Business Law Ch 42

Legal and Ethical Environment of Business

What was the ruling in Nestle USA, Inc. v. Doe?

Forced child laborers in Africa did not have a cause of action against a U.S. company that purchased cocoa from the farms where the forced labor occurred.

If a person looks to Karl Marx for ethical rules or commands, this is an example of ________

ethical fundamentalism

If the owners of a business believe that pollution is not harmful and that as long as they comply with the minimum standards of environmental law, it is irrelevant what scientific studies show. This conduct would be ethical under ________.

ethical relativism

A company is trying to determine whether it should close an unprofitable plant located in a small community. ________ would require that the benefits to shareholders from closing the plant be compared with the benefits to employees, their families, and others in the community from keeping it open.

Utilitarianism

The universal rules of Kantian ethics are based on two important principles: (1) consistency—

that is, ________, with no exceptions and (2) reversibility— that is, ________ the morality of someone else's conduct.

all cases are treated alike; the actor must abide by the rule they use to judge

Second, Inc.'s commitment to minimizing their environmental footprint is an example of ________.

corporate citizenship

Child labor laws that ensure that when young people work, the work is safe and does not jeopardize their health are an example of ________.

moral minimum

If an ice cream manufacturing plant discovered salmonella in one of its vats of chocolate ice cream that had already been distributed to 500 grocery stores, under which ethical theory would the owners ask: "Would I want to be subject to the risk of disease when I purchased ice cream from a grocery store?"

Kantian ethics

If an action by First, Inc. would increase the value of its stock significantly and permit the opening of a new plant in an underserved area, potentially employing 50 people, but require the termination of ten employees at a plant it will need to close, then according to ________, the plant should be closed and the new one built.

utilitarianism

Ethics and the law are ________.

intertwined

Utilitarianism

dictates that people must choose the action or follow the rule that provides the greatest good to society

-moral theory with origins in the works of Jeremy Bentham and John Stuart Mill.

corporate citizenship

theory of social responsibility argues that business has a responsibility to improve society and help solve social problems.

maximize profits

social responsibility theory that says corporation owes a duty to take actions that maximize profits for its shareholders

Rawls's social justice theory

fairness is considered the essence of justice.

principles of justice should be chosen by persons who do not yet know their station in society “veil of ignorance” would permit the fairest possible principles to be selected.

ethical fundamentalism

a person looks to an outside source for ethical rules or commands.

ex the bible

Ethical relativism

holds that individuals must decide what is ethical based on their own feelings about what is right and wrong.

moral minimum

social responsibility that says a corporation's duty is to make a profit while avoiding causing harm to others

Kantian ethics

people owe moral duties that are based on universal rules that are consistent and reversible

-also called duty or deontological ethics

-people can use reasoning to reach ethical decisions

ethics

set of moral principles or values that govern the conduct of an individual or group

stakeholder interest

social responsibility theory that says corporation must consider the effects of its actions on person other than its shareholders

law

body of statutes, regulations, rules and ordinances established by a governing authority such as federal, state and local governments

business ethics

ethical principles that govern the operation of a business organization

code of ethics

sets forth guiding principles and values of business

Which theory of ethics says that each person is presumed to have entered into a social contract with all others in society to obey moral rules that are necessary for people to live in peace and harmony?

Rawls's social justice theory

social responsibility of business

act with awareness of consequences and impact their decisions will have on others and environment

Which social responsibility theory dominated business and the law during the 19th century?

maximize profits

public benefit corporation (B corp)

for-profit corporation, but with missions additional to the pure profit-motive such as general public benefits

corporate social responsibility audits (CSR audit)

social audit formal review of a company’s operations and their impact on society

A ________ is a designation that a benefit corporation can qualify for if it meets certain verified social responsibility and environmental standards.

Certified b corporation