chapter 5 Flashcards
what are business ethics
are the accepted principles of right or wrong that govern the conduct of businesspeople.
what is ethical strategy
refers to a strategy, or course of action, that does not violate a company’s business ethics
where are ethical issues rooted in
differences in political systems, laws, economic development, and culture.
what are the most common ethical issues
Employment practices.
Human rights.
Environmental regulations.
Corruption.
Moral obligations of multinational corporations.
what is the nike case
when news reports revealed that working conditions at many of its subcontractors were poor. A 48 Hours report on CBS painted a picture of young women who worked with toxic materials six days a week in poor conditions for only 20 cents an hour at a Vietnamese subcontractor. The report also stated that a living wage in Vietnam was at least $3 a day, an income that could not be achieved at the subcontractor without working substantial overtime. Nike and its subcontractors were not breaking any laws, but questions were raised about the ethics of using “sweatshop labor” to make what were essentially fashion accessories.
Nike did not break the law, but the case raised questions regarding the ethics of using sweatshop labor.
to guard against ethical absues, firms sjould
Establish minimal acceptable standards that safeguard the basic rights and dignity of employees.
Audit foreign subsidies and contractors regularly to ensure standards are being met.
Take corrective action as necessary.
what are some examples of human rights
Freedom of association.
Freedom of speech.
Freedom of assembly.
Freedom of movement.
Freedom from political repression.
what Is the apartheid system in south africa
Mandated segregation and prohibited blacks from managing whites.
Businesses from developed countries questioned the ethics of doing business in South Africa.
genetral motors adopted the Sullivan principles which were what
GM could work in South Africa as long as he abided by the principles (promote the abolition of the laws and not obey the arptheid rules )
did the Sullivan principles work
no, Was not sufficient to break down the apartheid regime.
what is tragedy of the commons
a shared resource, such as a pasture or a fishery, is overused and depleted because individuals act in their own self-interest rather than the best interest of the group.
global tragedy of the commons is enhanced by what
by corporations that move production locations where they are free to pump pollutants into the atmosphere or dump them in oceans or rivers, thereby harming these valuable global commons
why in developing nations are there higher levels of pollution
Many developed nations have substantial regulations governing the emission of pollutants, the dumping of toxic chemicals, the use of toxic materials in the workplace, and so on. Those regulations are often lacking in developing nations
what is the FCPA (foreign corrupt practices act)
prohibits U.S. firms and individuals from paying bribes to foreign officials to further business deals
what is the combating bribery of foreign public official in international business transactions
Makes the bribery of foreign officials a criminal offense.
how was the FCPA amended
to allow for facilitating payments –> facilitating payments refer to the process of making financial transactions or payments easier and more convenient through the use of various tools or services.
how do bribes help
May improve efficiency and help growth.
Do bribes reduce businesses’ incentive to invest?
Reduces the returns on business investment and leads to low economic growth.
How should corporations handle ethical dilemmas regarding employment, human rights, corruption, and environmental pollution?
Pressure from customers and stakeholders to be transparent in ethical decision making.
No universal worldwide agreement about what constitutes accepted ethical principles.
what are ethical dilemmas
are situations in which no alternatives seem ethically acceptable.
From an international business perspective, what is said about ethical
some argue that what is ethical depends on one’s cultural perspective
what are the six determinate of ethical behaviour
Personal ethics.
Decision-making processes.
Organizational culture.
Unrealistic performance goals.
Leadership.
Societal culture.
what are personal ethics
Generally accepted principles of right and wrong governing the conduct of individuals
the formation if ethics is guided by what
our parents, our schools, our religion, and the media
studies of unethical behaviour have concluded whatabout bsuinesses
sometimes business people don’t realize they are behaving unethically
how should you improve unethical behaviour in a firm
understand how individuals make decisions that can be considered ethical or unethical in an org environment, don’t assume that from different cultures you have the same ethical process
what is organizational culture
Values and norms shared among an organization’s employees.
what are unrealistic performance goals
Pressure from parent company to meet unrealistic performance goals by cutting corners or acting unethically.
what does leadership help establish
Helps to establish the culture of an organization and set the examples that others follow.
Employees often take cues from business leaders
what is societal culture
Cultures that emphasize individualism and uncertainty avoidance are more likely to stress ethical behavior than cultures where masculinity and power distance are emphasized
what is Philosophy
Philosophy as a system of beliefs and knowledge provides a global influential framework.
what is approach
Approach is a focused way to deal with something, largely influenced by the philosophy.
what is methodology
Methodology helps Approach dealing with something by providing methods and tools.
what is the straw men philosophical approach
Offer inappropriate guidelines for ethical decision making.
what is the freedman doctrine (philospchial approaches )
Nobel Prize–winning economist Milton Friedman said “the social responsibility of business is to increase profits,” so long as the company stays within the rules of law.
the Friedman Doctrine advocates for businesses to focus primarily on making profits and leave social and environmental concerns to be addressed by other entities, such as governments and non-profit organizations.
what is cultural relativism
Ethics are reflection of culture. when in Rome as the romans do. When visiting a foreign land, follow the customs of those who live in it
Instead, it suggests that we should understand and evaluate cultural values and beliefs in relation to their specific cultural context.
Basically, all individuals adopt a process for making ethical (or unethical) decisions. This process is based on
on their personal philosophical approach to ethics—that is, the underlying moral fabric of the individual.
what did friemdna argue
argues that businesses should behave in a socially responsible manner, according to ethical custom and without deception and fraud.
he contradicts himself
what is the righteous moralist
Home-country standards of ethics should be followed in foreign countries.
Typically associated with managers from developed nations.
Criticized for its proponents going too far. would argue for maintaining the position, while a more pragmatic view might be that in this case, the right thing to do is to follow the prevailing cultural norms because there is a big penalty for not doing so
what is the naive immoralist
If a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.
is someone who believes that there are no universal moral principles, and that what is considered right or wrong is a matter of personal opinion or depends on the situation. if someone is behaving immorally, it is Okay for you to also
what is the utilitarian and Kantian ethics approach
The moral worth of actions or practices is determined by their consequences.
Actions are desirable if they lead to the best possible balance of good consequences over bad consequences.
Best decisions are those that produce the greatest good for the greatest number of people.
what are the drawbacks of the utilitarian and kantian ethics approach
Difficult to measure benefits, costs, and risks of the action.
Fails to consider justice.
what is utilitarianism
Utilitarianism is committed to the maximization of good and the minimization of harm. Utilitarianism recognizes that actions have multiple consequences, some of which are good in a social sense and some of which are harmful.
utilitarianism and business?
As a philosophy for business ethics, it focuses attention on the need to weigh carefully all the social benefits and costs of business activity and to pursue only those actions where the benefits outweigh the costs.
what are kiantain ethics
Based on the philosophy of Immanuel Kant.
People should be treated as ends and never purely as means to the ends of others.
People have dignity and need to be respected.
Contemporary moral philosophers view Kantian ethics as incomplete.
System has no place for moral sentiments such as sympathy or caring.
what are rights theories
Human beings have fundamental rights and privileges that transcend national borders and cultures.
what do moral theorists argue
that fundamental human rights form the basis for a moral compass that managers should use in ethical decision making
what is the universal declaration of human rights
Adopted by the United Nations and ratified by almost every country.
Lays down principles that should be adhered to irrespective of the culture.to set out fundamental rights and freedoms that should be protected for all people around the world
along with rights comes
obligations, We have the right to free speech and must respect the free speech of others.
Obligations fall on more than one class of moral agents—any person or institution that is capable of moral action
what are the justice theories
Focus on the attainment of a just distribution of economic goods and services.
A just distribution is a distribution of goods and services that is considered fair and equitable
what did John Rawls argue
argued that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage.
Impartiality is guaranteed by veil of ignorance.
Difference principle.
what is the veil of ignorance
encourages people to think about fairness and equality from a neutral perspective, leading to the development of principles and rules that treat everyone fairly, regardless of their individual circumstances.
what is the difference oprinciple
inequalities are justified if they benefit the position of the least advantage person
what are the seven actions that companies can take to ensure that ethics are being considered in business
hire and promote,
build an org culture
decision making processes
have ethics officers
have moral courage
make corporate social responsibility
pursue strategies that are sustainable
what is hire and promote
Hire and promote people with a strong sense of personal ethics.
Businesses can give potential employees psychological tests and check with prior employers regarding ethical behavior.
Prospective employees should investigate the ethical climate in an organization prior to taking a position.
organizational culture and leadership (making ethical decisions internationally)
Articulate values that place a strong emphasis on ethical behavior.
Emphasize the importance of a code of ethics.
Implement a system of incentives and rewards that recognize people who engage in ethical behavior and sanction those who do not.
what is a code of ethics
is a business’s formal statement of ethical priorities.
decision making processes (making ethical decisions internationally)
Put decision-making processes in place that require people to consider the ethical dimension of business decisions, think about ethical implications in a systematic way, need a moral compass
what is the first step to think through ethical prpbelsm
Identify which stakeholders a decision would affect and in what ways.
what is a stakeholder
are the individuals or groups that have an interest, stake, or claim in the actions and overall performance of a company.
what is an internal stakeholder
are people who work for or own the business such as employees, directors, and stockholders.
what are external stakeholders
are individuals or groups that have some claim on a firm such as customers, suppliers, and unions
what is step 2 to think through ethical problems
Determine whether a proposed decision would violate the fundamental rights of any stakeholders
what is step 3 to think through ethical problems
Establish moral intent—place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated.
what is step 4 to think through ethical problems
Engage in ethical behavior.
what is step 5 to think through ethical problems
Audit decisions to make sure they are consistent with ethical principles
why are ethical officers instituted
Assess the needs and risks that an ethics program must address.
Develop and distribute a code of ethics.
Conduct training programs for employees.
Establish and maintain confidentiality of employees
what is moral courage
Enables managers to walk away from a decision that is profitable but unethical.
Gives an employee the strength to say no to a superior who instructs employee to pursue actions that are unethical.
Gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company
how can companies strengthen their moral courage of employees
by committing themselves to not retaliate against employees who exercise moral courage, say no to superiors, or otherwise complain about unethical actions
what is corporate social responsibility
refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences
what are sustainable strategies
Strategies that not only help the multinational firm make good profits but that do so without harming the environment, while simultaneously ensuring that the corporation acts in a socially responsible manner with regard to its multiple stakeholders
what is the precautionary principle
The precautionary principle is a simple idea that suggests being cautious when dealing with something that could potentially harm people or the environment. It means that if there is a lack of scientific certainty about the safety of an action or product, we should err on the side of caution and take measures to avoid or minimize potential risks. In other words, it’s better to be safe than sorry.
