Chapter 2- understanding business ethics and social responsibility

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social responsibility
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when a business balances its committment to groups and individuals in an environment, such as customers
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name one example of social responsibility
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business balances making customers happy versus manager’s expectations at work
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ethics
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how you go about your resoning for things
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ethics is influenced by who?
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peers and parents
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business ethics
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involves what to do to make right choices and be on track
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managerial ethics
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standard of behavior guiding individual managers in their workplace
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name three types of behavior managers are responsible towards?
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-employees -organization -other economic agents
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behavior toward employees
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this covers hiring/firing, wages/working conditions, and privacy/respect
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behavior toward the organization
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determining ethical issues from employee to employer toward areas of conflict, such as honesty, interest, and confidentiality
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behavior toward other economic agents
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how ethics comes into play toward customers, competitors, stockholders, suppliers, dealers, unions; anything related to primary agents of interest
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how do you assess ethical behavior?
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-gather relevant factual info -analyze facts -make ethical judgments
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when considering ethical norms, what three questions should you ask?
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-is it legal? -is it balanced? -how will it make me feel about myself?
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what issue does utility ethical norms entail?
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does a particular act make the best use of the benefits to those who are affected by it? (do all relevant parties receive free benefits from it)
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what issue do ethical norms regarding rights entail?
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does it respect the rights of all individuals involved?
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what issue do ethical norms regarding justice entail?
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is it on top of what’s fair?
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what issue do ethical norms regarding caring entail?
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is it on top of people’s responsibilities to each other
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code of ethics
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this is involved with adopting written codes
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ethics online
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this is involved with instituting ethics program
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leadership
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this is also involved with instituting ethics program
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name all of the internal stakeholders involved in a company?
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employees, managers, and organizations
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stakeholders
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groups, individuals, and organizations directly affected by practices of an organization and have a role in its performance
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name all of the external stakeholders involved in a company?
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suppliers, society, government, creditors, shareholders, and creditors
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what does the stakeholder (person with interest/concern in something) model of responsibility involve?
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-treating customers fairly and honestly -respecting and treating employees fairly -transparency and proper accounting procedures from investors -maintaining mutual beneficial relationship between suppliers in business -being involved in programs/chairities locally and internationally
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what is the concept of accountability?
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expectation of expanding businesses in order to protect and make an impact on society
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air pollution consists of what?
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many factors contributing to lower air quality
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what is the cause of water pollution?
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chemical/waste dumping
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what are the two key issues characterizing land pollution?
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-damaged quality of land -future contamination, such as new forms of solid-waste disposal
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what is the concept of accountability through consumerism?
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-protecting the rights of consumers, and -avoiding collusion
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collusion
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plotting together and all agree upon it
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what are all of the elements of green marketing, and name examples for each?
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-production process- cut greenhouse gas emissions by making cars more fuel efficient -product modification- modify products to more environmentally friendly materials, like organic food -carbon offsets- emissions test -packaging reduction- making cups out of recycled material -sustainability- growing crops from the sun with no pesticides
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what does the consumer Bill of Rights state?
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that you have consumer rights when packaging products
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Name two responsibilities toward investors, and explain them.
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-insider training- confidential information used to gain from purchase/sale of stock. Ex: lawyer of company and two companies merge together, and -misrepresentation of finances- when you say assets are 9 mill when they’re only 1 mill
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insider trading
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confidential information used to gain from purchase/sale of stock. Ex: lawyer of company and two companies merge together
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Sarbanes-Oxly Act
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this requires a CFO to determine accuracy of all financial reporting
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misrepresentation of dollars
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when you say assets are $9 mill when they’re only $1 mill
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business balances its committment to groups and individuals in an environment, such as customers
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social responsibility
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name four different approaches to social responsibility, and explain them
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-obstructionist stance -defensive stance -accommodation stance -proactive stance
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defensive stance
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barely do minimum legal requirement
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accommodation stance
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do what you’re told, exceed limits, but barely
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obstructionist stance
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do bare minimum
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can small businesses be socially responsible?
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yes, by building trees
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how do organizations influence the gov’t?
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-Political Action Committee- special organizations created to solicit money and then distribute it to political candidates -Lobbying- go to other companies/Congress with some purpose/goal
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Political Action Committee
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special organizations created to solicit money and distribute to to political candidates
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Lobbying
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go to other companies/Congress with some purpose/goal
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name some different formal organizational dimensions, and explain them?
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-legal compliance- when organization conforms to federal, state, local, and international laws. task of managing this generally assigned to appropriate functional managers -ethical compliance- when members of organization follow basic standards of behavior -philanthropic giving- awarding funds/gifts to charities/other worthy causes
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legal compliance
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when organization conforms to federeal, state, local, and international laws.
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task of managing legal compliance generally assigned to whom?
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functional managers
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ethical compliance
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when members of an organization follow basic standards of behavior
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philanthropic giving
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awarding funds/gifts to charities/other worthy causes
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how do you evaluate social responsibility (when a business balances its commitment to groups/individuals in an environment)?
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through a corporate social audit- systematic analysis used to measure success in a firm through funds earnmarked for meeting its goals related to social responsibility (when a business balances its commitment to groups/individuals in an environment)
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corporate social audit
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systematic analysis used to measure success in a firm through funds earnmarked for meeting its goals related to social responsibility (when a business balances its commitment to groups/individuals in an environment)
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what does a corporate social audit requore?
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-clearly define all social goals -analyze resources devoting to each goal -determine how well organization achieves various goals -make recommendations toward which areas need more attention
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sustainability
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growing crops from the sun with no pesticides
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packaging reduction
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making cups out of recycled material
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carbon offsets
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emissions test
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product modification
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modify products to more environmentally friendly materials, like organic food
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production process
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cut greenhouse gas emissions by making cars more fuel efficient
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How are personal code of ethics developed?
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through a combination of factors, such as how our peers, parents, teachers, and bosses respond to our mannerisms.
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How can companies try to encourage and enforce ethical behavior?
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enforcing laws and prevent illegal activity from happening, such as fraud.
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What are the various areas of social responsibility (when a business balances its commitment to groups and individuals in an environment)? Give an example of each.
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-Areas toward the environment- carbon monoxide pollutants from cars -Areas toward customers- Food and Drug Administration enforcing labeling guidelines for food practices -Areas toward employees- just hire whoever interviews well, regardless of race. -Areas toward its investors- Sarbanes-Oxly Act- this requires CEO to guarantee accuracy of financial reporting
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name one example of social responsibility in regard to the area toward the environment
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carbon monoxide pollutants from cars
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name one example of social responsibility in regard to the area toward customers
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Food and Drug Administration enforcing labeling guidelines for food practices
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name one example of social responsibility in regard to the area toward employees
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just hire whoever interviews well, regardless of race
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name one example of social responsibility in regard to the area toward its investors
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Sarbanes-Oxly Act- this requires CEO to guarantee accuracy of financila reoprting
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list and describe three ways gov’ts influence social responsibility
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-regulation- establishment of laws/rules dictating what businesses can/cannot do -legislation- make laws to determine what businesses can/cannot do -tax codes- indirect form of regulation of gov’t used to determine how much to charge on taxes, such as how much tax to charge on cigarettes and tobacco.
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regulation
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establishment of laws/rules dictating what businesses can/cannot do
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legislation
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make laws to determine what businesses can/cannot do
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tax codes
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indirect form of regulation of gov’t used to determine how much to charge on taxes, such as how much to charge on cigarettes/tobacco
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name some informal organizational dimensions of social responsibility
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-organization leadership and culture -whistle-blowing- disclosure of illegal/unethical conduct on part of others within an organization.
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name some formal organization dimensions of social responsibility
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-legal compliance -ethical compliance -philanthropic giving
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whistle-blowing
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disclosure of illegal/unethical conduct on part of others within an organization
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organizational stakeholders
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groups that are directly affected by the organizational practices and have a stake (interest/concern of something) in its performance
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what are some of the major corporate stakeholders in a business organization?
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-local communities -customers -suppliers -investors -employees
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what does business ethics refer to?
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ethical/unethical behaviors by employees/managers in the context of their personal jobs
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How do top managers BEST demonstrate a commitment to ethical business practices?
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by adopting written codes of ethics
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What term refers to the way in which a business tries to balance its commitments to groups and individuals in its social environment?
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social responsibility
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What does the Sarbanes-Oxley Act of 2002 require a chief financial officer to do?
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guarantee the accuracy of financial reporting
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Dara’s Dress Shop was honored last year for its strong commitment to corporate social responsibility. Which of the following would MOST likely decrease the shop’s chances of being recognized again this year?
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Many of the dresses are made from fabrics spun by unprotected child laborers.
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Are illegal actions considered to be ethical?
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no
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What does a business social responsibility to investors include?
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following proper accounting procedures
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Jordan is a recent college graduate with a degree in computer programming. He has just begun his first full-time job and is excited to apply the skills that he worked so hard to acquire. Though he excelled as a student, Jordan is anxious about how successful he will be as an employee. When an opportunity unexpectedly presents itself to take credit for a brilliant software program that someone else wrote, Jordan does not resist and claims the program as his own. Which of the following statements must be true about Jordan’s decision?
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it raises questions about his personal ethics
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SeaBreeze Sailing Company manufactures sailboats for personal pleasure use. Which of the following would suggest that SeaBreeze Sailing Company is NOT committed to corporate social responsibility?
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The company engages in practices that benefit local investors.

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