Chapter 3: Business Ethics Flashcards
Ethics
a branch of philosophy dealing with values that relate to the nature of human conduct
Business Ethics
balancing the goal of profits with the value of individuals and society
Positive Law
law enacted and codified by governmental authority
standard for ethical behavior
Natural Law
imposes higher standards of behavior than those required by positive law and they must be followed even if those higher standards run contrary to codified law.
Civil Disobedience
the term used when natural law proponents violate positive law.
Kant’s categorical imperative
a standard of ethics that requires that we avoid one-sided analysis of ethical issues.
you cannot use others in a way that gives you a one-sided benefit.
basically just be a good person and if something happens to you don’t do the same to someone else, be better
Theory of Justice / social contract
John Locke and John Rawls as to what our ethical standards should be
they disagree with Kant’s categorical imperative
Rights Theory / Entitlement Theory
Nozicks theory of ethics that we all have certain rights that must be honored and protected by the government
Ethical Egoism
theory of ethics that we should act in our own self-interest
the Ayn Rand theory that separates guilt from acting in our own self-interest.
Utilitarian
doing the most good for the most people
Moral Relativists
resolve ethical dilemmas according to time and place
Stakeholders
those who have a stake, or interest, in the activities of a corporation; stakeholders include employees, members of the community in which the corporation operates, vendors, customers, etc.
Stakeholder Analysis
measures the impact of a decision on various groups and then asks whether public disclosure of that decision is defensible.
Capitalism succeeds because of
trust
Why do investors pour capital into a business
because they believe they will get a return on the investment
How does a breach of ethics affect a business
-it’s costly and affects their financial performance
-reputation
Social forces
protection of the state
protection of the person
protection of Public Health, Safety , and Morals
Protection of Property- Its use and title
Protection of Personal Rights
Protection from Exploitation, Fraud, and Oppression
Categories of Ethical Behavior
-Integrity and truthfulness
- promise-keeping
-loyalty, avoiding conflicts of interest
- fairness
- doing no harm
- maintaining confidentiality
Integrity
the adherence to one’s values and principles despite the costs and consequences.
Conflict of Interest
conduct that compromises loyalty
Quid pro quo
a favor or advantage granted or expected in return for something.
primum non nocere
above all do no harm
Blanchard and Peale Three Part Test
ask the following three questions:
Is it legal?
Is it balanced?
How does it make me feel?
Front Page of the Newspaper Test
helps a manager visualize the public disclosure of the proposed conduct
Contemplating any business act, an employee should ask himself whether he would be willing to see it immediately described by an informed and critical reporter on the front page of his local paper, there to be read by his spouse, children, and friends. At Salomon, we simply want no part of any activities that pass legal tests but that we, as citizens, would find offensive.
