New Business Ethics Example Questions Week 1

Comprehensive practice flashcards covering CSR responsibilities, stakeholder management, utilitarianism and distributive ethics, the Three-Domain Model, human rights frameworks, and Alzola's reconciliation project.

When a company obeys the law, treats its stakeholders fairly, and voluntarily contributes resources to a community project, which CSR responsibilities are represented?

Legal, ethical, and philanthropic only.

A retailer evaluates a purchasing decision by balancing profitability alongside its effects on employees, customers, suppliers, and local communities. Which model of business decision-making does this represent?

Integration.

Statement I: Management should concentrate on shareholder interests while social problems remain principally the responsibility of the state.

Statement II: Management should consider how business decisions affect employees, customers, suppliers and other stakeholders.

Which classification is correct?

Statement I represents Separation, while Statement II represents Integration.

Walmart's low-price strategy can benefit customers while placing pressure on suppliers and local businesses and creating concerns about employee treatment. What does this combination of effects demonstrate most clearly?

A. Stakeholder interests can conflict with one another.

B. Customers are the only affected stakeholders.

C. Profitability automatically satisfies ethical responsibility.

D. Legal compliance eliminates stakeholder tensions.

E. Philanthropy is the primary cause of stakeholder conflict.

Stakeholder interests can conflict with one another.

A local community mobilised against a powerful retailer and successfully stopped the store expansion in their locality. How should the community be classified using the stakeholder distinction?

A. Primarily an affected stakeholder

B. Primarily a shareholder

C. Primarily an influential stakeholder

D. philanthropic stakeholder only

E. Not a stakeholder

Primarily an influential stakeholder.

A board is deciding whether to open a new facility. Which justification is most consistent with the Week 1 concept of an ethical business?

A. Approve it whenever projected profit is highest, regardless of other effects.

B. Approve it if it is legal, because legality completely determines ethicality.

C. Approve if it integrates profit and shareholder interests

D. Reject any profitable project because profit conflicts with ethics.

E. Approve it if it maximises the interests of key stakeholders

Approve it if it maximises the interests of key stakeholders.

What is the primary foundational tension that Robert Audi examines in 'Can Utilitarianism Be Distributive?' regarding classical utilitarian frameworks?

A. The tension between the aggregate higher objective goods and the lower subjective pleasures

B. The tension between the ethical demand to maximise overall aggregate utility and the independent moral requirement to distribute it fairly among individuals.

C. The friction between the ethical demand to maximise happiness and the moral requirement to pursue other objective goods

D. The conflict between fair allocation of benefits and the need to protect human rights

The tension between the ethical demand to maximise overall aggregate utility and the independent moral requirement to distribute it fairly among individuals.

A Walmart analyst justifies lower prices by arguing that they benefit customers. But in their analysis, the analyst did not include reliable estimates of worker hardship, supplier effects, or longer-term consequences. Which of the following weaknesses does the analysis illustrate?

A. The analyst has included too many stakeholders.

B. Utilitarianism prohibits estimates of future effects.

C. Customer gains cannot count as benefits.

D. A shareholder calculation would necessarily remove the uncertainty.

E. Measuring and predicting the full consequences needed for a utilitarian comparison is difficult.

Measuring and predicting the full consequences needed for a utilitarian comparison is difficult.

10). How might a distributive reading of utilitarianism alter corporate or managerial decision-making, as opposed to a strict aggregate-maximising approach?

A. Managers would weigh the financial profitability of the firm and would be in favour of transparency and fair processes for resource distribution.

B. Managers would weigh the welfare and equitable distribution of outcomes among various stakeholders rather than focusing solely on maximising total corporate revenue or output.

C. Managers would focus exclusively on maximising shareholder value without any regard for external social costs.

D. Managers would treat all stakeholder claims as legally absolute rights rather than evaluating their welfare consequences.

Managers weigh the welfare and equitable distribution of outcomes among various stakeholders rather than focusing solely on maximising total corporate revenue or output.

Plan X gives 40 employees equal benefits, producing 400 units of total good. Plan Y benefits the same 40 employees unequally, producing 500 units. Assume there are no other effects. Which comparison follows Audi's account?

A. An egalitarian distributive reading favours X; classical aggregation favours Y.

B. Both readings must favour X because the same people benefit.

C. Both readings must favour Y because distribution never matters.

D. Classical aggregation favours X; an egalitarian reading favours Y.

E. Neither reading can compare the plans because the benefits differ.

An egalitarian distributive reading favours Plan X; classical aggregation favours Plan Y.

The CEO of Beta Company has gained a bad reputation for their involvement in a recent financial scandal. To improve their reputation, the CEO decide to participate in and contribute to a local charity event and post it on a social media website. The CEO's action is aligned with which ethical theory

A. Utilitarianism

B. Egoism

C. Kantian ethics

D. Fairness ethics

Egoism.

12) What is the key difference between Egoism & Utilitarianism

I. In Egoism, right and wrong are decided based on the outcome of a decision, whereas in Utilitarianism, the outcome is decided based on the fairness of an action

II. Egoism focuses on the outcome for the decision-makers, whereas Utilitarianism focuses on the wider societal outcomes

III..Egoism is equal to selfishness, whereas Utilitarianism is equal to reason-based decision-making

IV.Egoism believes in mutually beneficial outcomes whereas Utilitarianism believes in equal distribution of resources

Egoism focuses on the outcome for the decision-makers, whereas Utilitarianism focuses on the wider societal outcomes.

A firm's decision to exit from a volatile geopolitical contex ethical from a utilitarian perspective if:

A. It communicates the potential consequences of exit to different stakeholders

B. If it shares the responsibility of exit equally among stakeholders.

C. If it minimises every possible social harm to employees and local staff.

D. If is concerned about the potential loss of revenue and market share

E. If it prioritises the stakeholder group with the most members.

The potential loss of revenue and market share.

How does a utilitarian perspective correctly evaluate a corporate exit from a volatile geopolitical context?

It evaluates whether the exit achieves the most net good for everyone, rather than attempting to avoid every single harm.

Which domains constitute the Three-Domain Model of CSR, and how does it treat philanthropy compared to Carroll's pyramid?

The three domains are Economic, Legal, and Ethical; unlike Carroll's pyramid, the Three-Domain Model subsumes philanthropy into the ethical or economic domains.

How are the Ford Pinto and Nestlé infant formula cases classified within the Three-Domain Model of CSR, and why?

Purely economic. Ford continued producing a vehicle with a known dangerous defect expecting lawsuits, and Nestlé kept selling infant formula in poorer countries knowing it raised infant deaths.

How are early Napster and mandatory tobacco warning labels classified within the Three-Domain Model of CSR, and why?

Purely legal. Napster was free and legal while facilitating copyright infringement, and tobacco companies introduced warning labels strictly because the law mandated them.

How are Johnson & Johnson's 1982 Tylenol recall and Levi Strauss and Timberland's 1993 actions classified within the Three-Domain Model of CSR, and why?

Purely ethical. Johnson & Johnson recalled all Tylenol despite immense costs, and Levi Strauss and Timberland exited China over human rights abuses, forfeiting profits.

How are The Body Shop and Malden Mills classified within the Three-Domain Model of CSR, and why?

Economic/ethical. The Body Shop sells profitable and ethical green products, and Malden Mills continued paying workers after a factory fire because it was right and preserved a skilled workforce.

How are Union Carbide's 1984 Bhopal disaster and Chrysler in China classified within the Three-Domain Model of CSR, and why?

Economic/legal. Union Carbide took advantage of weaker Indian safety laws (resulting in a gas leak killing over $2{,}500$ people), and Chrysler complied with laws denying basic freedoms to maintain business operations.

How are GE's Hudson River cleanup and Smith & Wesson's safety features classified within the Three-Domain Model of CSR, and why?

Legal/ethical. GE paid to remediate dumped pollution under legal mandate and moral duty, and Smith & Wesson added gun safety features to prevent lawsuits and do 'the right thing.'

How are P&G Rely tampons and Wal-Mart Canada's cigarette phaseout classified within the Three-Domain Model of CSR, and why?

All three (economic, legal, and ethical). P&G withdrew tampons over toxic shock syndrome links, and Wal-Mart Canada ceased cigarette sales for positive PR, regulatory anticipation, and ethical reasons.

Where do human rights belong within the Three-Domain Model of CSR?

Within the ethical domain, under the deontological standard of duties and rights.

What are the three pillars of the 2011 UN Guiding Principles on Business and Human Rights?

Protect (states protect human rights), Respect (businesses avoid infringing on rights), and Remedy (victims gain access to justice).

What core argument does Alzola (2011) propose regarding the business and ethics relationship?

Neither separation nor integration of business and ethics is satisfactory; instead, Alzola proposes reconciliation.

What is Freeman's separation thesis, and how does he evaluate it?

The view that business and ethics are distinct—meaning a business decision carries no moral content; Freeman condemns this view as a fallacy.

According to Alzola, why does the integration thesis fail?

Because certain decisions remain morally neutral (such as choosing shirt colour), and completely merging business and ethics eliminates what makes each domain distinct.

What does Alzola mean by 'reconciliation', and which musical metaphor does he use to describe it?

Conducting business and ethics research as separate inquiries that remain in active dialogue and mutually limit one another; the metaphor used is polyphony.

How do the Three-Domain Model overlaps link to Alzola's (2011) reconciliation project?

The domain overlaps (iv and vii) prove business and ethics intersect (contradicting separation), while keeping domains distinct aligns with Alzola's principle of reconciliation.

Where does utilitarianism feature in CSR frameworks?

It acts as the consequentialist standard in the ethical domain, while rule utilitarianism provides justification for corporate philanthropy.

How do Milton Friedman and Edward Freeman differ regarding the scope of corporate social responsibility?

Friedman asserts that maximizing profit within legal boundaries is business's sole obligation (narrow CSR), whereas Freeman argues that all stakeholders matter and business cannot be separated from ethics.