Business Ethics Midterm In depth Part

  1. Carson describes several moral duties for salespeople. Does Carson believe a salesperson could ever be justified in violating one of these duties?
    Yes, but this would not happen very often; only rarely are the circumstances such that a salesperson would be justified in violating one of these moral duties
  2. Define Invisible Hand
    • According to adam smith, the market competition that drives self-interested individuals to act in ways that serve society.
    • This is how you get max social utility because everyone will pursue their self interest and that is how the market will be regulated to benefit both the buyer and seller
  3. Define Stakeholder Theory
    • By Freeman
    • Companies should maximize value for all their stakeholders without resorting to trade offs. If there are tradeoffs then they need to be made up for another time.
  4. Who is a stakeholder?
    The people that are necessary and essential for the companies survival.
  5. Who are the primary stakeholders?
    • Owners, customers, employees, suppliers, and community.
    • IF you have not helped each of those groups then that means that you need to help them later
  6. Define Tradeoffs
    • Try to avoid this in the stakeholder theory.
    • This is when not everyone can benefit which needs to be made up for. The goal is to maximize value for all in the company.
  7. How does Carson defend his view for sales ethics?
    The golden rule is his defense. Treat people the way you want to be treated
  8. What do you have to disclose for Carson?
    • Just the hazards for the products that you are selling.
    • If the customer does not ask a bunch of questions then you are not required to give them a whole speech.
  9. What do you do when customers ask questions in Carson's theory?
    • Tell them honestly but you still have constraints of how much time you need to spend with them, and how much knowledge you know cuz you have a duty to yourself and your job
    • You don't have to give information about your competitors
  10. How does the Golden Rule Support Carson's theory?
    By asking if you are ok with the answers given and how they are given.
  11. How does Holley defend his view of voluntary exchange?
    It maximizes social utility
  12. What do you have to tell the customer in Holley's theory?
    • Never lie
    • Tell them anything relevant even if they don’t ask, or tell them what is reasonable for them to know, or tell them what you want to know
  13. What if a customer walks in for a product, what do you do in Holley's theory?
    • You can't just give them what they want, you have to tell them all the information first and then you can make the sale. 
    • You do this to make sure that they follow the voluntary exchange transaction
  14. What are the conditions for voluntary exchange/acceptable exchange?
    • Both parties need to be adequate in the:
    • Knowledge Condition
    • Non-compulsion Condition
    • Rationality Condition
  15. What is the primary duty for sales people according to Holley?
    To avoid undermining the conditions for an acceptable exchange
  16. What are Carson's rules for sales people.
    • 1. Sales people have to provide buyers with safety warnings
    • 2. Do not lie
    • 3. Provide enough information that is needed within the constraints
    • 4. Do not steer customers to buying things they do not need/can be harmful
  17. What is Bowies view for the special obligations for the environment for business?
    Not the responsibility of business to be a leader in the area, it should be the consumers because they will tell us how much they are willing to pay because they care about profits and listen to the customers demands
  18. What is Bowies view on moral duties of business?
    • Follow the law
    • avoid negligence
    • Tell the truth
    • Maximize profits
    • Don't lobby politicians to weaken, defeat environmental laws
    • Educate the public about environmental laws
  19. What are freeriders?
    When a person cares about the environment but not as a consumer. Since everyone benefits from a clean environment but you can still buy products that are not environmentally friendly and still enjoy the benefit because other people are buying eco friendly stuff
  20. Why shouldn't the business lobby politicians according to Bowie?
    • When there is a mismatch because of free riders it leads to a market failure since everyone is trying to be a free rider.
    • This is when the public goes to the government for to set regulations so that there will be less free riders and that will not make the market to fail
    • If you’re going to listen to the public that means that we need to listen to what they tell the government to change otherwise it will be inconsistent
  21. What is Hoffman's view on the business and environment?
    Business has the obligation to take a leadership role in the environmental policies in order to reduce pollution because they have special expertise and knowledge and they are trying to achieve what the government is so their motives aline
  22. Why should business care about the environment according to Hoffman?
    • Great power comes with great responsibility
    • They have the knowledge and the resources to clean up their own mess and they should do so.
    • If they care about the environment then you don't have to defer responsibility like Bowie
  23. Why doesn't Hoffman like Bowies view?
    Because we think and act differently when we are consumers and citizens therefore if business relies on consumers then it will be less likely to produce pro environmental things since consumers want a deal
  24. What is the stockholder theory?
    • Freidman
    • Maximize profits for the owners since they are the ones who hired you
  25. What are the rules for stockholder theory?
    • Maximize profits for owners
    • Don't break the law
    • Follow the ethical rules of business
  26. What is the social responsibility in stockholder theory?
    Focus on profits and only do what you need to do within the rules to maximize profits.
  27. What does Locke mean about the state of nature, law of nature, and natural rights?
    • State of nature - A human society without any governments 
    • Law of Nature - Do what you want kill or be killed
    • Natural rights - The right to life, liberty, property
Card Set
Business Ethics Midterm In depth Part
Business Ethics Midterm In depth Part