CHAPTER 2: EVOLUTION OF BUSINESS ETHICS/ CORPORATE SOCIAL
REPONSIBILITY
TRUE/FALSE (PRESENTED BY: TAN LI JUN)
1. Utilitarianism argues that “when in Rome, do as the Romans do.”
FALSE
2. According to utilitarianism, an action is morally right if it produces the greatest
good for the greatest number of people affected by it.
TRUE
3. Retributive justice refers to the fair distribution of benefits and burdens.
TRUE
MULTIPLE CHOICE (PRESENTED BY: TAN LI JUN)
1. Utilitarianism is also referred to as a(n)
a. results-based approach.
b. self-interest approach.
c. duty-based approach.
d. entitlement-based approach.
2. The basic ____ view holds that an action is judged as right, good, or wrong on the
basis of its consequences.
a. universal
b. utilitarian
c. rights
d. relativist
3. Utilitarianism is a useful principle for conducting a stakeholder analysis, since it forces
decision makers to
a. consider collective as well as particular interests.
b. formulate alternatives based on the greatest good for all parties involved in a
decision.
c. estimate the costs and benefits of alternatives for all affected groups.
d. all of the above
4. Problems with utilitarianism include all of the following except
a. no agreement exists about the definition of the “good” that is to be maximized
for all concerned in the situation.
b. it primarily focuses on the individual.
c. the principles of justice and rights are ignored.
d. no agreement exists about who decides.
5. All of the following are problems with utilitarianism except
a. consequences are judged.
b. principles of justice are ignored.
c. the individual is not considered.
d. alternatives are based on the greatest good.
6. Which principle takes into consideration the individual’s actions toward humanity?
a. Utilitarianism
b. Nonconsequentialism
c. Categorical imperative
d. Universal imperative
7. Universalism is also referred to as a(n)
a. results-based approach.
b. self-interest approach.
c. duty-based approach.
d. entitlement-based approach.
8. Which of the following is also called deontological ethics?
a. Universalism
b. Ethical relativism
c. Justice
d. Utilitarianism
9. Rights approach is also referred to as a(n)
a. results-based approach.
b. self-interest approach.
c. duty-based approach.
d. entitlement-based approach.
10. Under which right are others responsible for your needs to achieve your goals?
a. Contractual
b. Positive
c. Negative
d. Universal
11. Which of the following is a limitation of principle of rights?
a. This view implies underlying laziness.
b. It contradicts everyday experience.
c. Individuals with this view can become absolutists.
d. It can exaggerate certain entitlements in society at the expense of others.
12. Affirmative action programs are examples of which type of justice?
a. Retributive
b. Procedural
c. Compensatory
d. Distributive
13. ____ justice means serving punishment to someone who has inflicted harm on
another.
a. Retributive
b. Procedural
c. Compensatory
d. Distributive
14. Which type of justice refers to the fair distribution of benefits and burdens?
a. Retributive
b. Procedural
c. Compensatory
d. Distributive
15. ____ justice designates fair decision practices, procedures, and agreements among
parties.
a. Retributive
b. Procedural
c. Compensatory
d. Distributive
16. It is important to consider who has the moral authority to punish whom, under which
principle?
a. Contractual
b. Negative
c. Justice
d. Legal
17. A corporation’s social responsibility includes which of the following?
a. Philanthropic responsibilities
b. Legal responsibilities
c. Ethical responsibilities
d. All of the above
18. Studies have shown that a combination of all of the following except ____ prevent
illegal action.
a. ethical incentives
b. corporate culture
c. compliance standards
d. potential disciplinary actions
ESSAY QUESTIONS
1. Explain utilitarianism and universalism ethical theories.
(PRESENTED BY: KHOO YEAK MING)
Utilitarianism is actions are good when they contribute towards fulfilling the ultimate
goal of human beings. This ultimate goal he defines as happiness. Action should be
considered good when it results in happiness for the majority of those affected by the
specific action. Whenever we are in moral doubt, we should merely calculate which of
our alternatives for action would result in the greatest amount of happiness for the
greatest number of people.
Utilitarianism is action based on judged as right, good, or wrong on the basis of its
consequences. Utilitarianism holds that the most ethical choice is the one that will
produce the greatest good for the greatest number of people.
Rules-based utilitarianism is a general principle that is used as criteria for deciding the
greatest benefit to be achieved from acting in a certain way. Act-based utilitarianism is
analyzing a particular action or behavior to determine whether the greatest utility or good
can be achieved.
Universalism, which is also called deontological ethics, holds that the ends do not justify
the means of action is the right thing must always be done, even if doing the wrong thing
would do the best for the most people. This approach is based on universal principles,
such as justice, rights, fairness, honesty, and respect.
The universalism believes that if you aren't willing for your action to be applied equally
to everyone including yourself then that action is not a valid moral action. Second, a
person should act in a way that respects and treats all others involved. People should
always be treated as valuable and they should not be tricked, manipulated, or bullied into
doing things. Third, universalism is forced decision-makers to take into account their
duty to act responsibly and respectfully toward all individuals in a situation.
2. Briefly describe Richard DeGeorge’s four types of justice.
(PRESENTED BY: KHOO YEAK MING)
i. Compensatory: concerns compensating someone for past harm or injuries.
ii. Retributive: serving punishment to someone who has inflicted harm on another.
A criterion for applying this justice principle is: “Does the punishment fit the
crime?”
iii. Distributive: fair distribution of benefits and burden. Have certain stakeholders
received an unfair share of cots accompanying a policy or action? Have others
unfairly profited from a policy?
iv. Procedural: designates fair decision practices, procedures, and agreements among
parties. This criterion asks, “have the rules and processes that government the
distribution of rewards, punishments, benefits and costs been fair.”
3. Identify and discuss ethical principles which could be applied in doing business.
(PRESENTED BY: KHOO YEAK MING)
Fairness ethical principle which could be applied in doing business. Because of the
fairness ethical principle is a fair distribution of work hardships to all and punish for the
wrong done.
Two recognized principle of fairness include:
(1) Equal treatment: each person has an equal right to the most extensive basic liberty
that is compatible with similar liberties for others.
(2) Equal opportunity, access to advantages: social and economic inequalities are
arranged so that they are both
(a) reasonably expected to be to everyone’s advantage and
(b) attached to positions and offices open to all.
4. Briefly describe the three categories of rights.
(PRESENTED BY: LEE JAN YI)
i. Legal Rights
entitlements that are limited to a particular legal system and jurisdiction.
e.g. citizen of Malaysia, the right to freedom of speech, religion, school,
properties.
ii. Moral Rights
universal and based on norms in every society, for example, the right not to be
enslaved and the right to work.
iii. Contractual Rights
provide individuals with mutually binding duties that are based on a legal system
with defined transactions and boundaries e.g. tenancy agreement
5. Discuss any three groups of external stakeholders and their moral stakes from the
organisation. (PRESENTED BY: LEE JAN YI)
i. Customers / consumers
- purchase goods and services
- provide revenue from sales, which allows the business to function and expand
Moral stakes:
- To receive goods and services that meet local laws regarding health and safety,
design, performance and so on.
- To be offered replacements, repairs, compensation in the event of failure of the
product or service
ii. Suppliers
- supply goods and services to allow the business to offers its products to their
customers.
Moral stakes:
- to be paid on time, as laid down either by law or by the service agreement
agreed between the business and supplier.
- to be treated fairly by the purchasing business
iii. Government
- passes laws that restrain many aspects of business activity
- provides law and order to allow legal business activity to take place
- achieves economic stability to encourage business activity
Moral stakes:
- promotes societal and community safety and health
- business have the duty to government to meet all legal constraints, such as
producing only legal goods, and to pay taxes on time.
CASE: JOHNSON & JOHNSON – THE TYLENOL CRISIS
(PRESENTED BY: LOW JUN WEI)
Johnson & Johnson had manufactured Extra-Strength Tylenol in capsule and tablet form
since 1959. Tylenol became one of Johnson & Johnson’s most successful products,
accounting for 17 percent of the company’s profits. Extra-Strength Tylenol constituted 70
percent of all Tylenol sales. Johnson & Johnson also enjoyed a tremendous amount of
trust and goodwill from the public, nurtured in part by its adherence to the company
credo of responsibility to customers, employees, shareholders, and the community. In
1982, seven people in the Chicago area died after taking Extra-Strength Tylenol capsules
that were laced with cyanide.
Discussion Questions
1. How would you advise the CEO of Johnson & Johnson to respond to this crisis?
What specific questions need to be addressed in formulating a response?
According to utilitarianism, I would advise the CEO to tell the public that this news is
fake and promise that the products are safe. Questions needed to be solved is how to
protect the reputation of company to the public.
2. Should the product been recalled? What are the arguments for and against a
recall?
According to the utilitarianism, the company should not recall the product. As the
greatest goods to the greatest number, as the CEO of the company, he needs to protect the
profit of stakeholders.
3. Comment on the actions taken by Johnson & Johnson in terms of corporate social
responsibility.
They did a good thing to the public as the product they sell have the better effect to the
disease and help a lot of people, they indeed meet the expectations of the society.
