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CMA Intermediate · Business Laws and Ethics · Business Ethics and Emotional Intelligence

Which of the following is an essential feature distinguishing business ethics from mere personal preference?

Business ethics rests on widely accepted standards of right and wrong applied to business conduct, with attention to their impact on stakeholders. It is not a matter of personal mood, is not enforced only by courts, and applies to everyone in the organisation, not just owners.

  1. AIt is based on widely accepted standards of right and wrong that apply to business conduct and affect stakeholdersCorrect
  2. BIt varies fully with the mood of each manager
  3. CIt is enforced only by courts through penalties
  4. DIt applies only to the owners and not to employees

Explanation

Business ethics rests on broadly shared standards of right and wrong and concerns the effect on stakeholders. It is not enforced solely by courts, since many ethical norms are voluntary. It also applies to everyone in the organisation, not owners alone.

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