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Ethics Midterm > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

True or false: Building effective relationships is one of the most important areas of business today.

A

True. Business ethics is a team sport and few decisions are made by only one individual

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2
Q

The relationship between companies and their stakeholders is a (one/two way) street

A

Two-way street. Not just about what you do to them, but what they do to you.

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3
Q

What does the stakeholder framework do?

A

-identify internal and external stakeholders -Helps monitor and respond to needs, values, and expectations of stakeholder groups

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4
Q

Define Corporate governance

A

The formal system of accountability and control of ethical and socially responsible behavior

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5
Q

Give four examples of stakeholders

A

Customers employees government agencies investors suppliers communities

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6
Q

Define stakeholders

A

Those who have a stake or claim in some aspect of a company’s products, operations, markets, industry, and outcomes

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7
Q

Define the Descriptive approach to stakeholder theory

A

Focuses on actual behavior, addressing decisions and strategies in stakeholder relationships

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8
Q

The three approaches to Stakeholder theory (IND) are

A

Instrumental Descriptive Normative

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9
Q

What is the normative approach to stakeholder theory?

A

Principles and values help identify ethical guidelines that dictate how to treat stakeholders

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10
Q

Difference between primary and secondary stakeholders?

A

Primary: those whose continued association is absolutely necessary for a firm’s survival Secondary:do not typically engage in transactions with the firm and are not essential to a firm’s survival

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11
Q

What is the instrumental approach to stakeholder theory?

A

Examines stakeholder relationships and describes outcomes for particular behaviors

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12
Q

Media, trade associations, and special interest groups are examples of (primary/secondary/neither/both) stakeholders

A

secondary

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13
Q

What are four levels of social responsibilty?

A

Economic Legal Ethical Philanthropic

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14
Q

Define the Stakeholder Orientation

A

The degree to which a firm understands and addresses stakeholder demands.

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15
Q

Give two examples of primary stakeholders

A

Employees, customers, investors, governments, and communities

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16
Q

Peta is an example of a Trade association. True or false?

A

False, PETA is a special interest group

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17
Q

The Legal step of social responsibility is “following standards of acceptable behavior as judged by stakeholders”. True or Fale?

A

False. Legal is “abiding by all laws and government regulations. See the steps of social responsibility in picture attached (slide 9)

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18
Q

Where are primary stakeholders arranged on the Stakeholder interaction model?

A

Around the Company, with arrows between each other showing dependence upon one another.

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19
Q

An organization’s obligation to maximize its positive impact on stakeholders and minimize its negative impact is known as its

A

social responsibility

20
Q

Businesses can (continue to/no longer afford to) ignore the natural environment as a stakeholder

A

no longer afford to. This is known as Sustainability, a social responsibility issue.

21
Q

True or false: Caring about stakeholders has no effect on profits

A

False. Can lead to increase profits. The purpose of a stakeholder orientation is to maximize positive outcomes that meet stakeholder’s needs

22
Q

The extent to which businesses strategically meet their economic, legal, ethical, and philanthropic responsibilities is known as

A

Corporate Citizenship

23
Q

Define Consumer Protection, a social responsibility issue.

A

The company has the responsibility of taking precautions to prevent consumer harm

24
Q

True or false: Reputation is one of an organization’s greatest intangible assets with tangible value

A

True. Although difficult to quantify, important because a single negative incident can influence an organization’s image and reputation instantly and for years afterwards

25
Q

Research shows corporate governance has a strong negative relationship with social responsibility. True or false?

A

False - Research shows corporate governance has a strong POSITIVE relationship with social responsibility

26
Q

Just incase, see list of World’s most ethical companies.

A

(slide 11)

27
Q

The four interrelated dimensions of Corporate Citizenship are

A

Strong sustained economic performance Rigorous compliance Ethical actions beyond what is legally required Voluntary contributions to advance reputation and stakeholder commitment

28
Q

Social responsibility issues deal with concerns that affect the welfare of our entire society, associated with the common good. True or false?

A

True

29
Q

Accountability, a component of corporate governance, is defined as

A

How closely workplace decisions align with a firm’s strategic direction

30
Q

Are Executive Compensation, Strategies, Shareholder Relations considered corporate governance topics?

A

Yes, see list attached (slide 17)

31
Q

Corporate Governance is defined as

A

Formal systems of accountability, oversight, and control

32
Q

Stakeholders support companies they perceive to be socially responsible, enhancing profitability. True or false?

A

True.

33
Q

Just incase, see list of best corporate citizens

A

(slide 15)

34
Q

Difference between Oversight and Control, two aspects of Corporate Governance

A

Oversight: A system of checks and balances to minimize opportunities for misconduct Control: The process of auditing and improving organizational decisions and actions

35
Q

True or False: Boards, on average, are getting larger

A

False. Boards are getting smaller, with an average of 11 members ( 5 : 1 ratio independent: non-independent)

36
Q

True or false: less than half boards conduct annual board performance evaluations

A

False. Almost all boards conduct annual board performance evaluations

37
Q

True or false: the majority of boards have mandatory retirement rules for directors.

A

True. 74 % of boards have mandatory retirement rules for directors

38
Q

Many boards spend (more/less/no/all of their) time discussing compensation than ensuring integrity of financial reporting systems

A

More. Ask questions like: How closely linked is executive compensation to company performance? Does performance-linked compensation encourage executives to focus on short-term performance at the expense of long-term growth?

39
Q

Define the interlocking directorate

A

the concept of board members being linked to more than one company

40
Q

True or false: Important characteristics in directors: strong financial background, industry background, and international experience

A

True

41
Q

See picture attached for changes in corporate governance

A

(slide 18)

42
Q

Difference between the Shareholder Model and the Stakeholder Model

A

Shareholder model: Founded in classic economic precepts Maximizing wealth for investors and owners. Stakeholder model: A broader view of the purpose of business. Includes satisfying concerns of primary stakeholders including employees, suppliers, regulators, communities and special interest groups

43
Q

true or false: The global financial crisis motivated many to demand greater accountability from boards

A

True.

44
Q

Define the Role of Board of Directors

A

Holds final responsibility for its firm’s success, failure, and ethicality of actions. In reality, boards rarely manage but instead monitor executive decisions.

45
Q

True or false: Stakeholders demand that boards are accountable and transparent

A

True. Directors offer expertise, competence, and diverse perspectives to strategic decisions. Qualified, knowledgeable, diverse, unbiased boards can prevent misconduct.

46
Q

Executive compensation is a (stable/growing/declining) ethical concern in the role of board of directors

A

growing ethical concern

47
Q

What are the six steps towards implementing a stakeholder perspective?

A
  1. Assessing the corporate culture 2. Identifying stakeholder groups 3. Identifying stakeholder issues 4. Assessing organizational commitment to social responsibility 5.Identifying resources and determining urgency 6.Gaining stakeholder feedback

Ethics Midterm (6 decks)

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