chapter 5 Flashcards
what are the 8 things that make up business ethics?
behavior
principle
trust
responsibility
relationship
reliability
choice
morality
what is ethics?
the standards of moral behaviour that is behaviour that is accepted by society as right vs wrong
what are the 5 ways to act ethical in business?
being honest
obeying laws and regulations
doing no harm to others
competing fairly
declining to put your own interest above your companies
what is an ethical issue?
a situation where somebody must choose between a set of actions that may be ethical or unethical
what are 9 unethical business activities?
taking things that don’t belong to you
saying things you know are not true
giving or allowing false impressions
buying influence or engaging in a conflict of interest
permitting organizational abuse
condoning unethical actions
hiding or divulging information
taking unfair advantage
committing improper personal behaviour
abusing power and mistreating others
what are the 3 ethical checklist questions?
is my proposed action legal
is it balanced
how will it make me feel about myself
what do compliance based ethics codes do?
emphasize preventing unlawful behaviour by increasing control and by penalizing wrongdoers
what is integrity based ethics codes?
ethical standards that define the organizations guiding values
what is a whistleblower?
people who report illegal or unethical behaviour among employees
what is the whistleblower legislation canada?
protects government employed whistleblowers
does the whistleblower legislation canada protect whistleblowers in a private business?
no
what are three ways to set ethical standards?
leading by example
provide ethics training program
establish formal codes of ethics
what are 6 benefits derived from exercising ethics?
enhanced reputation
customer trust and loyalty
employee engagement and retention
risk mitigation
improved investor relations/confidence
better relationships with stakeholders
what are the six steps to improve business ethics?
top management support
expectations begin at the top of the organization
ethics imbedded in training
ethics office set up
external stakeholders informed
enforcement
what does SOX stands for?
Sarbanes-Oxley act
what does the SOX do?
ensure accuracy and reliability of published and financial information of companies and protect whistleblowers from any company relation
who does the SOX regulate?
all publicly traded companies who’s shares are listed on any stock exchange under the jurisdiction of the US securities and exchange commission and any whistle blowers from that company
what are the four ways to measure a companies social performance?
corporate philanthropy
strategic philanthropy
corporate social initiatives
corporate social responsibility
what is corporate philanthropy?
donations to charities/ non-profit groups (Ronald McDonald houses, Siloam mission)
what is strategic philanthropy?
involves companies making long-term commitments to one cause (canadian tire foundation for families, united way Winnipeg)
what are corporate social incentives?
enhanced forms of corporate philanthropy that are more directly related to the companies competencies ( UPS and Fedex shipped emergency relief supplies for free in 2004 asian tsunami relief)
what is corporate social responsibility?
ways firms integrate social, environmental and economic concerns in to their values, decision making and operations in a transparent and accountable manner and how it effects different stakeholders
what does CSR stand for?
corporate social responsibility
what are the 15 CSR core values?
accountability
respect
social impact
sustainability
philanthropy
environmental stewardship
self-regulation
transparency
integrity
kindness
openness
humility
community
knowledge/ awareness
growth
what are the 8 benefits of CSR?
enhanced reputation and brand image
improved relationships with stakeholders
open access to increased funding/ investing
better alignment with customer and employee values
improved innovation
increased benefits for community/ environment
long-term sustainability
greater differentiation from competitors
what is the four part framework for CSR?
philanthropic responsibilities
ethical responsibilities
legal responsibilities
economic responsibilities
what does philanthropic responsibilities entail?
be a good corporate citizen and giving back to the community - desired by society
what does ethical responsibilities entail?
do what is just and fair and avoid harm
- expected by society
what does legal responsibilities entail?
obey laws and regulations
- required by society
what does economic responsibilities entail?
be profitable, foundation of a company - required by society
what are the four part definitional framework for CSR in order from top to bottom?
philanthropic responsibilities
ethical responsibilities
legal responsibilities
economic responsibilities
what are the two approaches to corporate responsibility in the 21st century?
strategic approach
pluralist approach
what is the strategic approach to corporate responsibility?
more management driven
requires managements primary orientation to be toward the economic interests of the shareholders, as owners, shareholders have the right to expect management to work in their best interests to optimize profits
what is the pluralist approach to corporate responsibility?
recognizes the special responsibility of management to optimize their profits, but not at the expense of employees, suppliers, and members of the community
this view says that corporations can maintain their economic viability only when they fulfill their moral responsibilities to society as a whole
what are the five key stake holders that corporations are responsible for?
investors
customers
communities
environment
employees
what are the four basic rights consumers have?
the right to safety
the right to be informed
the right to choose
the right to be heard
how do customers have the right to safety?
they have the right to safe products and services
how do customers have the right to be informed?
they need to know if there are problems with a product or problems with the company
what does the right to choose for customers mean?
they have the right to choose what products the purchase
what does the right to be heard mean to customers?
they have the right for their feedback and concerns to be heard by corporations and governments
why is it important to make sure consumers have the four basic rights?
because customers prefer to do business with companies that communicate socially responsible messages and practice ethical business standards
why is ethical behaviour good for shareholder wealth?
it doesn’t subtract from the bottom line it adds to it
what are the 3 reasons why it is important for a company to establish a culture of integrity?
to prevent anyone from breaking any rules
make sure employees do not cut corners due to stress and pressure
implement effective controls to minimize the opportunity for unethical behaviour
what is insider trading?
insiders using private company information that is not available to the public to further their own fortunes or those of their family and friends
what are six responsibilities businesses have to employees?
create jobs if they want to grow
once a company creates jobs ensure that hardworking and talent are fairly rewarded
hope of a better future through upward mobility
safe working environment that is free of all forms of discrimination
provide job security whenever possible
empowerment to an employees self work
what is one of a businesses responsibility to society?
to create new wealth which is disbursed to employees, suppliers, shareholders and other stakeholders
what is the one business responsibility to the environment?
to slow the erosion of the worlds natural resources
what is social auditing?
a systemic evaluation of an organizations progress toward implementing programs that are socially responsible and responsive
what are the five ways of social auditing?
community related activities (local fundraisers, donating time of employees to non-profits)
employee related activities (equal opportunity programs, offering flextime and benefits)
political activities (taking a stance on social issues and working with local, provincial and federal government officials)
support (for higher education and non-profit agencies)
consumer activities (ensuring product safety, setting fair prices, truthful advertising)
what is triple bottom line (TBL)?
the triple bottom line is used as a framework for MEASURING and REPORTING corporate performance against economic, social and environmental parameters
how does top management support improve ethics?
because they are leading by example and funding and supporting ethics training
how to expectations beginning from the top of the organization help improve ethics?
employees need to know what management wants and expects from them
how does ethics imbedded in training help improve ethics?
if there is ethics included in all training then new employees are taught the ethical way to do something
how can ethics offices improve ethics?
because there is a whole office and department to support and fund ethics
how can keeping external stakeholders informed improve ethics?
because when the external stakeholders know what the code of ethics are than they can make sure than anyone they interact with from the company is following the code of ethics
how can enforcement improve ethics?
if there is discipline and punishment when someone breaks the code of ethics then it will motivate people to follow the code
why did the SOX establish stronger standards?
to prevent misconduct and improve corporate governance practice
what are some examples of CSR (corporate social responsibility)?
reducing carbon footprints
improving labor policies
diversity, equity and inclusion
charitable global giving
community and virtual volunteering
corporate policies to help environment
socially and environmentally conscious investments
