LA Final exam chp 3 Pt 2 Making ethical business decisions Flashcards
To help corporate employees judge their actions, George S. May international company provides 6 basic guidelines to consider
- the law
- rules and procedures
- values
4.conscience - promises
- heroes
Is the action you are considering legal
the law
are you following the internal rules and procedures that have already been laid out by your company
rules and procedures
laws and internal company policies reinforce society’s values
values
if you feel any guilt, let your conscience be your guide
conscience
every business organization is based on trust
promises
we will have heroes who are role models for us. Is what you plan on doing an action that your hero would take?
heroes
One of the most important ways to create and maintain an ethical workplace is for
top-level management
The attitude and behavior of each business manager and owner are
vital to a company’s ethical success or failure
management behavior sets the
ethical tone of a firm, employees take their cues from management
a manager who looks the other way when they know about an employees unethical behavior
sets an example
Discharging an employee for ethical reasons has deterrent to unethical behavior in workplace
if management does not enforce company code, the code is basically non-existent
Business owners and managers can play a big part in encouraging bad behavior thats
against the rules and morals
requires companies to set up confidential systems so that employees and others can raise red flahs about suspected illegal or unethical auditing and accounting practices
The sarbanes-oxley act of 2002
Corporate ethics officers and ethics committees require a practical method to investigate and solve specific ethics prolems and make
ethical business decision
Leonard H. Bucklin of corporate ethics US has devised a procedure called
business process pragmatism
business process pragmatism involves
inquiry, discussion, decision, justification, and evaluation
An understanding of the facts must be initial action, the parties involved might be mass media, public, employees, or customers
Inquiry
a list of action options is developed
discussion
working together, those participating in the process craft a consensus decision
decision
At this point of process, reasons should be attached to each proposed action or series of actions
Justification
Consensus resolution to the corporate ethics problem withstand the moral scrutiny of the decisions taken and the process used to reach those decision
evaluation
Many U.S businesses now contract with companies in developing nations to produce goods because
the wage rates in those nations are significantly lower than the wages in the US
Given today’s global communications network, a few companies can assume that their actions in other nations will go unnoticed by “corporate watch” groups that
discover and publicize unethical corporate behavior
Another ethical problem in international business dealing has to do with the legitimacy of certain “side”
payments to government officials
In many countries, government regulation and control over trade and industry are much more extensive than in the US
so governemnt officials make the decisions on most major construction and manufacturing contracts
Side payments to government officials in exchange for favorable business contracts are not unusual in such countries,
where they aren’t considered to beunethical
Prohibits U.S. businesspersons from bribing the foreign officials to secure advantageous contracts
foreign corrupt practices act
The foreign corrupt practices act does not say you cant give big amounts of money to small gov. workers who just do basic tasks
these payments are sometimes called grease or helping payments
The foreign corrupt practices act also doesnt stop companies from paying private foreign companies or other unless they know the money will
end up going ot a foreign government against the FCPA rules
All companies must keep detailed records that “accurately and fairly” reflect the company’s
financial activities
all companies must have an accounting system that provides
reasonable assurance, that all transactions entered into by the company are accounted for and legal
The FCPA further prohibits any person from making false statements to accountants or
false entries in any record or account
