Chapter 5: Ethics And Responsibility Flashcards
Ethics and legality are
Two very different things
Legality vs ethics
Legality: laws that have been written to protect ourselves from fraud, theft, and violence
Ethics: how should people treat others, what responsibility should they feel for others
Unethical but no illegal
Sharing secrets about a neighbors
Raising price of “life saving medicine”
Ethics
Standards of moral behavior, that is, behavior that is accepted by society as right vs wrong
The golden rule
Do unto others as you would have them do unto you
Treat others how you would want to be treated
Ethics begins with
All of us
3 questions to ask about ethics
Is my action legal?
Is it balanced
How will it make me feel about myself
Is my action legal
Am I violating laws or policies?
Is it balenced?
Am I acting fairly, would I want to be treated this way?
How will it make me feel about myself?
Would I feel proud if my family found out? Will I have to hide these actions?
Compliance based ethics
Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers
Act unethical? You’re fired
Integrity based ethics
Ethical standards that define the organizations guiding values, creates an environment that supports ethically sound behavior, and stress a shared accountability among employees
Act unethical? Take this course and better yourself
Whistleblower
People who report illegal or unethical behaviour
Sarbanes-Oxly ACT (SOX)
Us legislation that established stronger standards to prevent misconduct, and to ensure the accuracy and reliability of published financial information
Protects whistleblowers
Corporate social responsibility (CSR)
A businesses concern for the welfare of society
Examples: hiring disabled, minimizing pollution, hiring minorities
Ethical consumerism
A strategy where companies provide products that appeal to people’s best selves
Corporate philanthropy
Dimensions of social responsibility that includes charitable donations
Tim hortons camp day
McDonalds McHappy Day
Corporate social initiatives
Dimensions of social responsibility that includes enhanced forms of corporate philanthropy that are more directly related to the company’s competencies
(Earthquake in haiti and companies sent free medical supplies)
Corporate policy
Refers to the position a firm takes on social and political issues
The strategic approach
Requires managements primary orientation to be toward the economic interests of shareholders.
Pluralist approach
Recognizes the special responsibility of management to optimize profits, but not at the expense of employees, suppliers, and members of the community
Customers four basic rights
1) the right to safety
2) the right to be informed
3) the right to choose
4) the right to be heard
Insider trading
An unethical activity in which insiders use private company information to further their own fortunes or those of their family and friends
Social audit
A systemic evaluation of an organizations progress toward implementing programs that are socially responsible and responsive
5 types of groups to watch social audits
1) Socially conscious investors
2) socially conscious research organizations
3) environmentalists
4) union officials
5) customers
Sustainable development
Implementing a process that integrates environmental, economic, and social considerations into decision making
Triple bottom line (TBL)
A framework for measuring and reporting corporate performance against economic, social, and environmental parameters
Fair trade
Social movement dedicated to making sure that producers in developing countries are paid a fair price for the good we consume
