BMAL-590 BUSINESS ETHNICS EXAM QUESTIONS
AND ANSWERS WITH COMPLETE SOLUTIONS
The difference between an ordinary decision and an ethical one:
accepted rules or standard practices are not clearly applicable, and the decision maker must weigh
values and diverging perspectives in a situation which is not quite the same as any he or she has faced
previously.
Values and judgments play a critical role in the making of ethical decisions, as does recognizing how
different groups may be impacted by a decision.
Business ethics
comprises principles and standards that guide behavior in the world of business.
Investors, employees, customers, interest groups, the legal system, and the community often determine
whether a specific action is right or wrong -- ethical or unethical.
Some special aspects must be considered when applying ethics to business: Businesses must earn a
profit to survive. Businesses must balance their desires for profits against the needs and desires of
society, and maintaining this balance often requires compromises or tradeoffs.
Reports of unethical activities:
accounting fraud, insider trading, falsifying documents, deceptive advertising, defective products,
bribery, abusive behavior, harassment, and employee theft regularly appear in the media
,Many examples of unethical activities go unreported and/or undetected. But many do come to light,
with devastating implications for the individuals involved, and potentially impacting many other innocent
individuals.
Organizations that develop a culture where ethical considerations are part of every decision are more
likely to make a positive impact on society, and less likely to be embroiled in scandals.
Reasons for Studying Business Ethics:
1. an individual's personal values and morality are only one factor in the ethical decision-making process
2. being a good person and having sound personal ethics may not be sufficient to handle the ethical
issues that arise in a business organization
3. business strategy decisions involve complex and detailed discussions, and a high level of personal
moral development may not prevent an individual from violating the law in an organizational context
4. the values people learn from family, religion, and school may not provide specific guidelines for
complex business decisions.
Studying ethics helps business people begin to identify ethical issues, recognize the approaches available
to resolve them, learn about the ethical decision-making process and ways to promote ethical behavior,
and begin to understand how to cope with conflicts between personal, organizational, and societal
values.
,Historic Tensions of business ethics:
With the development of big businesses, large mining operations, and expansive agricultural firms, along
with the "Industrial Revolution," society struggled to determine the appropriate role of these large
organizations. Unions developed to ensure workers' interests and well-being were considered, and the
idea of a living wage that was sufficient for education, recreation, health, and retirement began to take
hold.
Industrialization also led to concerns about pollution and the environment
Consumer protection became increasingly important, with legislation in many countries that sought to
safeguard consumers from potentially dangerous products.
The sense that corporations could become too large, and have too much power over consumers,
workers, and governments led to the enactment of anti-trust legislation that split up some large firms,
and prevented others from becoming too powerful.
social responsibility
the duty of a business to contribute to the well-being of a community
an organization's obligation to maximize its positive impact on stakeholders and to minimize its negative
impact.
Milton Friedman
He was a famous American economist. He strongly promoted the idea of free trade and condemned
government regulation and socialism.
, argued persuasively that the business of business was business, and that the primary role of a business
was to maximize profits within the rules dictated by governments and society.
He and others argued that companies should make charitable contributions and engage in social issues
only if these actions also contributed to the companies' reputation, ability to recruit qualified
employees, or other factors that ultimately contributed to profits and shareholder value.
In society, he argued, there are other entities such as governments and non-profit organizations that
bear the primary social responsibilities of society, and are best equipped to deal with social issues.
Utilitarian approach
ethical philosophy that advocates a decision that provides the most good or the least harm
Hence a community might decide to build a road that will improve the flow of traffic for many citizens,
even if that means that some individuals may be forced to sell their land, homes, or farms to allow for
the road.
Similarly, a company should develop an employee benefits package that serves the interests of most
employees, although some employees would prefer a slightly different package.
Moral Rights approach
guided by respect for the fundamental rights of human beings
suggests that every human being has some fundamental rights that must always be protected, and that
AND ANSWERS WITH COMPLETE SOLUTIONS
The difference between an ordinary decision and an ethical one:
accepted rules or standard practices are not clearly applicable, and the decision maker must weigh
values and diverging perspectives in a situation which is not quite the same as any he or she has faced
previously.
Values and judgments play a critical role in the making of ethical decisions, as does recognizing how
different groups may be impacted by a decision.
Business ethics
comprises principles and standards that guide behavior in the world of business.
Investors, employees, customers, interest groups, the legal system, and the community often determine
whether a specific action is right or wrong -- ethical or unethical.
Some special aspects must be considered when applying ethics to business: Businesses must earn a
profit to survive. Businesses must balance their desires for profits against the needs and desires of
society, and maintaining this balance often requires compromises or tradeoffs.
Reports of unethical activities:
accounting fraud, insider trading, falsifying documents, deceptive advertising, defective products,
bribery, abusive behavior, harassment, and employee theft regularly appear in the media
,Many examples of unethical activities go unreported and/or undetected. But many do come to light,
with devastating implications for the individuals involved, and potentially impacting many other innocent
individuals.
Organizations that develop a culture where ethical considerations are part of every decision are more
likely to make a positive impact on society, and less likely to be embroiled in scandals.
Reasons for Studying Business Ethics:
1. an individual's personal values and morality are only one factor in the ethical decision-making process
2. being a good person and having sound personal ethics may not be sufficient to handle the ethical
issues that arise in a business organization
3. business strategy decisions involve complex and detailed discussions, and a high level of personal
moral development may not prevent an individual from violating the law in an organizational context
4. the values people learn from family, religion, and school may not provide specific guidelines for
complex business decisions.
Studying ethics helps business people begin to identify ethical issues, recognize the approaches available
to resolve them, learn about the ethical decision-making process and ways to promote ethical behavior,
and begin to understand how to cope with conflicts between personal, organizational, and societal
values.
,Historic Tensions of business ethics:
With the development of big businesses, large mining operations, and expansive agricultural firms, along
with the "Industrial Revolution," society struggled to determine the appropriate role of these large
organizations. Unions developed to ensure workers' interests and well-being were considered, and the
idea of a living wage that was sufficient for education, recreation, health, and retirement began to take
hold.
Industrialization also led to concerns about pollution and the environment
Consumer protection became increasingly important, with legislation in many countries that sought to
safeguard consumers from potentially dangerous products.
The sense that corporations could become too large, and have too much power over consumers,
workers, and governments led to the enactment of anti-trust legislation that split up some large firms,
and prevented others from becoming too powerful.
social responsibility
the duty of a business to contribute to the well-being of a community
an organization's obligation to maximize its positive impact on stakeholders and to minimize its negative
impact.
Milton Friedman
He was a famous American economist. He strongly promoted the idea of free trade and condemned
government regulation and socialism.
, argued persuasively that the business of business was business, and that the primary role of a business
was to maximize profits within the rules dictated by governments and society.
He and others argued that companies should make charitable contributions and engage in social issues
only if these actions also contributed to the companies' reputation, ability to recruit qualified
employees, or other factors that ultimately contributed to profits and shareholder value.
In society, he argued, there are other entities such as governments and non-profit organizations that
bear the primary social responsibilities of society, and are best equipped to deal with social issues.
Utilitarian approach
ethical philosophy that advocates a decision that provides the most good or the least harm
Hence a community might decide to build a road that will improve the flow of traffic for many citizens,
even if that means that some individuals may be forced to sell their land, homes, or farms to allow for
the road.
Similarly, a company should develop an employee benefits package that serves the interests of most
employees, although some employees would prefer a slightly different package.
Moral Rights approach
guided by respect for the fundamental rights of human beings
suggests that every human being has some fundamental rights that must always be protected, and that
