Chapter 4: Ethics, corporate social responsibility, sustainability, and governance Flashcards
- moral principles and values that govern the behavior of people, firms, and governments regarding right and wrong
ethics
a meer of operating a business that meets or exceeds the ethical, legal, commercial, and public expectations of customers, shareholders, employees, and communities
corporate social responsibility (CSR)
meeting humanitys needs without harming future generations
sustainability
the system of procedures and processes by which corporations are managed, directed, and controlled
corporate governance
- ethics
- corporate social responsibility
- sustainability
corporate governance
(organizing framework for ethical behavior)
- acting in a fair and respectful way that does not harm human rights is the right thing to do
- is often prescribed within laws and regulations
- customers, governments, and the news media demand ethical behavior
- is good business, leading to enhanced corporate image and selling prospects
value of ethical behavior
are ethical standards unifrom around the world
not really. each sociaety develops its own traditions, values, attitudes, norms, customs, and laws
a probelm that involves two or more possible solutions, none of which resolves the situation in a morally satisfactory manner
ethical dilemma
the belief that ehtical truths are not absolute but differ from group to group
relativism
the belief that ehtical behavioral standards are niversal and global firms should seek to uphold them
normativism
- corruption
- bribery
- harmful work environment
- unethical business practices
- harmful global sourcing
- illicit products and marketing
- intellectual property infringement
ethical challenges in interantional business
- the practice of obtaining power, personal gain, or influence through illegitimate means
- includes bribery, embezzlement, fraud, extortion and blackmail, and money laundering
corruptions
- recent data suggest the cost amounts to more than 5 percent of global GDP annually
- corruption increases global business costs by up to 10 percent
corruptions
- widely practiced around the world, is the most notable form of corruption in international business
bribery
numerous countries signed the anti-bribery convention developed by
Organization for economic co-operation and development (OECD)
makes it illegal for US fimrs to offer bribes to foreign parties to secure or retain business
- excludes grease payments (small payments made to low level government officials to perform routine duties more efficiently
foreign corupt practices act (FCPA)
ideas or works that individuals or firms create, including discoveries and inventions; artistic, musical, and literary works; and words, phases, symbols, and designs
intellectual property
- legal claim through which the proprietary asset of firms and individuals are protected froom unauthorized use by other parties
intellectual property
trademarks, copyrights, and patents
examples of intellectual property rights, the legal claim through which proprietary assets are protected from unathorized use
arises in the form of piracy and counterfeiting, the unathorizing reproduction of use of copyrighted or patended work for financial gain
intellectual property infringement
refers to operating a business in a manner that meets exceeds the ethical, legal, and commercial expectations of customers, shareholders, employees, and the communitites where the firm does business
corporate social responsibility (CSR)
- workplace csr
- marketplace csr
- environmental csr
- ccommunity csr
settings for corporate social responsibility
focuses on the fimrs employees and implies a thoughtful appraoch to diversity, recruitment, salary, safety, health, and working conditions
which setting of csr is this ?
workplace csr
emphasizes interactions with customers, competitors, suppliers, and distributors and appropriate behavior regarding product development, marketing, and advertising
which setting of csr is this ?
marketplace csr
refers to the firms activites to minimize or eliminate the creation of pollutants as well as efforts to improve the natural environment
which setting of csr is this ?
envrionemental csr
accounts for the firms activites aimed at benefiting the community and society. it includes employee which setting of csr is this ? programs and philantrhopy
d
community csr
- avoiding human rights abuses
- upholding the right to join or forum labor unions
- eliminating child labor
- avoiding workplace discrimination
examples of CSR values
inplies the development and execution of company practices that avoid harming the ability of future generations to meet their needs
- it is endorsed by economic development experts, environmentalists, and human rights activists
sustainability
- beneficial agricultural practices
- air quality protection
- water conservation
examples of sustainable practices
provides the measn thorugh which the firms directors and managers undertake such behaviors
corporate governance
creating a set of values and set of ground rules for guiding behavior
the role of corporate governance
a document that describes the values and expectations that guide decision making be all employees in the in the firm
code of ethics
a document that translates the code of ethics into specific rules regarding behaviors and practices
code of conduct
- build internal and external capabilites to enhance the firms contribution to the local community and global environment
- ensure diverse voices are heard by creating organizational structures that employ managers and workers around the world
- develop global ethical standards and objectives that are commincated and implemented across the firm worldwide
- train managers in glonal ethical principles and integrate these into managerial repsonsibilities
- develop closer relations with foreign stakeholders to understand their needs better and jointly work toward solutions
embracing CSR and sustainability
has developed an anti-bribery agreement
organization for economic co-operation and development (OECD)
means institutionalizing appropriate behavior in the organizations culture so it becomes part and parcel of strategy
going deep
implies a continuous effort to understand how CSR and sustainability affect every aspect of the firms operations worldwide
going wide
goes hand in hand with globalization. it requires the firm to examine its global operations to identify and improve specific local issues that affect stakeholders
going local
- identify problem
- examine the facts
- create alternatives
- implement course of action
- evaluate results
5 step framework for making ethical decisions
