Managing business ethics Flashcards
What is Business ethics management?
The direct attempt to formally or informally manage ethical issues or problems through specific policies, practices and programmes
What are codes of ethics? and what are the four main types?
Voluntary statements that commit organisations, industries, or professions to specific beliefs, values and actions an/or set out appropriate ethical behaviour for employees.
- Organisational codes of ethics
- Professional codes of ethics
- Industry codes of ethics
- Programme or group codes of ethics
What are the critiques towards ethical codes? (6 things)
- Clear description means lack of flexibility for employees
- Difficulty with multiple situations and particularly crush-cultural ones
- Vague
- PR device
- Questionable control mechanisms that influence employee belief, values and behaviours
- Suppress individual moral instincts and emotions
How can codes of ethics be effective?
- if it is implemented and administers correctly
- should be tailored to organisation and good tone
- supported by managements and training
- how codes are enforced (reporting lines, violations communicated and have incentives)
Addressing cultural differences when drafting codes: what are the two extreme views? and what is the middle ground?
- Ethical absolutism: morals are eternal, universal, applicable moral principles:one code can and should fit all
- Ethical Relativism: morality is context-dependent and subjective. there are no universal right or wrong that can be rationally determined. that is different codes for different countries
Donaldson 1996; adopt middle ground:
- Respect for core human values
- Respect for local traditions
- Context matters when deciding between right and wrong
What is the instrumental perspective of assessing stakeholder importance? and what are the three attributes that determine importance?
- stakeholder impact analysis help company’s find the most crucial stakeholders for the company’s survival and to ensure their needs are satisfied.
- Power: the stakeholders power to influence the firm
- Legitimacy: of the stakeholder relationships with the firm
- Urgency: of the stakeholders claim on the firm
(latent, expectant and definitive stakeholders)
What are the different stakeholder types?
- Dormant stakeholders: possess power but lack legitimacy and urgency
- Discretionary stakeholders: no pressure to engage with this group, may choose to.
- Demanding Stakeholders: urgent claims, no power, annoying but not worth considering.
- Dominant stakeholders: the only stakeholders of an organisation according to theories. (boards of directors, HR, PR)
- Dangerous stakeholders: powerful and urgent claims and violent.
- Dependent stakeholders: dependent on others to carry out their will, no power.
- Definitive stakeholders: dominant stakeholders with urgent issues,or powerful with support.
What are the problems with stakeholder collaboration? ( 7 things)
- Resource intensity
- Culture Clash
- Schizophrenia
- Uncontrollability
- Co-optation
- Accountability
- Resistance
what are the areas of assessment for ethical performance of businesses? (4 things)
- Ethical: focus in internal management systems
- Environmental: impact on natural environment
- Social: Broaden remit, often including impacts on stakeholders
- Sustainability: focus on triple bottom line
Define Social accounting
The voluntary process concerned with assessing and communicating organisational activities and impacts on social, ethical and environmental issues relevant to stakeholders
example: Body Shop social accounting
Arguments for and against organisations engaging in social accounting? (4 and 6 things)
FOR:
- internal and external pressure: Firms are responding to new expectations that they disclose their operations
- identifying risks: Social accounting provides firms a clearer picture of their relative strengths and vulnerabilities
- improved stakeholder management: Social accounting helps provide information to the wider world, and helps managers make more informed decision making
- enhanced accountability and transparency:Social accounting helps ensure that companies answer for the consequences of their actions
AGAINST:
- perceived higher costs
- insufficient information
- inadequate information systems
- lack of standards
- Secrecy
- Unwillingness to disclose sensitive or confidential data
What makes for good social accounting?
(8 things) meediccc
Managing policies and systems Evolution External verification Disclosure Inclusivity Comparability Completeness Continuous improvement - auditing and certifying - reporting - reporting assurance
What are the formal vs informal ways of organising ethics? (4 and 2 things)
Formal ethics programmes:
- compliance orientation
- values orientation
- external orientation
- protection orientation
Informal:
- culture change approach: improvement in ethical decision making, require transformation of orgs values to create more ethical culture
- Cultural learning approach: focus on smaller subcultures groups within the firm, factionalism and dissent to promote learning.
What are the implications of business ethics and leadership? (4 things)
- Leaders often said to set ethical tone in organisations
- Leaders role to articulate and personify the values of the organisation
- Inspire and motivate employees to follow their lead
- Participation and empowerment to foster more imagination and autonomy
