CHAPTER 1

1. Explain the difference between intrinsic and instrumental values.

 Intrinsic values: Quality by which a value is a good thing in itself.
Pursued for its own sake, whether anything comes from that pursuit or not.
 Instrumental values: Quality by which the pursuit of one value is a good way to
reach another value.
2. List the four basic categories of ethics.
 Simple truth - right and wrong or good and bad.
 A question of someone’s personal character - his or her integrity.
 Rules of appropriate individual behavior.
 Rules of appropriate behavior for a community or society
3. List the three basic ethical theories limitations of each theory
 Virtue ethics: Concept of living one’s life according to a commitment to the
achievement of a clear ideal.
 Utilitarianism: Ethical choices that offer the greatest good for the greatest number
of people.
 Universal ethics: Actions that are taken out of duty and obligation to a purely
moral ideal rather than based on the needs of the situation.
4. What is an ethical dilemma and the three-step process for resolving an ethical
dilemma.
Ethical dilemma: Situation in which there is no obvious right or wrong decision, but
rather a right or right answer.
Three-step process for resolving an ethical dilemma
 Step 1. Analyze the consequences.
 Step 2. Analyze the actions.
 Step 3. Make a decision.
5. What is Kohlberg’s three levels of moral development and the six stages of
development in those three levels?

6. What would you do if your resolution of an ethical dilemma turned out to be the
wrong approach and it actually made things worse?
If my solution made things worse, I would take responsibility, admit my mistake, and try
to fix the problem as soon as possible. I’d learn from the situation to avoid repeating the
same error in future ethical decisions.

CHAPTER 2
7. Explain the term business ethics, and the difference between a descriptive and
prescriptive approach to business ethics.
Application of ethical standards to business behavior.
Can be approached from two perspectives.
• Descriptive: Documentation of what is happening.
• Normative (prescriptive): Recommendation of what should happen.
8. Give examples of how stakeholders could be negatively impacted by unethical
corporate behavior.
Shareholders: They may lose money because the company provides false financial
information or the stock price drops after a scandal.
Employees: They risk losing their jobs and may not receive severance or pension
payments if the company faces financial trouble.
Customers: They receive poor-quality products or services when the company operates
dishonestly.
Suppliers: They experience delayed payments or may not get paid at all if the company
goes bankrupt.
Government: It loses tax revenue and must deal with the company’s legal violations.
Creditors: They may not get back their principal and interest when the company cannot
repay its debts.
Community: It suffers from higher unemployment and local economic decline when the
business collapses or downsizes.
9. Define the term corporate governance and code of ethics.
Corporate governance: System by which business corporations are directed and
controlled.
Code of ethics: Company’s written standards of ethical behavior that are designed to
guide managers and employees in making the decisions and choices they face every day.
10. List the four types of ethical conflict and the three principles available to you in
resolving an ethical dilemma.
- Four types of ethical conflict
• Truth versus loyalty.
• Short term versus long term.
• Justice versus mercy.
• Individual versus community.
- Three principles available to you in resolving an ethical dilemma.
Ends-based: Which decision would provide the greatest good for the greatest number
of people?
Rules-based.
• What would happen if everyone made the same decision as you?
The Golden Rule.
• Do unto others as you would have them do unto you.
 11. Give an example of an ethical business dilemma you have faced in your career,
and explain how you resolved it, indicating the type of conflict you experienced and
the resolution principle you adopted.
Example:
I discovered a coworker skipping quality-check steps to finish faster. This helped meet
deadlines but could cause product errors. I had to choose between telling the truth or
staying loyal.
Conflict:
Truth vs. Loyalty
Resolution: I reported it to my supervisor and suggested reducing the team’s workload.
Principle used: Ends-based – choosing the greatest good for the greatest number.

CHAPTER 4
12. Define corporate social responsibility and two approaches of corporate
management.
- Define corporate social responsibility
Actions of an organization that are targeted toward achieving a social benefit over and
above maximizing profits for its shareholders and meeting all its legal obligations.
Also known as corporate citizenship and corporate consciences.
- Two approaches of corporate management.
Instrumental approach: Perspective that the only obligation of a corporation is to
maximize profits for its shareholders in providing goods and services that meet the needs
of its customers.
Social contract approach: Perspective that a corporation has an obligation to society over
and above the expectations of its shareholders.
13. Give three examples of a corporation’s legal obligations.
- Complying with labor laws and ensuring employee rights.
- Fulfilling tax obligations according to regulations.
- Following environmental and safety regulations in operations.
14. List the five major trends of driving CSR, and which one do you think is the
most important? Why?
Five major driving forces behind CSR:
- Transparency
- Knowledge
- Sustainability
- Globalization
- Failure of the public sector
Most important: Sustainability is the most important because it ensures long-term
business growth without harming the environment or society, which helps maintain
public trust and brand reputation.
15. Explain the term triple bottom line.
Adaptation of annual reports to reflect a triple bottom-line approach is a testament of how
seriously companies are taking CSR.
They provide social and environmental updates alongside their primary bottom-line
financial performance.
16. Explain the term ethical CSR.
Organizations pursue a defined sense of social conscience in managing their:
• Financial responsibilities to shareholders.
• Legal responsibilities to their local community and society as a whole.
• Ethical responsibilities to do the right thing for all their stakeholders.
17. Explain the term altruistic CSR.
Philanthropic approach to CSR.
Organizations underwrite specific initiatives to give back to the company’s local
community or to designated national or international programs.
18. Explain the term strategic CSR.
Philanthropic approach to CSR.
Organizations target programs that will generate the most positive publicity or goodwill
for the organization.
Programs run the greatest risk of being perceived as self-serving behavior on the part of
the organization.

CHAPTER 7
19. What is a whistle-blower, and the difference between internal and external
whistle-blower.
- Whistle-blower
Employee who discovers corporate misconduct and chooses to bring it to the attention of
others.
Difference between internal and external whistle-blower:
- Internal whistle-blowing
Employee discovering corporate misconduct and bringing it to the attention of his or her
supervisor.
- External whistle-blowing
Employee discovering corporate misconduct and choosing to bring it to the attention of
law enforcement agencies and/or the media.
20. List five conditions for whistle-blowing to be considered ethical.
- When the company, through a product or decision, will cause serious and considerable
harm to the public or break existing laws.
- When the employee identifies a serious threat of harm.
- When the employee’s immediate supervisor does not act, the employee should exhaust
the internal procedures and chain of command to the board of directors
- Employee must have documented evidence that:
 His or her view of the situation is accurate.
 The firm’s practice, product, or policy threatens the public or product user.
- Employee must have valid reasons to believe that revealing the wrongdoing to the
public will result in the changes necessary to remedy the situation

21. Under what condition could whistle-blowing be considered unethical?

- Motivated by financial gain or media attention.
- Employee is carrying out a vendetta against the company.
22. Do you think a hotline that guarantees the anonymity of the caller will
encourage more employees to come forward?
Yes. The Whistleblower Protection Act of 1989 guaranteed the anonymity of the whistle-
blower, which implies that ensuring confidentiality encourages more employees to come
forward and report misconduct without fear of retaliation.
23. Why are whistle-blowers regarded as models of honor and integrity?
- Whistle-blowers may be applauded as models of honor and integrity.
- Discovery of illegal activities before the situation is revealed in the media could
potentially save organizations millions of dollars.
- Discovery of potential harm to consumers offers immeasurable benefit to the general
public