Ch 7 Flashcards

0
Q

What are business ethics?

A

What constitutes right or wrong behavior and he application of moral principles in a business context

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1
Q

What is ethics?

A

Moral principles and values applied to social behavior

How moral principles are applied to ones life

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2
Q

What contributed to the 2008 recession?

A

Ethical problems by many US financial institutions

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3
Q

What is the moral minimum?

A

Minimum degree of ethical behavior expected of a business firm, usually defined as compliance with law

Just because something is legal doesn’t mean it’s ethical

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4
Q

What is often the goal of a company?

A

Profit maximization

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5
Q

How may a company adhesive short run profit maximization?

A

May continue to sell a profit even if it is defective

Over emphasis is the most common reason ethical problems occur

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6
Q

What happens when a company is attempting to achieve long run profit maximization?

A

Company’s tend to avoid things that could cause had publicity and law suits thoroughgoing unethical behavior

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7
Q

What is a company’s best bet to deadline its ethics?

A

When not sure how a law applies, a company’s best defense to allocations of misconduct is to show that the firm acted honestly and responsibly under the circumstances

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8
Q

What is one of the best ways to create an ethical workplace?

A

To have top managers who demonstrate its commitment to ethical decision making

Do not set goals unrealistically high

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9
Q

What does a code of conduct do?

A

States a company’s ethical priorities and demonstrates the company’s commitment to ethical behavior

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10
Q

How is an ethical code effective?

A

By being clearly communicated it its employees
Large firms have ethics training programs
Small firms offer some form of ethic training

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11
Q

What is the Sarbanes-Oxley Act?

A

Help reduce corporate fraud and eu thick decisions
Confidential systems so employees can raise red flags about suspected illegal or unethical auditing and accounting practices

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12
Q

What is a stock buyback?

A

The purchase of shares of a company’s own stock by that company on an open market
This cause price to be boosted

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13
Q

Who benefits from stock buybacks?

A

Corporate executives with stock options

Which enables them to buy shares of corporation’s stock at a set price

Technically legal but can be abused if used just to increase stock prices in the short term, without considering long term needs of the company

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14
Q

What was the problem with the American International Group?

A

Insurance company, lost millions of dollars from attempting create financial contracts, sought bailout but executives went to 400,000 dolla retreat

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15
Q

What was done about executive bonuses?

A

A provision was added to the American Recovery and Reinvestment tax act to restrict what bonuses could be given after receiving bailout funds

16
Q

What is ethical reasoning?

A

A reasoning process in which an individual links his or her moral convictions or ethical standards to the particular situation at hand

Duty based and outcome based

17
Q

What are religious ethical standards?

A

Christian tradition, based off of 10 commandments

These are typically absolute

18
Q

What are kantian ethics?

A

Ethics derived from philosophical reasoning
Kant- a persons thoughts and actions should be respected

Categorical imperative

19
Q

What is categorical imperative?

A

Ethical guideline developed by Kant that an action is evaluated by what would happen if everyone else in the same situation acted the same way

20
Q

what are the principles of rights?

A

Human beings have basic rights
Whether an action is ethical depends on how it affects the rights of various groups.

Natural law embraces this

21
Q

What is a potential problem with the principle of rights?

A

People’s rights sometimes conflict

Whoever right is stronger takes precedent

22
Q

What is utilitarianism?

A

Greatest good for the greatest number of people

Action evaluated in terms of who it will affect

23
Q

What is required in a utilitarianism approach?

A

Determination of individuals affected by an action
Cost-benefit analysis
Choice among alternative actions that will produce maximum social utility

24
Q

What is a cost-benefit analysis?

A

A decision-making technique that involves weighing the costs of a given action against the benefits of that action

25
Q

What is the corporate social responsibility?

A

The idea hat corporations can and should act ethically and be accountable to society for their actions

Stakeholder approach
Corporate citizenship
A way of doing business

26
Q

What is the stakeholders approach?

A

Responsibility to all groups affected by corporate decisions

27
Q

What is corporate citizenship?

A

Should promote goals that society deems worthwhile and taking positive steps towards attempting to solve social problems

28
Q

When is corporate responsibility most beneficial?

A

When actives are relevant and significant to its stakeholders

29
Q

What guidelines should be used making ethical business decisions?

A
The law, is it legal?
Rules and procedures, internal to company
Values, spirit of the law
Conscience
Promises
Heroes, what action would you hero take
30
Q

What are some practical solutions to corporate ethics questions?

A
Inquiry
Discussion, list of options and goals
Decision 
Justification, does solution withstand scrutiny 
Evaluation
31
Q

What is the foreign corrupt practices act?

A

It prohibits hue bribing of foreign officials to secure advantageous contracts

Also must have accounting records that provides everything was done legally

32
Q

What is “grease”?

A

Significant to minor officials whose duties are ministerial

Facilitating payments