Ethics Final Exam Flashcards
Corporate Governance
process of making and enforcing decisions with an organization or society
Principle and agent
This refers to the relationship where one party (the principal) delegates work to another (the agent), who performs that work. Example: A shareholder (principal) delegates the management of the company to a CEO (agent).
Problem with Principle and agent
separation of control (management) and ownership (Shareholders) gives to the principal-agent problem
Resolution of the principle agent problem
Two responses
- To monitor
- To control
How do these operate
Workplace surveillance, reporting requirements
Direction incentives and limitation
Internal Controls
Processes and procedures implemented to ensure the integrity of financial and accounting information. Example: Regular audits to prevent fraud.
External Controls
Mechanisms put in place by external bodies to ensure that an organization meets certain standards. Example: Government regulations that ensure companies report their finances accurately.
Stakeholder theory
business is not about producing value for shareholders
Triple bottom line accounting
a measure that accounts for an organization’s results in terms of its effects on people, planet, and profits
De Jure Value system
a legal concept used to refer to what happens in reality or in practice
De facto Value system
what is actually notated in legal code
Code of Conduct
clearly defined rules (speed limit)
Code of Ethics
guide of principles designed to help professionals conduct business honestly and with integrity
Conduct
what action should i take
Ethics
what kind of person should i be
Code of Conduct Advantages
It gives employees structure and helps them understand what’s expected of them
It reassures team members that you will respond appropriately to poor conduct.
Helps with legal problems
Disadvantages
Difficult to enforce
Creates fear and poor working conditions
Lack of trust with employees
Ethical Empowerment
Focuses the professional on diffusing the barriers that stand in the way of doing good and developing the skills to do even more good
General Statement of Values and Guiding Principles
An organization commits itself to ethical principles as a foundation for how it will operate
Competence and Professional Standards
Professions is an enterprise that is socially justified
Adopting and following code helps to support professionalization of business by taking greater responsibility within society for effects produced within society
Corporate Social Responsibility
self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public
Employers Obligations
Employers have legal obligations to ensure workplace safety
New workers under 25 are at least three times more likely than other workers to experience a significant workplace injury in first month of employment
Lack of experience and not asking questions about safety
Why is a safe workplace the employers responsibility
Employers have a legal obligation to ensure workplace fairness
Section 15 -1
Every individual is equal before and under the law has the right to equal protection and equal benefit
Section 15-2
aimed at enabling government action intended to combat discrimination proactively through affirmative measures
Fairness
idea of equality behind anti discrimination laws, equal opportunity & affirmative action is fairness
Equality
everybody gets the same treatment
Equity
everybody gets the treatment they require to participate fairly
Commendable (benign
picking the best trained person with necessary abilities
Invidious
obnoxious but tolerable - Female workers organization a lunchtime discussion group and communicate that males are not welcome
Direct Discrimination
intentional, intolerable discrimination
No hiring someone based off their religion
Indirect Discrimination
unintentional, intolerable discrimination
A policy that workers in a retail store must have heads uncovered
Glass Ceiling
Invisible barrier blocking progression of people within a business
Broken Rung
Managers tend to intentionally discriminate/unintentional against women and visible minorities in giving early career promotions
Men get promoted based on potential and women get promoted based on achievement
Susan Pinker
suggests the gender wage gap is produced by female workers choice
Prejudice affect on business
Prejudices obscure respect for persons and limit business capacity to access their abilities
Foreign Corrupt Practices Act 1977
US firms cant make payments to foreign governments
Ethics as an Export
Companies bring new skills and processes to foreign countries
Richard de George
Do not do international harm
Benefit the host country/people
Respect values, cultures, laws of host country
corporations should not exploit labor in developing countries even if it is considered legal in that country.
Localization
the process of making something local in character or restricting it to a particular place
Benefits of Globalization of Ethical Values
Corporations are capable of conferring and enjoying political benefits
They might decide to challenge relative values while respecting absolute values
Whisper india touch the pickle campaign
Business and Human Rights
Respect for Human Rights is necessary cost
Human rights are not cost free
Require removal of negative externalities
Donaldson: the firm cannot be the cause of deprivation
Companies are not obligated to aid the deprived
Donaldson
fitness affordability test
Firms should not be expected to do more than they can reasonably afford
But they cannot ethically use lack of affordability as an excuse
Double standard
De George: same standards are not always applicable to entrepreneurs and MNCs in international business
One cannot do what is not within one’s control
International, Voluntary Initiatives
Global sullivan principle, UN Global Impact, Cauz Round Table, Transparency International
Whose Probability
Where, and upon whom, the costs of harm fall, is a matter of justice
Tragedy of Commons
an economic problem where the individual consumes a resource at the expense of society
Science or Ideology
If evidence we might base our decisions on is incomplete or inconclusive
CERES Principles
Natural resources, reduce waste, conserve energy, restore environments, audits of environmental initiative
Shareholder activism
a way that shareholders can influence a corporation’s behavior by exercising their rights as partial owners
Accountability
refers to what happens after something has happened. Accountability is therefore concerned with the consequences of someone’s actions, rather than their initial duty to carry these actions out.
Responsibility
A duty or task that you are required or expected to do.
Codes of conduct
a written collection of rules, principles, values, expectations, and behavior that a company considers fundamental to their success
Codes of ethics
an organization’s ethical guidelines and best practices to follow for honesty, integrity, and professionalism.
Precautionary principle
enables decision-makers to adopt precautionary measures when scientific evidence about an environmental or human health hazard is uncertain and the stakes are high
Harassment
a form of discrimination. It includes any unwanted physical or verbal behaviour that offends or humiliates you. Generally, harassment is a behaviour that persists over time.
Board of directors
A group of people that provides expertise for a company or organization. The board of directors offers high-level overall direction and strategy for the organization and protects the financial interests of investors.
Corporate citizenship
refers to a company’s responsibilities toward society
US federal sentencing guidelines
A set of rules that set out a uniform sentencing policy for individuals and corporations convicted of felonies and serious misdemeanors in the United States.
Define public roles ethics and private roles ethics
public sector organizations have a duty to the public, while private companies only have a duty to their shareholders.
Explain the different between public role and private role ethics
Public ethics refers to the ethical principles and standards that guide the behavior of individuals and organizations in their interactions with the public or society at large. This can include ethical considerations in government, public service, corporate governance, and other areas where the actions of individuals or organizations have an impact on the broader public. Public ethics often involve issues of transparency, accountability, and the responsible use of power and resources.
Private ethics, on the other hand, pertain to the ethical principles and standards that govern personal behavior and decision-making in individual or private settings. This can encompass ethical considerations in personal relationships, family life, and interactions within private organizations or social groups
