Entrep Flashcards
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a large group that includes all those people and organizations with a vested
interest in the business.
stakeholders,
a small group who are the owners (or stockholders), and
shareholders
Serving the needs of the shareholders, as perhaps Shkreli thought he was doing, is based on a
limited view of organizational purpose.
This view, known as the “shareholder primacy”
a group of CEOs from the
biggest and most successful companies in the US, recently released a new statement addressing business
ethics.
the Business Roundtable,
“Together with partners in the public, private and
non-profit sectors, Business Roundtable CEOs are committed to driving solutions that make a meaningful
difference for workers, families, communities and businesses of all sizes.”4
CEOs prefaced this statement saying,
Businesses play a vital role in the economy by
a. creating jobs,
b. fostering innovation and
c. providing essential goods and services
d. make and sell consumer products;
e. manufacture equipment and vehicles;
f. support the national defense;
g. grow and produce food;
h. provide healthcare;
i. generate and deliver energy; and
j. offer financial, communications and
k. other services that underpin economic growth.
We will further the tradition of American companies leading the way in meeting or
exceeding customer expectations.
Delivering value to our customers.
This starts with compensating them fairly and providing important benefits. It also
includes supporting them through training and education that help develop new skills
for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
Investing in our employees.
We are dedicated to serving as good partners to the other companies, large and small,
that help us meet our missions.
Dealing fairly and ethically with our suppliers.
We respect the people in our communities and protect the environment by embracing
sustainable practices across our businesses.
Supporting the communities in which we work.
Generating long-term value for shareholders, who provide the capital that allows companies to
invest, grow and innovate.
We are committed to transparency and effective engagement with shareholders.
The aim of this chapter is twofold:
First, to assist entrepreneurs in understanding the significance of ethics and the role that
entrepreneurs play in developing an ethical and responsible organization.
Second, we want to enable entrepreneurs to develop a moral compass that allows them to lead
their business organization in a manner consistent with ethical and legal principles.
Whenever you think about the behavior you expect of yourself, in both your professional and
personal life, you are engaging in a philosophical dialogue with yourself to establish the standards of
behavior you choose to uphold—that is,
ethics.
This group of stakeholders might include:
a. employees (profit sharing),
b. shareholders (dividends),
c. the local community (time), and
d. social causes or charities (donations).
Being successful as an entrepreneur may therefore consist of much more than simply making
money and growing a venture.
a. Success may also mean treating employees, customers, and the community at large with honesty
and respect.
b. Success may come from the sense of pride felt when engaging in honest transactions—not just
because the law demands it, but because we demand it of ourselves.
c. Success may lie in knowing the profit we make does not come from shortchanging others.
guides the conduct by which entrepreneurs and their companies abide by
the law and respect the rights of their stakeholders, particularly their customers, clients,
employees, and the surrounding community and environment.
business ethics
Nearly all systems of _____________stress the building blocks
of engaging others with respect, empathy, and honesty.
moral, ethical, spiritual, and/or religious beliefs
For this reason, we use the words _____ and ______interchangeably in our discussion.
ethics
morals
We hold
that __________ conveys the same sense as__________________
“an ethical person”
“a moral person.”
that is, unity between what we say and what we do—is a highly valued trait.
Integri
ethics acts to guide conduct and may be derived from a variety of sources.
code of ethics
It could be a__________, internal code of conduct, or
personal
an__________ adopted by a business organization.
official code
Or it could be an __________ based on one’s profession
external code
Successful entrepreneurs and the companies they represent will take pride in their enterprise if
they engage in business with ____________,_
transparency, intentionality, and integrity.
integrity. To treat customers, clients,
employees, and all those affected by a venture with dignity and respect is
ethical.
Research on the performance of the _________________________________________ indicates a
positive association between ethical conduct and successful long-term financial performance.
World’s Most Ethical Companies (WMEC)
If we violate these standards, we are subject to
punishment as established by the law.
Compliance with legal standards is mandatory.
Therefore, ____________ generally refers to the extent to which a
company conducts its business operations in accordance with applicable regulations, statutes, and laws.
Yet this represents only a baseline minimum.
compliance
builds on this baseline and reveals the
principles of an individual business leader or a specific organization.
Ethical observance
are generally
considered voluntary and personal—often based on our individual perception of what is right and wrong.
Ethical acts
Some professions, such as ___________ , have traditional and established codes of ethics.
medicine and the law
for example, is embraced by most professionals in healthcare today as an
appropriate standard always owed to patients by physicians, nurses, and others in the field.
The Hippocratic Oath,
The law is typically indebted to ________________ and compelling reasons are needed to
support any change.
tradition and precedent,
requires that we meet the mandatory standards of the law, but that is not enough.
Behaving ethically
In 2017, from mid-May to July, hackers gained unauthorized access to servers used by ______ a
major credit reporting agency, and accessed the personal information of nearly one-half of the US
population.7
The Equifax Data Breach
To return to the case of Martin Shkreli, let’s examine it through some foundational theoretical lenses,
based on
ethical theories.
are primarily concerned with establishing standards or criteria that
delineate what is considered ethical behavior.
Normative theories of ethics
Common examples of normative ethical theories are
a. utilitarianism,
b. duty-based ethics (also known as Kantian ethics and/or deontology), and
c. virtue ethics.
The ________________ looks at the decision from the viewpoint of capitalism, free
markets, and a sense of duty to ensure maximum return on investment.
Protestant work ethic
