Business Ethics (Test 1) – Flashcards
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Ethics
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Rules of principal that defines right and wrong conduct
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Ethical Dilemma
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No obvious right or wrong decision
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List 3 Basic ethical theories
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1. Virtue Ethics: Aristotle's belief in individual character and integrity/ concept of living a clear ideal 2. For the greater good: Utilitariansim - Focused on the outcome for your actions rather then the virtue actions themselves. 3. Universal Ethics: Actions are taken out of duty and obligation
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What is a moral compass
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Moral standards are principles based on religious, cultural, or philosophical beliefs by which judgments are made about good or bad behavior. Beliefs come from: friends, family, ethnic background, religion, school, media
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Explain the difference between intrinsic and instrumental values. (Person's value in 2 ways) Intrinsic value
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Intrinsic: Value is a good thing in itself & is pursued for its own sake, whether anything good comes from that pursuit or not. Ex: happiness, health,& self respect Instrumental value: The pursuit of one value is a good way to reach another value. Ex: money, is valued for what it can buy rather than for itself.
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List the four basic categories of ethics
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1. Simple truth: simply doing the right thing. Right wrong, good or bad. 2. Personal Integrity: Demonstrated by someone's behavior.Comic book heroes, cost them personal sacrifice. 3. Rules of appropriate indvidual behavior- 4. Rules of appropriate behavior for a community or society:
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What is the golden rule
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Do unto others as you would have them do unto you, or treat others as you would like to be treated. Danger: not everyone thinks like that.
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Define ethical relativism
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Traditions of your society, your personal opinions, and the circumstances of the present moment define your ethical principles. Rules aren't set in black & white
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Define applied ethics
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Study of how ethical theories are put into place
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What is ethical dilemma
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No obvious right or wrong decision, but rather a No right or wrong answer only a right or right answer.
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Explain the 3 step process for resolving an ethical dilemma
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Step 1: Analyze the consequences; who will be helped and who will be harmed Step 2: Anaylyze the actions; Consider options from a different perspective, w/o thinking about the consequences. How do the actions measure up against moral principles like honesty? Step 3: Make a decision; Take both parts of your analysis into account, and make a decision.
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What are the 8 questions you should consider in resolving ethical dilemma
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1. What are the facts? 2. What can you guess about the facts you don't know? 3. What do the facts mean? 4. What does the problem look like through the eyes of the people involved? 5. What will happen if you choose one thing or another? 6. What do your feelings tell you? 7. What will you think of yourself if you decide one thing or another? 8. Can you explain and justify your decision to others.
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What are Kohlberg's 3 levels of moral development
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Preconventional: Stage 1: Obedience & punishment, individualism, Stage 2: instrumentalism & exchange. Conventional: Stage 3: "Good boy/nice girl", Stage 4: Law and order Postconventional: Stage 5: Social contract, Stage 6: principled conscience.
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Preconventional
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Stage 1: (Preconventional) - Obedience and punishment orientation. Avoidance of punishment and deference to power authority. Stage 2: (Individualism, instrumentalism and exchange) - focused on satisfying his or her own needs.
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Conventional
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Stage 3:"Good boy/nice girl", meeting expectations of family members, right or wrong it pleases the family members Stage 4: Law & order orientation. Aware of his membership in society & the existence of codes of behavior, right or wrong codes of legal, religious, or social behavior dictate it.
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Postconventional
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Stage 5: Social contract, individual rights Stage 6: Universal ethical principle, self chosen ethical principles, right or wrong it reflects the person's individual value system.
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List 5 sources of influence for your personal moral standards
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1. Family: has a big influence 2. Experience: with people and work, how you handle things. 3. Society: Live and act how society expects 4. Friends: make deicsions that try not hurt feelings 5. Law: Live according to the laws
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Business Ethics
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Standards of moral behavior to business situations
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Prescriptive
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Observed customs, attitudes and rules. Recommending what SHOULD be happening
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Descriptive
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Observed customs, attitudes and rules. Documenting what IS happening
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Identify 6 stakeholder of an Org. at SCC
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1. Stockholders: - Growth, have an invest at SCC 2. Employees - Stable empl. safe environment 3. Students: - Classes, degree, good teachers 4. Suppliers: - Orders, payments 5. Fed Gov: - tax revenue, compliance 6. Commnty: More busi. for area, employs locals,
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Give 4 examples of how stakeholderss could be neg. impacted by unethical corp behavior
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Stockholders: False & misleading financial loss of stock. Employees: Loss of empl. No serverance or pension. Customers/students: poor service Suppliers: delayed payments no orders
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Define the term Oxymoron and 3 examples
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Combination of two contradictory terms: Example deafening silence, jumbo shrimp, deliberate mistake, bad luck
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Is the term business ethics an oxymoron
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At times, Co wants you to do the right thing as long as it doesn't effect the co and their profits
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Corporate Governance
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Business corporations are directed and controlled
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Code of ethics
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Company's written standards of ethical behavior, guides mgrs & employees in making decision & choices they face
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Major ethical dilemma in each 4 decades
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1970's: Human Rights, forced labor, low wages, unsafe practices. Watergate 1980's: Bribes, illegal contracting, global issues 1990's: Fin mismgtment, (Greed) end of apratide 2000's: Privacy issues, Cyber tech crime
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Identify a key development. Each 4 decades
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1970's: Compliance laws. practices act passed 1980's: ERC develops US code of ethics 1990's: Federal sentencing guidelines 2000's: Anticorruption efforts grow.
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Which decade saw the most ethical dilemmas
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1970's: Human Right, forced labor, low wages, unsafe practices, firms cover ups
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Give 4 examples of cliches employees hear when faced with an ethical dilemma
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1. Consult the Co code of ethics 2. Do what's right for the Org stakeholders 3. Do what's legal 4. Do what you think is best
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List 4 types of ethical conflict
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1. Truth vs. Loyalty: tell the truth or remain loyal 2. Short vs. Long term: decision have a short or long term consequence 3. Justice vs. Mercy: perceive this issue dispensing justice or mercy 4. Individual vs. Communty: choice affect 1 individual or a wider group or community
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List 3 principles available to you in resolving an ethical dilemma. (Resolution)
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1. Ends based: Which decision would provide the greatest good for the greatest number of people 2. Rules based: What would happen if everyone made the same decision as you 3. The Golden Rule: Do unto others as you would have them do unto you.
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Example of ethical dilemma and explain
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Conflict I used: Truth vs. Loyalty Resolution Ends based
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Explain: Organizational Culture
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Values, beliefs and norms that all employees share
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Define: Value Chain
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Transformation of raw materials into delivered product or service
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List the 5 Key Functions area w/ in an Organization
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1. Research & Development: Develops & creates new product designs 2. Mfg: Sources components & builds the product 3. Marketing & Advertising: marketing products 4. Sales: Selling the products 5. Customer Service: Handling issues
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List the 4 primary line functions
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1. HR: Recruit, training & develops of personnel. 2. Finance: Internal & external acct, auditing stmt. 3. Information systems (IS or IT): maintain the tech backbone, data security, email, comm, web 4. Mgtmnt: Supervisory roles, oversees operations
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Identify 3 functional components of marketing process
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Advertising and marketing Public relations Sales
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Explain why marketers feel that their involvement in the production & delivery of goods & service is ethical process
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Customers are satisfied, good outcome justifies the methods used, no matter how misleading
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Explain the opposing argument that marketing is an unethical process
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Customers didn't need the product & was manipulated, or influenced by slick ads
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Which argument do you support
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The ethical one. Customers are happy and did not force the product
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Explain why HR consider to be the conscience of the Org
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Creation of job description, recruitment selection, performance reviews. Right people are hired, believed many other problems are avoided.
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Why is HR selection of leaders of Co important to ethical business conduct
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Leaders endorse & support, also model the ethical standards needs to keep Co out of danger
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Why have ethics policies and ethics training become so important
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Changing legislation & sentencing guidelines for unethical conducts
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List 3 primary areas of the finance function in an Org
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1. Financial Transactions: Flow of money, received money from customers 2. Accting: Keeps track of all fin by doc credit and debits 3. Auditing: Reports must be to interested parties, gov, leaders, creditors, Certification by CPA prof.
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Explain how the accounting professionals is Governed by GAAP
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Standards operating procedure w/ in industry. Governed by accepted accounting principles
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Why would audited accounts be regarded as being "clean"
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Statements have been certified by an Objective 3rd party to be "clean". Certification is meant to be for the publics benefits
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What key decision brought about the demise of Arthur Andersen
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Enron requests for creative bookkeeping policies. Senior partners on the Enron Accountants choose not to stand up to Enron & sanked Author Andersen
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Define Corporate Social Responsibility (CSR)
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Targeted toward achieving a social benefit over & above max profits for its shareholders & meeting all its legal obligations. means; corp is operating in a competitive environment
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2 other terms that may be used for Social aware corporate behavior
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AKA: Corp Citizenship Corp Conscience
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Give 4 examples of a corporations legal obligations
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1. Payments of all taxes 2. Payments to all employer contributions 3. Compliance w/all legal industry standards 4. Delivering Safe products to its customers
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What is the instrumental model of corporate management
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The only obligation of a corp is to make profits for its shareholders in providing goods & services, meet the needs of customers. Increase profits w/ in rules
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Do you agree or disagree w/ the social contract
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Yes, Corporations depends on society for its existance and growth
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List the 5 major trends driving CSR
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1. Transparency: Co's can't sweep under the rug. Good or bad will be known 2. Knowledge: Consumers & investors have more info or can look up a Co. records 3. Sustanibility: Strategies, Demonstate plans for develop 4. Globalization: Produced child labor laws, min wage, EPA, Reforms of gov. efforts, 5. Failure of the public sector: expect less gov than used to.
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Which major trends driving CSR most important
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I think it is transparency. What ever is done good or bad is known.
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Explain why Org. are struggling to adopt CSR initiatives
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CSR initiative do not generate immediate financial gains. Creating adverse results & ending up worse off.
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Why would customers be cynical of CSR initiatives
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Customers: Little more than a token action concerned with publicity rather than community
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Explain the term Triple bottom line
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Provide social and environmental updates alongside their primary bottom line finance performance. Phrase: John Elkington
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Explain the term ethical CSR
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Purest or most legitimate type of CSR. Social conscience in managing financials. responsibilities to shareholders, local community & society, do the right thing
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Explain the term altruistic CSR
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Takes a philathropic approach. Underwriting specific initiatives to give back to the local community. Giving back w/funds from shareholders, southwest supports McDonalds, Shell Oil donates fuel.
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Explain the term strategic CSR
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Targets programs that will generate the most positive publicity of goodwill, and generate the publicity most for the Organization
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What is the social contract model of Corp Management
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A Corp has an obligation to society over & above the expectations of its shareholders. Corp depends on society for its existance and growth. meet the demands of society.
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Classical Model - Milton Friedman
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Friedman argues that it would be unethical for a corp to do anything other than deliver profits. Also, Profits should be earned w/out deception or fraud. Managers have an ethical obligation to delivering on the expectations of his employers
