Governance and business ethics

What is business ethics?

• A system that teaches business people how to create profitable companies with limited resources

• A system of moral principles to guide people on how to behave formally in business meetings and related events

• It is the study of ethical principles and moral/ethical problems that arise in a business environment

What is the difference between shareholders and stakeholders?

• A shareholder is anybody who can affect or is affected by an organisation. A stakeholder owns part of a public company through shares of stock.

• A shareholder owns part of a public company through shares of stock. A stakeholder is anybody who can affect or is affected by an organisation

According to Milton Friedman, what is the social responsibility of business?

• to increase its profits so long as it stays within the rules of the game

• to have fair labour practices in line with the community and region where the business operates

• to have a sense of responsibility towards the community and environment where the business operates

What is corporate social responsibility?

• The maximization of profits and return a portion of those profits to shareholders as a reward for the risk they took in investing in the firm

• A company's sense of responsibility towards the community and environment (both ecological and social) in which it operates

• A system of governmental regulations to make corporations comply to the legal rules of the country where they are based

What is the difference between a code of ethics and a code of conduct?

• There is no difference

• The code of ethics outlines specific behaviors that are required or prohibited as a condition of ongoing employment. The code of conduct is wide-ranging and non-specific designed to provide a set of values.

• The code of ethics is wide-ranging and non-specific designed to provide a set of values. The code of conduct outlines specific behaviors that are required or prohibited as a condition of ongoing employment.

What is a Ponzi Scheme?

• is a legitimate investment where the board members in a company are aligned with the managers looking to attract new investors

• is a type of financial operation to transfer resources from external sources into domestic companies looking to finance current expenses

• is a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors

What is "insider trading"?

• the activity of person trading inside the company

• trading information with others to one's own advantage through having access to confidential information.

• trading information to make the company look good with all the stakeholders

What is "money laundering"?

• creating the appearance that profits (obtained illegally) are "legitimate" assets

• the act of putting money into a washing machine to remove stains and disinfect currency/notes

• buying stocks of a company whose main activity is cleaning or laundering luxury clothes

According to G. Hofstede what are the cultural dimensions that make the business environment so different around the world?

• Greed; Happiness; Hate; and Love

• Power; Experience; Commitment; Hard-working attitude; Interpersonal trust; Political hierarchy; and Freedom

• Power distance; Individualism vs. collectivism; Uncertainty avoidance; and Masculinity vs. femininity

• Business ethics; and Freedom