Chapter 4 Flashcards
What are the three dimensions of institutionalization? (MVC)
Mandated Boundaries Voluntary Practices Core Practices
Government established laws/regulations set (minimum/maximum/neither) standards for responsible behavior
Minimum
The Better Business Bureau can provide direction in which dimension of institutionalization?
Core practices - Documented best practices, often encouraged by legal and regulatory forces and trade associations
True or false: Philanthropy is giving back to communities and causes
True
Define Voluntary Practices, a dimension of institutionalization
Beliefs, values, and voluntary contractual obligations of a business
Externally imposed boundaries of conduct (e.g. laws, rules, regulations and other requirements) make up which dimension of institutionalization?
Mandated Boundaries
The elements of an ethical culture is represented by a diagram shaped like a three-layered bullseye. The center ring represents culture, whereas the next ring represents values/norms/artifacts/behavior. What would the third, outermost ring contain?
Voluntary actions, governance, core practices, and legal compliance. See picture attached (slide 4)
Which two types of legal compliance were often demanded by stakeholders?
consumer safety laws and environmental protection laws
Difference between criminal and civil law?
Civil law - defines the rights and duties of individuals and organizations. Individuals (in court) enforce civil laws. Criminal law prohibits specific actions and imposes punishments for breaking the law. State or nation enforces criminal laws
True or false: Laws change, despite helping businesses determine what society believes at a certain time.
True, telling employees to ‘obey the law’ is meaningless without training in legal risk areas
True or false: a well-implemented ethics program and strong cultures would increase risk
False: a well-implemented ethics program and strong cultures would reduce risk
What is the purpose for laws passed to regulate competition?
to prevent monopolies, inequitable pricing, and other practices that reduce or restrict competition.
Laws establish the basic ground rules for responsible business activities. What are five categories of laws when it comes to mandated requirements for legal compliance?
-Regulating competition -Protecting consumers -Promoting equity and safety -Protecting the environment -Incentives to encourage organizational compliance programs to deter misconduct
Define procompetitive legislation
laws that encourage competition and prevent activities that restrain trade. In some senses, these laws can be considered to be regulating competition.
Consumer protection laws require businesses provide accurate/adequate/neither information about products and services and follow safety standards
accurate.
Groups with specific vulnerabilities have (higher/lower/same) levels of legal protection
higher
True or false: the Occupational Safety and Health Administration (OSHA) makes inspections to ensure a safe working environment.
True. Other laws or programs promoting safety and equity are: -Title VII of the Civil Rights Act -Equal Employment Opportunity Commission (EEOC) -Affirmative action programs -The Equal Pay Act Americans with Disabilities Act
What does the FDA do?
regulates food safety, human drugs, and tobacco, among other things (such as wrongly classifying marijuana as Schedule 1)
Which group guards against unfair, deceptive, or fraudulent practices?
FTC’s Bureau of Consumer Protection
Define the Accountant, a gatekeeper
Measure and disclose financial information to the public while assuring accuracy.
Accountants, regulators, lawyers, financial rating firms, auditors are examples of _____
Gatekeepers. Critical in providing accurate information to stakeholders
If an accountant is not adhering to their stakeholder responsibilities, what may they be doing wrong?
-Excessive focus on growth and profits -Conflicts of interest
True or false: Trust is the glue that holds businesses and stakeholders together
True
The authority to monitor accounting firms that audit public companies is the
Public Company Accounting Oversight Board (PCAOB), established by SOX
What did the SOX act do?
Established a system of federal oversight of corporate accounting practices. -Reduces conflict of interest and increases accountability -Some legal protection for whistleblowers -Jumpstart Our Business Startups (JOBS) Act
Risk Assessors Assess financial risk and express that risk through letter ratings from “AAA” to “C”. True or false?
True, despite the fact that regulators believe more oversight is needed for credit-rating firms
What does FSGO stand for?
Federal Sentencing Guidelines for Organizations. These urges organizations to develop and implement compliance programs
Which act, the Dodd-Frank or SOX, created the following new offices while creating a whistle-blower bounty program: -The Office of Financial Research -The Financial Stability Oversight Council -Consumer Financial Protection Bureau (CFPB)
Dodd-Frank. it seeks to improve financial regulation, increase oversight, and prevent excessive risk-taking, deceptive practices and lack of oversight
True or false: FSGO standards apply to (both/none/one) of felonies and class-A misdemeanors committed by employees
Both. FSGO’s philosophy is that legal violations can be prevented through organizational values and commitment to ethical conduct
To be considered “Highly Approprate”, must core practices focus on sound organizational practices and integrity for performance measures or on individual morals?
Focus on sound organizational practices and integrity for performance measures
An well-implemented ethics program with lead to a strong or strong-leaning culture. True or false?
True
(Most/Less than half/all/no) ethical issues are non-financial.
Most.
What was the Integrity institute?
The Integrity Institute developed a model that standardizes measures of non-financial performance
Four major benefits to society by a business should be that they
-Improves communities quality of life -Reduces government involvement -Develops employee leadership skills -Helps create an ethical culture
Which two acts provide standards for financial performance?
The Sarbanes-Oxley Act and Dodd-Frank Act provide standards for financial performance
What type of marketing ties an organization’s product(s) to a social concern through a marketing program?
Cause-related marketing
Institutionalization of business ethics has advanced (rapidly/moderately) over the last 20 years
rapidly
The synergistic and mutually beneficial use of core competencies and resources to deal with stakeholders, benefit the company and society is known as
Strategic philanthropy
