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Behaving ethically requires that we meet the mandatory standards of the law and then go above and beyond them to recognize that an action may be legal but we personally may consider it unacceptable. Ethical reasoning often is more topical than law and reflects the changes in consciousness that individuals and society undergo. Often, ethical thought precedes and sets the stage for changes in the law.


Normative ethical theories are philosophical theories based on reason that tell individuals how they ought to behave. Descriptive ethical theories are based on scientific evidence describing how people tend to behave in a particular context. The theories discussed in this book are normative.




False. In Friedman’s view, a company’s social responsibility consists of enhancing stockholder value.


CSR is the practice of viewing a business within a broader context, as a member of society with certain implicit social obligations, rather than considering the maximization of shareholder wealth as a company’s sole purpose and objective.


In three columns, list stakeholders in order of perceived priority, their perceived interests, and the likely impact of the business decision on them. This will aid comprehension of the decision’s impacts as well as provide justification for the course of conduct ultimately chosen.


The ethical behavior of managers has a positive influence on the value of a variety of components affecting the company’s overall goodwill, including its brand, its workforce, and its customer relationships. Positive goodwill generated by ethical business practices, in turn, generates long-term business success.






Having a single ethical standard maximizes ethical behavior no matter who the other party is and supports an internally consistent rule of behavior toward all family, friends, customers, clients, and others with whom we interact.

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