Exam 9: Business Ethics

It may be unethical for a company to refuse to negotiate liability claims for alleged injuries because of a faulty product.

Effective corporate ethical policies must be clearly communicated to employees.

In studying the legal environment of business, students also review ethics in a business context. Ethics includes the study of what constitutes

In business deals, Fiona, the chief executive officer of Glazed Donuts, Inc., follows duty-based ethical standards. These are most likely derived from

The study of ethics goes beyond legal requirements to evaluate what is right for society.

Few companies provide any kind of support such as ethical training programs to make their ethical codes more effective.

Recreation & Sports Equipment Corporation sells a product that is capable of seriously injuring consumers who misuse it in a foreseeable way. Does the firm owe an ethical duty to take this product off the market? What con-flicts might arise if the firm stops selling this product?

If an action is legal, it is ethical.

SuperMeds Corporation develops a new drug that controls severe acne. The drug is not approved by the government for sale in the United States because one of its ingredients is a banned chemical. This chemical is not banned in Mexico. Whether it is ethical for SuperMeds to sell the drug in Mexico depends on

Duty-based ethical standards often come from religious precepts or through philosophical reasoning.

Corporations can be viewed as "citizens" that are expected to participate in bettering society.

In a corporation, managers are often faced with ethical trade-offs when a certain decision will benefit one group, but harm another.

Acting in good faith gives a business firm a better chance of defending its actions in court.

The effectiveness of internal company codes of ethics is determined by the degree of their enforcement by legal authorities.

At a meeting of employees, Fuel Injection Design & Manufacturing, Inc.'s managers announce the creation of a new company-wide code of ethical conduct and the initiation of an ad campaign to publicize the new code. They also say that any employees who do not adhere to the code will be discharged. The effectiveness of this code will be determined by

According to the view that New Allied Manufacturing Corporation is a "citizen," New Allied is expected to

Sam, the chief accounting officer of Texas Fencing Corporation, wants to be sure that all the company's accounts are legal and ethical. Sometimes, however, he is unsure exactly what is legal and what is illegal. Sam should

Frances, an executive with GMO Seed & Feed, Inc., has to decide whether to market a product that could offer substantial benefits but might also have potentially serious side effects for a small per-centage of users. How should Frances de-cide whether to sell the product? How does the standard of ethics that is applied affect this answer?

Sometimes, there is no "good" answer to the ethical questions that arise.

Bribery of foreign government officials is both an ethical and a legal issue.