Given the proper incentives -- the ability to profit from hard work and risk taking -- people will strive to do well.
Give two or three examples of business competition in which everybody wins. What are the defining characteristics of such games (if any)? Could all (or business activities consist of such games?
There are situations where one firm lowers its prices, competitors are likely to follow and everyone will see less profits. or, a competitor might hold its price to gain market share. They all stand to gain only by setting prices where everyone earns profits and has a stable market share.
These firms face a prisoner's dilemma where acting in one's self-interest does not serve one's self-interest. Another example of the prisoner's dilemma exists in the fishing industry, where the rate of catches has increased faster than the ability of the fish to reproduce. The result is a depletion of supply. The optimal strategy for each fisher is to cooperate with each other by restraining the volume of their catches. All business activities do not consist of such games because of lack of prior experience with the competitor that makes it difficult to play the game and situations where competitors do not behave rationally. and, of course, there are...
Define rationality and place it within a framework of business ethics.
Rationality means an action is based on sound reasoning. With an agent-based approach to integrating ethics in business, moral behavior is not limited to adherence to a rule or guideline, but also involves the individual rationally pursuing moral excellence as a goal in and of itself
Focus Questions for Chapter 8:
1. What is the key question of responsibility?
The key question of responsibility is, "Did the person behave ethically?"
2. In the final analysis, where does responsibility always rest? Explain.
The responsibility should always rest with the individual. Even though there is not universal set of ethics that employees can be expected to adopt, there is a general principle of integrity the individual can and should be judged by.
3. In which ways are responsibility usually misunderstood?
As people delegate responsibility to others, they depend on them to act on their behalf and in their interest. Yet, each individual has their own definition of ethical and moral behavior.
