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(a). Ethical relativism
(b). Situational ethics
(c). Consequentialism
(d). Deontology
(e). Virtue ethics
(f). Ethics of care

(a). Deontology
(b). Act utilitarianism
(c). Rule utilitarianism
(d). Virtue ethics

FALSE

Ethical conversation is less about finding the one and only right thing to do than it is about finding the better thing to do.

TRUE

Ethics guides us when we are wondering what we should be doing in a particular situation whereas business ethics is the application of ethics to the special problems and opportunities experienced business people.

FALSE

The social responsibility of business consists of the expectations that the community imposes on firms doing business inside its borders.

FALSE

Because of issues including risky bets it made insuring mortgage-backed securities, the company collapsed and received the largest federal bailout in U.S. history.

TRUE

In some countries, businesses must pay bribes to receive legitimate supplies; and although the business person may be morally opposed to paying bribes, the supplies are necessary to stay in business.

FALSE

The WPH framework considers whom the decision would affect, purpose (values), and how to make ethical decisions.

FALSE

The stakeholders of a firm are the many groups of people affected the firm’s decisions.

FALSE

The general community where a firm operates is a stakeholder of the firm.

FALSE

Unlike ethical relativism, situational ethics allows us to judge other people’s actions.

FALSE

In contrast to absolutism, consequentialism does not provide a rigid set of rules to follow regardless of the situation.

TRUE

Utilitarianism is one form of consequentialism that business managers may find useful.

FALSE

As reflected in Exhibit 2-2, during the past several years, ethics violations have been uncovered in the accounting practices of a number of large companies.

The court found that given that Kendall’s dermatologist was unaware of, and therefore did not warn her of, the risk of her condition resulting from Accutane, a reasonable person in the plaintiff’s situation would not have been aware of the potential for the medication to cause her illness. Therefore, given that the plaintiff was not made aware of the connection between her illness and the medication until the later lawyer’s advertisement, her lawsuit was timely.

The unquestionable nature of the rules in most absolutist repositories seems overly inflexible when applied to different situations.

Business ethics is the application of ethics to special problems and opportunities experienced business people.

Ethics is the study and practice of decisions about what is good, or right.

The social responsibility of business consists of the expectations that the community imposes on firms doing business inside its borders.

The legality of the decision in choosing a method of production, how to compete with competing firms, and the social responsibilities of the firm is the minimal standard that must be met for the firm to be an ethical business.

The definition of business ethics refers to standards of business conduct and does not result in a set of correct decisions.

Although the court in U.S. v. Alfred Caronia found that the defendant’s statements met the criteria for classification as commercial speech entitled to protection under some circumstances, the defendant’s speech was not constitutionally protected because of the reasons advanced the government for the regulation at issue.

The revelations of Enron and WorldCom suggested quite blatantly that the business world could not be allowed to regulate itself ethically, and their downfall in part led to many federal regulations designed to promote truthfulness and ethical practices among business managers.

The principle of rights asserts that whether a business decision is ethical depends on how the decision affects the rights of all involved, a principle that is foundational to Western culture.

“Guanxi” refers to a sort of relationship building and is an intricate system of interpersonal networks woven together social ties.

The WPH framework addresses whom a decision would affect, the purpose of the decision, and the guidelines on how to make ethical decisions.

The framework addresses whom a decision would affect, the purpose of the decision, and the guidelines on how to make ethical decisions. There is no reference to ranking stakeholders at a higher level.

The stakeholders of a firm are the many groups of people affected the firm’s decisions.

The legality of the decision in choosing a method of production, how to compete with competing firms, and the social responsibilities of the firm is the minimal standard that must be met for the firm to be an ethical business.

The stakeholders of a firm are the many groups of people affected the firm’s decisions.

The Golden Rule is referenced as the idea that we should interact with other people in a manner consistent with the way we would like them to interact with us.

Positive abstractions that capture our sense of what is good or desirable are called values.

Exhibit 2-5 “Primary Values and Business Ethics” outlines an efficient way to apply this second step in the WPH framework referencing the values of freedom, security, justice, and efficiency.

The idea that we should interact with other people in a manner consistent with the manner in which we would like them to interact with us is called the Golden Rule.

The Corporate and Criminal Fraud Accountability Act, also known as the Sarbanes-Oxley Act, was signed President Bush in 2002 in the wake of several corporate accounting scandals.

As set forth in Exhibit 2-7, the Public Company Accounting Oversight Board is responsible for ensuring that auditors and public accounting firms compile accurate and truthful financial reports for the companies they audit. The act also requires that companies devise a system that allows employees to report suspicions of unethical behavior within the company. The act also protects these whistle-blowers from being fired or from retaliation their employer for reporting a possible problem within the company.

Exhibit 2-3, The WPH Process of Ethical Decision Making, reflects that “public disclosure,” “universalization,” and the “Golden Rule” are all part of the How process in the WPH Framework.

The “public disclosure” test for ethical behavior is sometimes referred to as the television test because it requires us to imagine that our actions are being broadcast on national television.

The universalization test for ethical behavior seeks consideration of what the world would be like if a decision is copied everyone else.

Now news corporations are putting numerous security barriers and encryptions around their records so that nobody can gain access to them.

As set forth in Exhibit 2-7, if the CEO or CFO knows that the company’s financial reports are incorrect but claims they are truthful, or if he or she destroys or changes financial documents, the imposed fine can run into millions of dollars.

As set forth in Exhibit 2-7, the Sarbanes-Oxley Act protects whistle-blowers from being fired or from retaliation their employer for reporting a possible problem within the company.

As set forth in Exhibit 2-7, the Sarbanes-Oxley Act created the Public Company Accounting Oversight Board.

Situational ethics requires that we evaluate the morality of an action imagining ourselves in the position of the person facing the ethical dilemma.

Unlike ethical relativism and situational ethics, absolutism holds that whether an action is moral does not depend on the perspective of the person facing the ethical dilemma.

Like ethical relativism, situational ethics requires that we evaluate the morality of an action imagining ourselves in the position of the person facing the ethical dilemma; but unlike ethical relativism, situational ethics allows us to judge other people’s actions.

Ethical relativism denies the existence of objective moral standards. For example, ethical relativism requires that we see murder as a moral action as long as the murderer believes that the action is best for himself or herself.

Absolutism, or ethical fundamentalism, requires that individuals defer to a set of rules to guide them in the ethical decision-making process.

According to ethical relativism, individuals must evaluate actions on the basis of what they feel is best for them.

Act utilitarianism advises examining all the potential actions in each situation and choosing the action that yields the greatest amount of pleasure over pain for all involved.

Rule utilitarianism holds that general rules that on balance produce the greatest amount of pleasure for all involved should be established and followed in each situation.

Deontology consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences.

Consequentialism is a general approach to ethical dilemmas that requires that we inquire about the consequences to relevant people of our making a particular decision.

When you see references to Kantian ethics, the analysis that follows the reference will be a discussion of the most famous of the deontological approaches to business ethics.

Like many consequentialist theories of ethics, utilitarianism urges managers to take those actions that provide the greatest pleasure after having subtracted the pain or harm associated with the action in question.

According to act utilitarianism, a business manager who deceives an employee may be acting morally if the act of deception maximizes pleasure over pain for everyone involved.

Deontology consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences.

According to the categorical imperative, an action is moral only if it would be consistent for everyone in society to act in the same way.

Deontology is difficult to apply because people disagree about what duties we owe to one another and which duties are more important than others when they conflict.

Virtue ethics is an ethical system in which the development of virtues, or positive character traits such as courage, justice, and truthfulness, is the basis for morality.

Deontology consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences.

A difficulty with the application of virtue ethics is the lack of agreement about the meaning of “the good life.”

Ethics-of-care theorists argue that when one individual, the caregiver, meets the needs of one other person, the cared-for party, the caregiver is actually helping to meet the needs of all the individuals who fall within the cared-for party’s web of care.

The ethics of care holds that the right course of action is the option most consistent with the building and maintaining of human relationships.

Student responses may vary. Johnson and Johnson’s credo may serve as a guide.

Students should reference the WPH process of decision making identifying stakeholders, values, and guidelines. Students should also propose a solution. Solutions may vary.

(a). Ethical relativism
(b). Situational ethics
(c). Consequentialism
(d). Deontology
(e). Virtue ethics
(f). Ethics of care

(a). Ethical relativism – Asserts that morality is relative.
(b). Situational ethics – Requires that when we evaluate whether an action is ethical, we imagine ourselves in the position of the person facing an ethical dilemma.
(c). Consequentialism – Considers the consequences (i.e., harms and benefits) of making a particular decision.
(d). Deontology – Recognizes certain actions as right or wrong regardless of the consequences.
(e). Virtue ethics – Encourages individuals to develop virtues (e.g. courage and truthfulness) that guide behavior.
(f). Ethics of care – Holds that ethical behavior is determined actions that care for and maintain human relationships.

(a). Deontology
(b). Act utilitarianism
(c). Rule utilitarianism
(d). Virtue ethics

Student answers will likely vary based upon the application of the facts to the ethical principles involved. Following are suggestions:

(a). Under the principle of deontology, which consists of acting on the basis of the recognition that certain actions are right or wrong regardless of consequences, students will likely say that Sarah should be told the truth.
(b). Act utilitarianism says that the action that yields the greatest amount of pleasure over pain for all involved should be chosen. Under this principle, Sarah would likely be told that she looks fine.
(c). Rule utilitarianism holds that general rules that on balance produce the greatest amount of pleasure for all involved should be followed in each situation. Students may say that deception does not generally produce the greatest satisfaction.
(d). Virtue ethics is an ethical system in which the development of virtues or positive character traits is the basis for morality. Students may say that it is virtuous to tell the truth, or some may say that it is more virtuous to spare Sarah’s feelings.

The social responsibility of business consists of the expectations that the community imposes on firms doing business inside its borders. These expectations must be honored to a certain extent, even when a firm wishes to ignore them, because firms are always subject to the implicit threat that legislation will impose social obligations on them. So, if the community expects businesses to obey certain standards of fairness even when the standards interfere with profit maximization, firms that choose to ignore that expectation do so at their peril.