Exam questions and answers for Business Ethics

Question: Define the term stakeholder and briefly discuss the issues the stakeholder theory addresses. Also, list the primary stakeholders of a business and explain through examples their relations with an organization.

Answer:

Stakeholders are those who are affected by an organization.

Stakeholder theory deals with three issues:

·         What responsibilities or duties does an organization owe to its stakeholders?

·         How should an organization decide between its obligations to two or more stakeholders if they demand different things from an organization? What criteria should the organization use when deciding which stakeholder group’s wishes it should prioritize.

·         What legitimate interests justify a group of people being regarded as a stakeholder in an organization?

Primary stakeholders of a business                    Its relation

            Employees                                                     sell labor

            Stockholders                                                  invest capital

            Creditors                                                        lend money

            Suppliers                                                        sell materials

            Customers                                                      buy products

            Retailers                                                         distribute products

Question: One of the approaches used to describe business ethics is through the discussion of the legality, illegality, and justice of a decision or action. Briefly discuss the four combinations of legality and justice used to explain ethical issues.

Answer:

1. Actions that are good and legal but not a legal obligation: some actions may raise ethical issues because, although they are good and legal, people do not take them because the law does not require them to do.
2. Actions that are wrong and illegal: here, ethical or moral questions arise because an action is both wrong and illegal.
3. Actions that are legal but not necessarily just: another category includes actions that may be legal but are also, bad.
4. Actions that are just but illegal: It concerns actions that may be illegal but are morally or ethically good.

 

   Question: Define values and briefly differentiate between instrumental and terminal values. In     addition, explain the types of values that might affect how we think about ethical issues.

Values are defined as beliefs of a person, set of emotional rules that people follow to help make the right decisions in life.

Different types of values might affect how we think about ethical issues.

Instrumental values (moral and competence) are about how a person should live and behave.

Terminal vales ( personal and social) concern the ends or purposes that we should striving for. 

Question: Briefly discuss the five viewpoints on the role of values in business ethics.

1)      Traditionalist view is defined by its possession of shared values.

2)      The Modernist view- Those who take this position believe that values are tangible and can be unambiguously stated and defined through formal and rational debate.

3)      The neo-traditional view- They see values in the context of organizational and social cultures.

4)      The post-modern view- They see nothing in the social and intellectual world as tangible or fixed.

5)      The programmatic view is not about how to represent, or mirror, the world in our thinking but how cope with its ambiguity. 

 Question :Explain the conditions under which whistleblowing might be justified.

Answer:

6 conditions:

i. A product or policy of an organization needs to possess the potential to do harm

to some members of society.

ii. The concerned employee should first of all report the facts, as far as they are

known, to their immediate superior.

iii. If the immediate  superior  fails to act  effectively , the concerned employee should

take the matter to more senior managers, exhausting all available internal

channels in the process.

iv. The prospective whistleblower should hold documentary evidence that can be

presented to external audiences.

v. The prospective whistleblower must believe that the necessary changes will be

implemented as a result of their whistleblowing act.

vi. The sixth condition is a general one and it is that the whistleblower must be

acting in good faith, without malice .

 

 Question : List and define Hofstede’s four dimensions on national value differences.

Hofstede’s 4 dimensions

Power distance: the extend to which the less powerful members of organisations expect and accept that power is distributed unequally.

ii. Individualism: high in countries in which the ties between individuals are loose and everyone is expected to look out for themselves.

iii. Masculinity: high in those countries in which gender roles are distinct and in which men are expected to be assertive, tough and focused on material success and women are supposed to be more modest, tender and concerned with the quality of life. In societies in which masculinity is low the gender roles overlap and both men and women are supposed to be modest, tender and concerned with the quality of life.

iv. Uncertainty avoidance: the extend to which society members feel threatened by uncertain or unknown situations. Societies in which there is low uncertainty avoidance are comfortable with ambiguity; those in which there is high uncertainty avoidance seek to finesse ambiguity away.