Chapter 3 Flashcards
omegalul
Ethics
BELIEFS of what is right and wrong
Managerial ethics
Standard of behaviour that guide managers in their work.
Categories of managerial ethics
Toward employees (hiring/firing, wages/working conditions, and privacy)
Toward the organization
(how employees behave toward their employers/firms. Stealing supplies/padding expense accounts)
Toward other economic agents
(the relationship between a company and its customers, competitors, stockholders, suppliers, dealers, and unions)
Conflict of interest
Behaviour that benefits a person at the expense of another.
Four ethical norms to determine appropriate moral values
Utility: does the act do whats best for everyone
Rights: does it respect the rights of everyone
Justice: is it fair?
Caring: does it consider everyone’s responsibilities
Why does unethical behaviours occur?
Pressure
Opportunity
Rationalization
Corporate social responsibility (CSR)
Way that business attempts to balance their commitments to important individuals/groups in the external environment. Seeking the balance between financial and social/environmental goals.
Managerial capitalism vs CSR
Some believe businesses should only focus on their survival and maximizing their profits for the shareholders vs Some believe businesses, just like any other human being, take responsibility and try to improve their lives.
Fair trade movement
example of social responsibility. Addresses concerns for poorly treated workers in developing countries, unfair payments for their work, and child labour.
Organizational stakeholders
Individuals or groups that are directly affected by an organization’s activities.
the 5 major corporate stake holders
Customers Suppliers Investors Employees Community where they do business
Consumerism
Movement dedicated to protect rights of consumers
Collusion
Companies getting together to “fix” prices. (illegal)
Four ethical issues in advertising
Truth in advertising: Advertisements must be demonstrably true
Stealth advertising: Companies pay individual to secretly advertise their products to other individuals.
Morally objectionable advertising: Portrayals of individuals or products offend customers.
Advertising of counterfeit brands: Problem areas in many product lines such as cigarettes, alcohol, perfume, etc.
Whistle blowers
Employee who discovers and tries to put an end to a company’s unethical, illegal, or socially irresponsible actions by publicizing them.
Four ethical issues towards investors
Improper financial management: Paying themselves excessive salaries/bonuses or using investor’s money for personal use.
Misrepresentation of finances: Producing false financial statements for the company’s image
Cheque kiting: Transferring money between accounts through cheques, and using the money before the transaction has been completed, so no money had really gone through.
Insider knowledge: using confidential info to gain from the purchase/sale of stocks.
Four stances to social responsibility (ODAP)
Obstructionist: does little as possible to solve social/environmental problems
Defensive: Does the bare minimum, as required by the law.
Accommodative: Does the minimum, and likely to do more if prompted by a worthy enough program.
Proactive: Actively seeks opportunities to contribute.
Social audit
Formal way of managing social responsibilities. Summarizes how funds are being allocated for its social responsibility goals and how effective the goals are being met.
Sustainable development
Formal way of managing social responsibilities. Pursuing current needs, but not at the expense of putting future generations at a disadvantage.
Triple-bottom-line reporting
Combination of social audits and sustainability reports. Measures social, environmental, and economic performance of a company.
Informal way to manage social responsibility
Developing an appropriate culture to inhibit/facilitate SR activities. Comes from the leadership roles in an organization.
Dilemmas of small businesses
Small businesses, even if they want to, may lack resources,time, or ability to pursue social responsibility goals as they must focus on their survival first.
