business chapter 4 test – Flashcards
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What are some things that could be done to restore trust in the free amrket system and in corporate leaders
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a. punish those who have broken the law. No one should be above those laws. b. pass new laws making accounting records easier to read and understand, c. 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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The danger in writing new laws to correct behavior is that people may begin to think that any behavior that is within the law is also acceptable. When people consider only what is illegal, and not what is ethical, a society gets into trouble.
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what is the difference between being "ethical" and being "legal"
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Ethics and legality are very different things. Being legal means following the laws written to protect ourselves from fraud, theft and violent acts. It is narrower than ethical behavior. Ethical behavior requires more than simply following the law and looks at behavior in terms of people's relations 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 form the Bible, Aristotle, Shakespeare, the Koran and Confucius are
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The common themes from the Bible, Aristotle, Shakespeare, the Koran and Confucius are basic moral values such as integrity, respect for human life, self-control, honesty, courage, and self-sacrifice are right; cheating, cowardice and cruelty are wrong.
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what is an "ethical dilemma"
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An ethical dilemma is a situation in which you must choose between equally unsatisfactory alternatives when making a decision.
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hwo did teens respond when they were asked about making ethical decisions
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Most teens said they were prepared to make ethical decision 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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An ethical dilemma is a situation in which a person must choose between two equally unsatisfactory alternatives.
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what are three questions to ask yourself when faced with an ethical dilemma
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a. Is it legal? (Am I violating any law or company policy?) b. Is it balanced? (Am I acting fairly?) c. 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
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Organizational ethics begin at the top.
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people learn their standars and values from
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People learn their standards and values from observing what others do.
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A business should be managed ethically for many reasons. Name those reasons.
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a. to maintain a good reputation b. to keep existing customers c. to attract new customers d. to avoid lawsuits e. to reduce employee turnover f. to avoid government intervention g. to please customers, employees, and society h. it's the right thing to do
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identify the diference between a compliance- based ethics code and an integrity-based ethics code
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Compliance based ethics codes emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers. This type of ethics code is based on avoiding legal punishment. Integrity based ethics codes define the organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.
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what are six steps to follow for a long-term improvement of Americas 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 act protects whistleblowers
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The Sarbanes-Oxley ACT
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what is the most important factor to the success of enforcing an ethics code
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An important factor to the success of enforcing an ethics code is to select an ethics officer.
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what makes an ethics officer effective
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The effective ethics officer will set a positive tone, communicate effectively, and relate well with employees at every level. It is important the ethics officers have strong communications skills.
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corporate socail 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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US economist Milton Friedman made the famous statement
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that the only social responsibility of business is to make money for stockholders.
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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 socail responsibility
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corporate philanthropy corporate social initiative corporate responsibility corporate policy
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social service leave
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allows employees to take up to a year to work for a nonprofit organization while earning their full salary and benefits, including job security
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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 of 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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The wage and benefit packages offered by---- are among the best in hourly retail
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costco
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When employees feel they have been treated unfairly they will strike back, and get even in such ways as:
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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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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 five types of "watch-dog" groups that monitor how well companies enforce ethical and social responsibility policies.
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A. Socially conscious investors, who insist that companies extend the company's high standards to all their suppliers. B. Social conscious research organization. C. Environmentalists, who apply pressure by naming companies that don't abide by environmentalists' standards. D. Union officials, who force companies to comply with standards to avoid negative publicity. E. Customers who make buying decisions based on their social conscience.
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Are ethical problems unique to the United States?
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No, ethical problems are not unique to the U.S.
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What is new about the ethical standards used to judge government leaders?
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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 Workers' 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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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.
