Business Ethics and Legal Compliance
A company can be legally compliant but still act unethically
True
Explanation: Chapter 4 covers the distinction between legality and ethics, showing that just because a company follows the law doesn’t mean it’s acting ethically (p. 94).
CSR only applies to large multinational corporations
False
Explanation: Chapter 4 highlights that businesses of all sizes are expected to engage in CSR, not just large corporations (p. 111).
Employees are considered stakeholders in a business.
True
Explanation: Chapter 4 identifies employees as key stakeholders whose interests businesses must consider when making decisions (p. 99).
Transparency in corporate governance is a key component of ethical business practices
True
Explanation: Transparency is an important part of ethics in corporate governance, helping businesses maintain trust with stakeholders (p. 104).
Philanthropy and CSR are the same
False
Explanation: CSR is a broader concept that includes philanthropy but also encompasses ethical labor practices, sustainability, and corporate governance (p. 111).
Companies are only responsible to their shareholders, not to their wider stakeholders.
False
Explanation: Chapter 4 discusses the responsibilities businesses have toward all stakeholders, including employees, customers, and communities, not just shareholders (p. 95).
Whistleblowing is always considered unethical, as it goes against company loyalty
False
Explanation: Whistleblowing can be ethical when it exposes harmful or illegal activities, even though it may conflict with company loyalty (p. 92).
A company engaging in greenwashing is acting ethically
False
Explanation: Greenwashing is an unethical practice, where companies exaggerate or misrepresent their environmental efforts (p. 111).
A company’s environmental impact is not a concern of CSR.
False
Explanation: CSR includes addressing environmental concerns as part of a company's responsibility to stakeholders (p. 113).
A company's ethical duty is limited to minimizing harm; it doesn’t include creating positive impacts
False
Explanation: Chapter 4 emphasizes that businesses have a duty not just to minimize harm but to actively create positive impacts on society (p. 112)
Sustainability means only focusing on environmental issues
False
Explanation: Chapter 4 explains that sustainability involves environmental, social, and economic aspects, not just the environment (p. 106).
Good corporate governance ensures that the interests of shareholders are always prioritized over all other stakeholders.
False
Explanation: Chapter 4 explains that good governance involves balancing the interests of all stakeholders, not just prioritizing shareholders (p. 95).
Ethics are relative and differ from culture to culture, meaning there are no universal ethical standards in business
False
Explanation: While ethical practices may vary, there are universal ethical principles like fairness, honesty, and respect that apply globally (p. 94).
Engaging in CSR activities is optional for businesses
True (with a caveat)
Explanation: While CSR is not always legally required, it is increasingly expected by stakeholders, making it a strategic necessity for most businesses (p. 114).
A company's ethical duty is limited to minimizing harm; it doesn’t include creating positive impacts.
False
Explanation: Businesses are increasingly expected to actively create positive impacts for their stakeholders and not just avoid harm (p. 112).