Busn101 Ch. 4 – Flashcards
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Ethics
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Standards of moral behavior. that is, behavior accepted by society as right versus wrong.
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Compliance-based ethics codes
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Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.
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Integrity-based ethics codes
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Ethical standards that define the organizations guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.
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Whistleblowers
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Insiders who report illegal or unethical behavior.
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Corporate social responsibility (CSR)
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A business's concerns for the welfare of society.
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Corporate philanthropy
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The dimensions of social responsibility that includes charitable donations.
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Corporate social initiatives
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Enhanced forms of corporate philanthropy directly related to the company's competencies.
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Corporate responsibility
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The dimension of social responsibility that includes everything from hiring minority workers to making safe products.
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Corporate policy
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The dimension of social responsibility that refers to the position a firm takes on social and political issues.
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Insider trading
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An unethical activity in which insiders use private company information to further their own fortunes or those of their family and friends.
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Social Audit
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A systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs.
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What are some things that could be done to restore thrust in the free market system and in corporate leaders?
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1.) Punish those who have broken the law accordingly 2.) Pass more laws to make accounting records more transparent 3.) Pass more laws making business people and others more accountable
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What is the danger in simply writing new laws to correct behavior?
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People may begin to think that any behavior that is within the law is also acceptable. Measure of behavior then becomes "Is it legal?".
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What is the difference between being "ethical" and being "legal"?
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Being legal means following the laws written to protect ourselves from fraud, theft, and violent acts. It is narrower than ethical behavior. Ethical behaviors requires more than simply following the law and looks at behavior in terms of peoples relationships with one another.
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What is meant by the statement "Many Americans today have no moral absolutes."?
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This statement means that many Americans decide whether it's o.k. to steal, lie, or drink and drive based on the situation. He or she thinks that what is right is whatever works best for the individual, and that each person has to work out for himself or herself the difference between right and wrong.
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The common themes from the Bible, Aristotle, Shakespeare, the Koran and Confucius are:
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Integrity, respect for human life, self-control, honesty, courage, ad self-sacrifice are right. Cheating, cowardice, and cruelty are wrong. This supports The Golden Rule: Do unto others as you would have them do unto you.
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How "socially minded" are Americans in general? What information does the text cite to support that claim?
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Recent studies revealed majority of Americans reported not giving any time to their community. One third reported never giving to charity. Low managerial ethics are reported by business people. Students report cheating on exams, employees report violating safety rules. The text cites examples from college classrooms and corporate leaders behavior as examples.
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What is an "ethical dilemma"?
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A situation in which you must choose between equally unsatisfactory alternatives when making a decision.
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How did teens respond when they were asked about making ethical decisions?
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Most teens said that they were prepared to make ethical decisions in the workforce, but 38% felt lying, cheating, plagiarizing, or behaving violently is sometimes necessary.
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Describe an ethical dilemma.
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A situation in which you must choose between equally unsatisfactory alternatives when making a decision.
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What are three questions to ask yourself when faced with an ethical dilemma?
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1.) Is my proposed action legal? (Am I violating any law or company policy?) 2.)Is it balanced? (Am I acting fairly?) 3.) How will it make me feel about myself? (Would I feel proud if my family learned of my decision?)
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Organizational ethics begin at......... People learn their standards and values from.......
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Organizational ethics begin at the top. People learn their standards and values from observing others.
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What are the reasons to manage ethically?
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1.) To maintain a good reputation 2.) To keep existing customers 3.)To attract new customers 4.) To avoid lawsuits 5.) To reduce employee turnover 6.)To avoid government intervention in the form of new laws and regulations controlling business activities 7.) To please customers, employees, and society 8.) Simply do the right thing
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Identify the difference between a compliance-based ethics code and an intergrity-based ethics code.
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Compliance-based ethics code emphasizes preventing unlawful behavior by increasing control and penalizing wrongdoers. Integrity-based ethics codes define the organizations guiding values, create an environment that supports ethically sound behavior, and stress shared accountability.
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What are six steps to follow for a long-term improvement of America's business ethics?
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a. Top management must adopt and support an explicit code of conduct. b. Employees must understand that top management expects ethical behavior. c. Managers and employees must be trained to consider ethical implications of business decisions. d. Companies must set up an ethics office for employees to communicate about ethical matters anonymously. e. Outsiders must be told about the ethics program. f. The ethics code must be enforced.
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What is the most important factor to the success of enforcing an ethics code? What makes that person effective?
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The most important factor to the success of enforcing an ethic code is selecting an ethics officer. The most effective ethics appears set a positive tone, communicate effectively, and relate well to employees at every level.
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Corporate social responsibility is based on:
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Corporate social responsibility is based on a company's concern for the welfare of all its stakeholders, not just owners and on a commitment to the principles of integrity, fairness, and respect.
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Critics of corporate social responsibility (CSR) believe:
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Critics of corporate social responsibility believe a manager's role is to compete and win in the marketplace. Some believe managers who pursue CSR are doing so with other people's money, which they invest to make more money, not to improve society.
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Defenders of CSR believe:
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Defenders of CSR believe businesses owe their existence to the societies they serve. Firms have access to society's labor pool and natural resources, in which every member of society has a stake. CSR defenders believe that businesses have obligations to investors and that CSR makes more money for investors in the long run.
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Identify the four dimensions of corporate social responsibility.
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a. Corporate philanthropy includes charitable donations to nonprofit groups. b. Corporate social initiatives include enhanced forms of traditional philanthropy. These initiatives differ from traditional philanthropy in that they are directly related to the company's competencies. b. Corporate responsibility includes responsibility in all business decisions, such as hiring, pollution control, product decisions, responsible use of energy, and providing a safe work environment. c. Corporate policy refers to the position taken on social and political issues
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Describe the USA Freedom Corps.
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The USA Freedom Corps was established to oversee Citizen Corps, a program designed to strengthen homeland security efforts through the use of volunteers. Volunteers handle administrative work at local police departments and spread antiterrorism information as part of expanded Neighborhood Watch programs.
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Identify three web-based volunteer services that link volunteers with nonprofit and public sector organizations.
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NetworkforGood.org 1-800-Volunteer.org VolunteerMatch.org
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What are four groups that comprise the stakeholders to whom businesses are responsible?
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Four stakeholder groups are: a. Customers c. Employees b. Investors d. Society and the environment
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President John F. Kennedy proposed these four basic rights of consumers:
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President John F. Kennedy proposed these four basic rights of consumers: a. the right to safety c. the right to choose b. the right to be informed d. the right to be heard
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One of the surest ways f failing to please customers is...
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One of the surest ways of failing to please customers is not being totally honest with them.
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How does Bagel Works, a New England based chain of bagel stores, demonstrate a two-way, or dual approach to social responsibility?
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Bagel Works approach to social responsibility focuses on the well being of the planet in addition to profits. Each store employs environmentally protective practices, and donates to community causes.
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Is it only company executives that participate in insider trading?
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Insider trading isn't limited to company executives. An IBM secretary told her husband about a takeover of Lotus Development before it was publicly known. Her husband told two co-workers, who told friends, relatives, business associates, and others. In all, 25 people traded illegally on this tip. These people ended up with significant fines as a result.
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What is required by Regulation FD, adopted by the SEC in the early 2000s?
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Regulation FD (for fair disclosure) requires that companies which release any information share it with everyone, not just a few select people. If companies tell anyone, they must tell everyone, at the same time.
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What responsibilities do businesses have toward employees?
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Business' responsibility to employees includes: a. a responsibility to create jobs. b. an obligation to fairly reward hard work and talent. c. treating employees with respect.
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What are "contented cow" companies, vs. "common cow" companies?
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"Contented cow" companies are companies with contented employees. These companies outgrew and out earned their "common cow" companies by a significant amount. The difference in performance is attributed to the commitment and caring the outstanding companies demonstrated for their employees.
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How does offering employees good salaries and benefits help companies?
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Offering good salaries and benefits reduces employee turnover. This saves the company money, so retaining workers is good for morale and is good for business.
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What actions might disgruntled employees take?
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When employees feel they have been treated unfairly they will strike back, and get even in such ways as: a. blaming mistakes on others b. not accepting responsibility for decision making c. manipulating budgets and expenses d. making commitments they intend to ignore e. hoarding resources f. doing the minimum needed to get by g. making results look better than they are.
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Some companies feel responsible for promoting social justice and believe they have a role in giving back. What kinds of social contributions have companies made to go beyond charity?
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When companies play a role in building a community, their contributions can include cleaning up the environment, providing computer lessons, supporting the elderly and children from low-income families, and building community facilities.
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What is a product's carbon footprint?
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A product's carbon footprint is the amount of carbon released during production, distribution, consumption and disposal. This can include such items as the carbon released by the fertilizer used to grow agricultural products, including the carbon in the fertilizer itself, the gas used to run farm equipment and to transport the agricultural product, electricity and so on.
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What is the potential financial impact of environmental strategies?
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Some environmental efforts can allow a company to charge higher prices or to increase market share. Other times the efforts fail, when customers aren't willing to pay a premium for products which are environmentally responsible.
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Describe the impact of the green movement on the U.S. labor force.
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The green movement has had a positive impact on the U.S. labor force. Emerging renewable-energy and energy-efficient industries account for 8.5 million jobs and by 2030 will create as many as 40 million more in a variety of industries.
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A major problem of conducting a social audit is...
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A major problem of conducting a social audit is establishing procedures for measuring a firm's activities and their effects on society. The question is: what should be measured?
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Many consider that a workplace audit should measure:
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Many consider that a workplace audit should measure: a. workplace issues b. the environment c. product safety d. community relations e. military weapons contracting f. international operations and human rights g. respect for the rights of local people
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How is a "net social contribution" calculated?
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A "net social contribution" is calculated by adding all positive social actions, and then subtracting negative effects such as layoffs and pollution.
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Describe the four types of "watch-dog" groups that monitor how well companies enforce ethical and social responsibility policies.
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Four watchdog groups are: a. Socially conscious investors, who insist that companies extend the company's high standards to all their suppliers. b. Environmentalists, who apply pressure by naming companies that don't abide by environmentalists' standards. c. Union officials, who force companies to comply with standards to avoid negative publicity. d. Customers who make buying decisions based on their social conscience.
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Are ethical problems unique to the United States? What is new about the ethical standards used to judge government leaders?
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No, ethical problems are not unique to the U.S. What is new about the moral and ethical standards by which government leaders are being judged is that the standards are much stricter now. In other words, government leaders are now being held to a higher standard than in the past.
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What are many American businesses demanding from their international suppliers in terms of social responsibility?
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Many American businesses are demanding socially responsible behavior from their international suppliers by making sure their suppliers do not violate U.S. human rights and environmental standards.
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Describe the Joint Initiative on Corporate Accountability and Worker's Rights.
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The Joint Initiative on Corporate Accountability and Workers' Rights is a project that is designed to create a single set of labor standards with a common factory inspection system. The goal is to replace the current system of multiple approaches with something that is easier and cheaper to use. If it works, one of the outcomes is that the common guidelines will keep companies from undercutting one another on labor standards. A major issue is what constitutes a living wage in different areas of the world.
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What questions surround the issue of American ethical standards and international suppliers?
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Examples of the questions surrounding the issues of international ethics are: Is it always ethical for American companies to demand compliance with our moral standards? What about countries where child labor is an accepted part of society? What about foreign companies doing business in the U.S.? Should foreign companies doing business in the U.S. expect American companies to comply with their ethical standards? To what country's standards should multinational companies adhere?
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Is it likely that there will be a single set of international rules governing multinational corporations? Why or why not?
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It is unlikely that there will be a single set of international rules governing multinational corporations in the near future. There are too many differing opinions about what is ethical and socially responsible. Most standards set by various international bodies are advisory only.
