3. How to deal with economic crime- Addiopizzo Flashcards
1
Q
Ethics in Business
A
- Ethics in Business consists of all of the below mentioned
- Situational and individual factors
- Psychological mechanisms affecting ethical choices
- Drivers = Economic/ Relational/ Ethical
- How to prevent and repair ethical misbehavior
2
Q
Organizational Ethical misbehavior
A
- Sources = 1. Moral Motivation = Failure of Motivation/ 2. Moral Awareness = Awareness Failure/ 3. Moral Imagination = Failure of Imagination/ 4. Stakeholder failure = Separation Biases
- Misbehavior on individual level leads to = Worse person/ Layoff/ Jail
- Misbehavior on organizational level leads to = Legitimacy threats/ Lack of support/ Bankruptcy
3
Q
How should have Guidant addressed the legitimacy threat?- Short term vs long term strategies
A
- Short-term = Symbolic
- Long-term = Substantive
- Symbolic actions = Denial/ Apologizes/ Justification/ Pro-social claim/ Symbolic alignment (Long-term)
- Substantive actions = Substantive alignment/ Stakeholder engagement
4
Q
Legitimacy management- Symbolic
A
- Short-term orientation
- Lack of external control
- Organizational complexity
- Low ethical expectations
- High information asymmetry
- Low stakeholder commitment
5
Q
Legitimacy management- Substantive
A
- Long-term orientation
- High external control
- Relational values
- High ethical expectations
- Low information asymmetry
- High stakeholder commitment
6
Q
Corruption perception index by country in comparison
A
- Portugal good score (29) but but high exports to Angola (bad score, 167)
- Italy known for its chronic corruption (51)
- Germany has a good score (9) but Russia (bad score, 137) has a strong influence on Germany
- New Zealand rank 1 in the world = High ethical standards/ Low connection to other countries/ High institutional intervention
7
Q
Corruption notes
A
- Africa and South America with the highest corruption index (geographically)
- Customer fraud, cybercrime, and asset misappropriation are the most frequent crimes
8
Q
Corruption: bribery and extortion
A
- Corruption is the abuse of entrusted power for private gain
- It hurts everyone who depends on the integrity of people in a position of authority / power
- Bribery (Bestechung)/ Extorsion (Erpressung)
9
Q
Dealing with corrupt environments: Bribery
A
- Bribery = An action in which someone gives cash, gift, benefit, emolument (Vorzüge), privilege to alter the behaviors of the recipients / Aim = Obtain an unjust advantage by someone in position of trust/ Unjust judgement, Vote, some type behaviors
- Those who receive a bribe take advantage of their position of power for personal benefit and act against the duties of their position
- Offering a bribe is always illicit (illegal) = Because it involves inducing someone to perform a disloyal and unjust act
- Accepting a bribe is always morally illicit (illegal) = Action of disloyalty/ Action of injustice as recipients are not entitled to the remuneration/ Unfair competition/ Spreading of culture of corruption
10
Q
How to recognize bribery
A
- Intention of the gift-giver = Is the intention to gain an unjust advantage?
- Impact on the receiver = Is the evaluation unfairly influenced by the gift? Is the gift causing unfair competition?
- Perception of others = How would competitors and other players interpret the gift?
11
Q
Dealing with corrupt environments: Extorsion
A
- Extorsion takes place when someone (the extortionist) demands money or some other gift to which he or she is not entitled
- Happens through intimidation or undue exercise of authority
- It comes from those with decision-making power over something that affects the victim of the extortion
- Extorsion is always illicit = Disloyalty and injustice/ Injustice to the person from whom money is extorted/ Injustice to third parties/ Give raise to a scandal/ Encourage other to do likewise/ Reducing the sense of solidarity in society
- Under certain conditions it may be licit = No functional alternatives/ One truly behaves with rectitude (Geradlinigkeit)/ Third parties are not involved/ There is a moral reason/ Moral scandal is avoided
12
Q
How to fight against corrupt environments
A
- Top down approaches
- Professional and moral competencies
- Organization policies and code of conduct
- Run away
- Regulation
- External institutional support = E.G. Policie
13
Q
Why was the mafia so powerful?
A
- Protection Legitimacy
- Replace the government (security of people) Legitimacy
- Acceptable/ deeply embedded in Sicilian culture Legitimacy
- Legitimized Relations
- Personal relations Relations
- Dangerous / violent Violence
- Market control (6% Sicilian GDP) Economic power
- Political and academic connections Economic power
- Entrepreneurial Economic power
14
Q
Addiopizzo- Lack of institutional support
A
- Distorted economic incentives (Economic power)
- Distorted relational incentives (relations)
- Fasil to see ethical issues (Legitimacy)
- Violence (mobbing)
15
Q
What are the critical stakeholders hooked by Addiopizzo?
A
- Shopkeeper = “Stakeholder involved”?!
- Addipizzo itself = Most important stakeholder because it brings all together
- Sicilian population
- Activists
- Police
- Government
- Media
- Tourists
- Schools
- Other businesses
