Student name:__________

TRUE/FALSE - Write 'T' if the statement is true and 'F'

if the statement is false.
1) In a general sense, a business stakeholder is one who
has made substantial financial investments in the business.

⊚ true
⊚ false

2) A firm’s ethical reputation can provide a competitive

advantage in the marketplace with customers, suppliers, and
employees.

⊚ true
⊚ false

3) Ethics refers to how human beings should properly

live their lives.

⊚ true
⊚ false

4) Norms appeal to certain values that would be

promoted or attained by acting in a certain way.

⊚ true
⊚ false

5) Values are the only guidance individuals need to act in

ways that are positive or ethical.

⊚ true
⊚ false

6) Ethical values are personal codes of ethics that ensure that a person meets his or

Version 1 1
her individual standards of well-being.

⊚ true
⊚ false

7) The well-being promoted by ethical values is not a

personal and selfish well-being.

⊚ true
⊚ false

8) Societies that value individual freedom legally

stipulate codes of personal integrity and common decency to
safeguard this freedom.

⊚ true
⊚ false

9) In civil law, there is no room for ambiguity in

applying the law because much of the law is established by
past precedent.

⊚ true
⊚ false

10) Ethical theories are patterns of thinking, or

methodologies, to help us decide what to do.

⊚ true
⊚ false

MULTIPLE CHOICE - Choose the one alternative that philosophical ethics in the
best completes the statement or answers the question. field of business ethics?
11) Which of the following represents the role of

A) providing the

Version 1 2
fundamental language and categories of ethics D) promoting a
B) understanding how business organizations fit into culture in which ethical
a broader social and political context behavior flourishes
C) recognizing how and why people behave as they
do

12) Identify a true statement about the field of business

ethics.

D) It involves
A) It is rooted in the more general principle of social decisions at the individual,
ethics. at the organizational, and
B) It is not a multidisciplinary field. at a broader social and
C) It is mainly relevant to decision making within an governmental level.
organization.

13) Which of the following is a goal of a business ethics

class?

business decisions
A) understanding how and why people behave D) recognizing
unethically that business has its own
B) doing everything required to satisfy business standards of good and bad
stakeholders
C) separating ordinary ethical consideration from

14) ________ is a theory of human motivation that claims

that all human actions are selfish and motivated by self-
interest.

D) The separation
A) Theoretical reasoning thesis
B) The stakeholder theory
C) Psychological egoism

15) The ________

asserts that ordinary ethical

Version 1 3
standards should be kept separate from, and not be used to
judge, business decisions because business has its own
standards of good and bad.

D) social ethics
A) scientific method model
B) separation thesis
C) concept of theoretical reasoning

16) In a general sense, anyone who affects or is affected

by decisions made within a firm can be called a business
________.

C) analyst
A) nominee D) insider
B) stakeholder

17) Which of the following best describes a business

stakeholder?

D) anyone who
A) only the minority shareholders in a business entity affects or is affected by
decisions made within a
B) only those who have acquired significant shares in firm
a firm
C) anyone who audits a firm

18) Which of the following best describes ethics?

live their lives

A) an academic discipline that originated in the early D) a descriptive
1900s approach such as
B) a descriptive approach that provides an account of psychology and sociology
how and why people do act the way they do
C) the study of how human beings should properly

19) Which of the following is an approach advocated while teaching ethics?

Version 1 4
 to tell the right answers to
A) Teachers should teach ethical dogma to a passive their students.
audience. D) Teachers
B) Teachers should consider acceptance of should challenge students
customary norms as an adequate ethical perspective. to think for themselves.
C) Teachers should understand that their role is only

20) Philosophers often state that ethics is ________, which

means that it focuses on people’s reasoning about how they
should act.

C) circumstantial
A) normative D) clinical
B) derivative

21) Which of the following observations is true of ethics?

the way they do.

A) It is descriptive in nature. D) It is equivalent
B) It deals with our reasoning about how we should to law-abiding behavior.
act.
C) It provides an account of how and why people act

22) Social sciences such as psychology and sociology are

different from ethics owing to the fact that they are ________.

D) clinical in
A) normative in nature nature
B) descriptive in nature
C) conjectural in nature

23) ________ seeks an account of the how and why

people should act a certain way, rather than how they do act.

C) Ethics
A) Sociology D) Anthropology
B) Psychology

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24) Which of the following is a factor that distinguishes
social sciences, such as psychology and sociology, from
ethics?

of how people should act.

A) Unlike ethics, these disciplines inquire why D) Unlike ethics,
people act the way they do. these disciplines give
B) Unlike ethics, these disciplines are normative directives about how
rather than descriptive. people should act.
C) Unlike ethics, these disciplines provide an account

25) The ________ discipline provides an account of how

and why people do act the way they do.

C) normative
A) descriptive D) stipulative
B) supererogatory

26) Individual codes of conduct based on one’s value is sometimes referred to as

structures regarding how one should live, how one should act, ________.
what one should do, and what kind of a person should one be

C) leadership
A) morality D) rationality
B) independence

27) Morality is the aspect of ethics that we can refer to by

the phrase "________."

D) persuasive
A) personal freedom rationality
B) individual rationality
C) personal integrity

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 C) etiquettes
A) values D) norms
B) morals

29) Identify the area of ethics that raises questions about

justice, law, civic virtues, and political philosophy.

C) virtue ethics
A) stipulative ethics D) social ethics
B) existential ethics

30) The aspect of business ethics that examines business

institutions from a social rather than an individual perspective
is referred to as

D) institutional
A) decision making for social responsibility. morality.
B) corporate cultural responsibility.
C) organizational ethical responsibility.

31) ________ establish the guidelines or standards for type of person one should
determining what one should do, how one should act, what be.

C) Norms
A) Roles D) Laws
B) Attitudes

32) Which of the following is a true statement about

norms?

conditions.
A) They are underlying beliefs that cause people to D) They consist of
choose one way or another. guidelines for bringing
B) They are standards of appropriate and proper about positive behavioral
behavior. change.
C) They provide benchmarks of desirable societal

Version 1 7
33) The crux of normative ethics is that these disciplines

D) branch away
A) presuppose some underlying values. from social ethics to
B) describe what people do. personal ethics.
C) should always involve the study or discipline of
ethics.

34) Which of the following refers to an underlying belief

that causes people to choose between plausible courses of
action?

C) protocols
A) norms D) values
B) paradigms

35) Which of the following is true about values?

D) Values are
A) Values are the highest standards of appropriate underlying beliefs that
and proper behavior. cause us to act or to decide
B) Corporate scandals prove the fact that individuals in a certain way.
have personal values, but institutions lack values.
C) Values cannot lead to unethical results.

36) ________ are beliefs and principles that provide the

ultimate guide to a company’s decision making.

D) Vision
A) Mission statements statements
B) Core values
C) Historical milestones

37) Which of the following is a way of saying that a expectations for what is
corporation has a set of identifiable values that establish the normal within the firm?

B) organizational
A) organizational culture policy

Version 1 8
 C) organizational code
D) organizational structure

38) Ethics requires that the promotion of human welfare

be done

D) in a manner
A) based on the personal opinions of the decision that is acceptable and
maker. reasonable from all
B) based on the level of need of the beneficiaries. relevant points of view.
C) understanding the religious beliefs of the
beneficiary.

39) Dramatic examples of tyrannical regimes in history

demonstrate that

apathetic towards their

A) societies valuing freedom welcome laws that ethical duties.
require more than the ethical minimum. D) one’s ethical
B) just societies can only be achieved through strict responsibility may run
enforcement of ethical codes. counter to the law.
C) obedience to the law almost always makes people

40) Telling organizations that their ethical responsibilities

end with obedience to the law

D) eliminates
A) is just inviting more legal regulation. ambiguity while making
B) is enough to maintain an ethical business personal ethics-related
environment. decisions.
C) reduces the frequency of corporate scandals.

41) The failure of personal ethics among companies like

Enron and WorldCom led to the creation of the

A) Brooks Act.

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 D) Sarbanes-
B) Gramm-Leach-Bliley Act. Oxley Act.
C) Clinger-Cohen Act.

42) Which of the following observations is true?

D) An
A) Obedience to the law is sufficient to fulfill one’s individual’s ethical
ethical duties. responsibility can never
B) The law is very effective at promoting “goods.” run counter to the law.
C) The law cannot anticipate every new dilemma that
businesses might face.

43) Which of the following is a true statement about the

Americans with Disabilities Act (ADA)?

D) Mental
A) What counts as a disability remains ambiguous disabilities have been left
under the law. out of the purview of the
B) The law lays out clear-cut rules for reasonable law.
accommodation.
C) The law has not been put into practice till date.

44) A process to identify potential events that may affect entity objectives is called
the entity, and manage risk to be within its risk appetite, to ________.
provide reasonable assurance regarding the achievement of

D) risk pooling
A) risk assessment
B) practical reasoning
C) theoretical reasoning

45) Practical reasoning is reasoning about

C) what we
A) what we should think.
B) what we should do.

Version 1 10
should believe.
D) what we should share.

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46) Reasoning about what should be done is known as
________ reasoning.

C) theoretical
A) practical D) predictive
B) objective

47) Theoretical reasoning is reasoning about

D) what we
A) what we actually do. should implement.
B) what we should do.
C) what we should believe.

48) ________ reasoning is reasoning about what we

should believe.

C) Theoretical
A) Practical D) Descriptive
B) Abstract

49) Which of the following is the pursuit of the highest

standard for what we should believe?

D) practical
A) theoretical reason reason
B) notional reason
C) emotional reason

50) Which of the following is the great arbiter of truth

according to the tradition of theoretical reason?

C) science
A) religion D) norms
B) customs

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51) Which of the following can be thought of as the
answer to the fundamental questions of theoretical reason?

D) the normative
A) the scientific method model
B) the practical approach
C) the contingency approach

FILL IN THE BLANK. Write the word or phrase that worse, by the decisions
best completes each statement or answers the question. made within a particular
52) A ________ is anyone affected, for better or for firm.

53) ________ is a theory of human motivation that claims

that all human actions are selfish and motivated by self-
interest.

54) The ________ asserts that ordinary ethical standards

should be kept separate from, and not be used to judge,
business decisions because business has its own standards of
good and bad.

55) A process to identify potential events that may affect entity objectives is called
the entity, and manage risk to be within its risk appetite, to ________.
provide reasonable assurance regarding the achievement of

56) As a discipline, ________ deals with norms and

standards of appropriate and proper (normal) behavior.

57) ________ is the aspect of ethics that is referred to by

the phrase “personal integrity.”

58) Normative disciplines presuppose some underlying ________.

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59) Acts and decisions that seek to promote human
welfare are based on ________.

60) The aspect of business integrity that focuses on

examining business institutions from a collective rather than
from an individual perspective falls under the area of
________.

61) ________ reasoning is reasoning about what we

should believe.

ESSAY. Write your answer in the space provided or on a recently, and what kind of
separate sheet of paper. shift in focus has occurred
62) Explain how the study of ethics was viewed until post the scandals.

63) Describe the advantages associated with ethical

decision making.

64) Discuss the hesitation (that may be justified)

associated with teaching ethics. Explain briefly how the
authors of this text believe that ethics can be taught
constructively in a class.

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65) Define ethics. How is it different from social sciences
such as psychology and sociology?

66) Differentiate the concepts of morality and social

ethics.

67) Why is "ethics" considered a normative discipline?

68) Define values and discuss the element of corporate

culture in detail.

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69) Describe the two elements of ethical values.

70) Discuss the impact of maintaining that holding to the

law is sufficient to fulfill one's ethical duties, and what it says
about the law itself.

71) Explain the difficulties associated with telling a

business that its ethical responsibilities end with obedience to
the law.

72) Discuss the importance of precedents for most laws

concerning business.

73) Define risk assessment.

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74) While using the risk assessment model, what might
the decision makers include in their assessment before taking
action?

75) Differentiate between practical reason and theoretical

reason.

Version 1 17
Answer Key

Test name: Test1

Version 1 18
1) FALSE
In a general sense, a business stakeholder will decisions made
be anyone who affects or is affected by within the firm, for
better or worse.
2) TRUE
A firm’s ethical reputation can provide a
competitive edge in the marketplace with
customers, suppliers, and employees.
3) TRUE
Ethics refers not only to an academic how human beings
discipline, but to that arena of human life should properly live
studied by this academic discipline, namely, their lives.
4) TRUE
Norms establish the guidelines or standards be promoted or
for determining what we should do, how we attained by acting in
should act, what type of person we should be. a certain way.
Another way of expressing this point is to say
that norms appeal to certain values that would
5) FALSE
In general, values are those beliefs that incline corporation’s set of
us to act or to choose one way rather than values may lead to
another. One important implication of this either ethical or
guidance, of course, is that an individual’s or a unethical results.
6) FALSE
It is important to know two elements of ethical values. First, ethical

Version 1 19
values serve the ends of human well-being.
Second, the well-being promoted by ethical
values is not a personal and selfish well-being.
Thus, ethical values are those beliefs and
principles that impartially promote human
well-being.

7) TRUE
It is important to know two elements of ethical are those beliefs and
values. First, ethical values serve the ends of principles that
human well-being. Second, the well-being impartially promote
promoted by ethical values is not a personal human well-being.
and selfish well-being. Thus, ethical values
8) FALSE
Liberal societies that value individual freedom comprise the social
will seek to legally prohibit the most serious fabric of a
ethical harms. However, they will not legally developed culture.
require acts of charity, common decency, and
personal integrity that may otherwise
9) FALSE
In civil law (as opposed to criminal law),
where much of the law is established by past
precedent, there is always room for ambiguity
in applying the law.
10) TRUE
Ethical theories are patterns of thinking, or methodologies, to

Version 1 20
help us decide what to do.
11) A
The field of business ethics is rooted in the base for our own
more general discipline of philosophical study of business
ethics. The role of philosophical ethics is to ethics so that we
provide the fundamental language and will not have to start
categories of ethics. Learning about from scratch.
philosophical ethics provides a knowledge
12) D
Business ethics involves decisions at the evaluate decision
individual, at the organizational, and at a making at all three
broader social and governmental level. The of these levels.
field of business ethics helps us analyze and
13) A
A business ethics class has many goals, organizations, and
including helping us to develop the knowledge think through the
base and skills needed to identify ethical social, economic,
issues, understand how and why people and political
behave unethically, decide how we should act, policies that we
what we should do, and the type of person we should support as
should be as individuals, create ethical citizens.
14) C
Behind some skepticism about the relevance theory purports to
of ethics to business, and often part of the be an account of
reasoning behind the separation thesis, lies a human motivation,
theory called psychological egoism. This asserting that

Version 1 21
humans are fundamentally and unavoidably
motivated by self-interest.
15) B
The separation thesis asserts that ordinary separation thesis
ethical standards should be kept separate from, remains common in
and not be used to judge, business decisions business circles.
because business has its own standards of
good and bad. It is fair to say that this
16) B
In a general sense, a business stakeholder will specifically, and on
be anyone who affects or is affected by the firm’s long-term
decisions made within the firm, for better or sustainability as a
worse. Failure to consider these additional whole.
stakeholders will have a detrimental impact on
those stakeholders, on stockholders,
17) D
In a general sense, a business stakeholder will decisions made
be anyone who affects or is affected by within the firm, for
better or worse.
18) C
Ethics refers not only to an academic how human beings
discipline, but to that arena of human life should properly live
studied by this academic discipline, namely, their lives.
19) D
Ethics teachers must challenge students to should not be to
think for themselves. The teacher’s role preach ethical

Version 1 22
dogma to a passive audience, but instead to questioning, and
treat students as active learners and to engage deliberating.
them in an active process of thinking,
20) A
Philosophers often emphasize that ethics is actions; but these
normative, which means that it deals with our sciences are
reasoning about how we should act. Social descriptive rather
sciences, such as psychology and sociology, than normative.
also examine human decision making and
21) B
Philosophers often emphasize that ethics is way, rather than
normative, which means that it deals with our how they do act.
reasoning about how we should act. As a
normative discipline, ethics seeks an account
of how and why people should act a certain
22) B
Social sciences, such as psychology and seeks an account of
sociology, also examine human decision how and why
making and actions; but these sciences are people should act a
descriptive rather than normative. This is due certain way, rather
to the fact that they provide an account of how than how they act.
and why people act the way they do—they
describe; as a normative discipline, ethics
23) C
As a normative discipline, ethics seeks an certain way, rather
account of how and why people should act a than how they do

Version 1 23
act. This is why philosophers often emphasize
that ethics is normative.
24) A
Social sciences, such as psychology and why people should
sociology, provide an account of how and why act a certain way,
people do act the way they. As a normative rather than how they
discipline, ethics seeks an account of how and do act.
25) A
Social sciences, such as psychology and and why people do
sociology, examine human decision making act the way they do
and actions; but, unlike ethics, these sciences —they describe.
are descriptive rather than normative. When
we say that they are descriptive, we refer to
the fact that they provide an account of how
26) A
How should we live? This fundamental is based on our
question of ethics can be interpreted in two value structures,
ways. "We" can mean each one of us defined by our
individually, or it might mean all of us moral systems; and,
collectively. In the first sense, this is a therefore, it is
question about how I should live my life, how sometimes referred
I should act, what I should do, and what kind to as morality.
of person I should be. This meaning of ethics
27) C
Morality is the aspect of ethics that we refer to
by the phrase "personal integrity."

Version 1 24
28) B
There will be many times within a business have a moral value
setting where an individual will need to step of honesty, which,
back and ask: What should I do? How should I when applied to her
act? If morals refer to the underlying values or his decisions,
on which our decisions are based, ethics refers results in a refusal
to the applications of those morals to the to lie on an expense
decisions themselves. So, an individual could report.
29) D
Social ethics raises questions of justice, public structured and about
policy, law, civic virtues, organizational how we ought to
structure, and political philosophy. It delves live together.
into questions on how a society and social
institutions, such as corporations, ought to be
30) A
Business ethics is concerned with how perspective. This
business institutions ought to be structured, broader social
about whether they have a responsibility to the aspect of ethics is
greater society (corporate social responsibility referred to as
or CSR), and about making decisions that will decision making for
impact many people other than the individual social
decision maker. This aspect of business ethics responsibility.
asks people to examine business institutions
from a social rather than from an individual
31) C
Norms establish the guidelines or standards should act, what
for determining what we should do, how we

Version 1 25
type of person we should be.
32) B
Norms are standards of appropriate and proper of person we should
(or “normal") behavior. They establish the be.
guidelines or standards for determining what
we should do, how we should act, what type
33) A
Normative disciplines presuppose some
underlying values.
34) D
We can think of values as the underlying indulge in some less
beliefs that cause us to act or to decide one productive activity.
way rather than another. Thus, the value that
someone places on an education leads him or
her to make the decision to study rather than
35) D
We can think of values as the underlying way rather than
beliefs that cause us to act or to decide one another.
36) B
A company’s core values are those beliefs and
principles that provide the ultimate guide to its
decision making.
37) A
Talk of a corporation’s “culture” is a way of identifiable values
saying that a corporation has a set of that establish the

Version 1 26
expectations for what is “normal” within that the firm values and
firm. These norms guide employees, implicitly finds worthy.
more often than not, to behave in ways that
38) D
From the perspective of ethics, no one acceptable and
person’s welfare is more worthy than any reasonable from all
other’s. Ethical acts and choices should be relevant points of
view.
39) D
Holding that obedience to the law is sufficient demonstrate that
to fulfill one’s ethical duties begs the question one’s ethical
of whether the law, itself, is ethical. Dramatic responsibility may
examples from history, including Nazi run counter to the
Germany and apartheid in South Africa, law.
40) A
Telling business that its ethical responsibilities more legal
end with obedience to the law is just inviting regulation.
41) D
It was the failure of personal ethics among and many other
companies such as Enron and WorldCom that legal reforms.
led to the creation of the Sarbanes-Oxley Act
42) C
The law cannot possibly anticipate every new dilemma that
dilemma that businesses might face; so, often, confronts a business
there may not be a regulation for the particular leader.

Version 1 27
43) A
The Americans with Disabilities Act (ADA) and the effect it has
requires employers to make reasonable on the employee’s
accommodations for employees with ability to work,
disabilities. What conditions are covered among others.
under the ADA depends on a number of
factors, including the severity of the illness
44) A
Risk assessment is defined as a process to outcome versus
identify potential events that may affect the another can be a
entity, and manage risk to be within its risk professional
appetite, to provide reasonable assurance judgment for
regarding the achievement of entity attorneys and
objectives. It is important to recognize that accountants,
risk assessment is not simply a value-neutral deciding whether
process of professional judgment. While the risk is worth
determining the likelihood of one particular taking is not.
45) B
Practical reasoning is reasoning about what
we should do.
46) A
Practical reasoning is reasoning about what
we should do.
47) C
Theoretical reasoning is reasoning about what
we should believe.

Version 1 28
48) C
Theoretical reasoning is reasoning about what
we should believe.
49) A
Theoretical reason is the pursuit of truth, science is the great
which is the highest standard for what we arbiter of truth.
should believe. According to this tradition,
50) C
According to the tradition of theoretical which is the highest
reason, science is the great arbiter of truth. standard for what
Thus, theoretical reason is the pursuit of truth, we should believe.
51) A
Theoretical reason is the pursuit of truth, theoretical reason:
which is the highest standard for what we What should we
should believe. According to this tradition, believe?
science is the great arbiter of truth. Thus, the
scientific method can be thought of as the
answer to the fundamental questions of
52) stakeholder
In a general sense, a business stakeholder will decisions made
be anyone who affects or is affected by within the firm, for
better or worse.
53) Psychological egoism
Behind some skepticism about the relevance reasoning behind
of ethics to business, and often part of the the separation

Version 1 29
thesis, lies a theory called psychological are fundamentally
egoism. This theory purports to be an account and unavoidably
of human motivation, asserting that humans motivated by self-
interest.
54) separation thesis
The separation thesis asserts that ordinary separation thesis
ethical standards should be kept separate from, remains common in
and not be used to judge, business decisions business circles.
because business has its own standards of
good and bad. It is fair to say that this
55) risk assessment
Risk assessment is defined as a process to regarding the
identify potential events that may affect the achievement of
entity, and manage risk to be within its risk entity objectives.
appetite, to provide reasonable assurance
56) normative ethics
As a normative discipline, ethics deals with we should do, how
norms and standards of appropriate and proper we should act, and
(normal) behavior. Norms establish the what type of person
guidelines or standards for determining what we should be.
57) Morality
Morality is the aspect of ethics that we refer to
by the phrase “personal integrity.”
58) values
Normative disciplines presuppose some
underlying values.

Version 1 30
59) ethical values
Acts and decisions that seek to promote ends of human well-
human welfare are acts and decisions based on being.
ethical values. Thus, ethical values serve the
60) social ethics
Social ethics involves questions of political, institutions from a
economic, civic, and cultural norms aimed at social rather than
promoting human well-being. This aspect of from an individual
business ethics asks us to examine business perspective.
61) Theoretical
Theoretical reasoning is reasoning about what which is the highest
we should believe. It is the pursuit of truth, standard for what
we should believe.
62) As recently as the mid-1990s, articles in Leaders realize that
such major publications as The Wall Street they can no longer
Journal, the Harvard Business Review, and afford this approach
U.S. News and World Report questioned the in contemporary
legitimacy and value of teaching classes in business. The
business ethics. Few disciplines face the type questions today are
of skepticism that commonly confronted less about why or
courses in business ethics. Many students should ethics be a
believed that “business ethics” was an part of business,
oxymoron. Many also viewed ethics as a than they are about
mixture of sentimentality and personal opinion which values and
that would interfere with the efficient principles should
functioning of business. guide business
decisions and how

Version 1 31
ethics should be integrated within business. management unless
Students unfamiliar with the basic concepts they are familiar
and categories of ethics will find themselves with the ethical
as unprepared for careers in business as issues that arise
students who are unfamiliar with accounting within those
and finance. Indeed, it is fair to say that specific fields.
students will not be fully prepared, even
within fields such as accounting, finance,
human resource management, marketing, and
63) Unethical behavior not only creates legal efficiency. Trust,
risks for a business, it creates financial and loyalty,
marketing risks as well. Managing these risks commitment,
requires managers and executives to remain creativity, and
vigilant about their company’s ethics. It is initiative are just
now clearer than ever that a company can lose some of the
in the marketplace, go out of business, and its organizational
employees can go to jail if no one is paying benefits that are
attention to the ethical standards of the firm. more likely to
flourish within
A firm’s ethical reputation can provide a ethically stable and
competitive advantage in the marketplace and credible
with customers, suppliers, and employees. organizations.
Managing ethically can also pay significant
dividends in organizational structure and
64) Part of the hesitation about teaching believe that teachers
ethics involves the potential for abuse; should remain
expecting teachers to influence behavior may value-neutral in the
be viewed as permission for teachers to classroom and
impose their own views on students. Many respect a student’s

Version 1 32
own views. Another part of this concern is that decision making.
the line between motivating students and The fundamental
manipulating students is a narrow one. There assumption is that a
are many ways to influence someone’s process of rational
behavior, including threats, guilt, pressure, decision making, a
bullying, and intimidation. process that
But not all forms of influencing behavior involves careful
raise such concerns. There is a major thought and
difference between manipulating someone and deliberation, can
persuading someone, between threatening and and will result in
reasoning. The tension between knowledge behavior that is
and behavior can be resolved by emphasizing more reasonable,
ethical judgment, ethical deliberation, and accountable, and
ethical decision making. The only ethical.
academically and ethically legitimate way to
do this is through careful and reasoned
65) Ethics refers not only to an academic account of how and
discipline, but to that arena of human life why people do act
studied by this academic discipline, namely, the way they do; as
how human beings should properly live their a normative
lives. discipline, ethics
Philosophers often emphasize that ethics is seeks an account of
normative, which means that it deals with our how and why
reasoning about how we should act. Social people should act a
sciences such as psychology and sociology certain way, rather
also examine human decision making and than how they do
actions, but these sciences are descriptive act.
rather than normative. They provide an
66) The fundamental question of ethics “How should we live?”

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can be interpreted in two ways. concerned with how
business institutions
"We” can mean each one of us individually, ought to be
or it might mean all of us collectively. In the structured, about
first sense, this is a question about how I corporate social
should live my life, how I should act, what I responsibility, and
should do, and what kind of person I should about making
be. This meaning of ethics is sometimes decisions that will
referred to as morality, and it is the aspect of impact many people
ethics that we refer to by the phrase “personal other than the
integrity.” There will be many times within a individual decision
business setting where an individual will need maker. This aspect
to step back and ask: “What should I do? How of business ethics
should I act?” asks us to examine
business institutions
In the second sense, “How should we live?” from a social rather
refers to how we live together in a community. than an individual
This is a question about how a society and perspective. This
social institutions such as corporations ought broader social
to be structured and about how we ought to aspect of ethics is
live together. This area is sometimes referred referred to as
to as social ethics and it raises questions of decision making for
justice, public policy, law, civic virtues, social
organizational structure, and political responsibility.
philosophy. In this sense, business ethics is
67) To say that ethics is a normative we should do, how
discipline is to say that it deals with norms: we should act, what
those standards of appropriate and proper (or type of person we
"normal") behavior. Norms establish the should be.
guidelines or standards for determining what

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68) In general, values were earlier thought of values may lead to
as those beliefs that incline us to act or to either ethical or
choose one way rather than another.A unethical result. The
company's core values, for example, are those corporate culture at
beliefs and principles that provide the ultimate Enron, for example,
guide in its decision making. Individuals can seems to have been
have their own personal values and, committed to
importantly, institutions also have values. A pushing the
corporation's "culture" is a way of saying that envelope of legality
a corporation has a set of identifiable values as far as possible in
that establish the expectations for what is order to get away
"normal" within that firm. These norms guide with as much as
employees, implicitly more often than not, to possible in pursuit
behave in ways that the firm values and finds of as much money
worthy. One important implication of this is as possible.
that an individual or a corporation's set of
69) First, ethical values serve the ends of Ethical values are
human well-being. Acts and choices that aim those beliefs and
to promote human welfare are acts and principles that
choices based on ethical values. impartially promote
Second, the well-being promoted by ethical human well-being.
values is not a personal and selfish well-being.
70) Holding that obedience to the law is On a more
sufficient to fulfill one's ethical duties begs the practical level, this
question of whether or not the law itself is question can have
ethical. Examples from history, Nazi Germany significant
and apartheid in South Africa being the most implications in a
obvious, demonstrate that one's ethical global economy in
responsibility may run counter to the law. which businesses

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operate in countries with legal systems remain ethically
different from those of their home country. accountable to their
For instance, some countries permit stakeholders for
discrimination on the basis of gender; but those decisions.
businesses that choose to adopt such practices
71) Telling a business that its ethical reforms. If business
responsibilities end with obedience to the law restricts its ethical
is just inviting more legal regulation. The responsibilities to
difficulty of trying to create laws to cover obedience to the
each and every possible business challenge law, it should not be
would be enormous. The task would require surprising to find a
such specificity that the number of regulated new wave of
areas would become unmanageable. government
Additionally, it was the failure of personal regulations that
ethics among such companies as Enron and require what were
WorldCom, after all that led to the creation of formerly voluntary
the Sarbanes-Oxley Act and many other legal actions.
72) Most of the laws that concern business cases will also apply
are based on past cases that establish legal here?" Since there
precedents. Each precedent applies general will always be some
rules to the specific circumstances of an differences between
individual case. In most business situations, cases, the question
asking "Is this legal?" is really asking "Are will always remain
these circumstances similar enough to past somewhat open.
cases that the conclusions reached in those
73) Risk assessment is defined as a process regarding the
to identify potential events that may affect the achievement of
entity and manage risk to be within its risk entity objectives.
appetite, to provide reasonable assurance

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74) Using the risk assessment model, ● the financial
decision makers might include in their benefits of taking
assessment before taking action: the action
● the likelihood of being challenged in court ● the ethical
● the likelihood of losing the case implication of the
● the likelihood of settling for financial options available
damages
● a comparison of those costs
75) Practical reason is described as reasoning
about what we should do, whereas theoretical
reason involves reasoning about what we
should believe.

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