Chapter 4- Ethics & Social Responsibility – Flashcards
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Enron Scandal
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went bankrupt in a matter of weeks, was hiding a lot of debt
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WorldCom Scandal
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double-counting revenues, didn't disclose all debts
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Bernie Madoff
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defrauded $65 million from investors using a Ponzi scheme, sentenced to 150 yrs in prison
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True or false: Law protects us from ALL wrong behavior (theft, violence, etc)
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FALSE, only some wrong behavior
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Are all legal behavior ethical though?
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NOPE
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3 questions to ask in an ethical dilemma
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Is my proposed action legal? is it balanced? how will it make me feel about myself?
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True or false: Laws that protect us from fraud, theft, and violence determine ethical behavior.
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FALSE, ethical behavior involves more than following the law
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True or false: Two recent studies found a strong correlation between academic dishonesty among undergraduates and dishonesty at work.
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True
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True or false: What is considered ethical is universal and absolute. (shared by many religions)
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True
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True or false: Overly ambitious business goals and employee incentives can lead to unethical behavior.
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True
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True or false: Businesses with a formal code of ethics are less common now than in the past.
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True
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True or false: Corporate social responsibility refers to the concern businesses have for the welfare of society.
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TRUE
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What are ethics codes?
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written documents that define ethical conduct
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Compliance-based ethics codes
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based on control & punishment
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Integrity-based ethics codes
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appeal to the conscience of all employees and rely on a culture of ethical behavior
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6 steps to improve business ethics
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- top mgmt must define & model behavior -employees must understand what is expected fro them -training -ethics office(r); protection of whistleblowers -ethics code must be reach beyond company (ex: suppliers) -ethics code must be enforced
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whistleblower
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insiders who report illegal or unethical behavior
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When discussing moral and ethical issues, it is helpful to remember that ethical behavior begins with ___.
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each of us
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A phone call to a government official by an employee of the Enron Corporation disclosed the deception and dishonesty of the firm's accounting records. This employee played the role of a:
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whisteblower
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Corporate Social responsibility
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a business's concern for the welfare of society
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Opponents of CSR
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maximize financial return of investment
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Proponents of CSR
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maximize value for all stakeholders; make this world a better place
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corporate philanthropy
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dimension of social responsibility that includes charitable donations
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corporate social initiatives
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enhanced forms of corporate philanthropy directly related to the company's competencies
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Corporate responsibility
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the dimension of social responsibility that includes everything from hiring minority workers to making safe products
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corporate policy
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the dimension of social responsibility that refers to the position a firm takes on social and political issues
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important stakeholders
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customers investors, shareholders employees society environment
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Caveat Emptor
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"let the buyer beware"
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Caveat Venditor
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"let the seller beware"
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President Kennedy proposed 4 basic rights of consumers:
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right to safety right to be informed right to choose right to be heard
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insider trading
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using privileged info for person and unfair gain
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Key features of Modern Corporations
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Shared ownership, limited liability, "person" status
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social audit
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a company report that measures the firm's social contributions inside and outside of the firm.
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Ethical behavior covers a ________ range of conduct than legal behavior.
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wider
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4 types of Social Audit watchdogs
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socially conscious investors, environmentalists, union officials, customers
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Sustainability: Who discovered over 150 years ago that CO2 traps heat?
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John Tydall
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Sustainability: Keeling Curve
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showed Co2 concentrations are rising
