Chapter 7 Flashcards
Corporate social responsibility (CSR)
is defined as the duty of a company’s management to work in the best interests of the society it relies on for its resources (human, material, and environmental), to advance the welfare of society, and to act as a good global citizen through its policies.
Stakeholders
re individuals or groups affected by the organization that have a stake in its success and profitability.
Business ethics
refers to a set of rules or guidelines that management or individuals follow to make decisions for their company.
ethical dilemma.
Companies face ethical dilemmas related to paying bribes, using child labour, and corporate corruption.
ethical imperialism.
certain universal truths or values are standard across all cultures.
cultural relativism.
According to this perspective, the values of different cultures should be respected, as the ethics of one culture are not seen as better than those of another.
Resource depletion
is the consumption of scarce or non-renewable resources.
Corporate corruption
refers to involvement in illegal activities to further one’s business interests.
Dumping
means selling products in a foreign country below the cost of production or below the price in the home country.
predatory dumping.
A company may also lower the price of the product in the foreign country to increase sales and force its competition out of business in the host country. In this case, the exporter will then raise the prices.
Subsidizing
occurs when the importing of a good is helped through financial assistance from the foreign government.
Microcredit
is the granting of very small loans—often as little as $100—to spur entrepreneurship.
non-governmental organizations (NGOs)
are non-profit organizations that are made up of paid professional staff and unpaid volunteers, and have a service and development focus.
Ethics
A code of moral principles used to set standards of “good” and “bad”
Ethical Behavior:
What is accepted as good and right according to the governing moral code.
Terminal Values
Core moral beliefs.
Instrumental Values
Values that lead to positive outcomes for an individual.
Example: ambition, courage, persistence
Utilitarian view
greatest good to the greatest number of people.
results
Individualism view
primary commitment is to one’s long-term self-interests.
Moral-rights
respects and protects the fundamental rights of all people.
Justice view
fair and impartial treatment of people according to legal rules and standards.
How to Check Ethical Dilemas
Is it Legal? - will you be violating any criminal, civil laws or company policies by engaging in this activity?
Is it balanced? - is it fair to all parties concerned both short term and longer term? Is this a win win situation for those directly or indirectly involved?
Is it right? When push comes to shove how does this decision make you feel about yourself? Are you proud of yourself? How would you feel if this was printed in the newspaper? Will it stand the test of time?
Social Responsibilty
Social responsibility is an ethical framework and suggests that an entity, be it an organization or individual, has an obligation to act for the benefit of society at large.Social responsibility is a duty every individual has to perform so as to maintain a balance between the economy and the ecosystems.
Obstructionist Strategy
Obstructionist Strategy: managers choose not to be socially responsible.
Managers behave illegally and unethically; they hide and cover up problems
Example: Enron
Defensive Strategy
Defensive Strategies: managers stay within the law but make no attempt to exercise additional social responsibility.
Managers put shareholder interest above all other stakeholders
Managers say society should make laws if change is needed
Managers often deny intentional wrongdoing
Example: Tobacco companies
Did not put health warnings on packages and did not drop T.V. ads until the government told them to
Canadian and American tobacco companies continue to advertise in countries where bans do not exist
Accommodating Strategy
Accommodated Strategies: managers realize the need for social responsibility.
Managers try to balance the interest of all stakeholders.
Example: Companies that will match employee contributions to charity or sponsor a local sports team
Proactive Strategy
Proactive Strategies: managers actively embrace social responsibility.
Managers go out of their way to learn about and help stakeholders
Example: The Body Shop
Coca-Cola also pledged $20 million for the World Wildlife Foundation to protect sections of major rivers in North America, Europe, Africa and Asia.
The Body Shop creates all natural products, uses recycled material and devotes staff time to community projects.
McDonald’s has worked with children’s hospitals to establish Ronald McDonald house.
grease
bribing
