Chapter 3: Emerging Business Ethics Issues

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Ethical Issue
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A problem, situation, or opportunity that requires an individual or group to choose among actions. Failure to recognize an ethical issue puts corporations at risk.
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Honesty
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Truthfulness or trustworthiness. Issues related to honesty arise when people perceive business as something where normal rules do not apply.
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Fairness
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The quality of being just, equitable, and impartial.
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Equality
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How wealth or income is distributed
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Reciprocity
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Occurs when an action that has an effect upon another is returned
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Optimization
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The tradeoff between equity and efficiency
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Integrity
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Uncompromising adherence to ethical values.
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Ethical Dilemma
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Problem, situation, or opportunity that requires an individual or group to choose among several wrong or unethical actions. There is NO ethical choice.
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Misuse of Company Resources
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Leading form of observed misconduct Time theft, unauthorized use of equipment, embezzlement, etc
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Abusive or Intimidating Behavior
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Common ethical problem Intent is important in determining abuse Bullying: associated with a hostile workplace
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Lying (Three Types)
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Joking without malice Commission lying Omission lying
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Commission Lying
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Creating a false perception with words that deceive the receiver. Creating noise.
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Omission lying
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Intentionally not informing channel members of problems relating to a product that affects awareness, intention, or behavior
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Conflicts of Interest
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When an individual must choose whether to advance his/her personal interests, those of the organization, or some other group. Individuals must separate personal interests from business dealings
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Bribery
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The practice of offering something in order to gain an illicit advantage
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Active bribery
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The person who promises or gives the bribe commits the offense
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Passive bribery
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An offense committed by the official who receives the bribe
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Facilitation payments
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Legal as long as they are small
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Corporate Intelligence
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The collection and analysis of information on markets, technologies, customers, trends, etc
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Three Intelligence Models
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Passive monitoring system for early warning Tactical Field Support Support dedicated to top management strategy
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Discrimination
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Illegal in the US
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Anti-Discriminatory Laws
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EEOC (Equal employment opportunity commission) Age Discrimination in Employment Act Affirmative Action Programs
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Sexual Harassment
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A repeated, unwanted behavior of a sexual nature perpetrated upon an individual by another.
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Dual Relationship
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Personal, loving, and/or sexual relationship with someone whom you share professional responsibilities
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Unethical duel relationship
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The relationship causes a conflict of interest or impairment of professional judgement
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Environmental Issues
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Significant concern in business Air pollution (Kyoto Protocol) Water pollution Recycling Alternative Energy
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Fraud
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Any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression
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Accounting Fraud
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Misrepresentation of company’s financial reports, mostly due to increased competition and pressures to perform
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Marketing Fraud
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The process of dishonestly creating, distributing, promoting, and pricing products
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Puffery
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Exaggerated Advertising claims Difficult to distinguish from fraud
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Implied falsity
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An advertising message that misleads, confuses, or deceives the public
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Literally false
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Claims can be divided into non-establishment claims
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Consumer Fraud
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When consumers attempt to deceive business for personal gain Ie price tag/item switching, lying to obtain discounts
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Collusion
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An employee who helps a consumer commit fraud
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Duplicity
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A Consumer duping a store
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Guile
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A person who uses tricks to obtain an unfair advantage
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Financial misconduct
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The failure to understand and manage ethical risks Key problem in the recent financial markets Govt regulation: Dodd-Frank Wall Street Reform and Consumer Protection Act
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Insider Training (2 Types)
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Legal insider trading Illegal insider trading
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Legal insider trading
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Involves legally buying and selling stock in an insider’s own company, but not all the time.
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Illegal insider trading
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The buying/selling of stocks by insiders who possess material that is not public.
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Intellectual property rights and privacy
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Difficult to enforce Identity theft is a growing problem
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Challenge of Determining Ethical Issues in Business
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Most issues become visible through stakeholder concerns.

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