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Understanding Business Ethics

Understanding Business Ethics

Third Edition

Other Titles in:
Business Ethics

November 2015 | 600 pages | SAGE Publications, Inc

Filled with real-world case studies and examples of ethical dilemmas, Understanding Business Ethics prepares you to make ethical decisions in today’s complex, global environment. Bestselling authors explain the fundamental importance of ethical leadership, decision making, and strategic planning while examining emerging trends in business ethics such as the developing world, human rights, environmental sustainability, and technology.

In addition to presenting information related to the Association to Advance Collegiate Schools of Business (AACSB), the text’s 26 real-world cases profile a variety of industries, countries, and ethical issues in a way that is relevant and meaningful to your lives. Using an applied approach, this text helps you understand why and how business ethics really do matter!


  • New coverage of current and relevant topics such as corporate social responsibility, information technology, social media, big data, NGOs as stakeholders, and challenges to establishing an ethical organisation
  • New chapter-opening vignettes and real-life ethical dilemmas highlight contemporary examples such as “The Interview” movie and North Korea, Samsung and Child Labour, and the Hillsborough football disaster
  • New cases covering recent ethical situations such as Disney’s corporate social responsibility reputation and the General Motor’s ignition recall issue show you how to practically apply the concepts being learned to their everyday life
  • An extensive instructor’s manual covering all of the case studies and exercises in the book as well as links to additional material.        

The free, open-access Student Study site at features web quizzes, web resources, video resources, and more. There is also a dedicated Instructor site providing additional teaching resources.

Chapter 1: The Foundation of Ethical Thought
The Role of Morals  
The Foundation of Ethical Theory  
Teleological Frameworks  
Deontological Frameworks  
Seven Guiding Principles to Support Ethical Actions  
The Seven Deadly Sins  
The Trolley Problem  
Global Business Standards Codex  
Chapter 2: The Evolving Complexities of Business Ethics
The Global Complexity of Business Ethics  
History of Business Ethics  
The Role of Integrity  
Specific Behaviors of High Integrity  
Is Everyone Unethical?  
The Cheating Culture  
Grade Inflation and the Institutional Pressure to Cheat  
The Role of Technology and Cheating  
Generational Differences Pertaining to Ethics  
The Role of Trust in Ethical Conduct  
Chapter 3: Stakeholders and Corporate Social Responsibility
What Is a Stakeholder?  
Management’s Response to Stakeholders  
The Ability to Build Trust with the Stakeholders  
The Role of Stakeholder Communications  
Triple Bottom Line Reporting  
The Benefit Corporation  
Suppliers as Stakeholders  
Customers as Stakeholders  
Government as a Stakeholder  
NGOs as Stakeholders  
Local Community and Society as Stakeholders  
The Role of Corporate Social Responsibility  
Alternative Firm Configurations to Address Stakeholder Issues  
The Role of Corporate Reputation  
The Role of Corporate Philanthropy  
Part II: Internal Focus of Ethical Issues
Chapter 4: Ethics and Financial Reporting
Ethics and Financial Reporting  
The Role of Creative Accounting  
The History of Ponzi Schemes  
The Role Of Insider Trading As An Ethical Issue  
Ethical Philosophies and Accounting Issues  
The Role of Financial Reporting  
The Objectives of Financial Reporting  
Where Were the Auditors?  
Responsibilities of Management  
The Use of Heuristics in Auditing  
Responsibilities of Auditors  
Responsibilities of Audit Committees  
AICPA Code of Professional Conduct  
Components of the Sarbanes-Oxley Act  
Public Company Accounting Oversight Board  
Section 404—Internal Controls  
A Comprehensive Model of Top Management Fraud  
Accounting Shenanigans or Tricks of the Trade  
Chapter 5: Ethical Leadership and Corporate Governance
Ethical Leadership  
A Manager’s Ability to Develop Trust, Commitment, and Effort  
The Responsibility of Managers  
The Transformation From Moral Person to Ethical Leader  
Ethics and Corporate Governance  
Board of Directors  
The Role of the Board of Directors  
A Contingent Perspective of Corporate Governance  
Ethics and the Structure of the Board of Directors  
The Benefits of a Strong Board of Directors  
CEO Compensation and Ethical Reputation  
Ethical Viewpoints Explaining CEO Compensation  
Corporate Governance and Stakeholders  
Chapter 6: Strategic Planning, Corporate Culture, and Corporate Compliance
Ethics and Strategic Planning  
The Ethical Cycle  
Using Strategic Ethical Decisions to Build Character  
Is There a Link Between Strategic Planning and an Ethical Culture?  
How to Address Strategic Ethical Decision Making From a Global Perspective  
How to Address Ethical Crisis and Disaster Recovery  
Corporate Culture  
Evaluation of Corporate Culture  
Using Organizational Integrity to Link Corporate Culture to Corporate Compliance  
Ethics and Corporate Compliance  
The U.S. Federal Sentencing Guidelines for Organizations  
The Challenge of Compliance  
Corporate Compliance Systems and Global Corruption  
Chapter 7: Decision Making and Human Resource Issues
Ethical Decision Making: Kohlberg’s Six Stages of Moral Development  
The Role of Emotion in Moral Decision Making  
Rationalizing Unethical Behaviors  
Ethical Decision Making and Moral Intensity  
The Role of Power and Influence in Ethical Decisions  
Human Resource Issues  
The Role of Workplace Diversity  
Ethical Climate and Organizational Misbehavior  
Sexual Harassment and Sexual Discrimination  
Office Bullying  
Employee Monitoring  
The Ethical Issues Related to Extreme Jobs  
Part III: External Focus of Ethical Issues
Chapter 8: Ethics and the Environment
The Tragedy of the Commons  
Natural Environment as a Stakeholder  
Natural Environment as a Competitive Advantage  
Voluntary Environmental Compliance  
What Does It Mean to Be Green?  
Employees as Environmental Stakeholders  
NGOs as Environmental Stakeholders  
Communicating the Firm’s Environmental Commitment to Its Stakeholders  
United States Government Regulations  
Environmental Accounting Issues  
Environmental Justice  
Environmental Sustainability  
Ethics and Climate Change  
Climate Change as a Strategic Option  
The Effects of Climate Change on the Firm  
A Firm’s Carbon Footprint  
Chapter 9: Ethics and Information Technology
Why Are Information Technology Ethical Issues Important?  
Management Issues and Policy Areas for Information Technology  
The Next Step: Critical Analysis  
Privacy of Employees  
Types of Computer Monitoring  
Telephone Monitoring  
Privacy of Customers  
The Challenge of Technology  
The Role of Government Regulations  
The Volunteer Censoring of Internet Search Information  
Technology-Based Fraud  
Internet Attacks  
Chapter 10: Marketing and Advertising
Alternative Views of the Foundation of Marketing and Advertising  
Green Marketing  
Ethical Consumer Behavior  
Relationship Marketing and Privacy  
The Role of Consumer Boycotts  
The Ethical Challenges of Product Recalls  
The Reasons for Recalls  
The Steps of a Recall  
Financial Costs of a Recall  
The Ethics of Fair Pricing  
Ethics of Purchasing and Sales  
False and Misleading Advertising  
The Eventual Truth in Advertising  
Advertising to Children  
The Sydney Principles  
The Magic of Disney  
Chapter 11: Ethical Issues in the Developing World
The Bottom of the Pyramid  
New Generation Business Strategies for the Bottom of the Pyramid  
Social Entrepreneurship  
Fair Trade  
Human Rights  
Poverty and Hunger  
Food Versus Fuel  
The UN Millennium Development Goals  
Part IV: Developing and Evaluating a Strong Ethical Focus
Chapter 12: Establishing a Code of Ethics and Ethical Guidelines
Role of a Code of Ethics  
Code of Ethics and Stakeholders  
Benefits of a Code of Ethics  
Content of a Code of Ethics  
The Role of Total Responsibility Management and a Code of Ethics  
Steps for an Effective Code of Ethics  
Value of a Code of Ethics  
How to Make a Code of Ethics More Effective  
Examples of Codes of Ethics  
Role of Government Regulations  
Global Code of Ethics  
Chapter 13: Evaluating Corporate Ethics
Why Firms Need Ethics Training Programs  
Establishing an Ethics Training Program  
Establishing a Global Ethics Training Program  
Benefits of an Ethics Training Program  
Enforcement and the Ethics Training Program  
Sending the Right Message to the Employees  
Corporate Ethics Officers  
Ethical Auditing  
Components of the Ethical Audit  
Government Regulations and Whistle-Blowing  
Evaluation of Ethics and Stakeholders  
Part V: Cases
Case 1: Bernard Madoff: How “One Big Lie” Can Destroy Thousands of Lives
Case 2: Siemens: How the Greased Wheels Slid off the Ethical Track
Case 3: TOMS Shoes: Helping Soles All Over the World
Disney Citizenship: Lending a Mouse Ear to Hear How to Help Society
Case 4: World Food Programme: A Quarter a Day Keeps the Hunger Away
Case 5: Rupert Murdoch and News Corporation: All the News That’s Fit to Hack
Case 6: Enron: Were They the Crookedest Guys in the Room?
Case 7: Google: Don’t Be Evil Unless?.?.?.
Case 8: HealthSouth: The Rise and Fall of the Scrushy Empire
Case 9: De Beers and the Conflict Diamonds: A Monopoly Doesn’t Last Forever
Case 10: Interface: More Than Just a Carpet Company
Case 11: Facebook and Privacy: Big Brother “Likes” Us
Case 12: Outsourcing at Mattel: Elmo Sad?.?.?.?Elmo Covered in Lead Paint
Case 13: GM and the Ignition Switch: It Is Deja Vu All Over Again
Case 14: McWane: A Dangerous Business
Case 15: Merck’s Vioxx: How Would You Interpret the Data?
Case 16: Music Industry: Ethical Issues in a Digital Age
Case 17: Apple Outsourcing in China: iSweatshop?
Case 18: Patagonia: Don’t Buy Our Stuff
Case 19: Tokyo Electric Power and the Fukushima Daiichi Nuclear Power Disaster: A Tsunami of Problems
Case 20: Tyco: I’m Sure That It’s a Really Nice Shower Curtain
Case 21: Olympus: A Corporate Governance Picture That Was Out of Focus
Case 22: Wal-Mart: But We Do Give Them a 10% Employee Discount
Case 23: WorldCom: Can You Hear the Lawsuits Now?
Case 24: BP and the Deepwater Horizon Disaster: “I Would Like My Life Back”
Case 25: Greyston Bakery: The Zen of Philanthropy


Student Study Site

Use the Student Study Site to get the most out of your course!

Our Student Study Site at is completely open-access and offers a wide range of additional features, including something no other publisher offers: SAGE Journal articles!

 The open-access Student Study Site includes the following:

  • Mobile-friendly web quizzes allow for independent assessment of progress made in learning course material.
  • Carefully selected, video links feature relevant interviews, lectures, personal stories, inquiries, and other content for use in independent or classroom-based explorations of key topics.
  • EXCLUSIVE! Access to certain full-text SAGE journal articles that have been carefully selected for each chapter. Each article supports and expands on the concepts presented in the chapter. 
  • Web resources are included for further research and insights. 
Instructor Resource Site

Calling all instructors!
It’s easy to log on to SAGE’s password-protected Instructor Teaching Site at for complete and protected access to all text-specific Instructor Resources for Understanding Business Ethics, Third Edition. Simply provide your institutional information for verification and within 72 hours you’ll be able to use your login information for any SAGE title!

Password-protected Instructor Resources include the following:

  • A Microsoft® Word® test bank is available containing multiple choice, true/false, short answer, and essay questions for each chapter. The test bank provides you with a diverse range of pre-written options as well as the opportunity for editing any question and/or inserting your own personalized questions to effectively assess students’ progress and understanding.
  • A Respondus electronic test bank is available and can be used on PCs. The test bank contains multiple choice, true/false, short answer, and essay questions for each chapter and provides you with a diverse range of pre-written options as well as the opportunity for editing any question and/or inserting your own personalized questions to effectively assess students’ progress and understanding. Respondus is also compatible with many popular learning management systems so you can easily get your test questions into your online course.
  • Editable, chapter-specific Microsoft® PowerPoint® slides offer you complete flexibility in easily creating a multimedia presentation for your course.
  • An instructor guide includes sample answers to the discussion questions in the book.
  • Case notes include PowerPoint slides and a Word file of teaching notes for each case are designed for instructors to expand questions to students, or initiate class discussion.
  • EXCLUSIVE! Access to certain full-text SAGE journal articles that have been carefully selected for each chapter. Each article supports and expands on the concepts presented in the chapter. 
  • Sample course syllabi for semester and quarter courses provide suggested models for use when creating the syllabi for your courses.
  • Chapter-specific discussion questions help launch classroom interaction by prompting students to engage with the material and by reinforcing important content. 
  • Carefully selected, web-based video links feature relevant interviews, lectures, personal stories, inquiries, and other content for use in independent or classroom-based explorations of key topics.
  • Web resources are included for further research and insights. 

“Looking for a deeply reflected and applicable textbook for in-class use in business ethics? Here it is. The best textbook I’ve ever found is the Stanwicks’ masterpiece. Your students will love it.”

Volker Brecht
Southern University at New Orleans

“Great textbook, with relevant cases from the real world.”

Biruk Alemayehu
Southern University at New Orleans

“Excellent book with proper framing and interesting analyzes in various areas/fields, with special emphasis on practical cases.”

Alberto Costa
Universidade De Aveiro

This text provides a comprehensive overview of Business Ethics with a firm grounding in the various ethical approaches.

Dr Robert Elkington
Business Administration , University of Ontario Institute of Technology
December 6, 2016

I did adopt this text for 2016 - 2017 but I am not finding it what I need. I had used Johnson, C. Managing Ethical Challenges of Leadership in the past and believe that was a better fit with my course. I just requested the text by Johnson on Organizational Ethics and hope to use that in 2017 - 2018.

Professor wanda foster
Business Administration , Concordia University
November 2, 2016

I am using this text this semester. It works well, but I still find that I need to supplement it with more "meaty" materials on financial, marketing, and human capital management. I have also found that the portion of Chapter 11 on global ethics was mainly geared toward social and environmental ethical issues. I needed more on corruption, bribery and negotiation with companies from different cultures.

Professor wanda foster
Business Administration , Concordia University
October 2, 2016

New chapters & case studies are good additions.

Professor Kelly King
Business, Tyler Junior College
August 21, 2016

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ISBN: 9781506303239