Test Bank for Business Ethics: Decision Making for

Personal Integrity & Social Responsibility, 4th

Edition, Laura Hartman, Joseph DesJardins, Chris
MacDonald
Full download link at: https://testbankbell.com/product/test-bank-for-business-
ethics-decision-making-for-personal-integrity-social-responsibility-4th-edition-
laura-hartman-joseph-desjardins-chris-macdonald-94/

Student name:__________
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) In a general sense, a business stakeholder is one who has made substantial financial
investments in the business.

⊚ true
⊚ false

2) A firm’s ethical reputation can provide a competitive advantage in the marketplace with
customers, suppliers, and employees.

⊚ true
⊚ false

3) Ethics refers to how human beings should properly live their lives.

⊚ true
⊚ false

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4) Norms appeal to certain values that would be promoted or attained by acting in a certain
way.

⊚ true
⊚ false

5) Values are the only guidance individuals need to act in ways that are positive or ethical.

⊚ true
⊚ false

6) Ethical values are personal codes of ethics that ensure that a person meets his or her
individual standards of well-being.

⊚ true
⊚ false

7) The well-being promoted by ethical values is not a personal and selfish well-being.

⊚ true
⊚ false

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8) Societies that value individual freedom legally stipulate codes of personal integrity and
common decency to safeguard this freedom.

⊚ true
⊚ false

9) In civil law, there is no room for ambiguity in applying the law because much of the law
is established by past precedent.

⊚ true
⊚ false

10) Ethical theories are patterns of thinking, or methodologies, to help us decide what to do.

⊚ true
⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
11) Which of the following represents the role of philosophical ethics in the field of business
ethics?

A) providing the fundamental language and categories of ethics

B) understanding how business organizations fit into a broader social and political
context
C) recognizing how and why people behave as they do
D) promoting a culture in which ethical behavior flourishes

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12) Identify a true statement about the field of business ethics.

A) It is rooted in the more general principle of social ethics.

B) It is not a multidisciplinary field.
C) It is mainly relevant to decision making within an organization.
D) It involves decisions at the individual, at the organizational, and at a broader social
and governmental level.

13) Which of the following is a goal of a business ethics class?

A) understanding how and why people behave unethically

B) doing everything required to satisfy business stakeholders
C) separating ordinary ethical consideration from business decisions
D) recognizing that business has its own standards of good and bad

14) ________ is a theory of human motivation that claims that all human actions are selfish
and motivated by self-interest.

A) Theoretical reasoning
B) The stakeholder theory
C) Psychological egoism
D) The separation thesis

15) The ________ asserts that ordinary ethical standards should be kept separate from, and
not be used to judge, business decisions because business has its own standards of good and bad.

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 A) scientific method
B) separation thesis
C) concept of theoretical reasoning
D) social ethics model

16) In a general sense, anyone who affects or is affected by decisions made within a firm can
be called a business ________.

A) nominee
B) stakeholder
C) analyst
D) insider

17) Which of the following best describes a business stakeholder?

A) only the minority shareholders in a business entity

B) only those who have acquired significant shares in a firm
C) anyone who audits a firm
D) anyone who affects or is affected by decisions made within a firm

18) Which of the following best describes ethics?

A) an academic discipline that originated in the early 1900s

B) a descriptive approach that provides an account of how and why people do act the
way they do
C) the study of how human beings should properly live their lives
D) a descriptive approach such as psychology and sociology

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19) Which of the following is an approach advocated while teaching ethics?

A) Teachers should teach ethical dogma to a passive audience.

B) Teachers should consider acceptance of customary norms as an adequate ethical
perspective.
C) Teachers should understand that their role is only to tell the right answers to their
students.
D) Teachers should challenge students to think for themselves.

20) Philosophers often state that ethics is ________, which means that it focuses on people’s
reasoning about how they should act.

A) normative
B) derivative
C) circumstantial
D) clinical

21) Which of the following observations is true of ethics?

A) It is descriptive in nature.
B) It deals with our reasoning about how we should act.
C) It provides an account of how and why people act the way they do.
D) It is equivalent to law-abiding behavior.

22) Social sciences such as psychology and sociology are different from ethics owing to the
fact that they are ________.

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 A) normative in nature
B) descriptive in nature
C) conjectural in nature
D) clinical in nature

23) ________ seeks an account of the how and why people should act a certain way, rather
than how they do act.

A) Sociology
B) Psychology
C) Ethics
D) Anthropology

24) Which of the following is a factor that distinguishes social sciences, such as psychology
and sociology, from ethics?

A) Unlike ethics, these disciplines inquire why people act the way they do.
B) Unlike ethics, these disciplines are normative rather than descriptive.
C) Unlike ethics, these disciplines provide an account of how people should act.
D) Unlike ethics, these disciplines give directives about how people should act.

25) The ________ discipline provides an account of how and why people do act the way they
do.

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 A) descriptive
B) supererogatory
C) normative
D) stipulative

26) Individual codes of conduct based on one’s value structures regarding how one should
live, how one should act, what one should do, and what kind of a person should one be is
sometimes referred to as ________.

A) morality
B) independence
C) leadership
D) rationality

27) Morality is the aspect of ethics that we can refer to by the phrase "________."

A) personal freedom
B) individual rationality
C) personal integrity
D) persuasive rationality

28) Ethics refers to the applications of ________ on which people’s decisions are based.

A) values
B) morals
C) etiquettes
D) norms

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29) Identify the area of ethics that raises questions about justice, law, civic virtues, and
political philosophy.

A) stipulative ethics
B) existential ethics
C) virtue ethics
D) social ethics

30) The aspect of business ethics that examines business institutions from a social rather than
an individual perspective is referred to as

A) decision making for social responsibility.

B) corporate cultural responsibility.
C) organizational ethical responsibility.
D) institutional morality.

31) ________ establish the guidelines or standards for determining what one should do, how
one should act, what type of person one should be.

A) Roles
B) Attitudes
C) Norms
D) Laws

32) Which of the following is a true statement about norms?

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 A) They are underlying beliefs that cause people to choose one way or another.
B) They are standards of appropriate and proper behavior.
C) They provide benchmarks of desirable societal conditions.
D) They consist of guidelines for bringing about positive behavioral change.

33) The crux of normative ethics is that these disciplines

A) presuppose some underlying values.

B) describe what people do.
C) should always involve the study or discipline of ethics.
D) branch away from social ethics to personal ethics.

34) Which of the following refers to an underlying belief that causes people to choose
between plausible courses of action?

A) norms
B) paradigms
C) protocols
D) values

35) Which of the following is true about values?

A) Values are the highest standards of appropriate and proper behavior.

B) Corporate scandals prove the fact that individuals have personal values, but
institutions lack values.
C) Values cannot lead to unethical results.
D) Values are underlying beliefs that cause us to act or to decide in a certain way.

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36) ________ are beliefs and principles that provide the ultimate guide to a company’s
decision making.

A) Mission statements
B) Core values
C) Historical milestones
D) Vision statements

37) Which of the following is a way of saying that a corporation has a set of identifiable
values that establish the expectations for what is normal within the firm?

A) organizational culture
B) organizational policy
C) organizational code
D) organizational structure

38) Ethics requires that the promotion of human welfare be done

A) based on the personal opinions of the decision maker.

B) based on the level of need of the beneficiaries.
C) understanding the religious beliefs of the beneficiary.
D) in a manner that is acceptable and reasonable from all relevant points of view.

39) Dramatic examples of tyrannical regimes in history demonstrate that

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 A) societies valuing freedom welcome laws that require more than the ethical minimum.
B) just societies can only be achieved through strict enforcement of ethical codes.
C) obedience to the law almost always makes people apathetic towards their ethical
duties.
D) one’s ethical responsibility may run counter to the law.

40) Telling organizations that their ethical responsibilities end with obedience to the law

A) is just inviting more legal regulation.

B) is enough to maintain an ethical business environment.
C) reduces the frequency of corporate scandals.
D) eliminates ambiguity while making personal ethics-related decisions.

41) The failure of personal ethics among companies like Enron and WorldCom led to the
creation of the

A) Brooks Act.
B) Gramm-Leach-Bliley Act.
C) Clinger-Cohen Act.
D) Sarbanes-Oxley Act.

42) Which of the following observations is true?

A) Obedience to the law is sufficient to fulfill one’s ethical duties.

B) The law is very effective at promoting “goods.”
C) The law cannot anticipate every new dilemma that businesses might face.
D) An individual’s ethical responsibility can never run counter to the law.

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43) Which of the following is a true statement about the Americans with Disabilities Act
(ADA)?

A) What counts as a disability remains ambiguous under the law.

B) The law lays out clear-cut rules for reasonable accommodation.
C) The law has not been put into practice till date.
D) Mental disabilities have been left out of the purview of the law.

44) A process to identify potential events that may affect the entity, and manage risk to be
within its risk appetite, to provide reasonable assurance regarding the achievement of entity
objectives is called ________.

A) risk assessment
B) practical reasoning
C) theoretical reasoning
D) risk pooling

45) Practical reasoning is reasoning about

A) what we should think.

B) what we should do.
C) what we should believe.
D) what we should share.

46) Reasoning about what should be done is known as ________ reasoning.

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 A) practical
B) objective
C) theoretical
D) predictive

47) Theoretical reasoning is reasoning about

A) what we actually do.

B) what we should do.
C) what we should believe.
D) what we should implement.

48) ________ reasoning is reasoning about what we should believe.

A) Practical
B) Abstract
C) Theoretical
D) Descriptive

49) Which of the following is the pursuit of the highest standard for what we should believe?

A) theoretical reason
B) notional reason
C) emotional reason
D) practical reason

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50) Which of the following is the great arbiter of truth according to the tradition of theoretical
reason?

A) religion
B) customs
C) science
D) norms

51) Which of the following can be thought of as the answer to the fundamental questions of
theoretical reason?

A) the scientific method

B) the practical approach
C) the contingency approach
D) the normative model

FILL IN THE BLANK. Write the word or phrase that best completes each statement or
answers the question.
52) A ________ is anyone affected, for better or for worse, by the decisions made within a
particular firm.

53) ________ is a theory of human motivation that claims that all human actions are selfish
and motivated by self-interest.

54) The ________ asserts that ordinary ethical standards should be kept separate from, and
not be used to judge, business decisions because business has its own standards of good and bad.

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55) A process to identify potential events that may affect the entity, and manage risk to be
within its risk appetite, to provide reasonable assurance regarding the achievement of entity
objectives is called ________.

56) As a discipline, ________ deals with norms and standards of appropriate and proper
(normal) behavior.

57) ________ is the aspect of ethics that is referred to by the phrase “personal integrity.”

58) Normative disciplines presuppose some underlying ________.

59) Acts and decisions that seek to promote human welfare are based on ________.

60) The aspect of business integrity that focuses on examining business institutions from a
collective rather than from an individual perspective falls under the area of ________.

61) ________ reasoning is reasoning about what we should believe.

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ESSAY. Write your answer in the space provided or on a separate sheet of paper.
62) Explain how the study of ethics was viewed until recently, and what kind of shift in focus
has occurred post the scandals.

63) Describe the advantages associated with ethical decision making.

64) Discuss the hesitation (that may be justified) associated with teaching ethics. Explain
briefly how the authors of this text believe that ethics can be taught constructively in a class.

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65) Define ethics. How is it different from social sciences such as psychology and sociology?

66) Differentiate the concepts of morality and social ethics.

67) Why is "ethics" considered a normative discipline?

68) Define values and discuss the element of corporate culture in detail.

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69) Describe the two elements of ethical values.

70) Discuss the impact of maintaining that holding to the law is sufficient to fulfill one's
ethical duties, and what it says about the law itself.

71) Explain the difficulties associated with telling a business that its ethical responsibilities
end with obedience to the law.

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72) Discuss the importance of precedents for most laws concerning business.

73) Define risk assessment.

74) While using the risk assessment model, what might the decision makers include in their
assessment before taking action?

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75) Differentiate between practical reason and theoretical reason.

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Answer Key

Test name: Test1

1) FALSE

In a general sense, a business stakeholder will be anyone who affects or

is affected by decisions made within the firm, for better or worse.
2) TRUE

A firm’s ethical reputation can provide a competitive edge in the

marketplace with customers, suppliers, and employees.
3) TRUE

Ethics refers not only to an academic discipline, but to that arena of

human life studied by this academic discipline, namely, how human
beings should properly live their lives.
4) TRUE

Norms establish the guidelines or standards for determining what we

should do, how we should act, what type of person we should be.
Another way of expressing this point is to say that norms appeal to
certain values that would be promoted or attained by acting in a certain
way.
5) FALSE

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In general, values are those beliefs that incline us to act or to choose one
way rather than another. One important implication of this guidance, of
course, is that an individual’s or a corporation’s set of values may lead
to either ethical or unethical results.
6) FALSE

It is important to know two elements of ethical values. First, ethical

values serve the ends of human well-being. Second, the well-being
promoted by ethical values is not a personal and selfish well-being.
Thus, ethical values are those beliefs and principles that impartially
promote human well-being.
7) TRUE

It is important to know two elements of ethical values. First, ethical

values serve the ends of human well-being. Second, the well-being
promoted by ethical values is not a personal and selfish well-being.
Thus, ethical values are those beliefs and principles that impartially
promote human well-being.
8) FALSE

Liberal societies that value individual freedom will seek to legally

prohibit the most serious ethical harms. However, they will not legally
require acts of charity, common decency, and personal integrity that may
otherwise comprise the social fabric of a developed culture.
9) FALSE

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In civil law (as opposed to criminal law), where much of the law is
established by past precedent, there is always room for ambiguity in
applying the law.
10) TRUE

Ethical theories are patterns of thinking, or methodologies, to help us

decide what to do.
11) A

The field of business ethics is rooted in the more general discipline of

philosophical ethics. The role of philosophical ethics is to provide the
fundamental language and categories of ethics. Learning about
philosophical ethics provides a knowledge base for our own study of
business ethics so that we will not have to start from scratch.
12) D

Business ethics involves decisions at the individual, at the

organizational, and at a broader social and governmental level. The field
of business ethics helps us analyze and evaluate decision making at all
three of these levels.
13) A

A business ethics class has many goals, including helping us to develop

the knowledge base and skills needed to identify ethical issues,
understand how and why people behave unethically, decide how we
should act, what we should do, and the type of person we should be as
individuals, create ethical organizations, and think through the social,
economic, and political policies that we should support as citizens.

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14) C

Behind some skepticism about the relevance of ethics to business, and

often part of the reasoning behind the separation thesis, lies a theory
called psychological egoism. This theory purports to be an account of
human motivation, asserting that humans are fundamentally and
unavoidably motivated by self-interest.
15) B

The separation thesis asserts that ordinary ethical standards should be

kept separate from, and not be used to judge, business decisions because
business has its own standards of good and bad. It is fair to say that this
separation thesis remains common in business circles.
16) B

In a general sense, a business stakeholder will be anyone who affects or

is affected by decisions made within the firm, for better or worse.
Failure to consider these additional stakeholders will have a detrimental
impact on those stakeholders, on stockholders, specifically, and on the
firm’s long-term sustainability as a whole.
17) D

In a general sense, a business stakeholder will be anyone who affects or

is affected by decisions made within the firm, for better or worse.
18) C

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Ethics refers not only to an academic discipline, but to that arena of
human life studied by this academic discipline, namely, how human
beings should properly live their lives.
19) D

Ethics teachers must challenge students to think for themselves. The

teacher’s role should not be to preach ethical dogma to a passive
audience, but instead to treat students as active learners and to engage
them in an active process of thinking, questioning, and deliberating.
20) A

Philosophers often emphasize that ethics is normative, which means that

it deals with our reasoning about how we should act. Social sciences,
such as psychology and sociology, also examine human decision making
and actions; but these sciences are descriptive rather than normative.
21) B

Philosophers often emphasize that ethics is normative, which means that

it deals with our reasoning about how we should act. As a normative
discipline, ethics seeks an account of how and why people should act a
certain way, rather than how they do act.
22) B

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Social sciences, such as psychology and sociology, also examine human
decision making and actions; but these sciences are descriptive rather
than normative. This is due to the fact that they provide an account of
how and why people act the way they do—they describe; as a normative
discipline, ethics seeks an account of how and why people should act a
certain way, rather than how they act.
23) C

As a normative discipline, ethics seeks an account of how and why

people should act a certain way, rather than how they do act. This is why
philosophers often emphasize that ethics is normative.
24) A

Social sciences, such as psychology and sociology, provide an account

of how and why people do act the way they. As a normative discipline,
ethics seeks an account of how and why people should act a certain way,
rather than how they do act.
25) A

Social sciences, such as psychology and sociology, examine human

decision making and actions; but, unlike ethics, these sciences are
descriptive rather than normative. When we say that they are descriptive,
we refer to the fact that they provide an account of how and why people
do act the way they do—they describe.
26) A

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How should we live? This fundamental question of ethics can be
interpreted in two ways. "We" can mean each one of us individually, or
it might mean all of us collectively. In the first sense, this is a question
about how I should live my life, how I should act, what I should do, and
what kind of person I should be. This meaning of ethics is based on our
value structures, defined by our moral systems; and, therefore, it is
sometimes referred to as morality.
27) C

Morality is the aspect of ethics that we refer to by the phrase "personal

integrity."
28) B

There will be many times within a business setting where an individual

will need to step back and ask: What should I do? How should I act? If
morals refer to the underlying values on which our decisions are based,
ethics refers to the applications of those morals to the decisions
themselves. So, an individual could have a moral value of honesty,
which, when applied to her or his decisions, results in a refusal to lie on
an expense report.
29) D

Social ethics raises questions of justice, public policy, law, civic virtues,
organizational structure, and political philosophy. It delves into
questions on how a society and social institutions, such as corporations,
ought to be structured and about how we ought to live together.
30) A

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Business ethics is concerned with how business institutions ought to be
structured, about whether they have a responsibility to the greater
society (corporate social responsibility or CSR), and about making
decisions that will impact many people other than the individual
decision maker. This aspect of business ethics asks people to examine
business institutions from a social rather than from an individual
perspective. This broader social aspect of ethics is referred to as decision
making for social responsibility.
31) C

Norms establish the guidelines or standards for determining what we

should do, how we should act, what type of person we should be.
32) B

Norms are standards of appropriate and proper (or “normal") behavior.

They establish the guidelines or standards for determining what we
should do, how we should act, what type of person we should be.
33) A

Normative disciplines presuppose some underlying values.

34) D

We can think of values as the underlying beliefs that cause us to act or to

decide one way rather than another. Thus, the value that someone places
on an education leads him or her to make the decision to study rather
than indulge in some less productive activity.
35) D

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We can think of values as the underlying beliefs that cause us to act or to
decide one way rather than another.
36) B

A company’s core values are those beliefs and principles that provide
the ultimate guide to its decision making.
37) A

Talk of a corporation’s “culture” is a way of saying that a corporation

has a set of identifiable values that establish the expectations for what is
“normal” within that firm. These norms guide employees, implicitly
more often than not, to behave in ways that the firm values and finds
worthy.
38) D

From the perspective of ethics, no one person’s welfare is more worthy

than any other’s. Ethical acts and choices should be acceptable and
reasonable from all relevant points of view.
39) D

Holding that obedience to the law is sufficient to fulfill one’s ethical

duties begs the question of whether the law, itself, is ethical. Dramatic
examples from history, including Nazi Germany and apartheid in South
Africa, demonstrate that one’s ethical responsibility may run counter to
the law.
40) A

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Telling business that its ethical responsibilities end with obedience to the
law is just inviting more legal regulation.
41) D

It was the failure of personal ethics among companies such as Enron and
WorldCom that led to the creation of the Sarbanes-Oxley Act and many
other legal reforms.
42) C

The law cannot possibly anticipate every new dilemma that businesses
might face; so, often, there may not be a regulation for the particular
dilemma that confronts a business leader.
43) A

The Americans with Disabilities Act (ADA) requires employers to make

reasonable accommodations for employees with disabilities. What
conditions are covered under the ADA depends on a number of factors,
including the severity of the illness and the effect it has on the
employee’s ability to work, among others.
44) A

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Risk assessment is defined as a process to identify potential events that
may affect the entity, and manage risk to be within its risk appetite, to
provide reasonable assurance regarding the achievement of entity
objectives. It is important to recognize that risk assessment is not simply
a value-neutral process of professional judgment. While determining the
likelihood of one particular outcome versus another can be a
professional judgment for attorneys and accountants, deciding whether
the risk is worth taking is not.
45) B

Practical reasoning is reasoning about what we should do.

46) A

Practical reasoning is reasoning about what we should do.

47) C

Theoretical reasoning is reasoning about what we should believe.

48) C

Theoretical reasoning is reasoning about what we should believe.

49) A

Theoretical reason is the pursuit of truth, which is the highest standard

for what we should believe. According to this tradition, science is the
great arbiter of truth.
50) C

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According to the tradition of theoretical reason, science is the great
arbiter of truth. Thus, theoretical reason is the pursuit of truth, which is
the highest standard for what we should believe.
51) A

Theoretical reason is the pursuit of truth, which is the highest standard

for what we should believe. According to this tradition, science is the
great arbiter of truth. Thus, the scientific method can be thought of as the
answer to the fundamental questions of theoretical reason: What should
we believe?
52) stakeholder

In a general sense, a business stakeholder will be anyone who affects or

is affected by decisions made within the firm, for better or worse.
53) Psychological egoism

Behind some skepticism about the relevance of ethics to business, and

often part of the reasoning behind the separation thesis, lies a theory
called psychological egoism. This theory purports to be an account of
human motivation, asserting that humans are fundamentally and
unavoidably motivated by self-interest.
54) separation thesis

The separation thesis asserts that ordinary ethical standards should be

kept separate from, and not be used to judge, business decisions because
business has its own standards of good and bad. It is fair to say that this
separation thesis remains common in business circles.

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55) risk assessment

Risk assessment is defined as a process to identify potential events that

may affect the entity, and manage risk to be within its risk appetite, to
provide reasonable assurance regarding the achievement of entity
objectives.
56) normative ethics

As a normative discipline, ethics deals with norms and standards of

appropriate and proper (normal) behavior. Norms establish the
guidelines or standards for determining what we should do, how we
should act, and what type of person we should be.
57) Morality

Morality is the aspect of ethics that we refer to by the phrase “personal

integrity.”
58) values

Normative disciplines presuppose some underlying values.

59) ethical values

Acts and decisions that seek to promote human welfare are acts and
decisions based on ethical values. Thus, ethical values serve the ends of
human well-being.
60) social ethics

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Social ethics involves questions of political, economic, civic, and
cultural norms aimed at promoting human well-being. This aspect of
business ethics asks us to examine business institutions from a social
rather than from an individual perspective.
61) Theoretical

Theoretical reasoning is reasoning about what we should believe. It is

the pursuit of truth, which is the highest standard for what we should
believe.
62) As recently as the mid-1990s, articles in such major publications as
The Wall Street Journal, the Harvard Business Review, and U.S. News
and World Report questioned the legitimacy and value of teaching
classes in business ethics. Few disciplines face the type of skepticism
that commonly confronted courses in business ethics. Many students
believed that “business ethics” was an oxymoron. Many also viewed
ethics as a mixture of sentimentality and personal opinion that would
interfere with the efficient functioning of business.

Leaders realize that they can no longer afford this approach in

contemporary business. The questions today are less about why or
should ethics be a part of business, than they are about which values and
principles should guide business decisions and how ethics should be
integrated within business. Students unfamiliar with the basic concepts
and categories of ethics will find themselves as unprepared for careers in
business as students who are unfamiliar with accounting and finance.
Indeed, it is fair to say that students will not be fully prepared, even
within fields such as accounting, finance, human resource management,
marketing, and management unless they are familiar with the ethical
issues that arise within those specific fields.

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63) Unethical behavior not only creates legal risks for a business, it
creates financial and marketing risks as well. Managing these risks
requires managers and executives to remain vigilant about their
company’s ethics. It is now clearer than ever that a company can lose in
the marketplace, go out of business, and its employees can go to jail if
no one is paying attention to the ethical standards of the firm.

A firm’s ethical reputation can provide a competitive advantage in the

marketplace and with customers, suppliers, and employees. Managing
ethically can also pay significant dividends in organizational structure
and efficiency. Trust, loyalty, commitment, creativity, and initiative are
just some of the organizational benefits that are more likely to flourish
within ethically stable and credible organizations.

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64) Part of the hesitation about teaching ethics involves the potential
for abuse; expecting teachers to influence behavior may be viewed as
permission for teachers to impose their own views on students. Many
believe that teachers should remain value-neutral in the classroom and
respect a student’s own views. Another part of this concern is that the
line between motivating students and manipulating students is a narrow
one. There are many ways to influence someone’s behavior, including
threats, guilt, pressure, bullying, and intimidation.
But not all forms of influencing behavior raise such concerns. There is
a major difference between manipulating someone and persuading
someone, between threatening and reasoning. The tension between
knowledge and behavior can be resolved by emphasizing ethical
judgment, ethical deliberation, and ethical decision making. The only
academically and ethically legitimate way to do this is through careful
and reasoned decision making. The fundamental assumption is that a
process of rational decision making, a process that involves careful
thought and deliberation, can and will result in behavior that is more
reasonable, accountable, and ethical.

65) Ethics refers not only to an academic discipline, but to that arena of
human life studied by this academic discipline, namely, how human
beings should properly live their lives.
Philosophers often emphasize that ethics is normative, which means
that it deals with our reasoning about how we should act. Social sciences
such as psychology and sociology also examine human decision making
and actions, but these sciences are descriptive rather than normative.
They provide an account of how and why people do act the way they do;
as a normative discipline, ethics seeks an account of how and why
people should act a certain way, rather than how they do act.

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66) The fundamental question of ethics “How should we live?” can be
interpreted in two ways.

"We” can mean each one of us individually, or it might mean all of us

collectively. In the first sense, this is a question about how I should live
my life, how I should act, what I should do, and what kind of person I
should be. This meaning of ethics is sometimes referred to as morality,
and it is the aspect of ethics that we refer to by the phrase “personal
integrity.” There will be many times within a business setting where an
individual will need to step back and ask: “What should I do? How
should I act?”

In the second sense, “How should we live?” refers to how we live

together in a community. This is a question about how a society and
social institutions such as corporations ought to be structured and about
how we ought to live together. This area is sometimes referred to as
social ethics and it raises questions of justice, public policy, law, civic
virtues, organizational structure, and political philosophy. In this sense,
business ethics is concerned with how business institutions ought to be
structured, about corporate social responsibility, and about making
decisions that will impact many people other than the individual
decision maker. This aspect of business ethics asks us to examine
business institutions from a social rather than an individual perspective.
This broader social aspect of ethics is referred to as decision making for
social responsibility.
67) To say that ethics is a normative discipline is to say that it deals
with norms: those standards of appropriate and proper (or "normal")
behavior. Norms establish the guidelines or standards for determining
what we should do, how we should act, what type of person we should
be.

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68) In general, values were earlier thought of as those beliefs that
incline us to act or to choose one way rather than another.A company's
core values, for example, are those beliefs and principles that provide the
ultimate guide in its decision making. Individuals can have their own
personal values and, importantly, institutions also have values. A
corporation's "culture" is a way of saying that a corporation has a set of
identifiable values that establish the expectations for what is "normal"
within that firm. These norms guide employees, implicitly more often
than not, to behave in ways that the firm values and finds worthy. One
important implication of this is that an individual or a corporation's set
of values may lead to either ethical or unethical result. The corporate
culture at Enron, for example, seems to have been committed to pushing
the envelope of legality as far as possible in order to get away with as
much as possible in pursuit of as much money as possible.

69) First, ethical values serve the ends of human well-being. Acts and
choices that aim to promote human welfare are acts and choices based
on ethical values.
Second, the well-being promoted by ethical values is not a personal
and selfish well-being. Ethical values are those beliefs and principles
that impartially promote human well-being.

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70) Holding that obedience to the law is sufficient to fulfill one's
ethical duties begs the question of whether or not the law itself is ethical.
Examples from history, Nazi Germany and apartheid in South Africa
being the most obvious, demonstrate that one's ethical responsibility
may run counter to the law.
On a more practical level, this question can have significant
implications in a global economy in which businesses operate in
countries with legal systems different from those of their home country.
For instance, some countries permit discrimination on the basis of
gender; but businesses that choose to adopt such practices remain
ethically accountable to their stakeholders for those decisions.

71) Telling a business that its ethical responsibilities end with

obedience to the law is just inviting more legal regulation. The difficulty
of trying to create laws to cover each and every possible business
challenge would be enormous. The task would require such specificity
that the number of regulated areas would become unmanageable.
Additionally, it was the failure of personal ethics among such
companies as Enron and WorldCom, after all that led to the creation of
the Sarbanes-Oxley Act and many other legal reforms. If business
restricts its ethical responsibilities to obedience to the law, it should not
be surprising to find a new wave of government regulations that require
what were formerly voluntary actions.

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72) Most of the laws that concern business are based on past cases that
establish legal precedents. Each precedent applies general rules to the
specific circumstances of an individual case. In most business situations,
asking "Is this legal?" is really asking "Are these circumstances similar
enough to past cases that the conclusions reached in those cases will also
apply here?" Since there will always be some differences between cases,
the question will always remain somewhat open.

73) Risk assessment is defined as a process to identify potential events

that may affect the entity and manage risk to be within its risk appetite,
to provide reasonable assurance regarding the achievement of entity
objectives.

74) Using the risk assessment model, decision makers might include in
their assessment before taking action:
● the likelihood of being challenged in court
● the likelihood of losing the case
● the likelihood of settling for financial damages
● a comparison of those costs
● the financial benefits of taking the action
● the ethical implication of the options available

75) Practical reason is described as reasoning about what we should do,

whereas theoretical reason involves reasoning about what we should
believe.

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