1.

2. True

3. 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.

4. 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.

5. B

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

7. 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.

8. 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.

9. 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.

10. True

11. D

12. 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.