Discussion Questions 1

Homer Miller
Elizabeth Hansch
BUS 330: Business Ethics
June 18, 2016
Week 1 Discussion Questions
Chapter 1 Discussion Questions
1.) The ethical issues involved in the LIBOR case are the fraudulent reporting of the interest
rate, and the people it affected. Barclays underreported interest rates, and skewed the
entire financial position of the company, and the financial market.
2.) The stakeholders in the LIBOR case are the bankers, the British Bankers Association, the
customers of the banks involved, businesses effected by the underreporting, and the
governments involved with the banks. The stakeholders are those affected by the
decisions.
3.) The senior executives at Barclays had a responsibility to both the customers of the bank
and the British Bankers Association to prevent fraud. Instead, executives at Barclays
perpetuated the underreporting fraud and created the opportunities for others to follow
their examples.
4.) The ethical issues involved in the widespread investigation are different than if only
Barclays was involved. The ethical issues spread from one bank underreporting, and
affecting investors and customers, to many banks and even governments. Instead of the
ethical issue of Barclays falsifying interest rates, and affecting only their customers and
investors, other banks also did so affecting the entire financial system.
5.) The people involved, and especially the executives at the banks, are responsible for the
ethical integrity of a company. The corporate culture affects all aspects of a business, and

Discussion Questions 2
since the executives endorsed the fraud, the entire company was affected. Although the
system offered the opportunity, an ethical company would not have taken advantages of
the situation. No one else is at fault for the fraud except the people directly involved, as
well as those that endorsed their behavior.
Chapter 1 Review Questions
1.) There are several reasons why ethics is relevant to businesses. First, it is legally mandated
in the Sarbanes-Oxley Act of 2002. Second, acting unethically creates legal, financial,
and marketing risk for a company. Third, acting ethically can act as a competitive
advantage for a company. A good business can be an unethical business. There are
many examples of a company with strong core values that behave unethically. Ethics is
not required for a successful business, but will aid in future success.
2.) Values are the beliefs and standards that predispose a person to act one way rather than
another. Ethical values are those values that serve human well-being, while other values
serve different purposes. A value when used as a verb means to consider an item or
thing with high regard. A value as a noun means the beliefs and standards that incline a
person to act a certain way.
3.) Ethics is the way humans should behave, and includes the end of aiding society. Ethos is
the reason for ethics, and determines the ethics of a culture. Often, ethos is the underlying
reason, such as religion, that determines the ethics of a person.
4.) Descriptive ethics is the study of moral beliefs and practices, while normative ethics is
the study of principles that guide behavior. Although they are similar, there is a
difference. Descriptive ethics seeks to answer the question of what morals guide society,
and where they come from. Normative ethics seeks to determine the guiding principles of
society.

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5.) Morality is the concern of how a person should live his or her life. Virtues are the
character traits that determine a life worth living. Social ethics are those decisions that
determine public policy, law, civic, virtue and political philosophy.
6.) Ethics is important, especially in the area of accounting. As an accountant, it is a persons
job to examine financial transactions for accuracy, and then accurately report those
numbers. Ethics will teach an accounting student the necessity of accurate reporting, and
why it matters.
7.) Other than business owners and managers, customers and investors have a stake in
business decisions. Any person who is affected by a decision has a stake in said decision.
Chapter 2 Discussion Questions
1.) Although the United States has established a minimum wage, it should not establish a
maximum wage. The United States economics is based on capitalism, and that means the
people determine the price of things, including executive compensation. If the market
demands higher wages, then it should be allowed to maintain competitiveness between
companies.
2.) The standards that should determine a fair wage are those that the economic market
determines. Although executive compensation is far above that of average workers, the
economic state demands it in order to retain good talent at companies. If a person can
make more money, or other benefits, at another company, that person will go there. The
standards are the same for executives as for average workers, except that executives
allegedly have more knowledge than the average worker. Knowledge and execution
determine the pay a person deserves.
3.) Executive salary should be tied to results. An executive than runs a company into the
ground should be punished with less pay than a successful company. There needs to be
incentive for executives of a company to improve company performance.

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4.) Large salaries should result from rewards rather than incentives. There is more
justification for past behavior, than hopeful future results. There are alternatives to
monetary compensation as incentives and rewards. The technology industry has shown
this with such incentives as stock-options or a great working environment. Google offers
employees many incentives, such as nap areas and free food.
5.) There comes a point where money skews the ability of a person to reason ethically. It
depends on the type of person, but money affects people more than they realize. Soon a
person may become dependent on earning money, and begin making unethical decisions
in order to make more.
Chapter 2 Review Questions
1.) Ethical relativism is the philosophical belief that ethical values and judgements are
relative to a persons culture, society, or personal feelings. One challenge to ethical
relativism is treating ethics as opinions without reasoning behind them. Another
challenge is people often confusing values with ethics. A third challenge is confusing
relativism for respect, tolerance, or impartiality.
2.) Utilitarian ethics look at the results of an action to determine whether the action was
ethical. Its goal is to produce the greatest good for the largest number of people.
However, the goal of maximizing happiness can have negative consequences depending
on whose happiness is maximized. It is very subjective. Principle-based approach to
ethics emphasizes he principles or duties determine the correct ethical choice. A strength
of principle-based ethics is that it doesnt focus on maximizing good without thinking of
the reasoning behind it. However, determining who has rights and who does not is a
slippery slope. Virtue ethics focus on the traits that constitute a good and full human life.

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Virtue ethics seeks to understand the motivations of people. A weakness is that it focuses
on people rather than actions.
3.) Utilitarian ethics are relevant to business in that it allows for regulating agencies such as
the Federal Reserve to determine what is good for the larger society, rather than an
individual. One challenge is determining how to measure happiness, as there is no
defensible way to do so. Another challenge is the difference between individual freedom
and the needs of society. A final challenge is the reach of what is good to a person versus
what is good for society. It forces people to make decisions that are good for society
rather than what would benefit a smaller unit of people.
4.) Principle-based ethics establishes connection between individual rights and the nature of
human beings by balancing the two to maximize the most benefit. Since principle-based
ethics seeks to understand why people behave ethically, it connects the rights of people to
the nature of human beings. Understanding leads to action.
5.) Virtues would be trustworthiness, honesty, loyalty, and helpfulness. Vices are those thing
that cause harm such as envy, gluttony, laziness, pride, etc. The virtues of the Boy Scouts
and Girl Scouts are unified with the theme of acting with integrity.
Chapter 3 Discussion Questions
1.) The managerial philosophy of Walmart is to maximize profits for stakeholders and
minimize costs. The principles involved are of a utilitarian approach, and focus on
maximizing the happiness of Walmart stakeholders. The over-riding aims and goals of
Walmart are to offer the lowest prices and find ways to cut costs at all expense. The
values of Walmart are those that maximize productivity at the lowest cost.
2.) To determine if Walmart was acting in a socially responsible way, a person would have to
evaluate all of the cases mentioned collectively. One cannot look only at one case to
determine whether Walmart acted socially responsible. A person would have to consider

Discussion Questions 6
how Walmart treats all of its employees, including those that are third-party contractors,
and its suppliers.
3.) As a potential customer, it does not matter if Walmart has behaved unethically, if it offers
the lowest prices for goods needing to be purchased. As a potential employee, it matters a
great deal. I would not want to work for a company that treats any of its employees badly.
4.) For a company such as Walmart, it would be difficult to make a blanket statement about
its ethicality. However, since it is based in the United States, it needs to operate ethically
based on the values deemed appropriate in the Untied States. Although it is a global
company, underpaying workers in other nations can be deemed unethical. Upholding
cultural values for the countries in which it operates would have to be determined on a
case by case.
5.) Walmart executives can defend their actions by claiming no knowledge of the dealings in
Mexico, or by acknowledging the commonplace practice of bribery in Mexico. It is not
an ethical defense, but it is the only defense they have to offer. Although bribery may be a
common practice in Mexico, Walmart chose not to defend their actions through honoring
the culture.
6.) There are reasons for a business to take actions that are not legally mandated and that
may reduce profits. It allows them to be competitive to attract a competent workforce, as
well as allow for better publicity.
7.) Walmart has the responsibility to maintain the contractual obligations of its suppliers, but
also to treat its suppliers ethically. It would help to maintain relationships with suppliers.
Chapter 3 Review Questions
1.) The classic economic model of corporate responsibility has its roots in the free market
or neo-classical economic theory. On one side, the role of management is to maximize

Discussion Questions 7
profits; however, on the other side this management role results direction from the
function assigned to businesses in the free market society.
2.) One justification of the ethical model for corporate responsibility is that a businesss only
social responsibility to maximize profits, as longs at it engages in competition fairly.
Another justification is that society benefits from the pursuit of profits by a business. One
challenge is the effectiveness of the market to determine the happiness of customers.
Another challenge is that the ends of free market are not appropriate in an ethical society.
3.) The philanthropic model of corporate social responsibility believes that businesses are
free to contribute to society as a matter of philanthropy. It differs from the economic
model because it states that a business should act a certain way because its the right thing
to do, rather than for a reward.
4.) The modified version of the economic model requires business managers to meet certain
moral obligations first, before pursuing profits. The economic model states that profits
must be pursued within the confines of the law, but does not place an emphasis on the
moral obligation of a business.
5.) The stakeholder theory model argues that all stakeholders have a claim upon ethical
management, not just company stockholders. Its rationale is that there are no stakeholders
that can act in isolation. One challenge is that this theory is too vague to be of use.
Another challenge is that proponents of the theory must always override the ethical
responsibilities of other parties.
6.) The stakeholder emphasis on stakeholder value differs from the economic model in that
the economic model focuses on maximizing profits within the confines of the law. The
stakeholder model puts emphasis on the maximization of all stakeholder value, not
necessarily profit.

Discussion Questions 8
7.) Sustainability is a strategic goal for businesses because it will allow for future profits for
a business. By focusing on long-term goals, sustainability, a business will ensure future
growth and profits.