What shared role does ethics play in economic and human relationships?
It provides a shared foundation for those relationships.
Why can voting not establish its own prior rules?
Doing so would create an infinite regress.
What must voting depend on before its procedure begins?
An agreement that exists before and outside the procedure.
Who do law and penalties mainly address?
The minority who do not sense the boundary themselves.
What does the system rely on most people doing?
Complying willingly.
Which motive does Adam Smith’s *The Theory of Moral Sentiments* present alongside self-interest?
Fellow-feeling.
What can unchecked self-interest endanger in Adam Smith’s *The Wealth of Nations*?
The economic system.
What does business ethics primarily evaluate: actions or a person’s moral character?
The rightness of specific actions.
Why is profit maximisation alone an underspecified decision compass?
It leaves the time horizon, relevant interests, and acceptable risk undetermined.
What is the main purpose of a business enterprise?
To satisfy consumer needs while generating profit.
What must a business enterprise do over the long term to survive?
Operate profitably.
When is a business enterprise independent?
When it risks its own capital and operates under real market conditions.
What determines input and output prices under real market conditions?
The market.
What often does consumer demand seek beyond a particular product?
A solution to a broader problem.
What is productivity?
New value produced per unit of resource used.
Which author and year linked the division of labour to specialisation and coordination needs?
Adam Smith, 1776.
What does the social division of labour increase, according to Adam Smith (1776)?
Specialisation and output.
What coordination method do markets use, and what method do organisations use?
Markets use prices; organisations use administrative direction.
How do real economies coordinate activity?
They use market prices and organisational administrative direction together.
What does neoclassical theory assume about how firms choose and what they maximise?
Firms choose rationally to maximise profit.
What can market failure enable firms to do when neoclassical assumptions fail?
Diversify, adapt, make independent decisions, and sometimes define markets.
What are transaction costs in addition to production costs?
Costs of obtaining and evaluating price information and reaching and enforcing agreements.
How does traditional firm theory characterize the firm's purpose?
Serving its owner's interests.
Which four stakeholder claims does stakeholder theory treat as valid interests?
Owners' profit, employees' wages and fair conditions, state tax, and consumer quality.
Which work and year present the firm as a network of stakeholder relationships?
Freeman, *Strategic Management: A Stakeholder Approach*, 1984.
How does a firm's mission define its relevant market?
Broadly.
What factors influence a firm's decision to enter a market?
Income and risk prospects, existing-player acceptance, and entry and exit barriers.
In which market roles does a firm participate?
As a seller, a buyer, a competitor, and a cooperating partner.
How does the state directly influence the economy?
Through taxes, subsidies, and regulations.
Which report used computer models to demonstrate limits to unrestricted economic growth?
The Limits to Growth.
Who commissioned The Limits to Growth, and when was it published?
Meadows and colleagues, The Limits to Growth, 1972.
Which assumptions does alternative economics reject about people and economic growth?
That people are exclusively self-interested and that growth is a primary goal in itself.
How do social enterprises and non-profits differ in funding and revenue?
Social enterprises earn and reinvest profits; non-profits rely on donations and public funds.
What moral concerns did Heller link to the spread of the money economy?
Wealth accumulation and unjust enrichment through exploiting others’ lack of information or distress.
What did the ethical school criticise in classical economics?
Its isolated view of the economy and neglect of social welfare and moral nature.
Which thinkers represented the ethical school’s counter-debate?
Sismondi, Carlyle, and Ruskin.
What happens to good-car owners when buyers cannot verify used-car quality?
They withdraw their cars from the market.
What conditions must hold for markets to self-regulate?
Complete information, comprehensive contracts, costless enforcement, no externalities, and no large bargaining-power differences.
Which three mechanisms did Ferraro, Pfeffer and Sutton identify for theory shaping reality?
Theory supplies problem language, creates norms of reasonableness, and becomes embedded in institutions.
What do descriptive questions ask about economic actors?
What they do and believe.
What do normative questions ask about economic actors?
What they should do and how that is justified.
Whose dictum says an ought cannot be derived from an is?
Hume's.
What does widespread bribery alone imply about its acceptability?
Nothing; it does not make bribery acceptable.
What are morals?
Personal and shared convictions about right and wrong in how people treat others.
How are morals largely acquired?
Through social life without formal instruction.
According to Kvalnes, 2015, what is ethics?
The systematic scholarly study of right and wrong.
What does the supra level analyze in business ethics?
The global order.
What does the macro level analyze in business ethics?
The national economy.
What does the meso level analyze in business ethics?
The organisation.
What does the micro level analyze in business ethics?
The individual.
What makes a situation a moral dilemma?
Two or more moral values or duties make simultaneous demands, only one can be satisfied, and every choice violates a value.
How does a real dilemma differ from a pseudo-dilemma?
A real dilemma pits morally comparable claims against each other; a pseudo-dilemma contrasts a required action with a tempting, non-equivalent alternative.
Which four recurring dilemma patterns did Rushworth Kidder identify, and when?
Rushworth Kidder identified them in 1995 and 2005: truth versus loyalty, individual versus community, short term versus long term, and justice versus mercy.
Which two thinking systems did Daniel Kahneman distinguish, and in what year?
Daniel Kahneman distinguished fast, intuitive System 1 and slow, analytical System 2 in 2011; both contribute to moral judgement.
What does the local official demand in the factory case?
Computers for the town hall in exchange for restoring power.
Why can the project manager not hand over the computers?
Doing so would violate the rules.
Which reference is associated with Smith’s Glasgow resignation and customs appointment?
Smith, 1764.
In which year did Smith resign his moral philosophy chair at Glasgow?
1764.
What does the course consider insufficient as the sole compass for management?
Profit maximisation alone.
What is the firm’s role in relation to a business enterprise?
It is the legal framework for the enterprise’s operations.
What does total factor productivity account for?
Every production factor used.
How does neoclassical theory portray ownership and management within a firm?
They merge into one decision-maker, making the firm a black box.
Which three categories appear in Donaldson–Preston's 1995 stakeholder theory typology?
Descriptive, instrumental, and normative theory.
What does descriptive stakeholder theory concern in Donaldson–Preston's 1995 typology?
Actual firm behaviour.
What does instrumental stakeholder theory concern in Donaldson–Preston's 1995 typology?
Links with financial performance.
What does normative stakeholder theory concern in Donaldson–Preston's 1995 typology?
Moral justification.
Which 1997 model ranks stakeholders by power, legitimacy, and urgency?
Mitchell–Agle–Wood's stakeholder salience model.
What characterises an efficient market?
Flexible adjustment through prices.
What characterises a buyer's market?
Oversupply and buyer power.
What does market structure concern?
The number of players and their relative size and strength.
How do environmental groups and civic organisations address corporate externalities?
They draw attention to negative corporate externalities.
What economic organisation did Schumacher advocate in Small Is Beautiful?
Human-scale, decentralised organisation rather than pursuing economies of scale at any cost.
What does ecologisation mean for organisations?
Becoming embedded in nature and striving to preserve the environment.
What does humanisation mean for organisations?
Serving people and supporting their physical and mental development.
How do social enterprises measure success?
By how much they alleviate a targeted social problem.
How does Farkas Heller’s *The History of Economic Theory* (1945) trace economic thought?
Through the formation of problems rather than simply through schools.
Which economic concerns did the Church Fathers address?
The just price and the taking of interest.
What sequence describes the movement from mercantilism to classical economics?
Mercantilism, physiocracy, then the classical school, where descriptive and normative questions separated.
What goal did mercantilism assign to political economy?
Increasing the quantity of money.
When did Lord Lauderdale distinguish individual prosperity from social welfare?
1804.
What fills the gaps left by incomplete contracts?
Judgement, custom, and good faith.
Why can outsiders not assert their interests in a bargain involving externalities?
They are not parties to the bargain.
How do Arrow and Kindler–Zsolnai characterize codes of ethics?
As rational institutional responses that reduce the social costs of economic life.
How can a money-only assumption about human motivation become self-fulfilling in an organisation?
It can select for and cultivate people who behave accordingly.
Which author argued that bad management theories destroy good practice and business schools shape economic actors?
Sumantra Ghoshal, 2005.
Which fields must organisational ethics combine?
Moral philosophy and moral and social psychology.
Which milestones appear on the course's business-ethics field-history timeline?
Rerum Novarum (1891), Bowen's CSR starting point (1953), Friedman's article (1970), Freeman's stakeholder theory (1984), Donaldson–Dunfee (1994), Enron and Sarbanes–Oxley (2001–02), the financial crisis (2008), and ESG and its backlash (2010s).
What does the project-manager case's micro analysis examine?
The immediate choice.
What does the project-manager case's meso analysis examine?
Organisational protocols.
What does the project-manager case's macro analysis examine?
Local regulation.
What moral claims and consequences typically characterize moral dilemmas?
Several stakeholders have reasonable moral claims, and every option entails a real moral loss.
What can intuition contribute to moral judgement, and what makes it unreliable?
Intuition can carry moral information but is vulnerable to systematic bias and framing.
How can analysis improve moral judgement, and what is its limitation?
Analysis can correct bias but takes time.
Answer 44 questions on Business Ethics and the Firm.
1. What role does ethics play in economic and human relationships?
2. Why must a voting procedure rely on agreement that exists before the vote?
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