Chapter 04 - Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking
CHAPTER 4
BUSINESS ETHICS, CORPORATE SOCIAL RESPONSIBILITY,
CORPORATE GOVERNANCE, AND CRITICAL THINKING
LEARNING HINTS
1.Why is it important to study business ethics?
2. Are there any circumstances under which an individual should lie to protect his employer?
Analyze your answer using the following theories: rights theory; justice theory; utilitarianism;
and profit maximation.
3. The recent scandals involving Enron and Anderson Consulting suggest that under a costbenefit analysis (utilitarian theory) or a rights theory, some judgments made by corporate officers
were unethical. In almost all cases, the right thing to do is also the smart thing to do in the long
run.
4. What are the values of a corporate code of conduct? Would such a code have made any
difference in the Enron and Anderson scandals?
5. Analyze Google’s Conduct of Conduct. How would you modify it and why?
6. Describe the Sarbanes-Oxley Act and its applicability to corporations and their management.
7. Describe how modifying internal management structure and eliminating certain management
incentives can lead to more ethical business behavior.
8. What are some of the issues one should consider in order to make ethical decisions?
9. Describe effective ways to recognize and resist requests to do unethical acts at work.
CHAPTER OUTLINE AND KEY CONCEPTS
I.
Learning Objectives
II.
Why Study Business Ethics?
A. Sarbanes-Oxley Act
B. To make better decisions
C. To better understand ourselves and others
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Chapter 04 - Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking
III.
The Corporate Social Responsibility Debate
A. Corporations – heroes or villains?
B. Ethics in Action
IV.
Ethical Theories
A. Distinguish between teleological and deontological ethical theories.
B. Rights Theory
1. Kantianism
a.
Categorical imperative
b.
Global Business Environment - Golden Rule as foundation of
Kant’s categorical imperative; found in all cultures
2. Modern Rights Theories
3. Strengths of Rights Theory
4. Criticisms of Rights Theory
C. Justice Theory –Rawls’ Greatest Equal Liberty Principle v. Difference Principle
1. Strengths of Justice Theory
2. Criticisms of Justice Theory
D. Utilitarianism
1. Act utilitarianism distinguished from rule utilitarianism.
2. Strengths and criticisms of utilitarianism contrasted.
E. Profit Maximization
1. Describe, compare and contrast the strengths and criticisms of Profit
Maximization.
2. Improving Corporate Governance and Corporate Social Responsibility
a.
Under what circumstances is a company required to adopt an
ethics code?
b.
What are the pros and cons of requiring ethical instruction?
c.
How do shareholdesr and stakeholders’ interest shape an
organization’s ethical code of conduct and values?
d.
Ethics in Action – Google’s Code of Conduct
3. Independent Boards of Directors
a.
What are the benefits of changing the internal management
structure of an organization?
b.
Describe how eliminating perverse incentives and supervising
management could benefit anorganization.
4. The Law
a. Sarbanes-Oxley Act
b. The law’s limitations
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Chapter 04 - Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking
V. Guidelines for Ethical Decision Making- One model suggests that there are nine
factors to consider for making ethical decisions:
A.. What facts impact my decision?
B. What are the alternatives?
C. Who are the stakeholders?
D. How do the alternatives impact society as a whole?
E. How do the alternatives impact my firm?
F. How do the alternatives impact me, the decision maker?
G. What are the ethics of each alternative?
1. What would a Utilitarian do?
2. What would a Profit Maximizer do?
3. What would a Rights Theorist do?
4. What would a Justice Theorist do?
H. What are the practical constraints of each alternative?
I. What course of action should be taken and how do we implement it?
J. Knowing when to use the guidelines
VI.
Thinking Critically
15 common fallacies regarding critical thinking:
A. Non Sequiturs
B. Appeals to Pity
C. False Analogies
D. Begging the Question
E. Argumentum ad Populum
F. Bandwagon Fallacy
G. Argumentum ad Baculum
H. Argumentum ad Hominem
I. Argument from Authority (e.g., argument to reverence or respect)
J. False Cause
K. The Gambler’s Fallacy
L. Reductio ad Absurdum (slippery slope fallacy)
M. Appeals to Tradition
N. The Lure of the New
O. Sunk Cost Fallacy
VII.
Common Characteristics of Poor Decision Making
A. Failing to remember goals
B. Overconfidence
C. Complexity of the issues
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Chapter 04 - Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking
VIII.
Resisting Requests to Act Unethically
A. Recognizing Unethical Requests and Bosses
B. Buying Time
C. Find a Mentor and a Peer Support Group
D. Find Win-Win Solutions
E. Work within the Firm to Stop the Unethical Act
F. Prepare to Lose Your Job
IX.
Leading Ethically
A. Be Ethical
B. Communicate the Firm’s Core Ethical Values
C. Connect Ethical Behavior with the Firm’s and Worker’s Best Interests
D. Reinforce Ethical Behavior
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