BUSN Chapter 4 – Business Ethics and Social Responsibility

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Ethics
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A set of beliefs about right and wrong, good and bad.
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Universal Ethical Standards
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Ethical norms that apply to all people across a broad spectrum of situations.
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Business Ethics
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The application of right and wrong, good and bad, in a business setting.
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Ethical Dilemma
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A decision that involves a conflict of values; every potential course of action has some significant negative consequence.
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Code of Ethics
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A formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions, across a range of situations.
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Whistle-Blowers
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Employees who report their employer’s illegal or unethical behavior to either the authorities or the media.
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Social Responsibility
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The obligation of a business to contribute to society.
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Stakeholders
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Any groups that have a stake (or personal interest) in the performance and actions of the organization.
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Consumerism
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A social movement that focuses on four consumer rights: the right to be safe, informed, to choose, to be heard.
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Planned Obsolescence
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The strategy of deliberately designing products to fail in order to shorten the time between purchases.
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Sarbanes-Oxley Act of 2002
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Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms. Key provisions limit conflict-of-interest issues and require financial officers and CEOs to certify the validity of their financial statements.
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Corporate Philanthropy
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All business donations to nonprofit groups, including money, products, and employee time.
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Cause-Related Marketing
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Partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit.
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Corporate Responsibility
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The actions of the business rather than donations of money and time.
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Sustainable Development
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Doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs.
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Green Marketing
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Developing and promoting environmentally sound products and practices to gain a competitive advantage.
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Social Audit
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A systematic evaluation of how well a firm is meeting its ethics and social responsibility objectives.

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