Chapter 1 'Think Theory' answers

Introducing Business Ethics



A good definition is an important starting point for any theory. The one we have given for business ethics is mainly a definition of business ethics as an academic subject. If you were trying to define an organization’s business ethics, what definition would you use? Try writing it in the form, ‘An organization’s business ethics are . . .’

Simply turning the academic definition of business ethics on its head renders the following:
“An organization’s business ethics is its practice of addressing issues of right and wrong in business situations, activities, and decisions.”

An alternative definition:
“An organization’s business ethics is the way individual employees, and the company as a whole, engage in practice with issues of right and wrong in both everyday situations and decision-making.”


The case depicted in All the Queen’s Horses is both illegal and unethical. How do you think the people who worked with Rita Crundwell felt about her activities? In your view were they most upset by the illegality or the poor ethics or both?

In the film, Rita Crundwells colleagues express the bewilderment, dismay and upset that her fraudulent actions caused. Furthermore, they relate how they were required to carry on acting as per normal when they found out about Rita’s transgressions whilst the FBI investigation was carried out, leading to feelings of extreme stress.

The individuals’ that worked with Rita appeared to be more upset by the poor ethics of her actions, more than the illegality. This was due to Rita’s apparent willingness to lie in order to cover her actions, as well as the length of time which she spent embezzling money. Furthermore, many of her colleagues and other people who lived in the town seem particularly angered by the fact that her fraudulent behaviour led to reduced public spending, the city having fewer financial resources, and therefore the city running a deficit, which led to it having to borrow money.


Capital punishment and gun ownership are interesting issues to think about globalization theory and cultural dimensions of ethics, but they only have tangential elements of business responsibility as such. Can you think of some similar examples that a businessmight have to deal with?

There are cultural differences almost everywhere that businesses may have to deal with. Food provides one set of potential stumbling blocks that can greatly affect the business: global restaurant chains may face culturally-specific issues in different markets due to religious custom (such as selling pork in Muslim or Jewish areas, using beef fat for French fries in Hindu areas). Another example with potentially-significant consequences is in simple non-verbal communication. A nod of the head usually means yes, and a shake, no; but in Bulgaria this is apparently reversed, with a shake of the head indicating yes and a nod, no.


Think about inequality in terms of the definition for sustainability provided above. To what extent do you think inequality is relevant for the maintenance of social, economic or environmental systems?

There are numerous possible answers. Here are just some examples:

  • Inequality can threaten social systems:
    • Corrodes sense of common purpose and that progress benefits everyone.
    • Can threaten state cohesion and the effective delivery of state programs.
    • Violates sense of social justice and then the sense that we should all obey social rules.
    • Do our political systems need more, or less, corporate influence?
  • Can threaten economic systems:
    • Is the economy strong if it only delivers gains for the elite?
    • Can an economy thrive if the majority loses hope in future prosperity?
  • Can threaten environmental systems:
    • Without broadly distributed welfare gains, it may be impossible to ask the lower and middle classes to restrain consumption (eg. regarding carbon).
    • In the face of economic suffering, who are we to demand that people stop degrading the environment? Raising the standard of living for the “base of the pyramid” could help authorities limit problematic economic activities such as poaching and small-scale mining (which is very damaging to local water quality).