R01- Ethics in Business Test #1 Review Session (Fall 2024)

Ethics in Business
Test #1 Review Session (R01)

27 September 2024
Prof. Rametta

Open Ended

Sometimes, ethical issues that arise at one (lower) level may not be completely solvable at that level. When that occurs, what might we need to do?

Sometimes, ethical issues that arise at one (lower) level may not be completely solvable at that level. When that occurs, what might we need to do?

We may need to practice "ethical displacement," which involves shifting the issue to, and addressing it at, a higher level of ethical decision making (even though the lower-level issue must still be resolved).

Open Ended

For firms, (economic) efficiency means making goods/services at a low cost. What does economic efficiency mean in the context of consumers?

For firms, (economic) efficiency means making goods/services at a low cost. What does economic efficiency mean in the context of consumers?

In this context, economic efficiency means consumers getting value for their money (i.e., "getting a good deal," "getting their money's worth").

Categorize

Options (8)

Shareholders

Competitors

Employees

Voters

Government Regulators

Customers

Peers

Mass Media

Below are eight (8) examples of stakeholders. Place each in its correct category of stakeholder.

Enabling Stakeholder

Normative Stakeholder

Functional Stakeholder

Diffused Stakeholder

The Four Categories of Stakeholders

Enabling Stakeholders permit the business to function.

Normative Stakeholders set industry norms that the business follows.

Functional Stakeholders perform business functions, and influence the business' inputs and outputs.

Diffused Stakeholders have a less direct relationship with the business, but still have an impact.

Open Ended

What is stakeholder capitalism,

and what important institution (that we discussed) has adopted this view?

What is stakeholder capitalism, and what important institution (that we discussed) has adopted this view?

Also called "the social responsibility of business view," this is the view adopted by the Gabelli School. It is the view that businesses must carefully consider all stakeholder interests, and that this process is central to a business' mission. Businesses must be responsible to customers, employees, the environment, etc. Shareholders are an important stakeholder, but not the only important one.

Open Ended

If we follow the instrumental approach to considering stakeholder interests, once we identify the stakeholders and their interests, how do we manage conflicts between those interests?

If we follow the instrumental approach to considering stakeholder interests, once we identify the stakeholders and their interests, how do we manage conflicts between those interests?

Following this approach, we would manage conflicting interests in a way that maximizes financial outcomes (for example, profit and shareholder returns).

Open Ended

What is a wrongful harm? What kind of wrongful harm was Tesla accused of in its marketing of its cars' self-driving abilities?

What is a wrongful harm? What kind of wrongful harm was Tesla accused of in its marketing of its cars' self-driving abilities?

Not all harms are wrongful harms. A wrongful harm is any harm stemming from a failure to fulfill a duty or obligation. Tesla has been accused of fraud, which is one example of a wrongful harm.

Wrongful harms can involve both negligence and intentional actions, and those who are not buyers or sellers can be wrongfully harmed. Think of how a pedestrian who is struck by a self-driving Tesla that fails to stop, and has an inattentive driver.

Despite the car being self-driving, the driver has an obligation to be attentive behind the wheel; they were not, so the pedestrian was harmed because the driver violated their obligation to be attentive.

Open Ended

What is a positive externality? Explain the concept and give an example; make sure you explain how the example you provide aligns with this concept.

What is a positive externality? Explain the concept and give an example; make sure you explain how the example you provide aligns with this concept.

A positive externality results when there is some benefit of production or consumption that is not reflected in the price of a good/service; some other party gets such benefits "for free," without paying for them.

As a result, we see underproduction or underconsumption of beneficial good or services, since there is less incentive for producers to produce them (some other party is getting the benefit "for free") and consumers can be "free riders" and benefit from those who consume the product, without needing to consume it themselves.

An example of this is vaccination: the price of vaccination does not reflect all the good vaccines bring to society; those who decline vaccination enjoy protection "for free" because of those who are vaccinated.

Open Ended

Candor is one of the three elements of fiduciary duty.

What is candor in this context? In your answer, explain how Elon Musk could be said to have violated this duty in the ways he secured resources for his startup, xAI.

Candor is one of the three elements of fiduciary duty.

What is candor in this context? In your answer, explain how Elon Musk could be said to have violated this element in the ways he secured resources for his startup, xAI.

Candor means that the fiduciary must disclose to the beneficiary all relevant information relating to matters that concern their relationship.

Concerns have been raised that Elon Musk may have violated this element of candor in how he secured resources for his startup, xAI.

By sharing resources between, for example, Tesla and xAI, Tesla shareholders may have not been fully aware of what Musk was doing with their money at xAI.

Open Ended

One of defining traits of a professional is the ability (and responsibility) to exercise significant control over their work. What does that mean?

One of the three defining traits of a professional is the ability (and responsibility) to exercise significant control over their work. What does that mean?

Professionals, like physicians, nurses, CPAs, attorneys, architects, and social workers, have a high level of expertise.

Given that expertise, the public trusts them to set their own performance standards (what technically correct conduct looks like in their profession), and professionals also set their own code of ethics (what morally correct conduct looks like in their profession).

In this way, they exercise significant control over their work.

Open Ended

Act-utilitarianism says, in part, that right actions are those that produce the greatest net pleasure. What is "net pleasure"?

Act-utilitarianism says, in part, that right actions are those that produce the greatest net pleasure. What is "net pleasure"?

As we evaluate the consequences of an action, some of those consequences will be pleasant (beneficial), and others painful (costly). Act-utilitarianism says we should subtract the total pain caused by an action from the total pleasure, much as net income is calculated by subtracting costs from revenue.

Open Ended

How does rule-utilitarianism differ from act-utilitarianism?

How does rule-utilitarianism differ from act-utilitarianism?

Act-utilitarianism analyzes the consequences of individual actions to determine whether they are right or wrong.

Rule-utilitarianism evaluates the rightness of an action by asking whether the action conforms to rule, that (if generally accepted) would produce the greatest balance of pleasure over pain for everyone.

Open Ended

According to Kantian Ethics, why is stealing not universalizable?

According to Kantian Ethics, why is stealing not universalizable?

Because if the underlying rule ("Whenever someone else has something you want, steal it") were universalized, everyone would "steal" from each other all the time, making the concept of stealing (and owning property) meaningless; nothing could be stolen since "stealing" would be logically impossible.

Think about whether if everyone (universally) followed the rule underlying a proposed action, whether that would make it logically impossible to do the very action you're trying to do.

Open Ended

How could using a dating app for professional networking purposes violate Kant's respect for persons principle?

How could using a dating app for professional networking purposes violate Kant's respect for persons principle?

The concern is that dating app users who are looking for professional connections may use dating app users who are looking for romantic/dating connections as a mere means to an end, and thus disrespect their autonomy. Those using the app for romantic/dating connections may have no idea the person they are chatting with is looking only for professional connections; this can be seen as deceptive and as treating them just as a "tool" to network.

Open Ended

How is Aristotle's term, eudaimonia, best translated?

How is Aristotle's term, eudaimonia, best translated?

This term is best translated as human flourishing (not psychological happiness).

Labelling

This image is taken from our discussion of virtue as a "mean." Place each label where it belongs on the image.

Drag labels to their correct position on the image

Obsessiveness

Negligence

Conscientiousness