LA final chapter 3 pt 1 Flashcards
the study of constitutes right or wrong behavior
ethics
focuses on what constitutes right or wrong behavior in the business world and on how businesspersons apply moral and ethical principles to situations that arise in the work place
Business ethics
corporations can focus on their strengths and other entities that are better suited to deal with social problems and
perform charitable acts can specialize in those activities
In an ideal world, profit maximazation leads to the
most efficient allocation of scarce resources
Corporation’s profits, its impact on people, and its impact on the planet
triple bottom line
when making decisions, a business should evaluate the following
- legal implications of each decision
- public relations impact
- safety risks for consumers and employees
- financial implications
in attempting to maximize profits, corporate executives and employees have to distinguish between ___ and ___ maximization
short-run and long-run
in the short run, a company may increase its profits by continuing to sell a product, even though it knows that the
product is defective or dangerous
In the long run, because of lawsuits, large settlements, and bad publicity, such unethical conduct will cause profits to
suffer
business ethics is consistent only with
long-run maximzation
The internet has increased the potential for major corporation to suffer damage to its
reputation or loss of profits through negative publicity
The study of business ethics is concerned with the purposes of a business and how that business
achieves those purposes
Business ethics is concerned with the image of the business and the impacts that the business has on the environment,
customers, suppliers, employees, and the global economy
bc the law doesnt codify all ethical requirements of all persons, compliance with the law is not always..
sufficient to determine “right” behavior
When two competing companies secretly agree to set prices on products, society suffers harm
-the companies will charge higher prices than they could if they continued to compete
compliance with the law is sometimes called the
moral minimum
Company codes are not law, they are rules that the company set forth so it can
enforce
codes of conduct typically outline the company’s policies on
particular issues and indicate how employees are expected to act
ethics is based more on
judgment than research
Numerous companies have provided strict guidelines about what is appropriate and inappropriate when
making posts at one’s own or other’s social media accounts
federal agency that investigates unfair labor practices
national labor relations board
reasoning process in which the individual examines the situation at hand in light of his or her moral convictions or ethical standards
Ethical reasoning
Ethical reasoning relating to business traditionally has been charactertized by two approaches:
- ethical behavior in terms of duty
- determines what is ethical in terms of consequences or outcome, of any given action
duty-based ethical standards are often derived from revealed truths like
religious precepts
duty-based ethical standards may also be derived solely from
philosophical reasoning
German philosopher (Immanuel Kant) identified some general guiding principles for moral behavior, based on what he believed to be the fundamental nature of human beings
kantian ethics
individuals should evaluate their actions in light of the consequences that would follow if everyone in society acted the same way
main theme in kantian ethics
action is evaluated in terms of what would happen if everybody else in the same situation or category acted the same
categorical imperative
believe that a key factor in determining whether a business decision is ethical is how that decision affects the rights of others
principle of rights
philosophical theory developed by Jeremy Bentham and modifiied by john stuart mill
Utilitarianism
Focuses on the consequences of an action, not the nature of the action itself or on any set of preestablished moral values or religious beliefs
utilitarianism
Under utilitarian model of ethics, an action is morally correct or right when it produces the greatest amount of good for the greatest number
when an action affects the majority adversely, it is morally wrong
Utilitarian theory requires the following
- determination of which individuals will be affected byt he action in question
- Cost-benefit analysis, which involves an assessment of the negative an positive effects of alternative actions on these individuals
- choice among alternative actions that will produce maximum societal utility
combines a commitment to good citizenship with a commitment to making ethical decisions, improving society and minimizing environmental impact
corporate social responsibility
Corporate social responsibility is not imposed on corporations by law, it does involve a commitment to self-regulation in a way that attends to the text and intent of the
law, ethical norms, and global stnadards
Social aspect requires that corporations demonstrate that they are
promoting goals that society deems worth while and are moving toward solutions to social problems
Bc business controls so much of the wealth and power of this country, business has a responsibility to s
society to use that wealth and power in socially beneficial ways
Some corporations publish annual social responsibility reports
which also may be called corporate sustainability
corporate responsibility is most successful when a company undertakes activites that are
significant and related to its business operations
other groups affected by corporate decisions
stakeholders
“Stakeholder view” is that in some circumstances, one or more of these other groups may have a
greater stake in company decisions than the shareholders do
corporation considers the impact of its decisions on its
employees, customers, creditors, suppliers, and the community in which it operates
To avoid making a decision that may be perceived as unethical and result in negative publicity or protests, a corporation should consider the
impact of its decision on the stakeholders
Most difficult aspect of the stakeholder analysis is determinig which groups interests should recieve
greater weight if the interests conflict
During the Great Recession, layoffs numbered in the millions. some corporations succeeded in reducing labor costs without layoffs. To avoid slashing their workforces, these employers turned to alternatives such as
- Four-day workweeks
- unpaid vacations and voluntary furloughs
- wage freezes
- pension cuts
- flexible work schedules
