only value is profitat any cost.
36.(p. 162) What serves as an articulation of the fundamental principles at the heart of the
organization and should guide all decisions without abridgment?
A.Annual report
B.Vision statement
C.Mission statement
D.Income statement

The mission statement or corporate credo serves as an articulation of the fundamental


principles at the heart of the organization and those that should guide all decisions,
without abridgment.

37.(p. 162) As with the construction of a personal code or mission, it is critical to


first: A.articulate a clear vision regarding the firm's direction.
B. ask yourself what you stand for or what the company stands for.
C.to believe that the culture is actually possible, achievable.
D.to identify clear steps as to how the cultural shift will occur.

As with the construction of a personal code or mission, it is critical to first ask


yourself what you stand for or what the company stands for.

38.(p. 162) The second step in the development of guiding principles for the firm
is: A.asking yourself what you stand for or what the company stands for.
B. the articulation of a clear vision regarding the firm's direction.
C.to identify clear steps as to how the cultural shift will occur.
D.to believe that the culture is actually possible, achievable.

The second step in the development of guiding principles for the firm is the
articulation of a clear vision regarding the firm's direction.

39.(p. 163) Identify the most determinative element in integration, without which, there
is no clarity of purpose, priorities, or process.
A.Ethics
B.Leadership
C.Mores
D. Communication

One of the most determinative elements of integration is communication because


without it there is no clarity of purpose, priorities, or process.
40.(p. 165) Which of the following involves the disclosure of unethical or illegal
activities to someone who is in a position to take action to prevent or punish the
wrongdoing?
A. Whistleblowing
B.Redlining
C.Gentrification
D.Flyposting

Whistleblowing involves the disclosure of unethical or illegal activities to someone


who is in a position to take action to prevent or punish the wrongdoing.

41.(p. 165) Identify the correct statement about whistleblowing.


A.It involves the disclosure of illegal activities, and not unethical activities.
B.It may seem disloyal, but it does not harm the business.
C. It can occur both internally and externally.
D. It can expose illegal and unethical activities, but cannot end them.

Whistleblowing can occur internally, as when Sherron Watkins reported her concerns
to Ken Lay regarding Enron. Whistleblowing can also occur externally when
employees report wrongdoing to legal authorities.

42.(p. 167) Which of the following allows organizations to uncover silent vulnerabilities
that could pose challenges later to the firm, serving as a vital element in risk
assessment and prevention?

A. Strict implementation of the code of conduct. B.Ongoing assessment of the


corporate culture.
C.Free-flowing communication between hierarchies.
D.Ethics ombudsmen and hotlines.

Monitoring and an ongoing ethics audit allow organizations to uncover silent


vulnerabilities that could pose challenges later to the firm, thus serving as a vital
element in risk assessment and prevention.
43.(p. 167) What is the term used to describe a potentially damaging or ethically
challenged corporate culture?
A."Caustic" culture
B."Pyrophoric" culture
C."Corrosive" culture
D."Toxic" culture

A potentially damaging or ethically challenged corporate culture is sometimes


referred to as a "toxic" culture.

44.(p. 169) Which of the following prescriptions of the United States Sentencing
Commission (USSC) assigns most federal crimes to one of 43 "offense levels," based
on the severity of the offense?

A. Federal Sentencing Guidelines for Organizations


B.Federal Guidelines of Offense for Organizations
C.Federal Prescription of Offensive Levels
D.The Doctrine of Offensive Levels for Organizations

Beginning in 1987, the USSC prescribed mandatory Federal Sentencing Guidelines


for Organizations. These prescriptions, based on the severity of the offense, assign
most federal crimes to one of 43 "offense levels."

45.(p. 169) The Supreme Court separated the "mandatory" element of the Federal
Sentencing Guidelines for Organizations from their advisory role, holding that their
mandatory nature:
A.made it impossible to pass an accurate sentence.
B.discouraged whistleblowing.
C. violated the Sixth Amendment right to a jury trial.
D. encouraged internal whistleblowing.

In the October 2004 decision in U.S. v. Booker, the Supreme Court separated the
"mandatory" element of the Federal Sentencing Guidelines for Organizations from
their advisory role, holding that their mandatory nature violated the Sixth Amendment
right to a jury trial.
46.(p. 170) Which of the following directed the USSC to consider and to review its
guidelines for fraud relating to securities and accounting, as well as to obstruction of
justice, and specifically asked for severe and aggressive deterrents in sentencing
recommendations?
A. Bank Secrecy Act
B. Sarbanes-Oxley Act
C.Gramm-Leach-Bliley Act
D.Financial Services Modernization Act

The USSC strived to use the Federal Sentencing Guidelines for Organizations to
create both a legal and an ethical corporate environment. This effort was supported by
the Sarbanes-Oxley Act, which subsequently directed the USSC to consider and to
review its guidelines for fraud relating to securities and accounting, as well as to
obstruction of justice, and specifically asked for severe and aggressive deterrents in
sentencing recommendations.

Fill in the Blank Questions

47.(p. 146) Every organization has a _____ fashioned by a shared pattern of beliefs,
expectations, and meanings that influence and guide the thinking and behaviors of the
members of that organization.
culture

Every organization has a culture fashioned by a shared pattern of beliefs, expectations,


and meanings that influence and guide the thinking and behaviors of the members of
that organization.

48.(p. 146) If one joins a firm with a culture that supports values than those with which
one is comfortable, there will be a _____ for better or worse.
values conflict

If you join a firm with a culture that supports other values than those with which you
are comfortable, there will be values conflictsfor better or worse.
49.(p. 148) The phrases "that's how things have always been done here" or "that's our
prevailing climate," tells us that culture can serve to _____ an organization in the
common ways of managing issues.
constrain

The culture can also serve to constrain an organization in the common ways of
managing issues, as in the typical phrases, "that's how things have always been done
here" or "that's our prevailing climate."

50.(p. 148) Defining the specific culture within an organization is not an easy task since
it is partially based on each participant's _____ of the culture.
perception

Defining the specific culture within an organization is not an easy task since it is
partially based on each participant's perception of the culture.

51.(p. 149) In situations where the _____ provides an incomplete answer for ethical
decision making, the business culture is likely to be the determining factor in the
decision.
law

In situations where the law provides an incomplete answer for ethical decision
making, the business culture is likely to be the determining factor in the decision.

52.(p. 151-152) The _____ tradition reminds us that we are as likely to act out of habit and
based on character as we are to act after careful deliberations.
virtue ethics

When we talk about decision making, it is easy to think in terms of a rational,


deliberative process in which a person consciously deliberates about and weighs each
alternative before acting. But the virtue ethics tradition reminds us that our decisions
and our actions are very often less deliberate than that. We are as likely to act out of
habit and based on character as we are to act after careful deliberations.
53.(p. 152) Values-based cultures are also known as _____ cultures.integrity-based

In the 1990s, a distinction came to be recognized in types of corporate culture: some


firms were classified as compliance-based cultures (the traditional approach) while
others were considered to be values-based or integrity-based cultures.

54.(p. 153) A _____ culture will empower legal and audits offices to mandate and
monitor compliance with the law and with internal codes.
compliance-based

A compliance-based culture will empower legal counsel and audit offices to mandate
and to monitor compliance with the law and with internal codes.

55.(p. 153) The argument in favor of a values-based culture is that a compliance culture
is only as strong and as precise as the _____ with which workers are expected to
comply.
rules

The argument in favor of a values-based culture is that a compliance culture is only as


strong and as precise as the rules with which workers are expected to comply.

56.(p. 155) Ethics holds a higher position in the firm if a highly skilled individual is hired
into an exclusive position as _____ and is given a staff and a budget to support the
work required. ethics officer

Ethics was not a priority if the general counsel served as the ethics officer in her
"spare time," and no additional resources were allocated to that activity. Ethics holds a
different position in the firm if a highly skilled individual is hired into an exclusive
position as ethics officer and is given a staff and a budget to support the work
required.
57.(p. 157) If an executive is "quietly ethical" within the confines of the top management
team, but more distant employees do not know about her or his ethical stance, they are
not likely to be perceived as a(n) __.
ethical leader

If an executive is "quietly ethical" within the confines of the top management team,
but more distant employees do not know about her or his ethical stance, they are not
likely to be perceived as an ethical leader.

58.(p. 158) While some means may be ethically more appropriate than others (e.g.,
persuasion rather than coercion), it is not the method alone that establishes a leader as
ethical. The other element of ethical leadership involves the _____ towards which the
leader leads.
end or objective

While some means may be ethically more appropriate than others (e.g., persuasion
rather than coercion), it is not the method alone that establishes a leader as ethical.
The other element of ethical leadership involves the end or objective towards which
the leader leads.

59.(p. 159) One of the key manifestations of ethical leadership is the articulation of
_____ for the organization.
values

One of the key manifestations of ethical leadership is the articulation of values for the
organization.

60.(p. 165) _____ involves the disclosure of unethical or illegal activities to someone
who is in a position to take action to prevent or punish the wrongdoing.
Whistleblowing

Whistleblowing involves the disclosure of unethical or illegal activities to someone


who is in a position to take action to prevent or punish the wrongdoing.
61.(p. 169) The Federal Sentencing Guidelines for Organizations, based on the severity
of the offense, assign most federal crimes to one of 43 " ___."
offense levels

Beginning in 1987, the USSC prescribed mandatory Federal Sentencing Guidelines


for Organizations that apply to individual and organizational defendants in the federal
system, bringing some amount of uniformity and fairness to the system. These
prescriptions, based on the severity of the offense, assign most federal crimes to one
of 43 "offense levels."

Essay Questions

62.(p. 145-146) What is a corporate culture? How does it shape an employee?

Every organization has a culture, fashioned by a shared pattern of beliefs,


expectations, and meanings that influence and guide the thinking and behaviors of the
members of that organization. While culture shapes the people who are members of
the organization, it is also shaped by the people who comprise it. Even in this age of
decentralized corporations and other institutions, there remains a sense of culture in
organizations. This is especially true in small local firms, but it is just as true of major
global corporations. Despite the fact that corporations have many locations, with
diverse employee bases and management styles, an individual working for a large
global firm in one country will share various aspects of her or his working culture
with someone working for the same firm halfway around the world. This is not to say
that their working environments cannot be wholly different in many regards; the
culture, however, survives the distance and differences.
Businesses also have unspoken yet influential standards and expectations. If you join
a firm with a culture that supports other values than those with which you are
comfortable, there will be valuesconflictsfor better or worse.

63.(p. 146-148) How can culture be both positive and negative in its nature?

A firm's culture can be its sustaining value - that which offers it direction and stability
during challenging times. It can, however, also serve to constrain an organization in
the common ways of managing issues, as in the typical phrases such as "that's how
things have always been done here" or "that's our prevailing climate the stability that
can be a benefit at one time can be a barrier to success at another.
64.(p. 148-149) In addition to attitudes, and behaviors, list the other determinants of
culture within an organization.

Several of the elements that are easiest to perceive, such as attitudes and behaviors,
are only a small fraction of the elements that comprise the culture. In addition, culture
is present in and can be determined by exploring any of the following, among others
tempo of work, the organization's approach to humor, methods of problem solving,
the competitive environment, incentives, individual autonomy, and hierarchical
structure.
Even with this list of cultural elements, it can be difficult for individuals in a firm to
identify the specific characteristics of the culture within which they work. Culture
becomes so much a part of the environment that participants do not even notice its
existence.

65.(p. 149) How are the corporate culture and ethics related in an organization?

The law can be ambiguous in determining if a business should make a reasonable


accommodation for an employee with certain types of disabilities (allergies, arthritis,
dyslexia etc.). In situations where the law is an incomplete guide for ethical decision-
making, the business culture is likely to be the determining factor in the decision.
Ethical businesses must find ways to encourage, to shape, and to allow ethically
responsible decisions.
An ethical culture would be one in which employees are empowered and expected to
act in ethically responsible ways even when the law does not require it.

66.(p. 151-152) Explain how corporate culture and virtue ethics are related.

The cultivation of habits, including the cultivation of ethical virtue, is greatly shaped
by the culture in which one lives. When we talk about decision-making, it is easy to
think in terms of a rational, deliberative process in which a person consciously
deliberates about and weighs each alternative before acting. But the virtue ethics
tradition reminds us that our decisions and our actions are very often less deliberate
than that. We are as likely to act out of habit and based on character than we are to act
after careful deliberations. So the question of where we get our habits and character
isall-important.
Part of the answer surely is that we can choose to develop some habits rather than
others. But it is also clear that our habits are shaped and formed by education
and trainingby culture. It also takes place in the workplace, where individuals
quickly learn appropriate and expected behaviors. Intentionally or not, business
institutions provide an environment in which habits are formed and virtues, or vices,
are created.

67.(p. 152) How can an ethical culture have a direct effect on the bottom line of an
organization?

If attended to and supported, a strong ethical culture can serve as a deterrent to


stakeholder damage and improve bottom line sustainability. If ignored, the culture
could instead reinforce a perception that "anything goes," and "any way to a better
bottom line is acceptable," destroyinglong-term sustainability.

68.(p. 152-153) Describe how a values-based culture works.

A values-based culture is one that reinforces a particular set of values rather than a
particular set of rules. Certainly, these firms may have codes of conduct; but those
codes are predicated on a statement of values and it is presumed that the code includes
mere examples of the values' application. Integrating these values into the firm's
culture encourages a decision- making process that uses the values as underlying
principles to guide employee decisions rather than ashard-and-fast rules.
The argument in favor of a values-based culture is based on the fact that a compliance
culture is only as strong and as precise as the rules with which workers are expected to
comply. A firm can only have a certain number of rules and the rules can never
unambiguously apply to every conceivable situation. A values-based culture
recognizes that where a rule does not apply, the firm must rely on the personal
integrity of its workforce when decisions need to be made. This is not to say
that values-based organizations do not include a compliance structure.

69.(p. 153) How does a compliance-based structure work?

A compliance-based culture emphasizes obedience to the rules as the primary


responsibility of ethics. A compliance-based culture will empower legal and audits
offices to mandate and monitor compliance with the law and with internal codes.

70.(p. 153) Explain the reasoning behind the popularity of the values-based culture.

The argument in favor of a values-based culture is based on the fact that a compliance
culture is only as strong and as precise as the rules with which workers are expected to
comply. Avalues-based culture recognizes that where a rule does not apply, the firm
must rely on the personal integrity of its workforce when decisions need to be made.

71.(p. 154-155) How are leaders responsible for supporting ethical decision-making?

If the goal of corporate culture is to cultivate values, expectations, beliefs, and


patterns of behavior that best and most effectively support ethical decision-making, it
becomes the primary responsibility of corporate leadership to steward this effort.
Leaders are charged with this duty in part because stakeholders throughout the
organization are guided to a large extent by the "tone at the top."
If a leader is perceived to be shirking her or his duties, misusing corporate assets,
misrepresenting the firm's capabilities, or engaging in other inappropriate behavior,
stakeholders receive the message that this type of behavior is not only acceptable, but
perhaps expected and certainly the way to get ahead in that organization. Instead, if a
leader is clearly placing her or his own ethical behavior above any other
consideration, stakeholders are guided to follow that role model and to emulate that
priority scheme.
Beyond personal behavior, leadership sets the tone through other mechanisms such as
the dedication of resources. Ethical business leaders not only talk about ethics and act
ethically on a personal level, but they also allocate corporate resources to support and
promote ethical behavior. There is along-standing credo of management: "budgeting
is all about values." More common versions are "put your money where your mouth
is" and "walk the talk."

72.(p. 156-157) What characters are requisite within a leader to be perceived as being
ethical?

One study of the nature of ethical leadership emphasized the importance of being
perceived as apeople-oriented leader, as well as the importance of leaders engaging in
visible ethical action. Traits that were also important included receptivity, listening,
and openness, in addition to the more traditionally considered traits of integrity,
honesty, and trustworthiness. Finally, being perceived as having a broad ethical
awareness, showing concern for multiple stakeholders, and using ethical decision
processes are also important. Those perceived as ethical leaders do many of the things
"traditional leaders" do (e.g., reinforce the conduct they are looking for, create
standards for behavior, and so on), but they do that within the context of an ethics
agenda. People perceive that the ethical leader's goal is not simply job performance,
but performance that is consistent with a set of ethical values and principles. Finally,
ethical leaders demonstrate caring for people (employees and external stakeholders) in
the process.

73.(p. 158) What are the differences between an effective leader and an ethical leader?

Leaders guide, direct, and escort others towards a destination, an effective leader is
someone who does this successfully and, presumably, efficiently. Effective leaders are
able to get followers to their common destination. But not every effective leader is an
ethical leader. One key difference lies with the means used to motivate others and
achieve one's goals. Effective leaders might be able to achieve their goals through
threats, intimidation, harassment, and coercion. One can also lead using more
attractive means such as modeling ethical behavior, persuasion, or simply using one's
institutional role.
Certainly ethically appropriate methods of leadership are central to becoming an
ethical leader. Creating a corporate culture in which employees are empowered and
expected to make ethically responsible decisions is a necessary part of being an
ethical business leader. But while some means may be ethically better than others
(e.g., persuasion rather than coercion), it is not the method alone that establishes a
leader as ethical. While perhaps necessary, ethical means of leading others are not
sufficient for establishing ethical leadership. The other element of ethical leadership
involves the end or objective towards which the leader leads.

74.(p. 159-162) What is a code of conduct? What is its role within an organization?

One of the key manifestations of ethical leadership is the articulation of values for the
organization. Before impacting the culture through a code of conduct or statement of
values, a firm must first determine its mission. In the absence of other values, the only
value is profit at any cost. Therefore, without additional guidance from the top, a
firm is sending a clear message that a worker should do whatever it takes to reap
profits.
A code of conduct, therefore, may more specifically delineate this foundation both for
internal stakeholders such as employees and for external stakeholders such as
customers. The code has the potential to both enhance corporate reputation and
provide concrete guidance for internaldecision-making, thus creating a built-in risk
management system.
By establishing the core tenets on which a company is built, corporate leadership is
effectively laying down the law with regard to the basis and objectives for all future
decisions.
75.(p. 163) What is the last determining factor for the success of a code to impact
culture?

To have an effective code that will successfully impact culture, there must be a belief
throughout the organization that this culture is actually possible, achievable. If
conflicts remain that will prevent certain components from being realized, or if key
leadership is not on board, no one will have faith in the changes articulated.

76.(p. 163-165) How is communication important for the integration of an ethical culture?
What is whistleblowing?

Integrating an ethical culture throughout a firm and providing means for enforcement
is vitally critical both to the success of any cultural shift and to the impact on all
stakeholders. One of the most determinative elements of integration is communication
because without it, there is no clarity of purpose, priorities, or process.
Communication of culture must be incorporated into the firm's vocabulary, habits, and
attitudes to become an essential element in the corporate life,decision-making, and
determination of success.
Whistleblowing involves the disclosure of unethical or illegal activities to someone
who is in the position to take action to prevent or punish the wrongdoing.
Whistleblowing can expose and end unethical activities, but it can also seem disloyal,
it can harm the business, and it can extract significant costs on the whistleblower.

Virtue ethics emphasizes the more affective side of our character.


51. (p. 120) Which of the following focuses on the concept of practices and what type of
people these practices are creating?
A. Virtue ethics framework of ethics.
B.Social justice through fairness framework of ethics.
C.Utilitarian framework of ethics.
D.Deontological framework of ethics.

Virtue ethics reminds us to look to the actual practices we find in the business world
and ask what type of people these practices are creating.

Fill in the Blank Questions

52. (p. 100) Virtue ethics directs us to consider the _____ of individuals and how various
character traits can contribute to, or obstruct a happy, meaningful life.
moral character

Virtue ethics directs us to consider the moral character of individuals and how various
character traits can contribute to, or obstruct, a happy and meaningful human life.

53. (p. 100) _____ is commonly identified with the principle of "maximize the overall
good" or, in a slightly different version, of producing "the greatest good for the
greatest number."
Utilitarianism

Utilitarianism is commonly identified with the principle of "maximize the overall


good" or, in a slightly different version, of producing "the greatest good for the
greatest number."

54. (p. 101) The emphasis on producing the greatest good for the greatest number makes
utilitarianism a _____.
social philosophy

The emphasis on producing the greatest good for the greatest number makes
utilitarianism a social philosophy that provides strong support for democratic
institutions and policies and opposes those policies that aim to benefit only a small
social, economic, or political minority.
55. (p. 101) People endorsing child labor by justifying that it brings in foreign investment
within poor countries are mostly _____.
utilitarians

Child labor can have beneficial results for bringing foreign investment and money into
a poor country. In the opinion of some observers, allowing children to work for
pennies a day under sweatshop conditions produces better overall consequences than
the available alternatives.
Thus, one might argue on utilitarian grounds that such labor practices are ethically
permissible because they produce better overall consequences than the alternatives.

56. (p. 104) The " _____ " version of utilitarianism would be sympathetic with
government regulation of business on the grounds that such regulation will insure that
business activities do contribute to the overall good.
administrative

The administrative version of utilitarianism would be sympathetic with government


regulation of business on the grounds that such regulation will insure that business
activities do contribute to the overall good.

57. (p. 106) One problem associated with utilitarianism is that the essence of
utilitarianism is its reliance on _____.
consequences

One challenge goes directly to the core of utilitarianism. The essence of utilitarianism
is its reliance on consequences.

58. (p. 108) Legal rules, organizational rules, role-based rules, and professional rules, all
form a part of a social agreement called the _____, which functions to organize and
ease relations between individuals.
social contract

Legal rules, organizational rules, role-based rules, and professional rules can be
thought of as part of a social agreement, or social contract, which functions to
organize and ease relations between individuals.
59. (p. 110) The basis of the ethical principle emphasized by _____ is to respect the
dignity of individuals.
Immanuel Kant

The 18th-century German philosopher Immanuel Kant, argued that there is essentially
one such fundamental ethical principle: respect the dignity of each individual human
being.

60. (p. 114) Right to a minimum wage, equal opportunity, to bargain collectively as part
of a union, and to be free from sexual harassment are examples of _____ rights.
legal

Legal rights are granted to employees on the basis of legislation or judicial rulings.
Thus, employees have a right to a minimum wage, equal opportunity, to bargain
collectively as part of a union, to be free from sexual harassment, and so forth.

61. (p. 117) _____ is a view that holds that people act only out of self-interest.
Egoism

To understand how virtue ethics differs from utilitarian and deontological approaches,
consider the problem of egoism. Egoism is a view that holds that people act only out
of self- interest.

Essay Questions

62. (p. 98) What is an ethical theory and how do they help?

An ethical theory is nothing more than an attempt to provide a systematic answer to


the fundamental ethical question: How should human beings live their lives? Not only
do ethical theories attempt to answer the question of how we should live, but they also
provide reasons to support their answer. Ethical theories seek to provide a rational
justification for why we should act and decide in a particular way.
63. (p. 100-101) Explain how child labor may be justified in the eyes of a utilitarian.

Utilitarianism's fundamental insight is that we should decide what to do by


considering the consequences of our actions. One might argue on utilitarian grounds
that child labor practices are ethically permissible because they produce better overall
consequences than the alternatives.

64. (p. 102-103) According to one version of attaining the utilitarian goal, and with
reference to Adam Smith's an invisible hand', how is it possible to have the most
efficient economy?

One movement within utilitarian thinking invokes the tradition of Adam Smith and
claims that free and competitive markets are the best means for attaining utilitarian
goals. Given this utilitarian goal, current free market economics advises us that the
most efficient economy is structured according to the principles of free market
capitalism.

65. (p. 102-103) Explain how the branch of utilitarianism claims free and competitive
markets can help maximize the overall good?

Utilitarianism answers the fundamental questions of ethics - what should we do? - by


reference to a rule: Maximize the overall happiness. One movement within utilitarian
thinking invokes the tradition of Adam Smith, claiming that free and competitive
markets are the best means for attaining utilitarian goals. This version would promote
policies that deregulate private industry, protect property rights, allow for free
exchanges, and encourage competition. In such situations, decisions of rationallyself-
interested individuals would result, as if led by "an invisible hand" in Adam Smith's
terms, in the maximum satisfaction of individual happiness.
Current free market economics advises us that the most efficient economy is
structured according to the principles of free market capitalism. This requires that
business managers, in turn, should seek to maximize profits. This idea is central to
one common perspective on corporate social responsibility. By pursuing profits,
business insures that scarce resources go to those who most value them and thereby
insures that resources will provide optimal overall satisfaction. Thus, these economists
see competitive markets as the most efficient means to the utilitarian end of
maximizing happiness.
66. (p. 105-106) Briefly highlight the problems associated with utilitarian thinking.

If utilitarianism advises that decisions be made by comparing the consequences of


alternative actions, then we must have a method for making such comparisons. In
practice, however, some comparisons and measurements are very difficult.
A second challenge goes directly to the core of utilitarianism. The essence of
utilitarianism is its reliance on consequences. Ethical and unethical acts are
determined by their consequences. In short, the end justifies the means. But this seems
to deny one of the earliest ethical principles that many of us have learned: The ends do
not justify the means.
Utilitarian reasoning demands rigorous work to calculate all the beneficial and
harmful consequences of our actions. Perhaps more important, utilitarian reasoning
does not exhaust the range of ethical concerns. Consequences are only a part of the
ethical landscape. Responsible ethical decision-making also involves matters of
duties, principles, and personal integrity.

67. (p. 106) How does utilitarianism directly go against the fundamental ethical
principle?

The essence of utilitarianism is its reliance on consequences. Ethical and unethical


acts are determined by their consequences. In short, the end justifies the means. But
this seems to deny one of the earliest ethical principles that many of us have learned:
the ends do not justify the means.

68. (p. 108) Briefly explain how the concept of role-based rules works in business.

As an employee, one takes on a certain role that creates duties. Every business will
have a set of rules that employees are expected to follow. Sometimes these rules are
explicitly stated in a code of conduct, other times in employee handbooks, still others
simply by managers.
Likewise, as a business manager, one ought to follow many rules in respect to
stockholders, employees, suppliers, and other stakeholders.
Perhaps the most dramatic example of role-based duties concerns the work of
professionals within business. Lawyers, accountants, auditors, financial analysts, and
bankers have important roles to play within political and economic institutions. Many
of these roles, often described as "gatekeeper functions," insure the integrity and
proper functioning of the economic, legal, or financial system.
69. (p. 108) What are the roles enacted by professionals within business termed as, and
what do they entail?

Lawyers, accountants, auditors, financial analysts, and bankers have important roles to
play within political and economic institutions. Many of these roles, often described
as "gatekeeper functions," insure the integrity and proper functioning of the economic,
legal, or financial system.

70. (p. 108-109) What is the social contract?

Legal rules, organizational rules, role-based rules, and professional rules can be
thought of as part of a social agreement, or social contract, which functions to
organize and ease relations between individuals.

71. (p. 110) What is a moral right?

Moral right is the right to be treated with respect, to expect that others will treat us as
an end and never as a means only, the right to be treated as an autonomous person.

72. (p. 110) Explain how Immanuel Kant means that humans are subjects, and not
objects.

German philosopher Immanuel Kant, argued that there is essentially one fundamental
ethical principle: respect the dignity of each individual human being. One way to do
so requires us to treat all persons as ends in themselves and never only as means to
our own ends. In other words, our fundamental duty is to treat people as subjects
capable of living their own lives and not as mere objects that exist for our purposes.
To use the familiar subject/object categories from grammar, humans are subjects
because they make decisions and perform actions rather than being objects that are
acted upon.
73. (p. 111) How is the concept of moral right central to the concept of deontological
ethics?

The concept of a moral right is central to the deontological tradition since the inherent
dignity of each individual means that we cannot do just anything we choose to another
person. Moral rights protect individuals from being treated in ways that would violate
their dignity and that would treat them as mere objects or means. Moral rights imply
that some acts and some decisions are "off-limits."

Accordingly, our fundamental moral duty (the "categorical imperative") is to respect


the fundamental moral rights of others. Our rights establish limits on the decisions and
authority of others.

74. (p. 114) Distinguish between legal and contractual employee rights.

Legal rights are those granted to employees on the basis of legislation or judicial
rulings. Thus, employees have a right to a minimum wage, equal opportunity, to
bargain collectively as part of a union, to be free from sexual harassment, and so forth.
Employee rights might refer to those goods that employees are entitled to on the basis
of contractual agreements with employers. In this sense, a particular employee might
have a right to a specific health care package, a certain number of paid holidays,
pension funds, and the like.

75. (p. 117-118) Briefly explain the concept of virtue ethics.

Virtue ethics is a tradition within philosophical ethics that seeks a full and detailed
description of those character traits, or virtues, that would constitute a good and full
human life.
An ethics of virtue shifts the focus from questions about what a person should do, to a
focus on who that person is. This shift requires not only a different view of ethics but,
at least as important, a different view of ourselves. Implicit in this distinction is the
recognition that our identity as a person is constituted in part by our wants, beliefs,
values, and attitudes. A person's characterthosedispositions, relationships,
attitudes, values, and beliefs that popularly might be called a"personality"is not a
feature independent of that person's identity. Character is not like a suit of clothes that
you step into and out of at will. Rather, the self is identical to a person's most
fundamental and enduring dispositions, attitudes, values, and beliefs. Note how this
shift to an emphasis on the individual changes the nature of justification in ethics.
76. (p. 117) What is the biggest challenge posed by egoism'?

The biggest challenge posed by egoism and, according to some, the biggest challenge
to ethics, is the apparent gap between self-interest and altruism, or between motivation
that is "self-regarding"and motivation that is "other-regarding." Ethics requires us, at
least at times, to act for thewell-being of others.

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