BLAW Chapter 9

Unless a corporation violates a law, its actions do not raise questions about corporate ethics.

Ethics is the study of the principles that lead to financially successful conduct.

Business ethics looks at the decisions that businesses make or have to make and whether those decisions are right or wrong.

Ethics is as clearly defined as the law.

Focusing on a firm's short-run profits without considering the company's long-term needs may be acting unethically.

It may be unethical for a company to refuse to negotiate liability claims for alleged injuries because of a faulty product.

The legality of an action is always clear.

Adhering strictly to all business laws is all that is necessary to fulfill all business ethics obligations.

The study of ethics goes beyond legal requirements to evaluate what is right for society.

If an action is legal, it is ethical.

If people merely comply with the law, they are acting at the lowest ethical level society will tolerate.

An action may be legal but not ethical.

Acting in good faith gives a business firm a better chance of defending its actions in court.

Ethical reasoning is the process through which an individual links his or her moral convictions or ethical standards to the particular situation at hand.

Duty-based ethical standards often come from religious precepts or through philosophical reasoning.

Religious rules generally are absolute with respect to the behavior of their adherents.

Ethical reasoning is the process through which an individual rationalizes whatever action he or she chooses to take.

Under the principle of rights theory, one person's principles are as "right" as another's.

In ethical terms, a cost-benefit analysis is an assessment of the negative and positive effects of alternative actions on individuals.

According to utilitarianism, it does not matter how many people suffer a negative effect from an act.

The concept of corporate social responsibility is imposed on corporations by law.

Corporations can be viewed as "citizens" that are expected to participate in bettering society.

Corporations can be perceived as owing ethical duties to groups other than their shareholders.

In a corporation, managers are often faced with ethical trade-offs when a certain decision will benefit one group, but harm another.

Sometimes, there is no "good" answer to the ethical questions that arise.

Managers must apply the same ethical standards to their employees as they do to themselves.

Business owners' misbehavior has no negative consequences for their business.

Management's behavior sets the ethical tone of a firm.

The effectiveness of internal company codes of ethics is determined by the degree of their enforcement by legal authorities.

Few companies provide any kind of support such as ethical training programs to make their ethical codes more effective.

Codes of ethical conduct can indicate how employees are expected to act.

Effective corporate ethical policies must be clearly communicated to employees.

Companies are required to set up confidential systems so that employees can "raise red flags" about suspected illegal or unethical accounting practices.

Some provisions of U.S. bribery laws are directed toward accountants.

Bribery of foreign government officials is both an ethical and a legal issue.

In studying the legal environment of business, students also review ethics in a business context. Ethics includes the study of what constitutes

Donna works for eMarketing, Inc. Her job includes putting "spin" on the firm's successes and failures. In this context, ethics has to do with how businesspersons, in making their decisions, apply

Julie is sales manager for Kelso's Concrete & Stone Products, Inc. In applying ethical principles to the business of the firm, Kelso's and Julie will most likely evaluate

Flexo Trucking Company transports hazard-ous waste. Garn is a Flexo driver, whom the company knows drives longer hours than federal regula-tions permit. One night, Garn exceeds the limit and has an accident. Spilled chemicals contaminate Hill City's water source, forcing the residents to move away. Flexo acted unethically because

Peak & Vale Accountants provides other firms with accounting services.Questions of what is ethical involve the extent to which Peak & Vale has

Invested Capital Corporation provides other firms with funds to expand op-erations.If InvestedCapital strictly complies with existing laws, the firm'sbusiness ethics obligations will

SuperMeds Corporation develops a new drug that controls severe acne. The drug is not approved by the government for sale in the United States because one of its ingredients is a banned chemical. This chemical is not banned in Mexico. Whether it is ethical for SuperMeds to sell the drug in Mexico depends on

Housemate, Inc., makes and sells a variety of household products. With a fair amount of certainty, Housemate's decision makers can predict whether a given business action would be legal in

Precision Engineering Inc., like other corporations, is subject to laws that are broad in their purpose and their scope. Compliance with these laws is not always sufficient to determine "right" behavior because

Brewster, the chief executive officer of Cog & Gear Lubricants Corporation, wants to en-sure that Cog & Gear's activities are legal and ethical. The best course for Brewster and Cog & Gear is to act

Sam, the chief accounting officer of Texas Fencing Corporation, wants to be sure that all the company's accounts are legal and ethical. Sometimes, however, he is unsure exactly what is legal and what is illegal. Sam should

Dispatch Hauling Corporation has an online forum where employees can post comments.Eddie posts a racially offensive video on the forum. Dispatch should

In business deals, Fiona, the chief executive officer of Glazed Donuts, Inc., follows duty-based ethical standards. These are most likely derived from

Ryland, an officer for Sports Park, Inc., attempts to apply a duty-based approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person must

In making business decisions,Glenda, personnel manager for HVAC Maintenance, Inc., applies her belief that all persons have fundamental rights. This is

As CEO of Alabama Archery Supplies, Bertrand applies ethical standards derived from religious principles. For businesses, religious principles can be

Steaks n' Fries Restaurant Company's decision makers view a particular risk in the consumption of Steaks n' Fries' products as open and obvious. Continuing to market the products without explicitly telling consumers of the risk could be justified from a perspective of

Provident Medical Health Center asks its employees, many of which are mem-bers of the American Nurses Association, to apply the utilitarian theory of ethics.This theory does not require

Dyan, the owner of Expert Restoration Services, Inc., adheres to the "principle of rights" theory. Under this theory, a key factor in determining whether a business decision is ethical is how that decision

In making decisions for Commercial Janitorial & Maintenance Services, Inc., Isaiah uses a cost-benefit analysis. This analysis is part of

Morgan and other executive officers of Regional Economic Development Associates, Inc., applies the utilitarian theory of ethics in business contexts. Utilitarianism focuses on

Bob, research manager for CornAgri Products, Inc., ap-plies utilitarian eth-ics to determine that an action is morally cor-rect when it produces the greatest good for

Palette Paints, Inc. expends funds and takes steps to ensure that all employees are safe on the job, that all products are safe for consumers, and that the environmental impact of the corporation is minimal. Palette Paints appears to believe in the concept of

In deciding questions of corporate social responsibility, Waste Disposal & Recycling, Inc., is concerned with

According to the view that New Allied Manufacturing Corporation is a "citizen," New Allied is expected to

Any decision by the management of Fast-Food Franchise Corporation may significantly affect its

Mary works in the accounting department of New Trends Sales Company. Her job includes reviewing expense reports submitted by management and employees. In determining which expenses are "padding," Mary should apply to management

Lucas is a business manager for Micro Manufacturing Company. Ethical dilemmas that Lucas is not likely to encounter include deciding

At a meeting of employees, Fuel Injection Design & Manufacturing, Inc.'s managers announce the creation of a new company-wide code of ethical conduct and the initiation of an ad campaign to publicize the new code. They also say that any employees who do not adhere to the code will be discharged. The effectiveness of this code will be determined by

Fealty Credit Corporation asks its employees to evaluate their actions and get on the ethical business decision-making "bandwagon." Guidelines for judging individual actions most likely include all of the following except

Duncan is in charge of the ethics of Earth Eggs, Inc., an organic egg raising company. As part of this responsibility, Duncan is most likely not in charge of

Ridgeline Excavation & Construction, LLC, creates an internal code of ethics. Like the codes of other firms, Ridgeline's company code is not

Ethical standards would most likely be considered violated if Team Logos Merchandising Corporation deals with a company in a developing nation that

Major Construction & Manufacturing Corporation makes a side payment to a govern-ment official in India. Under the Foreign Corrupt Practices Act, this is permitted

To assist in detecting illegal bribes, International Civil Engineers, Inc., and all other U.S. companies must