Chapter 3 Flashcards
foreign corrupt practices act
makes it illgeal to bribe foreign officals (govt) to assist in obtaining a business advantage not otherwise available to other compannies
FCPA is enforced by US Dpt of Justice and or SEC
ex: co, pay foregin officals in Italy that my competitors will not get - business advantage - illegal
FCPA standard
is the company paying money to foreign officals to assist in obtaining a business advantage (bribe)
or
by nature of that country, are foreign officals paid for their duties (does every company have to make payments to those officals) –> grease payments - illegal
permissive payments
- if they are lawful within the foreign country
- for small amounts to minor officals to facilitate or speed up the performance of adminstrative services
- to private foreign companies or other third parties
corruption is widespread in some nations and it can be the norm in dealing with both govt and businesses in certain locations
in many developing nations, govt officals regualry accept grease payments to get approval for buuidling codes or buying propety
cultural practices make it commonplace that people wishing to deal with the govt have to expect to make a faciltiating payment to get anyhting ot happen
example of FCPA
paying money for contract or business advantage
format of FCPA
how is it enforced
whats the standard - business advantage vs grease payments
types of business ethics
1) duty based
2) outcome based
duty based ethics
1) principal of rights - looks at how that decision affects teh rights of others
2) categorical impperative - what would happen if everybody else in the same situation acted the same way
principal of rights (falls under duty based)
principle that human beings have certain fundamental rights (to life, freedom, pursuit of happiness)
example: large co. does not pay small contractors/businesses because not as big: how does this affect contractors? contractors employees? contractors paying other contractors?
look at how that decision affects the rights of others - employees, customers, suppliers, community
categorical imperative (falls under duty based)
deciding whether an action is right or wrong, or desireable/undesirable - a person should evaluate in terms of what would happen if everybody else in the same situation acted the same way (or made the same decision)
kantian ethical principles - central postulate of Kanthian ethics is the categorical imperative
outcome based ethics
focuses on the consequences of an action - looks at the impacts of a decision in an attempt to maximize benefits and minimize harms
1) utilitarinism
2) cost-benefit analysis
utilitariansim (falls under outcome based)
evaluating the consequences of an action on those who will be affected by it
- in utilitarian reasoning, a good “decision” is one that results in the greatest good for the greatest number of people affected by the decision
cost benefit analysis: falls under outcome based ethics
applying the utilitarian theory requires the following steps:
1) cost benefit analysis - decision making technique that involves weighing the costs of a given action against the benefits of the action
2) an action that will produce maximum benefit to society
- in some situations an action the produces the greatest good for the most people may not seem to be most ethical
