Business Ethics: Legal, Ethical, and Sustainability Frameworks
Study online at https://quizlet.com/_j979sx
1. What is the primary role of law in business ethics?: The law establishes a 'moral minimum'
or a floor, providing rules, stability, predictability, and enforcement mechanisms.
2. Why is law often considered insufficient for ensuring ethical business con-
duct?: Law is reactive, slow to change, often incomplete (gray areas), and can be technically followed while still
causing significant harm.
3. What are the three pillars of sustainability?: People, Planet, and Profit.
4. How did the Purdue Pharma case illustrate the gap between legal compli-
ance and ethical conduct?: While their marketing tactics were technically legal under FDA approval, they
were unethical because they misled doctors about addiction risks and caused massive social harm.
5. What strategy did Enron use to maintain technical compliance while mis-
leading investors?: They used Special Purpose Entities (SPEs) to hide debt and structure deals that complied
with accounting rules but misrepresented the company's financial health.
6. How did the Volkswagen emissions scandal demonstrate the manipulation
of legal compliance?: VW designed software to pass emissions tests in controlled conditions, while the cars
emitted up to 40 times the legal pollution limit during real-world driving.
7. What is the ethical issue regarding NovaTech's wage practices?: They pay above
the legal minimum wage, but still below a living wage, highlighting that legal compliance does not guarantee worker
wellbeing.
8. Why does operating in emerging economies with weak governance increase
a company's ethical responsibility?: Because local laws may be inadequate or poorly enforced,
companies must go beyond local compliance to prevent human rights abuses, such as those involving local security
forces.
9. What are the five key reasons for a business to go beyond legal compliance?-
: Risk management, reputational risk, investor pressure, operational performance, and long-term value creation.
10. What are the three main ethical frameworks discussed in the course?: -
Duty-Based Ethics (Deontology), Outcome-Based Ethics (Utilitarianism), and Stakeholder-Centric Ethics.
11. What is the primary focus of Duty-Based Ethics (Deontology)?: It focuses on
principles, rights, and obligations, asking 'Is this the right thing to do?' regardless of the consequences.
12. How would a Duty-Based ethical framework have changed Purdue Phar-
ma's actions?: They would have prioritized truthfulness and non-maleficence over profit, leading to full
disclosure of addiction risks and less aggressive marketing.
, Business Ethics: Legal, Ethical, and Sustainability Frameworks
Study online at https://quizlet.com/_j979sx
13. What is the 'moral minimum' in a business context?: The minimum standard of conduct
required by law.
14. What are the three guiding questions for ethical decision-making?: Is this fair?
Are we misleading anyone? Would this look okay on the front page of the news?
15. Why is the law considered 'reactive'?: Because it typically establishes regulations only after
harm has already occurred.
16. What is the main difference between compliance and sustainability?: Com-
pliance focuses on meeting the minimum legal floor, while sustainability focuses on long-term value creation for
stakeholders.
17. How do global supply chains create accountability gaps?: Suppliers may meet local
laws, but those laws may be exploitative or insufficient to protect workers, leaving the parent company ethically
responsible for poor conditions.
18. What are the three types of tradeoffs businesses face when going beyond
compliance?: Financial, strategic, and operational.
19. What is the core takeaway regarding the relationship between power and
responsibility?: Power creates responsibility; companies with significant influence have a higher duty to act
ethically.
20. What does 'Legal `Ethical' mean?: A company can be in full compliance with the law and still
engage in harmful or unethical practices.
21. What is the focus of Outcome-Based Ethics (Utilitarianism)?: It focuses on the
consequences of actions, aiming to produce the greatest good for the greatest number of people.
22. What is the focus of Stakeholder-Centric Ethics?: It focuses on fairness and the impact of
business decisions on all parties affected by the company, not just shareholders.
23. Why is it important to use multiple ethical frameworks?: Because the law alone cannot
determine what is 'right' in complex situations involving competing stakeholders and long-term uncertainty.
24. What is the core focus of duty-based ethics?: It focuses on adherence to rules, honesty,
and principles, where any form of deception is considered inherently unethical.
25. How does outcome-based ethics (utilitarianism) evaluate a decision?: It eval-
uates actions based on their consequences, aiming to maximize the greatest good for the greatest number while
minimizing harm.
26. What is the primary question asked in stakeholder-centric ethics?: Is this
decision fair to all stakeholders, including employees, customers, investors, communities, and governments?
Study online at https://quizlet.com/_j979sx
1. What is the primary role of law in business ethics?: The law establishes a 'moral minimum'
or a floor, providing rules, stability, predictability, and enforcement mechanisms.
2. Why is law often considered insufficient for ensuring ethical business con-
duct?: Law is reactive, slow to change, often incomplete (gray areas), and can be technically followed while still
causing significant harm.
3. What are the three pillars of sustainability?: People, Planet, and Profit.
4. How did the Purdue Pharma case illustrate the gap between legal compli-
ance and ethical conduct?: While their marketing tactics were technically legal under FDA approval, they
were unethical because they misled doctors about addiction risks and caused massive social harm.
5. What strategy did Enron use to maintain technical compliance while mis-
leading investors?: They used Special Purpose Entities (SPEs) to hide debt and structure deals that complied
with accounting rules but misrepresented the company's financial health.
6. How did the Volkswagen emissions scandal demonstrate the manipulation
of legal compliance?: VW designed software to pass emissions tests in controlled conditions, while the cars
emitted up to 40 times the legal pollution limit during real-world driving.
7. What is the ethical issue regarding NovaTech's wage practices?: They pay above
the legal minimum wage, but still below a living wage, highlighting that legal compliance does not guarantee worker
wellbeing.
8. Why does operating in emerging economies with weak governance increase
a company's ethical responsibility?: Because local laws may be inadequate or poorly enforced,
companies must go beyond local compliance to prevent human rights abuses, such as those involving local security
forces.
9. What are the five key reasons for a business to go beyond legal compliance?-
: Risk management, reputational risk, investor pressure, operational performance, and long-term value creation.
10. What are the three main ethical frameworks discussed in the course?: -
Duty-Based Ethics (Deontology), Outcome-Based Ethics (Utilitarianism), and Stakeholder-Centric Ethics.
11. What is the primary focus of Duty-Based Ethics (Deontology)?: It focuses on
principles, rights, and obligations, asking 'Is this the right thing to do?' regardless of the consequences.
12. How would a Duty-Based ethical framework have changed Purdue Phar-
ma's actions?: They would have prioritized truthfulness and non-maleficence over profit, leading to full
disclosure of addiction risks and less aggressive marketing.
, Business Ethics: Legal, Ethical, and Sustainability Frameworks
Study online at https://quizlet.com/_j979sx
13. What is the 'moral minimum' in a business context?: The minimum standard of conduct
required by law.
14. What are the three guiding questions for ethical decision-making?: Is this fair?
Are we misleading anyone? Would this look okay on the front page of the news?
15. Why is the law considered 'reactive'?: Because it typically establishes regulations only after
harm has already occurred.
16. What is the main difference between compliance and sustainability?: Com-
pliance focuses on meeting the minimum legal floor, while sustainability focuses on long-term value creation for
stakeholders.
17. How do global supply chains create accountability gaps?: Suppliers may meet local
laws, but those laws may be exploitative or insufficient to protect workers, leaving the parent company ethically
responsible for poor conditions.
18. What are the three types of tradeoffs businesses face when going beyond
compliance?: Financial, strategic, and operational.
19. What is the core takeaway regarding the relationship between power and
responsibility?: Power creates responsibility; companies with significant influence have a higher duty to act
ethically.
20. What does 'Legal `Ethical' mean?: A company can be in full compliance with the law and still
engage in harmful or unethical practices.
21. What is the focus of Outcome-Based Ethics (Utilitarianism)?: It focuses on the
consequences of actions, aiming to produce the greatest good for the greatest number of people.
22. What is the focus of Stakeholder-Centric Ethics?: It focuses on fairness and the impact of
business decisions on all parties affected by the company, not just shareholders.
23. Why is it important to use multiple ethical frameworks?: Because the law alone cannot
determine what is 'right' in complex situations involving competing stakeholders and long-term uncertainty.
24. What is the core focus of duty-based ethics?: It focuses on adherence to rules, honesty,
and principles, where any form of deception is considered inherently unethical.
25. How does outcome-based ethics (utilitarianism) evaluate a decision?: It eval-
uates actions based on their consequences, aiming to maximize the greatest good for the greatest number while
minimizing harm.
26. What is the primary question asked in stakeholder-centric ethics?: Is this
decision fair to all stakeholders, including employees, customers, investors, communities, and governments?
