Unit 4
ethical dilemma The quandary [situation] people find themselves in when they have to
decide if they should act in a way that might help another person or group even though
doing so might go against their own self-interest.
ethics The inner guiding moral principles, values, and beliefs that people use to analyse or
interpret a situation and then decide what is the right or appropriate way to behave.
values Permanent and deeply held underlying beliefs and attitudes. Determine a person’s
behaviour
stakeholders The people and groups that supply a company with its productive resources
and so have a claim on and a stake in the company.
utilitarian rule An ethical decision is a decision that produces the greatest good for the
greatest number of people.
moral rights rule An ethical decision is one that best maintains and protects the
fundamental or inalienable rights and privileges of the people affected by it.
justice rule An ethical decision distributes benefits and harms among people and groups in
a fair, equitable, or impartial way.
practical rule An ethical decision is one that a manager has no reluctance about
communicating to people outside the company because the typical person in a society
would think it is acceptable.
Trust is the willingness person or group to have faith or confidence in the goodwill of
another person, even though this puts them at risk.
reputation The esteem or high repute that individuals or organizations gain when they
behave ethically.
societal ethics Standards that govern how members of a society should deal with one
another in matters involving issues such as fairness, justice, poverty, and the rights of the
individual.
occupational ethics Standards that govern how members of a profession, trade, or craft
should conduct themselves when performing work-related activities
individual ethics Personal standards and values that determine how people view their
responsibilities to others and how they should act in situations when their own self-
interests are at stake.
organizational ethics The guiding practices and beliefs through which a particular
company and its managers view their responsibility toward their stakeholders
social responsibility The way a company’s managers and employees view their duty or
obligation to make decisions that protect, enhance, and promote the welfare and well-
being of stakeholders and society as a whole
obstructionist approach Companies and their managers choose not to behave in a socially
responsible way and instead behave unethically and illegally. [least SR]
Chapter 04 - Ethics and Social Responsibility
Chapter 04
Ethics and Social Responsibility
True / False Questions
1. Moral principles, values, or beliefs about what is "right" or "wrong" are known as ethics.
True False
2. Steve has noticed that there has been an error in his weekly pay stub and the company has
unknowingly paid him too much. Steve's pondering about whether to report this issue is an
ethical dilemma.
True False
3. Though laws often change, ethical principles remain constant and do not change over time.
True False
4. Ethics and "the law" are the same thing.
True False
5. Ethical beliefs lead to the development of laws and regulations.
True False
6. Laws and regulations lead to the development of ethical beliefs.
True False
7. Stakeholders have a claim on a company because when they buy its stock or shares they
become its owners.
True False
4-1