Chapter 2

 A set of moral principles or values that governs the conduct of an individual or a group  Ethics and the law are intertwined  The rule of law and the rule of ethics may demand the same response by a person confronted with a problem  In some situations, the law may permit an act that is ethically wrong 2-2Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

2-3 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Ethical fundamentalism Utilitarianism Kantian ethics Rawl’s social justice theory Ethical relativism 2-4Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

 A theory of ethics which says that a person looks to an outside source for ethical rules or commands  False Claims Act (Whistleblower Statute): A federal statute that permits private parties to sue companies for fraud on behalf of the government and share in any monetary recovery 2-5Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

 A moral theory which dictates that people must choose the action or follow the rule that provides the greatest good to society  It has faced criticism because:  It is difficult to estimate the “good” that will result from different actions  It is difficult to apply in an imperfect world  It treats morality as if it were an impersonal mathematical calculation 2-6Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

 A moral theory which says that people owe moral duties that are based on universal rules  It is based on two principles  Consistency – all cases are treated alike  Reversibility – the actor must abide by the rule he or she uses to judge the morality of someone else’s conduct  Criticism  It is difficult to reach consensus as to what the universal rules should be 2-7Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

 A moral theory which asserts that fairness is the essence of justice  Each person is presumed to have entered into a social contract with all others in society to obey moral rules that are necessary for people to live in peace and harmony  Criticism  Establishing blind “original position” for choosing moral principles is impossible in the real world  People in society may choose not to maximize the benefit to the least advantaged persons in society 2-8Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

 A moral theory which holds that individuals must decide what is ethical based on their own feelings about what is right and wrong  Criticism  Action that is usually thought to be unethical would not be unethical if the perpetrator thought it was in fact ethical 2-9Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

2-10 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. A corporation owes a duty to take actions that maximize profits for shareholders Maximizing profits A corporation’s duty is to make a profit while avoiding causing harm to others Moral Minimum A corporation must consider the effects its actions have on persons other than its shareholders Stakeholder interest A business has a responsibility to do good Corporate Citizenship

 Walmart Stores, Inc. v. Samara Brothers, Inc.  529 U.S. 205, 120 S.Ct. 1339, 146 L.Ed.2d 182, Web 2000 U.S. Lexis 2197 Supreme Court of the United States  Issue  Must a product’s design have acquired a secondary meaning before it is protected as trade dress? 2-11Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

 A section that requires a public company to disclose whether it has adopted a code of ethics for senior financial officers  Makes certain conduct illegal  Establishes criminal penalties for violations 2-12Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

 Citizens United v. Federal Election Commission  130 S.Ct. 876, 175 L.Ed.2d 753, Web 2010 U.S. Lexis 766 (2010) Supreme Court of the United States  Issue  Do the challenged federal restrictions on campaign financing and electioneering violate the free speech rights of Citizens United? 2-13Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

 A theory of responsibility which says that a business has a responsibility to do good  Proponent view  Corporations owe a debt to society to make it a better place  Criticism  Duty of a corporation to do good cannot be expanded beyond certain limits  If taken to its maximum limit, potential shareholders might be reluctant to invest in corporations 2-14Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

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