Ch 9: Ethics and corp responsibility Flashcards
What are the firm’s ethical duties to its stakeholders?
- Act in a legal, ethical, and moral manner
- Be a corporate citizen
- Conserve natural resources and protect the interest of future generations
List some drivers of unethical strategies and business behavior!
- “The business of business is business, not ethics”
- Overzealous pursuit of wealth and selfishness
- Company culture fostering illegal and unethical conducts
- Heavy pressures on managers to meet performance targets
What are the categories of the costs companies incur when ethical wrongdoing is discovered and punished?
- Visible costs (fines and penalties)
- Internal administrative costs (legal and training costs)
- Intangible or less visible costs (rep., loss of moral, harsh gov regulations)
School of thoughts regarding ethics in global companies:
- Ethical Universalism
- Ethical Relativism (in light of local customs)
- Integrative Social contracts theory (a mix)
What is Social responsibility (CSR)?
it refers to a company’s duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.
A CSR strategy should balance what and what?
It should balance [People, planet, profit] and the triple bottom line performance (economic, environmental, and social metrics)
What are the two approaches to social responsibility?
- Shareholder model: maximize their wealth
2. Stakeholder model: maximize the survival of the firm.
The school of ethical relativism state that..
ethical standards should be governed by
- limited number of universal ethical principles
- and, the circumstances of local cultures, traditions, and shared values.
