BUS486: The Business Environment
Chapters: 18, 19
Understand the concept of social responsibility
Understand various ethical systems and frameworks
Understand ethical reasoning in management
Class 2 Preparation Questions:
1. What are the two different conceptions of Corporate Social Responsibility?
2. Define Market Capitalism
3. Define Managerial Capitalism
4. If they are not aligned, what would be a way to align market and managerial
5. List the 7 Stakeholder Constituents which a corporation’s managers should
6. How does the Business Roundtable Statement on Social Responsibility differ
from Milton Friedman’s view of the role of business?
7. Enron Example (pages 667-674) What factors led to the collapse of Enron?
8. Should Enron have used partnerships in the manner it did? What if anything is
wrong with using partnerships such as the Raptors, Chewco, and the LJMs?
9. What responsibilities does the board of directors have in such situations? What
responsibilities did and should Enron and its directors have for its employees’
10. Why did Arthur Andersen and Vinson and Elkins not conclude that there were
problems with Enron’s structuring of transactions?
11. Is there an inherent conflict of interest for an outside auditor that also provides
other services to its client?
12. What if anything was wrong with Enron’s political contributions and lobbying?
What assistance did the contributions buy Enron when it was collapsing?
13. How much of its financial arrangements should Enron have disclosed?
14. What responsibilities does an audit firm have?
15. What is Ethics?
16. What is Business Ethics?
17. What are the 2 particular features of utilitarianism?
18. Living Benefits Case (709-710) Should living benefits be allowed? What
guidance does utilitarianism provide?
19. Is act or rule utilitarianism appropriate for formulating a policy for Prudential?
20. Does the business of living benefits violate any instrumental or intrinsic rights?
21. If living benefits were allowed, should purchasers be allowed to package policies
and resell them as is done with mortgages?
22. Should a company be allowed to operate solely as a broker matching sellers and
investors? Is this making a market in death?
23. What should Prudential do and why?