Question

Shannon and Ian, student consultants, chose a home construction business as a client for a semester strategic planning assignment. Upon examination of the client's financial statements, the students discover that their client has been cheating the government out of several thousand dollars a year in taxes. Their client is a company owned by a couple who are in their late 50s and who have two children in college. Shannon and Ian are the only persons other than the owners who are in a position to know about this situation. Which ethical principle should guide Shannon and Ian in their decision whether or not to report the owners to the Internal Revenue Service?

Multiple Choice

• There is no such thing as "moral free space"—all ethical standards are determined by societal norms, and individuals have an implied social contract to live up to these standards.

• Ethical relativism should always be adhered to before ethical universalism when dealing within boundaries of a country's culture and norms.

• Few nations or cultures have common moral agreement on what is ethically right and wrong.

• There should be no absolute limits put on what actions and behaviors fall inside the boundaries of what is ethically or morally right and which actions/behaviors fall outside.

• Adherence to universal ethical norms always takes precedence over local ethical norms.

Answer 1

Adherence to universal ethical norms always takes precedence over local ethical norms.

Universal or first order ethical norms should always be kept ahead over local or second order firms. There should not be any compromise on what is ethically right or wrong. According to ethical universalism all countries and societies are supposed to follow universally applicable ethical principles of what is right and wrong.

In all situations it will be fair to follow the standards of universal principles of right and wrong in all business irrespective of local business or norms.