Exam 3: Conducting Business Ethically and Responsibly

Ethical standards relating to business practices are fairly consistent around the world.

What requirement does the Personal Information Protection and Electronic Documents Act (PIPEDA) impose on companies?

The first step in the simplified three-step model for applying ethical judgments to situations that may arise during the course of business activities is to determine the norms that relate to the situation. determine the most appropriate moral values. determine the implications of breaching the activity or policy. gather the relevant factual information. make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.

All of the following are functions of codes of ethics except they increase public confidence in a firm or its industry. they ensure that unethical behaviour will not occur in the firm. they may help stem the tide of government regulation. they improve internal operations by providing consistent ethical standards. they help management respond to problems that arise as a result of unethical behaviour.

Bob Crawford sold his shares in Texon Company after finding out from Texon's CEO that its stock was about to drop in price because its soon-to-be-released quarterly financial update was going to show that earnings were lower than expected. Bob engaged in whistle-blowing. misrepresentation of finances. insider trading. an obstructionist stance to social responsibility. cheque kiting.

All things considered, the utility norm is the best one to use when making decisions about ethics.

The Personal Information Protection and Electronic Documents Act (PIPEDA) is designed to protect electronic documents from computer hackers. requires organizations to obtain consent before they collect, use, or disclose information about individuals. has been declared unconstitutional. prohibits organizations from using personal information about their employees. applies almost exclusively to universities.

A firm is considering opening a new plant in an existing building at a business park. It is located in the middle of a coal-producing region, which remains visibly blighted by the effects of strip mining. The plant's heating system is based on coal heat, which is locally produced and relatively cheap, reducing the plant's operating expenses significantly. Company engineers note that the plant's roof is ideal for solar panels, which would reduce the firm's future dependence on coal, nuclear, and other conventional sources of energy. However, the cost of installing the panels is considerable and would mean that the new plant would not return a profit to the company for several years. The CEO feels that the panels should be installed. Which of the following, if true, strengthens the ethical standing of the CEO's position? Due to new federal "cap and trade" controls, the cost of coal is likely to increase sharply in the next decade, along with that of electricity generated by burning coal. The commitment to "green" and sustainable energy use would lower the company's emissions locally as well as support the development of an alternative power industry. Regulations require mining firms in the region to restore natural landscaping after operations are completed, including sections stripped before the new standards were adopted. Projections made by the firm's long-range planning team indicate that the market will support full use of the new location for at least twenty years, enough time to see savings accrue from the solar panels. The most economical source for purchasing the solar panel equipment is owned by the same corporation responsible for strip mining in the new location.

Damage to the environment by strip mining is associated with which of the following types of pollution? Noise Land Water Oil Air

The defensive stance to social responsibility rejects the idea that business has contributed to many of society's problems and, therefore, business has a social obligation to correct those problems.

What is ethical behavior?

If we apply the ethical standard of utility, it may be acceptable to allow inflated expense reports.

List two ways that a company can formalize top management commitment to ethical business practices.

When DaimlerChrysler introduced the PT Cruiser, demand was so strong that some dealers would sell one only if the customer was willing to pay several thousand dollars over the sticker price. This is an example of effective business practice. price gouging. collusion. profit maximization. price lining.

Jane is a whistle-blower because she has concerns about some of the actions of her company. Whistle-blowers tend to be employees who have just come to work for the firm. are promoted by top management as a reward for pointing out activities that might hurt the company. tend to be younger than other employees and would like to be promoted. often find themselves demoted or even fired for blowing the whistle on the company. are hired away by other firms because of their high ethical values.

Which of the following is a reason for businesses to assume a socially responsible role? Business controls vast resources of money and talent which can be used to help society. Business helped to create many of society's problems and therefore should help to solve these problems. Statistics show that businesses that support social responsibility projects have higher return on investments. Corporations have civic responsibilities just like other citizens and should help to better our lives. All of these are reasons.

What are carbon credits?

Sam has noticed that the safety mechanism on the piece of equipment that he operates is not working. After repeatedly telling management about the defect but getting no response, he decides to report it to the provincial agency responsible for workplace safety. This is an example of collusion. insider trading. stealth advertising. violating the line of reporting. whistle-blowing.

Exxon's response to the Valdez oil spill in Alaska some years ago has been criticized on several fronts. Some say the company waited too long to respond, and that when the response came it was very weak. But Exxon points out that they cleaned up the spill and that they have gone out of their way to bring the area back to conditions that existed before the spill. This stance to social responsibility would best be classified as defensive. obstructionist. charitable. accommodative. proactive.

In 2010, new laws came into effect that, unfortunately, made it more difficult for the Competition Bureau to convict price-fixers.